PolarX Limited
Annual Report 2017

Plain-text annual report

PolarX Limited (formerly Coventry Resources Limited) ABN 76 161 615 783 Annual Report 30 June 2017 PolarX Limited (formerly Coventry Resources Limited)  CONTENTS Page No Corporate Directory Review of Operations Directors’ Report Statement of Profit or Loss and Other Comprehensive Income Statement of Financial Position Statement of Cash Flows Statement of Changes in Equity Notes to the Financial Statements Directors’ Declaration Auditor’s Independence Declaration Independent Audit Report Additional ASX Information 2 3 17 27 28 29 30 31 64 65 66 70 PolarX Limited                   2017 Annual Report              Review of Operations CORPORATE DIRECTORY Directors Mr. Mark Bojanjac Dr. Frazer Tabeart Dr. Jason Berton Mr. Michael Fowler Mr. Robert Boaz Company Secretary Mr. Ian Cunningham Executive Chairman Managing Director Executive Director Non-Executive Director Non-Executive Director Registered Office and Principal Place of Business Suite 9 5 Centro Avenue Subiaco WA 6008 Australia Telephone: Facsimile: (+61 8) 9226 5566 (+61 8) 9226 2027 Share Register Computershare Investor Services Pty Ltd Level 11 172 St Georges Terrace Perth WA 6000 Australia Telephone: 1300 787 272 International: (61 8) 9323 2000 (61 8) 9323 2033 Facsimile: Stock Exchange Listing Australian Securities Exchange ASX Code: PXX Auditors Stantons International Audit and Consulting Pty Ltd Level 2, 1 Walker Avenue West Perth WA 6005 PolarX Limited 2 2017 Annual Report                           Review of Operations REVIEW OF OPERATIONS SUMMARY PolarX Limited (formerly Coventry Resources Limited) (PolarX or the Company) combines the assets of Coventry Resources Ltd and Vista Minerals Pty Ltd to create a well-funded company with a new management team and a series of high-grade copper and copper-gold projects along a 35km long mineralised belt in the southern Alaska Ranges, USA. The Company’s core assets include the Caribou Dome Copper Project and the adjacent Stellar Copper Gold Project (Figure 1), both of which contain known high-grade deposits of copper (Caribou Dome itself) and copper-gold (Zackly), plus multiple targets for additional mineralisation which are being readied for drill testing. Pre-feasibility studies are scheduled to commence at Caribou Dome and Zackly in 2018, and baseline environmental studies have commenced at both sites. Alaska is a stable, pro-mining jurisdiction. Approximately 80% of the state’s GDP comes from mining, oil and gas, with six large-scale mines currently in production. Alaska’s largest alluvial gold field, Valdez Creek, is ~15km from the Caribou Dome Project, and operates all-year round. Figure 1 Location map of the Company's core assets at Caribou Dome and Stellar Illustrating copper anomalism along a 35km strike-length CARIBOU DOME COPPER PROJECT, ALASKA USA The Caribou Dome Copper Project (Caribou Dome Project) is located approximately 250km northeast of Anchorage in Alaska, USA. It is readily accessible by road – the Denali Highway passes within 20 kilometres of the Project and from there a purpose-built road provides direct access to the historic underground development at the Project. The Caribou Dome Project comprises 203 State Mining Claims covering approximately 26,600 acres (10,765 hectares). PolarX Limited 3 2017 Annual Report Review of Operations Mineralisation was discovered at the Caribou Dome Project in 1963. From 1963-1970 nine lenses of sediment-hosted copper mineralisation were delineated over approximately 700 metres of strike. 95 diamond core holes were drilled during this period, from surface and underground. This drilling was concentrated primarily on just 250 metres of strike, at Lenses 4, 5 and 6. On 25 February 2015, PolarX secured the right to acquire an 80% interest in the Caribou Dome Project by meeting certain expenditure obligations and annual cash payments (refer further Note 28 to the financial statements for a summary of acquisition terms). Very limited exploration had been undertaken since 1970, until PolarX secured the rights to explore and develop the project in February 2015. It compiled all historic technical information, prioritised targets arising, completed a ground geophysics (induced polarisation) survey, and completed 4,300 metres of diamond core drilling. Confirmatory drilling rapidly validated previous work and the Company’s initial results from work undertaken to further expand the resources at the Caribou Dome Project have been very promising. All drilling (prior to 2016) was within a 700m long corridor, with mineralisation remaining open in both directions along strike and at depth. Significant intersections prior to the 2017 financial year (FY2017) included:             51.1m* at 5.3% Cu from 4.4m 18.1m at 9.3% Cu from 22.7m 14.1m at 9.9% Cu from 134.6m 18.4m at 6.3% Cu from 31.4m 15.4m at 7.0% Cu (U/G drill hole) 10.4m at 7.9% Cu from 14.0m 12.8m at 5.8% Cu (U/G drill hole) 13.0m at 4.9% Cu (U/G drill hole) 10.1m at 7.1% Cu from 39.0m 9.1m at 7.0% Cu from 28.7m 10.2m at 6.2% Cu from 46.6m 12.2m at 5.0% Cu from 27.1m * True width estimated to be approximately 25m Multiple high-priority targets remain undrilled. With >18km of the stratigraphic horizon that hosts the mineralisation evident within the Company’s project area, there is considerable potential to discover additional high-grade mineralisation and to continue to expand the resource base at the Project. FY2017 Exploration Program Diamond Core Drilling Program From June to early October 2016, 22 diamond core holes were drilled at the Caribou Dome Project for a total of 6,520m. The objectives of the drilling program were to: (i) increase the potential resource base at the Caribou Dome Project; and (ii) to improve the understanding of the grade, thickness and distribution of the shallow mineralisation so that development of a potential initial starter high-grade open pit operation can be assessed with greater confidence. Results from the drilling program are summarised below:   6 holes at the NE end of the Caribou Dome Deposit to test for extensions of the mineralisation along strike and at depth (CD16-001, CD16-003, CD16-005, CD16-006, CD16-007 and CD16-009). Very significant high-grade mineralisation was intersected in 3 of the holes drilled at the NE end of the Caribou Dome Deposit, including: ‐ ‐ ‐ 4.3m at 5.2% Cu from 220.5m, 2.2m at 1.0% Cu from 243.8m and 0.6m at 9.1% Cu from 250.1m (CD16-009) 1.1m at 5.5% Cu from 532.1m (including 0.45m at 13.6% Cu) at the target contact between volcanic and sedimentary rocks (CD16-005) 3m at 1.8% Cu from 487.7m and 1.0m at 2.0% Cu from 507.6m (CD16-007) 2 holes to evaluate the poorly-drilled corridor of mineralisation in the central portion of the Caribou Dome Deposit (CD16-002 and CD16-004B). Moderate intersections of high-grade mineralisation were returned from holes CD16-002 and CD16-004B, both of which were drilled to test for continuity of mineralisation in the poorly-drilled corridor in the central portion of the Caribou Dome Deposit, including: ‐ 0.3m at 2.65% Cu from 104.2m and CD16-004B intersected 0.4m at 3.6% Cu from 115.2m (CD16-002) PolarX Limited 4 2017 Annual Report Review of Operations   1 hole to better define the NE extent of mineralisation at Lenses 4 and 6. CD16-008 was drilled to better define the extents, thickness, geometry and tenor of mineralisation at the NE end of Lenses 4 and 6 – where the majority of currently delineated shallow, potentially open-pittable, mineralisation is located. CD16-008 intersected: ‐ 3.5m at 11.5% Cu from 49.2m and a further 0.4m at 2.4% Cu from 103.1m Drilling in the Central Portion of the Caribou Dome Deposit - 5 holes were drilled to better define the shallow mineralisation in and around the central portion of the Caribou Dome Deposit (around Lenses 4, 5 and 6) where the majority of shallow, potentially open-pittable mineralisation is located (CD16-014, CD16-015, CD16-016, CD16-019 and CD16-022). Assay results included: ‐ ‐ ‐ ‐ ‐ 11.4m @ 6.7% Cu from 70.2m 5.7m @ 7.3% Cu from 92.4m 4.0m @ 6.4% Cu from 156.1m 4.2m @ 4.3% Cu from 91.7m, and 5.3m @ 1.8% Cu from 165m These holes provide much better understanding on the distribution of mineralisation at central portion of the Deposit where the majority of shallow, potentially open-pittable mineralisation is located.  Drilling at the NE end of the Caribou Dome Deposit - 3 holes were drilled at the NE end of the Caribou Dome Deposit to begin to test for extensions of mineralisation up-dip from the mineralisation intersected at depth in CD16-005 and CD16-007 (CD16-010, CD16-011 and CD16-012 – see Figure 1). Significant results included: ‐ ‐ ‐ ‐ ‐ ‐ 4.3m @ 5.2% Cu from 220.5m 1.1m @ 5.5% Cu from 532.1m 0.6m @ 9.1% Cu from 528.7m 0.4m @ 6.8% Cu from 192.6m, and 2.2m @ 1.0% Cu from 243.8m 2.9m @ 2.4% Cu from 193.4m    All of the holes in this area were inclined holes drilled in the same orientation as down-slope topography – hence the actual depth of mineralisation below surface is considerably less than the apparent depth of reported mineralisation intersected down hole. Drilling between Lense 2 and Lense 6 - 2 holes were drilled to begin to evaluate a previously undrilled 100m long corridor between Lenses 2 and 6, where mineralisation outcrops at surface, an area where any additional mineralisation could positively impact the economics of developing an open pit (CD16-020 and CD16-021). Significant mineralisation was intersected in both holes, with results including: ‐ ‐ ‐ ‐ 4.4m @ 1.2% Cu from 69.2m 0.5m @ 2.6% Cu from 53.3m 1.6m @ 0.9% Cu from 52.4m, and 0.3m @ 1.6% Cu from 59.9m Drilling at the Western End of Lense 2 - a single hole (CD16-018) was drilled to evaluate a combination of the Lense 2 West IP Anomaly (see Figure 2) and the potential plunge position of the Lense 2 mineralisation. While this hole failed to intersect significant mineralisation, important information on the structural controls of mineralisation were identified to assist targeting extensions of mineralisation in this area in the future; and Drilling at the Kopis IP Anomaly - two holes were completed at the Kopis IP Anomaly, approximately 1km from (NE of) the closest previous drilling (see Figure 3). One of these holes (CD16-013) intersected a narrow interval of stock- worked chalcopyrite veins in volcanic rocks, with best assay results comprising 0.5m @ 0.9% Cu from 131.9m. Neither hole intersected the target sedimentary sequence. The presence of chalcopyrite coinciding with this >1,000m long IP anomaly is very encouraging, and further drilling is planned for this highly prospective area. PolarX Limited 5 2017 Annual Report Review of Operations Figure 2. Drill hole traces and some of the significant intersections for the holes drilled during the Company’s 2016 diamond core drilling program at the Caribou Dome Deposit, together with the traces of all previous holes within 100m of surface and the extents of previously mapped outcropping mineralisation. Ground Geophysical Surveying During June-August 2016 a contract crew completed induced polarisation (IP) surveying over 7km of strike, centred on the Caribou Dome Deposit itself; targeting the strike extensions of the prospective geological contact between sedimentary and volcanic rocks (Figure 3). A very strong IP anomaly was delineated over the deposit itself. Numerous very high-priority new targets have been delineated along strike from the deposit, including the newly defined Kopis Anomaly which covers 1,100m of strike within the same geological position as the Caribou Dome Deposit itself – namely at the contact between a sedimentary sequence and the underlying volcanic sequence of rocks. The Kopis IP Anomaly coincides with a strong soil geochemistry anomaly and extensive outcropping mineralisation. Two holes were drilled during FY2017 to begin evaluation of the Kopis IP Anomaly (refer above). Although no sediments were intersected in drilling, minor vein stockworks of chalcopyrite in volcanic rocks were intersected. Further exploratory drilling is warranted. PolarX Limited 6 2017 Annual Report Review of Operations Figure 3. 125m depth slice of inverted IP data acquired during 2016 at the Caribou Dome Project. There is a strong correlation between IP anomalism and known mineralisation. Numerous strong IP anomalies are yet to be evaluated with drilling. Geology and geochemistry is being used to prioritise them. Soil Sampling During late June and early July 2016 approximately 800 soil samples were collected over more than 5km of strike over an extension of the prospective sedimentary sequence in the far northeast of the project area, where, historically, outcropping- sediment hosted copper mineralisation had been recorded. This new area is >11km NE of the Caribou Dome Deposit itself (see Figure 4) and has been subject to very little previous exploration. A 5km wide zone of highly anomalous copper in soils is evident in this new “Senator Prospect” area, with soil samples assaying up to 0.17% copper (see Figure 4). The sampling team identified some exposed areas of outcropping sediment- hosted mineralisation while they were collecting soil samples. Select rock chip samples from these areas have returned assays up to 12.1% Cu, confirming significant potential for additional high-grade sediment-hosted copper mineralisation in this sizeable new area. As a result of this program, 26 new mineral claims were staked during FY2017 to secure the mineral rights over the new anomalism and surrounding areas (for a total 4,160 acres or 16.8km2). Further exploration work will be undertaken at the Senator Prospect as part of the 2017 exploration program (refer – FY2018 Exploration Program below). PolarX Limited 7 2017 Annual Report Review of Operations Figure 4. Image of copper soil geochemistry across the entire Caribou Dome Project, illustrating the 5km-wide highly anomalous zone delineated during 2016 in the far northeast of the Project – the “Senator Prospect”. Mineral Resource Estimate Following completion of the 2016 exploration program, in April 2017 the Company announced its initial mineral resource estimate for the Caribou Dome Project of 2.8Mt @ 3.1% Cu (using 0.5% lower-cut) for contained copper metal of approximately 86,000t (Resource Estimate). The Resource Estimate, which was prepared in accordance with the JORC Code (2012), is summarised in Table 1 below (refer also ASX announcement of 6 April 2017). Table 1: Caribou Dome Mineral Resource Estimate (March 2017) Open Cut RL>=1300 Underground RL<1300 Total Category Tonnes Grade Cu (%) Tonnes Grade Cu (%) Tonnes Grade Cu (%) Contained Cu (t) Measured 495,000 3.6 74,000 3.7 569,000 3.6 21,000 Indicated 480,000 2.2 113,000 2.3 593,000 2.2 13,000 Inferred 655,000 3.1 979,000 3.3 1,634,000 3.2 52,000 Total Notes: 1,630,000 3.0 1,166,000 3.2 2,796,000 3.1 86,000 1. Numbers are presented at a 0.5% Cu cut-off grade and are rounded; and 2. Refer to the ASX announcement of 6 April 2017 for full details on the Mineral Resource Estimate, including the applicable technical information and reporting criteria. PolarX Limited 8 2017 Annual Report Review of Operations The Company considers there is potential for a significant increase in the Mineral Resource Estimate from further drilling along strike and down-dip, targeting both near surface and at depth extensions Approximately 60% of the Mineral Resource, comprising 1.6Mt occurs within approximately 150m of surface at an average grade of 3.0% copper. Within that domain, some 935,000t averages 4.4% copper at a 2% cut-off grade (refer ASX announcement of 6 April 2017), and may potentially form part of an open-pit mine design. The initial JORC Resource further demonstrates the project’s strong commercial potential and characterises the immediate opportunity for significant upside. The initial JORC Resource at this stage only considers:  approx. 800m of strike within 18km of largely untested sedimentary sequence on the Company’s tenure;  does not yet fully capture the obvious underground mining potential where the second deepest hole recorded 15.4m @ 7% copper; and  does not yet include any of the obvious additional potential along strike of the drilling to date. The particularly high copper grade of Caribou Dome is most instrumental to future robust economics. Additional mineable tonnage would add substantial tangible value. More drilling is clearly warranted to enhance the resource model and better define the deeper material. To begin to evaluate at a high-level the technical and potential economic viability of an open pit development, the Company undertook a preliminary scoping study (PSS) based on using the near surface material for a low-capex open-pit starter operation. The PSS has demonstrated the economic potential arising from the near surface high-grade material. A preliminary open-pit mine design is also being examined which could form the starting basis of a future mine. Deeper material below ~150m from surface has not yet been examined in the PSS, although it already comprises ~1.2Mt at an average grade of 3.2% copper (using 0.5% lower cut) and contains approximately 40% of the total current resource estimate. Based on its preliminary optimisation studies, the Company identified the potential for an open-cut mining operation to produce a copper concentrate. Although no underground studies have yet been reported, PolarX is of the opinion that copper extraction from underground operations could be viable beneath the assumed open-cut. All of the required infrastructure would already be in place therefore no additional CAPEX would be required, with the exception of underground mining development. As such, below 1300mRL a reporting cut-off could be chosen to report copper in the range of 3.2 to 4% as being appropriate to include that material which may be economic to mine in an underground scenario. Metallurgical Testwork Initial metallurgical test-work (in early 2016), focused on conventional flotation, achieved recoveries of >95% Cu, with concentrates grading up to 24.5% Cu, from a composite sample from the Lense 4, 5 and 6 area (which averaged 5.03% Cu). Subsequent testwork investigated whether metallurgical responses differ across the Deposit. This work was undertaken by testing samples from discrete locations across the Deposit, rather than compositing samples. Accordingly, for the first time metallurgical testwork was undertaken on a representative sample of mineralisation from the Lense 7/8 area (at the NE end of the Deposit). The head grade of this sample was 7.4% Cu. During FY2017 the Company reported that excellent results had been returned, with recoveries of >99% Cu achieved in all rougher flotation tests and concentrates grading up to 27.4% Cu were produced during cleaner flotation tests.. This work is still at a relatively early stage and ongoing metallurgical testwork is being undertaken to refine the optimal processing flowsheet for the Caribou Dome Project. PolarX Limited 9 2017 Annual Report Review of Operations ACQUISITION OF STELLAR PROJECT In May 2017, the Company announced plans to significantly expand its highly prospective footprint in Alaska by acquiring 100% of the issued capital of Vista Minerals Pty Ltd (Vista), which holds a 100% interest in the Stellar Copper Gold Project (Stellar Project). Subsequently on 26 July 2017 the Company announced that it had completed the acquisition of Vista (Vista Acquisition). The Stellar Project occurs on the southern flank of the Central Alaska Range and is contiguous with the north-eastern end of the Caribou Dome Project. The Stellar Project occurs in a complex geological setting where multiple periods of intrusive activity have led to the development of widespread magmatic-hydrothermal mineralisation containing varying amounts of copper and gold. The Stellar Project contains five main prospects: the Zackly Cu-Au skarn; the Jupiter, Mars and Gemini porphyry Cu-Au-Mo targets, and the Au-only Moonwalk Prospect. Zackly is the only prospect to have been tested by drilling, undertaken between 1981 and 1994. This drilling identified a mineralised skarn with average grades of 2.9% Cu and 4.51g/t Au along a strike-length of ~800m. Potential exists to significantly increase the strike length of the mineralisation through further drilling which could lead to the classification of a JORC resource. The Stellar Project comprises 111 contiguous State Mining Claims in the Talkeetna District of Alaska (Figure 5). The claims cover a total area of 17,760 acres (7,187 hectares) and are registered to Millrock Alaska LLC a wholly owned subsidiary of Millrock Resources Inc. (“Millrock”). The Company has recently staked an additional 70 State Mining Claims to cover obvious extensions of the copper and gold soil geochemical anomaly hosting the Zackly, Mars, Jupiter, Gemini and Moonwalk prospects. Figure 5: Geochemical map of the Stellar Project showing the location of the main prospects referred to in the text PolarX Limited 10 2017 Annual Report Review of Operations Recent Exploration and Mineralisation In 2010 and 2012 Millrock Alaska undertook a program of stream sediment sampling, rock-chip sampling and soil sampling across the entire project. A total of 187 rock samples, 340 soil samples and 56 stream sediment samples were collected and analysed for base and precious metals. The results of the soil sampling have delineated a series of high priority exploration targets in addition to the known skarn mineralisation at Zackly (see Figure 6 below). The Zackly Prospect is the most significant mineralisation identified to date on the Stellar Project. Five drilling campaigns were undertaken by various companies between 1981 and 1994, with 99 holes for a total of 9,595m of core and 3,419m reverse circulation percussion samples completed. These campaigns delineated a steeply south dipping copper-gold skarn system associated with limestone, andesitic to basaltic volcanic rocks and dioritic intrusions. Mineralised zones vary from 0.5m true thickness to over 10m, averaging 3.0m. Limited metallurgical test work in 1987 and 1992 on oxidised Zackly mineralisation from surface trenches focused on gold recoveries and indicated that a combination of flotation cells (Cu-Au) and a gravity circuit (Au) should be further evaluated. Significant drill intercepts from the Zackly Prospect include (all drilling intercepts greater than 0.1% Cu are contained in the ASX announcement dated 24 May 2017):              11.58m @ 7.2% Cu, 16.1g/t Au from 151.79m (Z-04-81, Core) 7.92m @ 2.1% Cu, 2.55g/t Au from 171.30m (Z-02-81, Core) 10.36m @ 2.0% Cu, 2.3g/t Au from 99.36m (Z-07-81, Core) 12.19m @ 0.7% Cu, 16.1g/t Au from 21.33m (Z-05-81, Core) 6.71m @ 1.9% Cu, 4.1g/t Au from 79.24m (Z-01-81, Core) 0.91m @ 3.2% Cu, 14.5g/t Au from 167.64m (Z-08-81, Core) 3.05m @ 2.1% Cu, 4.1g/t Au from 71.93m (Z-12-81, Core) 3.47m @ 2.5% Cu, 7.6g/t Au from 190.19m (Z-31-82, Core) 9.15m @ 2.3% Cu, 5.5g/t Au from 6.10m (Z-50, RC) 9.14m @ 2.2% Cu, 2.7g/t Au from 3.05m (Z-48, RC) 5.43m @ 2.3% Cu, 5.1g/t Au from 23.92m (Z-86, Core) 6.10m @ 1.3% Cu, 6.8g/t Au from 0m (Z-78, RC) 13.72m @ 1.9% Cu, 2.1g/t Au from 82.29m (Z-55, RC)  4.57m @ 2.8% Cu, 5.3g/t Au from 106.68m (Z-49, RC) The skarn mineralisation at the Zackly Prospect extends for over 2000m along strike, but the core zone, the Main Skarn is approximately 800m long and focussed on the western/central area of drilling. Three historical (non-JORC compatible) foreign mineral resource estimates were prepared for the Main Skarn in 1982, 1987 and 1993. The most recent of these, prepared by Hemlo Gold in 1993 estimated that the Main Skarn contained 1.54 million tonnes @ 2.90% Cu and 4.51g/t Au*. PolarX Limited 11 2017 Annual Report Review of Operations Figure 6: Zackly Prospect showing historical and planned IP survey lines, historical drill hole collar locations, mapped faults and the location of the surface projections of the known Main Skarn mineralisation and along-strike potential eastern and western extensions Two lines of IP surveying were undertaken to the west of the Main Skarn by Vista in late 2016. Strong chargeability anomalies were identified in both IP lines, supporting the potential for up to 1500m additional mineralised strike-length to the west of the Main Skarn. Furthermore, historical IP to the east of the Main Skarn supports a potential faulted offset of the mineralisation with at least 650m of untested strike-length of strong chargeability anomalism (see Figure 6). Infill IP and drilling is required at the Zackly Prospect to validate existing drill intercepts and seek extensions to the mineralisation, ultimately leading to a JORC compatible resource estimate if the drilling is successful. The Mars Prospect, 6km west of the Zackly Prospect, was first visited and sampled by Millrock Alaska in 2010. The main Cu-Au geochemical anomaly is coincident with a strong circular magnetic anomaly, the centre of which is composed of diorite with chalcopyrite veins. Significant geochemical results include a 1200m soil traverse averaging 462 ppm in Cu, a 950m soil traverse averaging 763 ppm Cu and a 900m soil traverse averaging 891 ppm Cu. A sample of altered diorite collected from the centre of the magnetic anomaly returned 0.51% Cu, 0.21g/t Au and high grade rock samples of 7.4% Cu and 1.79g/t Au were collected from float and a gossanous gully, respectively. No further work has been undertaken at Mars Prospect. The Jupiter Prospect occurs immediately north of the Zackly Prospect and comprises a 2000m long continuous Cu-Au anomaly with average values in the soil samples of 914ppm Cu and 0.08g/t Au. Vista completed three lines of reconnaissance IP surveying over the Jupiter Prospect in late 2016 which identified several poorly constrained chargeability anomalies. Additional IP surveying and drilling is required at this prospect. The Gemini Prospect occurs approximately 5km to the north of the Zackly Prospect and comprises a large co-incident Cu and Au in soils anomaly some 2.0km x 2.0km in dimension, with peak values of 1,130ppm Cu and 0.25g/t Au. There has been no detailed mapping, no geophysics and no drilling at the Gemini Prospect. Finally, the Moonwalk Prospect occurs in the northern extremity of the claim block in a different geological terrane to the mineralisation at the Zackly Prospect, the Mars Prospect and the Gemini Prospect. At the Moonwalk Prospect, a granodiorite has been mapped intruding into a series of black shales and silty sediments. The granodiorite appears to be a 100m thick sill with a strike length of 700m, and locally contains quartz-sulphide veins which have assayed up to 30.45 g/t Au in one grab sample. Soil samples within the granodiorite averaged 1.15g/t Au across 19 samples collected over a 700m x 500m area, with a high of 3.54 g/t Au. No geophysical surveys or drilling have been undertaken to date. PolarX Limited 12 2017 Annual Report Review of Operations PROPOSED 2017 EXPLORATION PROGRAM Following completion of the Vista Acquisition, PolarX’s focus is now on the exploration and development of both the Caribou Dome Project and new Stellar Project, which collectively form a contiguous package of claims with ~35km strike length. Together, they deliver an exciting high-grade copper and copper-gold portfolio and provide a unique chance to build a meaningful resource house at an opportune time in the market. In August 2017, PolarX recommenced exploration activities in Alaska. Exploration activities for the remainder of the 2017 field season will be focussed on three prospects:  Diamond drilling and IP surveying at the Zackly Cu-Au skarn;   IP surveying, geological mapping and rock-chip sampling at the Mars Cu-Au target; and IP surveying, geological mapping and rock-chip sampling at the Senator Cu target. Zackly Cu-Au Skarn Initial exploration programs for the 2018 financial year will focus on the Zackly high grade Cu-Au skarn deposit where historic foreign resource estimates comprise 1.5Mt at 2.9% Cu and 4.51 g/t Au in the Zackly Main Skarn. IP surveys conducted after the resource drilling in 1981, 1982 and 1987 have indicated the potential for along-strike extensions of the Zackly Main skarn to the east and to the west (Figure 6 above). One drill rig commenced in mid-August 2017 and will be used to evaluate these along strike extensions. Infill IP surveys totalling 10.6 line-km have been undertaken across the Main Skarn (for orientation purposes), and along strike in both directions to assist targeting drill hole collar locations. IP crews were mobilised in early August 2017. A second drill rig has commenced a program of approximately 12 holes to twin existing drill intersections in the Zackly Main Skarn and provide the basis for re-classifying this to JORC 2012 standard. Mineralised core from this program will be used in metallurgical test-work to assess processing options for Zackly skarn mineralisation. Mars Cu-Au target The Mars target contains soil and rock-chip anomalism permissive of a large porphyry copper-gold system. A total of 53 soil samples were collected across the Mars prospect as part of regional sampling undertaken in 2012 and 2013 by Millrock Alaska. Of these samples, 12 returned assay values exceeding 0.1g/t Au, and 21 returned assay values exceeding 500ppm Cu. A total of 35 rock samples were collected in 2012, mainly from talus slopes and outcrops. Variably iron stained and locally carbonate +/- epidote +/- chlorite altered dioritic intrusions, andesitic volcanic rocks and gabbroic rocks were sampled, some of which were quartz veined or brecciated and in places gossanous. 10 of the rock samples returned assay values exceeding 0.25g/t Au, with a peak value of 1.79g/t Au. 10 of the samples were also highly anomalous in copper (>0.5% Cu), with a peak value of 7.4% Cu. Four lines of IP surveying (6.8km in total) will be collected across the Mars prospect in late 2017, with results to be used to plan a drilling program to evaluate the potential of this prospect (Figure 7) PolarX Limited 13 2017 Annual Report Review of Operations Figure 7: Surface geochemistry and planned IP lines at the Mars Cu-Au prospect Senator Cu target The Senator copper prospect was discovered through a soil sampling program undertaken by the Company in 2016 (refer above). This highlighted an area covering approximately 5km x 2.5km with elevated copper in soils (>100ppm Cu) and sporadic outcrop. Recent site visits have highlighted the potential of this area having identified intense iron alteration (jarosite and hematite) and the presence of copper oxides on fracture surfaces (see Figure 8 below). Figure 8: Widespread iron oxide alteration (jarosite and hematite) at the Senator copper prospect. Note helicopter in central left of photograph for scale. PolarX Limited 14 2017 Annual Report Review of Operations Geological mapping, rock-chip sampling and IP surveying (approximately 11 line-km), and if warranted, drill testing is being undertaken at Senator during the 2018 financial year. UNCLE SAM GOLD PROJECT, ALASKA USA The Uncle Sam Project is located 75 kilometres southeast of the City of Fairbanks in Alaska. Intrusion-related gold is being targeted, in a similar age of intrusive rocks to those which host the Pogo Gold Mine approximately 60 kilometres to the east of the Uncle Sam Project. The Company secured the rights to the Project on 15 December 2010 when it entered into an option agreement, as subsequently amended on 22 December 2011, with Millrock Resources Inc. and Millrock Alaska LLC pursuant to which the Company was granted the right to earn a 100% interest in the Uncle Sam Project (the Uncle Sam Option). In April 2013, the Company exercised the Uncle Sam Option (refer further Note 29 to the financial statements for key terms). On 27 July 2015, the Company entered into a mineral lease and purchase agreement with Great American Minerals Exploration Inc. (GAME), pursuant to which GAME agreed to lease the Uncle Sam Project for 10 years with an option to purchase the property outright at any time during the lease period (refer further Note 29 to the financial statements for key terms). There were no further developments in relation to the Uncle Sam Project during. CORPORATE On 1 September 2016, the Company completed a placement of 56,473,750 Shares at an issue price of $0.032 per Share for gross proceeds of $1,807,160 to institutional and sophisticated investors. Net funds raised pursuant to the September placement were for the purposes of continuing to advance the development of the Caribou Dome Project and for general working capital purposes. On 29 April 2017, the Company entered into a $200,000 convertible note facility with Vista, of which $100,000 was drawn down as at balance date. Following the acquisition of Vista in July 2017 (refer below) the facility was repaid. On 24 May 2017, the Company announced the proposed Vista Acquisition and proposed financing, both of which were subject to shareholder approval which was received on 30 June 2017. Subsequently, on 26 July 2017 the Company announced that it had (i) completed the acquisition of Vista and (ii) raised approximately $5.5 million via the issue of 274,750,000 ordinary shares at an issue price of $0.02 per Share (refer further Note 18 to the financial statements). The July placement was a condition precedent to completion of the Vista Acquisition. The net proceeds from the July placement will be used for exploration and development activities on the Caribou Dome Project and the Stellar Project and for general working capital. Following the acquisition of Vista, Dr Frazer Tabeart and Dr Jason Berton were appointed as directors of the Company, with Dr Tabeart appointed as Managing Director/CEO. On 7 August 2017, the Company completed a 1 for 5 security consolidation and on 15 September 2017 changed its name to PolarX Limited (refer further Note 18 to the financial statements). PolarX Limited 15 2017 Annual Report Review of Operations Notes to the Review of Operations Qualified and Competent Persons Statements The 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The information contained in this announcement has been presented in accordance with the JORC Code and references to “Measured Resources”, “Inferred Resources” and “Indicated Resources” are to those terms as defined in the JORC Code. The information in this announcement that relates to Mineral Resource estimation for the Caribou Dome Project is based on information compiled by Mr Peter Ball who is a Member of The Australasian Mining and Metallurgy. Mr Ball has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and the activity he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Ball consents to the inclusion in the report of the matters based on the information in the form and context in which it appears. The information in this announcement that relates to mineralisation interpretation and database quality used in the Mineral Resource Estimation and exploration and metallurgical testwork results for the Caribou Dome Project, is based on information compiled by Mr Ben Vallerine, who is a consultant to the Company and holds an indirect shareholding in the Company. Mr Vallerine is a Member of the Australian Institute of Geoscientists. Mr Vallerine has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and the activity he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Vallerine all consents to the inclusion in the report of the matters based on the information in the form and context in which it appears. All other information in this report relating to exploration results, mineral Resources or ore Reserves is based on information compiled by Dr Frazer Tabeart (an employee of PolarX Limited) who is a member of The Australian Institute of Geoscientists. Dr Tabeart has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person under the JORC Code. Dr Tabeart consents to the inclusion of the data in the form and context in which it appears. *Foreign Historic Mineral Resource Estimate for the Zackly Main Skarn in the Stellar Project: (i) (ii) Readers are referred to the Company's initial market release dated 24 May 2017 which provides supporting information on these historical foreign resource estimates. The Company confirms that the supporting information disclosed in the initial market announcement continue to apply and have not materially changed. (iii) Readers are cautioned that that this estimate is a "foreign estimate" under ASX Listing Rule 5.12 and is not reported in accordance with the JORC Code. (iv) A Competent Person has not yet undertaken sufficient work to classify the foreign estimate as mineral resources or ore reserves in accordance with the JORC Code. (v) It is uncertain that, following evaluation and/or further exploration work, it will be possible to report this foreign estimate as mineral resources or ore reserves in accordance with the JORC Code. Forward Looking Statements Any forward-looking information contained in this report is made as of the date of this report. Except as required under applicable securities legislation, PolarX does not intend, and does not assume any obligation, to update this forward-looking information. Any forward-looking information contained in this report is based on numerous assumptions and is subject to all of the risks and uncertainties inherent in the Company’s business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information due to the inherent uncertainty thereof. PolarX Limited 16 2017 Annual Report Directors’ Report The Directors present their report for PolarX Limited (formerly Coventry Resources Limited) (PolarX or the Company) and its subsidiaries (the Group) for the year ended 30 June 2017. The Company changed its name to PolarX Limited on 15 September 2017. The Company also completed a 1 for 5 security consolidation on 7 August 2017 (the Consolidation). Accordingly, references to shares and options throughout this Directors’ Report are on a post-Consolidation basis, unless otherwise advised. Whilst references to the Company’s shares and options on issue in the notes to the financial statements are on a pre-Consolidation basis, unless otherwise stated, given the Consolidation took effect after the reporting date. Further details on these events are set out in Note 18 to the financial statements. DIRECTORS The names, qualifications and experience of the Directors in office during the period and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated. Mark Bojanjac Executive Chairman (appointed 13 December 2016, formerly Non-Executive Chairman) Qualifications BCom, ICAA Experience Mr Bojanjac is a Chartered Accountant with over 25 years’ experience in developing resource companies. Mr Bojanjac was a founding director of Gilt-Edged Mining Limited which discovered one of Australia’s highest grade gold mines and was managing director of a public company which successfully developed and financed a 2.4m oz gold resource in Mongolia. He also co- founded a 3 million oz gold project in China. Mr Bojanjac was most recently Chief Executive Officer of Adamus Resources Limited and oversaw its advancement from an early stage exploration project through its definitive feasibility studies and managed the debt and equity financing of its successful Ghanaian gold mine. Interest in shares and options 2,000,000 unlisted options exercisable at $0.0715 on or before 19 February 2020 Other Directorships Director of Geopacific Resources Limited (since 28 March 2013) Frazer Tabeart Managing Director (appointed 26 July 2017) Qualifications Ph.D, B.Sc (Hons), ARSM, MAIG Experience Dr. Tabeart is a geologist with 30-years international experience in exploration and project development, with strong technical background in porphyry copper-gold systems in SE Asia, SW Pacific, the American Cordillera and central and northern Asia. After spending 16 years with WMC Resources and managing exploration portfolios in the Philippines, Mongolia and Africa, he left to join the Mitchell River Group. Interest in shares and options Other Directorships Dr. Tabeart has served on ASX-listed Company Boards at Executive level over last 10 years. 4,103,273 ordinary shares Dr. Tabeart is a Director and Principal at Mitchell River Group, and current Managing Director at African Energy Resources Limited (since 1 November 2007) and Non-Executive Director at Segue Resources Limited (since 1 September 2014). Jason Berton Executive Director (appointed 26 July 2017) Qualifications Ph.D, B.Sc (Hons), MAusIMM Experience Dr. Berton is a geologist with over 16 years’ mining and exploration experience including working for Homestake, Barrick and BHP Billiton and SRK Consulting. Dr Berton has also previously spent two years in private equity investment and four years as Managing Director of ASX- listed Estrella Resources. Dr Berton holds two Degrees, a Bachelor of Economics and a Bachelor of Science (Hons) plus a PhD in Structural Geology, all from Macquarie University. PolarX Limited 17 2017 Annual Report Directors’ Report Interest in shares and options 13,631,832 ordinary shares Other Directorships None Michael Fowler Independent Non-Executive Director Qualifications BSc, MSc, MAusIMM Experience Interest in shares and options Mr Fowler is a geologist with 25 years’ experience in the resources industry. He graduated from Curtin University in 1988 with a Bachelor of Applied Science degree majoring in geology and in 1999 received a Master of Science majoring in Ore Deposit Geology from the University of Western Australia. On graduating he explored for gold and base metals for Dominion Mining in the Murchison, Gascoyne and Eastern Goldfields regions of Western Australia. In 1996, Mr Fowler joined Croesus Mining NL and was made Exploration Manager in 1997. He oversaw all exploration for Croesus until June 2004 and was then appointed Business Development Manager and subsequently Managing Director in October 2005. Mr Fowler has overseen the discovery and development of several significant gold deposits. He has intimately involved in a number of significant acquisitions and project reviews. 1,000,000 unlisted options exercisable at $0.0715 on or before 19 February 2020 Other Directorships Director of Genesis Minerals Limited (since 16 April 2007) Robert Boaz Independent Non-Executive Director   Qualifications Honors B.A., M.A. Economics Experience Interest in shares and options Other Directorships Mr Boaz graduated with honours from McMaster University of Hamilton, Ontario with a Bachelor of Arts in Economics and has a Masters Degree in Economics from York University in Toronto. He is a highly respected financial and economic strategist in Canadian bond and equity markets with experience related to equity research, portfolio management, institutional sales and investment banking. Mr Boaz has over 20 years’ experience in the finance industry, most recently as Managing Director, Investment Banking with Raymond James Ltd and Vice-President, Head of Research and in-house portfolio strategist for Dundee Securities Corporation. Mr Boaz is currently President & CEO of Aura Silver Resources Inc. 1,000,000 unlisted options exercisable at $0.0715 on or before 19 February 2020 Aura Silver Resources Inc. (since 2008) Renaissance Gold Inc. (since 2010) Caracara Silver Inc. (since 2011) Michael Haynes Managing Director (resigned 13 December 2016) Qualifications BSc (Hons.) Experience Mr. Haynes has more than 22 years’ experience in the mining industry. Mr. Haynes graduated from the University of Western Australia with an honours degree in geology and geophysics. He has been intimately involved in the exploration and development of resource projects, targeting a wide variety of commodities, throughout Australia and extensively in Southeast and Central Asia, Africa, North and South America, and Europe. Mr. Haynes has held technical positions with both BHP Minerals Limited and Billiton plc. He ran his own successful consulting business for a number of years providing professional geophysical and exploration services to both junior and major resource companies. He has worked extensively on project generation and acquisition throughout his career. Over the past eleven years he has been intimately involved in the incorporation, ongoing financing and management of numerous resources companies. Interest in shares and options 4,700,787 ordinary shares* *as at the date of his resignation on 13 December 2016 PolarX Limited 18 2017 Annual Report Directors’ Report Other Directorships Director of Overland Resources Limited (from 9 May 2005 to 23 June 2017) Director of Black Range Minerals Limited (from 27 June 2005 to 11 November 2015) Ian Cunningham Executive Director, Chief Financial Officer and Company Secretary (resigned as Executive Director on 13 December 2016) Qualifications BCom, LLB, ICAA, FGIA Experience Mr. Cunningham is a Chartered Accountant and Chartered Secretary and holds a Bachelor of Commerce degree and Bachelor of Laws degree from the University of Western Australia. He also holds a Graduate Diploma in Applied Corporate Governance from the Governance Institute of Australia and a Graduate Diploma of Applied Finance and Investment from the Securities Institute of Australia. Mr. Cunningham has more than 12 years’ experience in the resources industry in executive and senior management roles, including most recently with Adamus Resources Limited, during which time Adamus developed the Nzema Gold Mine (Ghana) and subsequently merged with Endeavour Mining Corporation. Prior to that he worked in the Financial Advisory division of Deloitte in both Australia and the UK. Interest in shares and options 3,720,931 ordinary shares Other Directorships None RESULTS OF OPERATIONS The Group’s total comprehensive loss after taxation attributable to the members for the year was $1,056,489 (2016: $1,131,643). DIVIDENDS No dividend was paid or declared by the Group in the year and up to the date of this report. CORPORATE STRUCTURE PolarX Limited is an Australian registered public company limited by shares. NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES During the financial year, the Group’s principal activity was mineral exploration. The Group currently holds interests in copper and gold exploration projects in Alaska USA. During the 2017 financial year there were no changes in the principal activities from the prior financial year. EMPLOYEES The Group had one employee at 30 June 2017 (2016: one employee). REVIEW OF OPERATIONS A detailed summary of the Group’s operations during the year, including significant changes in the state of affairs, are detailed in the Review of Operations. SIGNIFICANT EVENTS AFTER THE REPORTING DATE On 26 July 2017, the Company acquired Vista Minerals Pty Ltd. (Vista) in exchange for 459,821,368 pre-Consolidation shares (Vista Acquisition). Vista holds a 100% interest in the Stellar Copper Gold Project (Stellar Project) in Alaska via its wholly owned subsidiary, Vista Minerals (Alaska) Inc. For further details on the Stellar Project refer to the Review of Operations. PolarX Limited 19 2017 Annual Report Directors’ Report On 26 July 2017, concurrent with the Vista Acquisition, the Company completed a private placement of 274,750,000 pre- Consolidation shares at an issue price of $0.02 per share for gross proceeds of $5.495 million to institutional and sophisticated investors. On 7 August 2017, the Company completed a 1 for 5 security consolidation. As a result, there were 238,897,103 shares on issue and 5,172,370 options outstanding after the Consolidation. On 17 August 2017, 226,170 options with an exercise price of C$0.25 lapsed. On 15 September 2017, the Company changed its name to PolarX Limited. On 19 September 2017, the Company issued 400,000 options, each exercisable at $0.12 on or before 18 September 2020, in lieu of cash consideration for consulting services provided since 1 July 2017. No other significant events have occurred subsequent to the balance sheet date but prior to the date of this report that would have a material impact on the consolidated financial statements. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The Group will continue to carry out its business plan, by:    continuing to explore the Caribou Dome Project and Stellar Project and advance these projects towards development; continuing to meet its commitments relating to exploration tenements and carrying out further exploration, permitting activities and project development; and prudently managing the Group’s cash to be able to take advantage of any future opportunities that may arise to add value to the business. ENVIRONMENTAL REGULATION AND PERFORMANCE The Group carries out operations that are subject to environmental regulations under Federal, Territorial and Provincial legislation in the USA. The Group has procedures in place to ensure regulations are adhered to. The Group is not aware of any breaches in relation to environmental matters. SHARE OPTIONS As at the date of this report, there were 5,346,200 (post-Consolidation) options over ordinary shares. The details of the options on issue at the date of this report are as follows: Number Exercise Price Expiry Date 146,200 4,000,000 400,000 400,000 400,000 $0.13 $0.0715 $0.175 $0.195 $0.12 30 June 2018 19 February 2020 17 June 2020 30 August 2019 18 September 2020 No option holder has any right under the options to participate in any other share issue of the Company or any other entity. Balance Date (pre-Consolidation) There were 25,861,850 options (pre-Consolidation basis) on issue at the balance date. On 31 August 2016, the Company issued 2,000,000 options (pre-Consolidation basis), each exercisable at $0.039 on or before 30 August 2019, in lieu of cash consideration for consulting services. PolarX Limited 20 2017 Annual Report Directors’ Report During the 2017 financial year, 4,983,450 options (pre-Consolidation basis) expired. No options were exercised during the financial year. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS The Company has made agreements indemnifying all the Directors and Officers of the Company against all losses or liabilities incurred by each Director or Officer in their capacity as Directors or Officers of the Company to the extent permitted by the Corporations Act 2001. The indemnification specifically excludes wilful acts of negligence. The Company paid insurance premiums in respect of Directors’ and Officers’ Liability Insurance contracts for current Officers of the Company, including Officers of the Company’s controlled entities. The liabilities insured are damages and legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the Officers in their capacity as officers of entities in the Group. The total amount of insurance premiums paid has not been disclosed due to confidentiality reasons. DIRECTORS’ MEETINGS During the financial year, in addition to regular informal Board discussions and decisions made via circulating resolutions, the number of Directors’ meetings held during the year, and the number of meetings attended by each Director were as follows: Name Mark Bojanjac Michael Fowler Robert Boaz Michael Haynes Ian Cunningham Number of Meetings Eligible to Attend Number of Meetings Attended 4 4 4 2 2 4 4 4 2 2 PROCEEDINGS ON BEHALF OF COMPANY No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. CORPORATE GOVERNANCE The Board of Directors is responsible for the overall strategy, governance and performance of the Company. The Board has adopted a corporate governance framework which it considers to be suitable given the size, nature of operations and strategy of the Company. To the extent that they are applicable, and given its circumstances, the Company adopts the eight essential Corporate Governance Principles and Best Practice Recommendations ('Recommendations') published by the Corporate Governance Council of the ASX. The Company’s Corporate Governance Statement and Appendix 4G, both of which have been lodged with ASX, are available on the Company’s website: www.polarx.com.au. AUDITOR’S INDEPENDENCE AND NON-AUDIT SERVICES Section 307C of the Corporations Act 2001 requires the Group’s auditors to provide the Directors of Coventry with an Independence Declaration in relation to the audit of the full-year financial report. A copy of that declaration is included at page 65 of this report. There were no non-audit services provided by the Company’s auditor. REMUNERATION REPORT (AUDITED) This report outlines the remuneration arrangements in place for Directors and other key management personnel of Coventry Resources Limited in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purpose of this report, Key Management Personnel (KMP) are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the Parent entity. PolarX Limited 21 2017 Annual Report Directors’ Report Details of Directors and Key Management Personnel Non-Executive Directors Mr. Mark Bojanjac Mr. Michael Fowler Mr. Robert Boaz Chairman (appointed as Executive Chairman on 13 December 2016) Non-Executive Director Non-Executive Director Executive Directors (KMP) Mr. Mark Bojanjac Mr. Michael Haynes Dr. Frazer Tabeart Dr. Jason Berton Mr. Ian Cunningham Executive Chairman (appointed 13 December 2016) Managing Director (resigned 13 December 2016) Managing Director (appointed 26 July 2017) Executive Director (appointed 26 July 2017) Executive Director / Chief Financial Officer / Company Secretary (resigned as Executive Director 13 December 2016) Remuneration Policy The Board is responsible for determining and reviewing compensation arrangements for the Directors and management. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team. The Company does not link the nature and amount of the emoluments of such officers to the Group’s financial or operational performance. The lack of a performance link at this time is not considered to have a negative impact on retaining and motivating Directors. The rewards for Directors’ have no set or pre-determined performance conditions or key performance indicators as part of their remuneration due to the current nature of the business operations. The Board will determine appropriate levels of performance rewards as and when they consider rewards are warranted. The table below shows the performance of the Group as measured by earnings / (loss) per share for the previous five years: As at 30 June 2017 2017 2016 2015 Loss per share (cents) Share price at reporting date (cents) *Presented on a pre-Consolidation basis $0.21 1.6 $0.39 6.2 $0.48 3.5 2014 $30.69 0.5 2013 $9.61 8.0 PolarX Limited 22 2017 Annual Report Directors’ Report Details of the nature and amount of each element of the emolument of Directors and KMP of the Company for the financial year are as follows: Short Term Benefits Base Salary $ Director Fees $ Consulting Fees $ Super- annuation $ Share Based Payments – Options $ - - - - - - - - - - - - 18,265 20,000 10,464 - - 48,729 55,771 20,000 20,032 - - 95,803 - - 97,500 79,030 140,000 316,530 - - - 132,498 115,000 247,498 1,735 - 995 - - 2,730 - - - - - - 7,171 7,171 14,341 - - 28,683 48,978 24,489 24,489 - - 97,956 Total $ 27,171 27,171 123,300 79,030 140,000 396,672 104,749 44,489 44,521 132,498 115,000 441,257 Director 2017 Non-Executive Directors Michael Fowler Robert Boaz Executive Directors (KMP)4 Mark Bojanjac1 Michael Haynes2 Ian Cunningham3 2016 Non-Executive Directors Mark Bojanjac Michael Fowler Robert Boaz Executive Directors (KMP) Michael Haynes Ian Cunningham Notes: 1. Mark Bojanjac was appointed as Executive Chairman on 13 December 2016; 2. Michael Haynes resigned as Managing Director on 13 December 2016; and 3. Ian Cunningham resigned as Executive Director on 13 December 2016, but continued in the roles of Chief Financial Officer and Company Secretary. 4. Frazer Tabeart and Jason Berton were appointed as directors on 26 July 2017. There were no other key management personnel of the Company during the financial years ended 30 June 2017 and 30 June 2016. The share options issued as part of the remuneration to Non-Executive Directors were subject to vesting conditions, designed to secure their ongoing commitment to the Company. The terms and conditions of each grant of options affecting remuneration in the previous, this or future reporting periods are as follows (pre-Consolidation basis): Name Grant Date Grant Number Second Vesting Date) Expiry Date / Last Exercise Date Mark Bojanjac* 20/02/15 10,000,000 20/02/17 19/02/20 Average Fair Value per Option at Grant Date $0.0092 Exercise Price per Option Total Value Granted $ Vested % Vested $0.0143 $92,393 10,000,000 Michael Fowler* 20/02/15 5,000,000 20/02/17 19/02/20 $0.0092 $0.0143 $46,197 5,000,000 Robert Boaz* 20/02/15 5,000,000 20/02/17 19/02/20 $0.0092 $0.0143 $46,197 5,000,000 100 100 100 *Options were granted for no consideration with 50% vesting on 20 February 2016 (fair value per option $0.0091) and the remaining 50% vested on 20 February 2017 (fair value per option $0.0093). There were no alterations to the terms and conditions of options granted as remuneration since their grant date. There were no forfeitures during the year. No remuneration options were exercised during the year ended 30 June 2017 (2016: Nil). Options were granted as part of the recipient’s remuneration package. On resignation, any unvested options will be forfeited. PolarX Limited 23 2017 Annual Report Directors’ Report Shareholdings of Directors and Key Management Personnel The number of shares (pre Consolidation basis) in the Company held during the financial year by Directors and Key Management Personnel of the Group, including their personally related parties, is set out below (shown on a pre- Consolidation basis). Balance at the start of the year Granted as compensation Received on exercise of options Balance on resignation date / Other Balance at the end of the year 30 June 2017 Non-Executive Directors Michael Fowler Robert Boaz Executive Directors (KMP)4 Mark Bojanjac1 Michael Haynes2 Ian Cunningham3 30 June 2016 Non-Executive Directors Mark Bojanjac1 Michael Fowler1 Robert Boaz Executive Directors (KMP) Michael Haynes Ian Cunningham Notes: - - - 23,503,930 18,604,651 - - - 23,503,930 18,604,651 - - - - - - - - - - - - - - - - - - - - - - - (23,503,930) - - - - - 18,604,651 - - - - - - - - 23,503,930 18,604,651 1. Mark Bojanjac was appointed as Executive Chairman on 13 December 2016; 2. Michael Haynes resigned as Managing Director on 13 December 2016; and 3. Ian Cunningham resigned as Executive Director on 13 December 2016, but continued in the roles of Chief Financial Officer and Company Secretary. 4. Frazer Tabeart and Jason Berton were appointed as directors on 26 July 2017. PolarX Limited 24 2017 Annual Report Directors’ Report Option holdings of Directors and Key Management Personnel The numbers of options (pre-Consolidation basis) over ordinary shares in the Company held during the financial year by Directors and Key Management Personnel of the Group, including their personally related parties, are set out below (shown on a pre-Consolidation basis): Balance at the start of the year Granted as compensation Exercised during the year Balance on resignation date / Other Balance at the end of the year 30 June 2017 Non-Executive Directors Michael Fowler Robert Boaz Executive Directors (KMP)5 Mark Bojanjac2 Michael Haynes3 Ian Cunningham4 30 June 2016 Non-Executive Directors Mark Bojanjac Michael Fowler Robert Boaz Executive Directors (KMP) Michael Haynes Ian Cunningham Notes: 5,000,000 5,350,000 10,000,000 978,250 - 10,000,000 5,000,000 5,350,000 978,250 - - - - - - - - - - - - - - - - - - - - - - 5,000,000 (350,000) 1 5,000,000 - 10,000,000 (978,250) - - - - - - - - 10,000,000 5,000,000 5,350,000 978,250 - 1. Expired on 28 November 2016 2. Mark Bojanjac was appointed as Executive Chairman on 13 December 2016; and 3. Michael Haynes resigned as Managing Director on 13 December 2016. Prior to his resignation, 350,000 options expired on 28 4. November 2016 and the balance of 628,250 expired on 1 December 2016. Ian Cunningham resigned as Executive Director on 13 December 2016, but continued in the roles of Chief Financial Officer and Company Secretary. 5. Frazer Tabeart and Jason Berton were appointed as directors on 26 July 2017. Executive Directors and Key Management Personnel The Managing Director / CEO, Mr. Michael Haynes (resigned 13 December 2016) consulted to the Company for the period up to the date of his resignation and was remunerated on a monthly basis at a rate of $14,583.33 per month (excluding GST). The Executive Chairman, Mr. Bojanjac, consulted to the Company from 13 December 2016 to balance date and during that period was remunerated on a monthly basis at a rate of $15,000.00 per month (excluding GST). Mr. Bojanjac is not entitled to any termination benefits. The Company Secretary / Chief Financial Officer, Mr. Ian Cunningham consults to the Company and is remunerated on a monthly basis at a rate of $11,666 per month (excluding GST). Mr. Cunningham is not entitled to any termination benefits. Non-Executive Directors Mark Bojanjac (up until the date of his appointment as Executive Chairman on 13 December 2016), Michael Fowler and Robert Boaz are paid Director’s fees on a monthly basis. No notice period is required should a non-executive director elect to resign. PolarX Limited 25 2017 Annual Report Directors’ Report Service Agreements The Company entered into a one-year service agreement, commencing 1 July 2016, for certain administrative services and office space, at a combined cost of $6,000 per month, with MQB Ventures Pty Ltd, a company of which Mr. Haynes is a Director. END OF REMUNERATION REPORT Signed on behalf of the board in accordance with a resolution of the Directors. Mark Bojanjac Executive Chairman 28 September 2017 PolarX Limited 26 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2017 Interest Revenue & Other Income 27,471 11,440 Notes Consolidated 2017 $ 2016 $ Public company costs Consulting and directors fees Share-based compensation Legal fees Staff costs Serviced office and outgoings Interest and penalties Investor relations Travel expenses Foreign exchange loss Other expenses Loss from operations Income tax expense Loss after Income tax 50,825 79,187 390,214 306,081 15, 24 28,683 142,970 62,419 59,230 50,390 49,270 72,000 72,200 1,763 - 47,098 78,125 75,953 98,736 31,187 31,437 6 141,415 174,368 951,947 1,091,604 (924,476) (1,080,164) 7 - - (924,476) (1,080,164) Other comprehensive loss Items that may be reclassified to profit and loss in subsequent periods Foreign currency translation Other comprehensive loss for the year 15 (132,013) (51,479) (132,013) (51,479) Total comprehensive loss for the year (1,056,489) (1,131,643) Loss per share: Basic and diluted loss per share (cents per share) 19 (0.21) (0.39) Weighted Average Number of Shares: Basic and diluted number of shares 19 450,165,841 278,351,052 The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. PolarX Limited 27 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Statement of Financial Position as at 30 June 2017 Current Assets Cash and cash equivalents Other receivables and prepayments Total current assets Non-Current Assets Property, plant and equipment Exploration and evaluation assets Total Non-Current Assets Total Assets Current liabilities Trade and other payables Convertible note Total Current Liabilities Total Liabilities NET ASSETS Equity Contributed equity Reserves Accumulated losses TOTAL EQUITY Notes Consolidated As at June 30 2017 $ June 30 2016 $ 16(a) 8 54,856 2,137,481 263,133 35,612 90,468 2,400,614 9 11 12,165 17,902 6,031,415 3,794,242 6,043,580 3,812,144 6,134,048 6,212,758 12 5, 12 993,990 123,934 108,863 - 232,797 993,990 232,797 993,990 5,901,251 5,218,768 13 15 14 61,123,936 59,462,844 5,153,880 5,208,013 (60,376,565) (59,452,089) 5,901,251 5,218,768 The above statement of financial position should be read in conjunction with the accompanying notes. PolarX Limited 28 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Statement of Cash Flows for the year ended 30 June 2017 Cash flows from Operating activities Payments to suppliers and employees Interest received and other income Notes Consolidated 2017 $ 2016 $ (988,502) (909,056) 41,260 11,440 Net cash flows used in operating activities 16 (947,242) (897,616) Cash flows from investing activities Purchase of property, plant and equipment Payments for expenditure on exploration Net cash flows used in investing activities Cash flows from financing activities Proceeds from issue of shares Share issue costs Convertible note Proceeds from exercise of options Net cash flows from financing activities - (17,649) (2,889,506) (2,149,537) (2,889,506) (2,167,186) 13 (c) 1,807,160 4,710,792 5 (146,068) (427,701) - 100,000 - 3,354 1,761,092 4,286,445 Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year Foreign exchange variances on cash Cash and cash equivalents at end of year (2,075,656) 1,221,643 2,137,481 (6,969) 894,351 21,487 54,856 2,137,481 The above statement of cash flows should be read in conjunction with the accompanying notes. PolarX Limited 29 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Statement of Changes in Equity for the year ended 30 June 2017 Consolidated At 1 July 2016 Loss for the period Other comprehensive loss Total comprehensive loss for the period Transactions with owners in their capacity as owners Shares issued Share issue costs Notes Number of Shares Issued Capital Accumulated Losses Foreign Currency Translation Reserves Warrant Reserves Share Based Payment Reserves Option Premium Reserve Total 403,439,615 59,462,844 (59,452,089) (83,965) 1,190,098 4,098,880 3,000 5,218,768 - - (924,476) - - - - (924,476) - - - (132,013) - - - (132,013) - - (924,476) (132,013) - - - (1,056,489) 13 (b) 56,473,750 1,807,160 - - - - - 1,807,160 - (146,068) - - - - - (146,068) Options issued to consultants Share-based compensation 15, 24 15, 24 - - - - - 49,197 - 49,197 - - - - - 28,683 - 28,683 Balance at 30 June 2017 459,913,365 61,123,936 (60,376,565) (215,978) 1,190,098 4,176,760 3,000 5,901,251 Consolidated At 1 July 2015 Loss for the year Other comprehensive loss Total comprehensive loss for the year capacity as owners Shares issued Share issue costs Options exercised Notes Number of Shares Issued Capital Accumulated Losses Foreign Currency Translation Reserves Warrant Reserves Share Based Payment Reserves Option Premium Reserve Total 231,273,112 55,175,883 (58,371,925) (32,486) 1,190,098 3,956,426 3,000 1,920,996 - - (1,080,164) - - - - (1,080,164) - - - (51,479) - - - (51,479) - - (1,080,164) (51,479) - - - (1,131,643) 13 (b) 172,037,503 4,710,792 - - - - - 4,710,792 - (427,701) - - - - - (427,701) 129,000 3,870 - - - (516) - 3,354 Share-based compensation 15, 24 - - - - - 142,970 - 142,970 Balance at 30 June 2016 403,439,615 59,462,844 (59,452,089) (83,965) 1,190,098 4,098,880 3,000 5,218,768 The above statement of changes in equity should be read in conjunction with the accompanying notes. PolarX Limited 30 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 1. Corporate Information The financial report of PolarX Limited (formerly Coventry Resources Limited) (PolarX or the Company) and its subsidiaries (the Group) for the year ended 30 June 2017 was authorised for issue in accordance with a resolution of the Directors on 28 September 2017. PolarX Limited is a public company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange. It is a “for profit” entity. The Company changed its name to PolarX Limited (formerly Coventry Resources Limited) on 15 September 2017. The nature of the operations and principal activities of the Group are described in the Directors’ report. References throughout the financial statements and notes to the financial statements to shares and options are on a pre- Consolidation basis (refer further Note 18). 2. Going Concern The financial report has been prepared on the going concern basis, which contemplates continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business. For the year ended 30 June 2017, the Group incurred a loss from operations of $924,476 (2016: $1,080,164) and incurred net cash outflows of $2,075,656 (2016: inflows of $1,221,643)). At 30 June 2017, the Group had net current liabilities of $142,329 (2016: net current assets $1,406,624). The Group’s ability to continue as a going concern is dependent upon it maintaining sufficient funds for its operations and commitments. The Directors continue to be focused on meeting the Group’s business objectives and is mindful of the funding requirements to meet these objectives. The Directors consider the basis of going concern to be appropriate for the following reasons:    the current cash balance of the Group relative to its fixed and discretionary commitments; given the Company’s market capitalisation and the underlying prospects for the Group to raise further funds from the capital markets; and the fact that future exploration and evaluation expenditure are generally discretionary in nature (i.e. at the discretion of the Directors having regard to an assessment of the Group’s eligible expenditure to date and the timing and quantum of its remaining earn-in expenditure requirements). Subject to meeting certain minimum expenditure commitments, further exploration activities may be slowed or suspended as part of the management of the Group’s working capital. The Directors are confident that the Group can continue as a going concern and as such are of the opinion that the financial report has been appropriately prepared on a going concern basis. However, should the Group be unable to raise further required financing, there is uncertainty which may cast doubt as to whether or not the Group will be able to continue as a going concern and whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. 3. Summary of Significant Accounting Policies Basis of Preparation The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on a historical cost basis. PolarX Limited 31 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 The financial report is presented in Australian dollars. The change in presentation currency for the 2016 financial year, from the Canadian dollar to the Australian dollar, was required following the Australian Continuance on 25 May 2016. As a result of the change, the Company performed a retrospective restatement beginning 30 June 2014 and accordingly, the comparative periods presented have also been adjusted to reflect the change in the Company’s presentation currency. (a) Compliance Statement The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. (b) New accounting standards and interpretations New and revised accounting requirement applicable to the current reporting period The Group has adopted the following new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 1 July 2016 and that are applicable to the Group. (i) AASB 1057 Application of Australian Accounting Standards In May 2015, the AASB decided to revise Australian Accounting Standards that incorporate IFRSs to minimise Australian-specific wording even further. The AASB noted that IFRSs do not contain application paragraphs that identify the entities and financial reports to which the Standards (and Interpretations) apply. As a result, the AASB decided to move the application paragraphs previously contained in each Australian Accounting Standard (or Interpretation), unchanged, into a new Standard AASB 1057 Application of Australian Accounting Standards. AASB 1057 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of existing requirements. (ii) AASB 2014-1 Amendments to Australian Accounting Standards (Part D: Consequential Amendments arising from AASB 14) Part D of AASB 2014-1 makes consequential amendments arising from the issuance of AASB 14. AASB 2014-1 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of existing requirements. (iii) AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations The amendments to AASB 11 state that an acquirer of an interest in a joint operation in which the activity of the joint operation constitutes a ‘business’, as defined in AASB 3 Business Combinations, should:  apply all of the principles on business combinations accounting in AASB 3 and other Australian Accounting Standards except principles that conflict with the guidance of AASB 11. This requirement also applies to the acquisition of additional interests in an existing joint operation that results in the acquirer retaining joint control of the joint operation (note that this requirement applies to the additional interest only, i.e., the existing interest is not remeasured) and to the formation of a joint operation when an existing business is contributed to the joint operation by one of the parties that participate in the joint operation; and provide disclosures for business combinations as required by AASB 3 and other Australian Accounting Standards. AASB 2014-3 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group. PolarX Limited 32 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 (iv) AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation The amendments to AASB 116 prohibit the use of a revenue-based depreciation method for property, plant and equipment. Additionally, the amendments provide guidance in the application of the diminishing balance method for property, plant and equipment. The amendments to AASB 138 present a rebuttable presumption that a revenue-based amortisation method for intangible assets is inappropriate. This rebuttable presumption can be overcome (i.e., a revenue-based amortisation method might be appropriate) only in two (2) limited circumstances:  The intangible asset is expressed as a measure of revenue, for example when the predominant limiting factor inherent in an intangible asset is the achievement of a revenue threshold (for instance, the right to operate a toll road could be based on a fixed total amount of revenue to be generated from cumulative tolls charged); or  When it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated.AASB 2014-1 is applicable to annual reporting periods beginning on or after 1 January 2016. AASB 2014-4 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of existing requirements. (v) AASB 2014-9 Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements The amendments introduce the equity method of accounting as one of the options to account for an entity’s investments in subsidiaries, joint ventures and associates in the entity’s separate financial statements. AASB 2014-9 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group. (vi) AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The amendments address a current inconsistency between AASB 10 Consolidated Financial Statements and AASB 128 Investments in Associates and Joint Ventures. The amendments clarify that, on a sale or contribution of assets to a joint venture or associate or on a loss of control when joint control or significant influence is retained in a transaction involving an associate or a joint venture, any gain or loss recognised will depend on whether the assets or subsidiary constitute a business, as defined in AASB 3 Business Combinations. Full gain or loss is recognised when the assets or subsidiary constitute a business, whereas gain or loss attributable to other investors’ interests is recognised when the assets or subsidiary do not constitute a business. This amendment effectively introduces an exception to the general requirement in AASB 10 to recognise full gain or loss on the loss of control over a subsidiary. The exception only applies to the loss of control over a subsidiary that does not contain a business, if the loss of control is the result of a transaction involving an associate or a joint venture that is accounted for using the equity method. Corresponding amendments have also been made to AASB 128. AASB 2014-10 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group. PolarX Limited 33 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 (vii) AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012-2014 Cycle These amendments arise from the issuance of Annual Improvements to IFRSs 2012-2014 Cycle in September 2014 by the IASB. Among other improvements, the amendments clarify that when an entity reclassifies an asset (or disposal group) directly from being held for sale to being held for distribution (or vice-versa), the accounting guidance in paragraphs 27-29 of AASB 5 Non-current Assets Held for Sale and Discontinued Operations does not apply. The amendments also state that when an entity determines that the asset (or disposal group) is no longer available for immediate distribution or that the distribution is no longer highly probable, it should cease held-for-distribution accounting and apply the guidance in paragraphs 27-29 of AASB 5. AASB 2015-1 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of existing requirements. (viii) AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101 The amendments:   clarify the materiality requirements in AASB 101, including an emphasis on the potentially detrimental effect of obscuring useful information with immaterial information clarify that AASB 101’s specified line items in the statement(s) of profit or loss and other comprehensive income and the statement of financial position can be disaggregated  add requirements for how an entity should present subtotals in the statement(s) of profit and loss and other comprehensive income and the statement of financial position  clarify that entities have flexibility as to the order in which they present the notes, but also emphasise that understandability and comparability should be considered by an entity when deciding that order  remove potentially unhelpful guidance in IAS 1 for identifying a significant accounting policy. AASB 2015-2 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of existing requirements. New accounting standards and interpretations issued but not yet effective The following applicable accounting standards and interpretations have been issued or amended but are not yet effective. The Company has not elected to early adopt any new Standards or Interpretations. The adoption of the Standards or Interpretations are not expected to have material impact on the financial statements of the Group. PolarX Limited 34 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 Reference Title Summary AASB 139 Financial Instruments: Recognition and Measurement 9: AASB Financial Instruments and associated Amending Standards below) for The Standard will be applicable retrospectively (subject to the provisions on hedge accounting revised and outlined requirements and the measurement of financial instruments, revised recognition and derecognition requirements for financial instruments and simplified requirements for hedge accounting. includes classification Application Application date of date for Standard* Group* 1 January 2018 1 July 2018 the classification of The key changes that may affect the Group on initial application include certain simplifications to financial assets, simplifications to the accounting of embedded for expected derivatives, upfront accounting credit loss, and the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. AASB 9 also introduces a new model for hedge accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to change its hedge policies in line with the new hedge accounting requirements of the Standard, the application of such accounting would be largely prospective. The directors anticipate that the adoption of AASB 9 will not have a material impact on the Group’s financial instruments. PolarX Limited 35 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 AASB 15 Revenue from Contracts with Customers AASB 118: Revenue, AASB 111 Construction Contracts When effective, this Standard will replace the current accounting requirements applicable to revenue with a single, principles-based model. Apart from a limited number of exceptions, including leases, the new revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of business to facilitate sales to customers and potential customers. 1 January 2018 1 July 2018 to depict The core principle of the Standard is that an the entity will recognise revenue to transfer of promised goods or services the customers consideration to which the entity expects to be entitled in exchange for the goods or services. To achieve this objective, AASB 15 provides the following five-step process: in an amount that reflects   identify the contract(s) with a customer; identify the performance obligations in the contract(s);  determine the transaction price;  allocate the transaction price to the performance obligations in the contract(s); and  recognise revenue when (or as) the performance obligations are satisfied. This Standard will retrospective restatement, as well as enhanced disclosures regarding revenue. require The directors anticipate that the adoption of AASB 15 will not have a material impact on the Group’s revenue recognition and disclosures. PolarX Limited 36 2017 Annual Report 1 January 2019 1 July 2020 PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 AASB Leases 16 AASB 117 Leases Int. 4 Determining whether an Arrangement contains a Lease Int. 115 Operating Leases—Lease Incentives Int. 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117: Leases and related interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for leases to be classified as either operating leases. Lessor accounting remains similar to current practice. leases or finance The main changes Standard are as follows: introduced by the new  recognition of the right-to-use asset and liability for all leases (excluding short term leases with less than 12 months of tenure and leases relating to low value assets);  depreciating the right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and unwinding of the liability in principal and interest components;  inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the lease liability using the index or rate at the commencement date;  application of a practical expedient to permit a lessee to elect not to separate non-lease components and instead account for all components as a lease; and  additional disclosure requirements. to either retrospectively apply The transitional provisions of AASB 16 allow a lease the Standard to comparatives in line with AASB 108 or of retrospective application as an adjustment to opening equity at the date of initial application. cumulative recognise effect the The directors anticipate that the adoption of AASB 16 will not have a material impact on the Group’s recognition of leases and disclosures. PolarX Limited 37 2017 Annual Report 1 January 2018 1 July 2018 PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 None 2014- AASB 10: Amendments to Australian Accounting – Standards Sale or Contribution of Assets an between Investor and its Associate or Joint Venture AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (applicable to annual reporting periods commencing on or after 1 January 2018). This Standard amends AASB 10: Consolidated Financial Statements with regards to a parent losing control over a subsidiary that is not a “business” as defined in AASB 3: Business Combinations to an associate or joint venture and requires that:  a gain or loss (including any amounts in other comprehensive income (OCI)) be recognised only to the extent of the unrelated investor’s interest in that associate or joint venture;  the remaining gain or loss be eliminated against the carrying amount of the investment in that associate or joint venture; and  any gain or loss from remeasuring the remaining investment in the former subsidiary at fair value also be recognised only to the extent of the unrelated investor’s interest in the associate or joint venture. The remaining gain or loss should be eliminated against the carrying amount of the remaining investment. The directors anticipate that the adoption of AASB 2014-10 will not have a material impact on the Group's financial statements. *Designates the beginning of the applicable annual reporting period unless otherwise stated (c) Basis of Consolidation The consolidated financial statements incorporate all of the assets, liabilities and results of the parent (PolarX Limited) and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent 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. A list of the subsidiaries is provided in Note 10. The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group. Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling interests". The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries and are entitled to a proportionate share of the subsidiary's net assets on liquidation at either fair value or at the non-controlling interests' proportionate share of the subsidiary's net assets. Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and each component of other comprehensive income. Non-controlling interests are shown separately within the equity section of the statement of financial position and statement of comprehensive income. PolarX Limited 38 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 (d) Income Tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date. Deferred income tax is provided for on all temporary differences at balance date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes. No deferred income tax will be recognised from the initial recognition of goodwill or of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. No deferred income tax will be recognised in respect of temporary differences associated with investments in subsidiaries if the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will not reverse in the near future. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited to Profit or Loss except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on tax rates (and tax laws) that have been enacted or substantially enacted at the balance date and the anticipation that the Group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. The carrying amount of deferred tax assets is reviewed at each balance date and only recognised to the extent that sufficient future assessable income is expected to be obtained. Income taxes relating to items recognised directly in equity are recognised in equity and not in the Statement of profit or loss. (e) Cash and cash equivalents Cash and cash equivalents in the Statement of Financial Position include cash on hand, deposits held at call with banks and other short term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown as current liabilities in the Statement of Financial Position. For the purpose of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as described above, net of outstanding bank overdrafts. (f) Trade and other receivables Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. Collectability of trade receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified. An impairment provision is recognised when there is objective evidence that the Group will not be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 60 days overdue are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rate. (g) Property, plant and equipment Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can PolarX Limited 39 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 be measured reliably. Repairs and maintenance expenditure is charged to Profit or Loss during the financial period in which it is incurred. Depreciation The depreciable amount of most of the fixed assets are depreciated on a diminishing balance method and some of the fixed assets are depreciated on a straight line basis over their useful lives to the Group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Plant and equipment 10 % to 30 % Computer Equipment Furniture and Fittings Camp Buildings 33 % 20 % 10 % The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Derecognition Additions of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are recognised in the Profit or Loss. Impairment Carrying values of plant and equipment are reviewed at each balance date to determine whether there are any objective indicators of impairment that may indicate the carrying values may be impaired. Where an asset does not generate cash flows that are largely independent it is assigned to a cash generating unit and the recoverable amount test applied to the cash generating unit as a whole. Recoverable amount is determined as the greater of fair value less costs to sell and value in use. The assessment of value in use considers the present value of future cash flows discounted using an appropriate pre-tax discount rate reflecting the current market assessments of the time value of money and risks specific to the asset. If the carrying value of the asset is determined to be in excess of its recoverable amount, the asset or cash generating unit is written down to its recoverable amount. (h) Exploration expenditure Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure, but does not include general overheads or administrative expenditure not having a specific nexus with a particular area of interest. Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting a mining operation. Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided that one of the following conditions is met:  such costs are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; or PolarX Limited 40 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017  exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing. Expenditure which fails to meet the conditions outlined above is written off, furthermore, the directors regularly review the carrying value of exploration and evaluation expenditure and make write downs if the values are not expected to be recoverable. Identifiable exploration assets acquired are recognised as assets at their cost of acquisition, as determined by the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources. Exploration assets acquired are reassessed on a regular basis and these costs are carried forward provided that at least one of the conditions referred to in AASB 6 is met. Exploration and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset acquired, is accounted for in accordance with the policy outlined above for exploration expenditure incurred by or on behalf of the entity. Acquired exploration assets are not written down below acquisition cost until such time as the acquisition cost is not expected to be recovered. When an area of interest is abandoned, any expenditure carried forward in respect of that area is written off. Expenditure is not carried forward in respect of any area of interest/mineral resource unless the Group’s rights of tenure to that area of interest are current. (i) Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or categories of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. 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. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. (j) Trade and other payables Liabilities for trade creditors and other amounts are measured at amortised cost, which is the fair value of the consideration to be paid in the future for goods and services received that are unpaid, whether or not billed to the Group. PolarX Limited 41 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 (k) Contributed equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration. (l) Revenue Revenue is recognised and measured by the fair value of the consideration received or receivable to the extent that it is probable that the economic benefits will flow to the Group and the revenue is capable of being reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Interest income Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset. (m) Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group, excluding any costs of servicing equity other than dividends, by the weighted average number of ordinary shares, adjusted for any bonus elements. Diluted earnings per share Diluted earnings per share is calculated as net profit attributable to members of the Group, adjusted for:    costs of servicing equity (other than dividends); the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus elements. (n) Share based payment transactions The Group provides benefits to individuals acting as, and providing services similar to employees (including Directors) of the Group in the form of share based payment transactions, whereby individuals render services in exchange for shares or rights over shares (‘equity settled transactions’). There is currently an Employee Share Option Plan in place, which provides benefits to Directors and individuals providing services similar to those provided by an employee. The cost of these equity settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by using the Black Scholes formula taking into account the terms and conditions upon which the instruments were granted, as discussed in Note 24. In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of PolarX Limited (‘market conditions’). PolarX Limited 42 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 The cost of the equity settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’). The cumulative expense recognised for equity settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the group, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of the market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised at the beginning and end of the period. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition. Where the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of the modification. Where an equity settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any expense not yet recognised for the award is recognised immediately. However if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected in the computation of loss per share (see note 19). (o) Goods and Services Tax 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 Tax 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 Statement of Financial Position are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the Australian Tax Office is included as part of receivables or payables in the Statement of Financial Position. Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the GST component of investing and financing activities, which is receivable from or payable to the ATO, are disclosed as operating cash flows. (p) Investments in controlled entities All investments are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with the investment. Subsequent to the initial measurement, investments in controlled entities are carried at cost less accumulated impairment losses. (q) Foreign currency translation Functional and presentation currency Items included in the financial statements of each entity within the Group are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The functional and presentation currency of Coventry Resources Limited is Australian dollars. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss. PolarX Limited 43 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 Group entities The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:  assets and liabilities are translated at the closing rate at the date of that Statement of Financial Position;  income and expenses are translated at average exchange rates (unless this is not a reasonable approximation of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions);  retained earnings are translated at the exchange rates prevailing at date of transaction; and  all resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are taken to shareholders’ equity. When a foreign operation is sold the exchange differences relating to that entity are recognised in the profit or loss, as part of the gain or loss on sale where applicable. (r) Leases Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, that are transferred to entities in the economic entity are classified as finance leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the Group will obtain ownership of the asset or over the term of the lease. Leases are classified as operating leases where substantially all the risks and benefits remain with the lessor. Payments in relation to operating leases are charged as expenses in the periods in which they are incurred. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term. (s) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of Coventry Resources Limited. (t) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money, and where appropriate, the risks specific to the liability. PolarX Limited 44 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. 4. Critical accounting estimates and judgments Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Capitalised exploration and evaluation expenditure The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors which could impact the future recoverability include the size and composition of any future mineral resource and ore reserve estimates, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices. To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made. In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent that it is determined in the future that this capitalised expenditure should be written off, this will reduce profits and net assets in the period in which this determination is made. Share based payment transactions The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black Scholes formula taking into account the terms and conditions upon which the instruments were granted, as discussed in Note 24. Functional currency translation reserve Under the Accounting Standards, each entity within the Group is required to determine its functional currency, which is the currency of the primary economic environment in which the entity operates. Management considers the United States subsidiary to be a foreign operation with United States dollars as the functional currency. In arriving at this determination, management has given priority to the currency that influences the labour, materials and other costs of exploration activities as they consider this to be a primary indicator of the functional currency. 5. Convertible Note On 29 April 2017, the Company entered into a convertible note deed (the Note) with Vista Minerals Pty Ltd (Noteholder) to borrow up to $200,000. Under the terms of the Note, the funds could be withdrawn on the “liquidity date”, which was the date the Company’s consolidated cash position was at or below $50,000. On 14 June 2014, the Company borrowed $100,000 pursuant to the Note, which was repayable within twelve months. Interest accrued on the balance at 8% per annum. At 30 June 2017, there was accrued interest of $351 and a loss on the change in the fair value of the convertible note of $8,512. The Noteholder had the option to convert the outstanding balance and accrued interest into shares of the Company. Upon issue of a conversion notice, the Noteholder is entitled to receive that number of shares equal to the amount withdrawn plus accrued interest divided by a 10% discount to the volume weighted average price of the closing price of the Company’s Shares trading on the ASX for 30 trading days immediately prior to the date of the conversion notice. The Company repaid the outstanding balance plus accrued interest on 2 August 2017. PolarX Limited 45 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 6. Other expenses Accounting and audit fees Bank fees Computer expenses Insurance Printing and stationary Postage Subscriptions Telephone Depreciation Others 7. Income Tax (a) Income tax expense Current tax Deferred tax Consolidated 2017 $ 52,195 7,834 5,236 34,657 5,139 2,852 400 3,688 216 29,198 141,415 2016 $ 51,792 5,186 5,236 29,214 8,458 14,883 211 1,829 306 57,253 174,368 Consolidated 2017 $ - - - 2016 $ - - - (b) Numerical reconciliation between aggregate tax expense recognised in the statement of profit or loss and other comprehensive income and tax expense calculated per the statutory income tax rate A reconciliation between tax expense and the product of accounting loss before income tax multiplied by the Company’s applicable tax rate is as follows: (Loss)/Profit from operations before income tax expense Tax at the company rate of 30% (2016: 30%) Expense of remuneration options Other non-deductible expenses Income tax benefit not brought to account Income tax expense (924,476) (277,342) 8,605 1,681 267,056 - (1,080,164) (324,049) 1,838 240,831 81,380 - PolarX Limited 46 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 (c) Deferred tax Statement of financial position The following deferred tax balances have not been brought to account: Deferred Tax Liabilities Capitalised exploration and evaluation expenditure Prepayments Offset by deferred tax assets Deferred tax liability not recognised Assets Foreign losses available to offset against future taxable income at 30% (2016 – 30%) Australian carry forward losses Accrued expenses Deferred tax assets offset against deferred tax liabilities Deferred tax assets not brought to account as realisation is not regarded as probable Deferred tax asset recognised - - - - 161,923 369,655 7,630 539,208 - - 2,776 - 2,776 4,455 118,348 7,500 130,303 - (539,208) (130,303) - - The benefit for tax losses will only be obtained if: (i) the Company derives future assessable income in Australia of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised, and (ii) the Company continues to comply with the conditions for deductibility imposed by tax legislation in Australia and (iii) no changes in tax legislation in Australia, adversely affect the Company in realising the benefit from the deductions for the losses. (d) Tax consolidation Coventry has not formed a tax consolidation group and there is no tax sharing agreement. 8. Other Receivables and Prepayments – Current GST / VAT receivable Prepayments Consolidated 2017 $ 18,101 17,511 35,612 2016 $ 40,888 222,245 263,133 Trade debtors, other debtors and goods and services tax are non-interest bearing and generally receivable on 30 day terms. They are neither past due nor impaired. The amount is fully collectible. Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value. PolarX Limited 47 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 9. Property, Plant and Equipment Plant and Equipment Cost Accumulated depreciation Net carrying amount Office Furniture and Fixtures Cost Accumulated depreciation Net carrying amount Computer Equipment Cost Accumulated depreciation Net carrying amount Total property, plant and equipment Cost Accumulated depreciation Net carrying amount Consolidated 2017 $ 17,557 (5,958) 11,599 519 (266) 253 1,946 (1,633) 313 20,022 (7,857) 12,165 2016 $ 17,557 (439) 17,118 519 (203) 316 1,946 (1,478) 468 20,022 (2,120) 17,902 Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the current financial year: Consolidated Plant and Equipment Carrying amount at beginning of year Additions Depreciation expense Net exchange differences on translation Carrying amount at end of year Office Furniture and Fixtures Carrying amount at beginning of year Additions Depreciation expense Net exchange differences on translation Carrying amount at end of year 2017 $ 17,118 - (5,068) (451) 11,599 316 - (63) - 253 2016 $ - 17,557 (439) - 17,118 393 - (79) 2 316 PolarX Limited 48 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 Computer Equipment Carrying amount at beginning of year Additions Depreciation expense Net exchange differences on translation Carrying amount at end of year 468 - (154) (1) 313 702 - (243) 9 468 Total property, plant and equipment 12,165 17,902 10. Investments in subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 3. Details of subsidiaries are as follows: Name Country of incorporation % Equity Interest Coventry Minerals Pty Ltd Australia Crescent Resources (USA) Inc USA Aldevco Pty Ltd Aldevco Inc. Australia USA 11. Deferred Exploration and Evaluation Expenditure Exploration and evaluation expenditure At cost Accumulated provision for impairment Total exploration and evaluation 2017 100% 100% 100% 100% 2016 100% 100% 100% 100% Consolidated 2017 $ 2016 $ 7,321,865 5,084,692 (1,290,450) (1,290,450) 6,031,415 3,794,242 Consolidated 2017 $ 2016 $ Carrying amount at beginning of the year 3,794,242 1,330,839 Acquisition cost Exploration and evaluation expenditure during the year Payment related to mineral lease agreement Net exchange differences on translation Carrying amount at end of year - 2,410,010 (42,781) (130,056) 6,031,415 - 2,523,436 (33,660) (26,373) 3,794,242 PolarX Limited 49 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 The Directors’ assessment of the carrying amount for the Group’s exploration and development expenditure was after consideration of prevailing market conditions; previous expenditure for exploration work carried out; and the potential for mineralisation based on the Group’s independent geological reports. The recoverability of the carrying amount of the deferred exploration and evaluation expenditure is dependent on successful development and commercial exploitation, or alternatively the sale, of the respective areas of interest. 12. Current Liabilities Trade and other payables Trade payables Accruals Convertible note 13. Contributed Equity Consolidated 2017 $ 67,742 56,192 123,934 108,863 2016 $ 634,622 359,368 993,990 - 232,797 993,990 (a) Issued and paid up capital No. of shares No. of shares Ordinary shares fully paid 459,913,365 403,439,615 2017 2016 No. of shares $ No. of shares $ (b) Movements in ordinary shares on issue Balance at beginning of year 403,439,615 59,462,844 231,273,112 55,175,883 Share issue Balance at end of year (c) Ordinary shares 56,473,750 1,661,092 172,166,503 4,286,961 459,913,365 61,123,936 403,439,615 59,462,844 The Group does not have authorised capital nor par value in respect of its issued capital. Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of the Company, to participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company. On 1 September 2016, the Company completed a placement consisting of 56,473,750 Shares at an issue price of $0.032 per Share for gross proceeds of $1,807,160 to institutional and sophisticated investors. (d) Capital Risk Management The Group’s capital comprises share capital, reserves less accumulated losses amounting to $5,901,251 at 30 June 2017 (2016: $5,218,768). The Group manages its capital to ensure its ability to continue as a going concern and to optimise returns to its shareholders. The Group was ungeared at year end and not subject to any externally imposed capital requirements. Refer to Note 23 for further information on the Group’s financial risk management policies. PolarX Limited 50 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 (e) Share options At 30 June 2017, there were 25,861,850 unissued ordinary shares under options (2016: 28,845,300 options). On 31 August 2016, the Company issued 2,000,000 options, each exercisable at $0.039 on or before 30 August 2019, in lieu of cash consideration for consulting services provided during the 2016 financial year. These expenses had been accrued for at 30 June 2016. During the financial year 4,983,450 options expired. No options were exercised during the financial year. Since the end of the financial year, no options have been exercised and 1,130,850 options have expired. Refer Note 18 for details on option issued since the end of the financial year. No option holder has any right under the options to participate in any other share issue of the Company or any other entity. Information relating to the Options granted by the Company, including details of options issued under the Plan, is set out in Note 24. 14. Accumulated losses Movements in accumulated losses were as follows: At 1 July Loss for the year At 30 June 15. Reserves Foreign currency translation reserve Warrant reserves Share based payments reserves Option premium reserve Movement in reserves: Share based payments and option premium reserve Balance at beginning of year Options issued to agents Options exercised Equity benefits expense Balance at end of year Consolidated 2017 $ 2016 $ 59,452,089 924,476 60,376,565 2017 $ (215,978) 1,190,098 4,176,760 3,000 58,371,925 1,080,164 59,452,089 2016 $ (83,965) 1,190,098 4,098,880 3,000 5,153,880 5,208,013 Consolidated 2017 $ 2016 $ 4,101,880 49,197 - 28,683 4,179,760 3,959,426 - (516) 142,970 4,101,880 The Share based payments and option premium reserve is used to record the value of equity benefits provided to individuals acting as employees, directors as part of their remuneration, and consultants and for their services. Refer to Note 24 for details of share based payments during the financial year and prior year. PolarX Limited 51 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 Foreign currency translation reserve At 1 July Foreign currency translation Balance at end of year 2017 $ (83,965) (132,013) (215,978) 2016 $ (32,486) (51,479) (83,965) The foreign currency translation reserve is used to record the value of warrants provided to shareholders as part of capital raising activities. Warrant reserve At 1 July Warrants exercised Balance at end of year 2017 $ 2016 $ 1,190,098 1,190,098 - - 1,190,098 1,190,098 The warrant reserve is used to record the currency difference arising from the translation of the financial statements of the foreign operation. 16. Cash and Cash Equivalents (a) Reconciliation of cash Cash balance comprises: Cash and cash equivalents (b) Reconciliation of the net loss after tax to the net cash flows from operations Net loss after tax Adjustments for: Depreciation Loss on convertible note Share-based compensation GAME lease payment Changes in operating assets and liabilities: (Decrease)/increase in other receivables/prepayments (Decrease)/increase in trade and other payables Net cash flow used in operating activities 17. Expenditure commitments (a) Tenement expenditure commitments Consolidated 2017 $ 2016 $ 54,856 2,137,481 (924,476) (1,080,164) 216 8,512 28,683 13,792 23,009 (96,978) (947,242) 306 - 142,970 - (50,645) 89,917 (897,616) Commitments related to mining taxes to keep claims/patents for the Uncle Sam Project at reporting date but not recognized as liabilities are A$10,837 (US$8,330) per annum (refer further to Note 29). PolarX Limited 52 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 Commitments related to the Caribou Dome Project at reporting date but not recognized as liabilities below include the following (refer further Note 28): (i) maintaining the claims (licenses) at the Project in good standing, including making annual claim rental payments and ensuring minimum expenditure commitments are met; (ii) expending a minimum of US$100,000 on the Project for the 12 month period ending 1 September 2017; (iii) expending a minimum of US$2,000,000 (inclusive of expenditure in (ii) above and prior year minimum expenditure requirements) in each of the periods (i) 2 September 2014 to 1 September 2017; (ii) 2 September 2017 to 1 September 2020; and (iii) 2 September 2020 to 6 June 2023 (unless the Earn-in deadline of 6 June 2023 is extended); (iv) expending a total of US$9,000,000 on the Project (inclusive of the payments in (ii) and (iii) above) or completing a feasibility study on the Project by 6 June 2023 (unless the Earn-in deadline of 6 June 2023 is extended); and (v) making annual payments to the underlying vendors of the Project in the amounts of: Due Date 6 June 2018 6 June 2019 6 June 2020 6 June 2021 6 June 2022 Earn-in deadline (currently 6 June 2023) Payment US$100,000 US$100,000 US$100,000 US$100,000 US$100,000 US$1,360,000 (b) Services agreement Within one year 18. Subsequent events Consolidated 2017 $ - - 2016 $ 72,000 72,000 On 26 July 2017, the Company acquired Vista Minerals Pty Ltd. (Vista) in exchange for 459,821,368 shares (Vista Acquisition). Vista holds a 100% interest in the Stellar Copper Gold Project (Stellar Project) in Alaska via its wholly owned subsidiary, Vista Minerals (Alaska) Inc. For further details on the Stellar Project refer to the Review of Operations. On 26 July 2017, concurrent with the Vista Acquisition, the Company completed a private placement of 274,750,000 shares at an issue price of $0.02 per share for gross proceeds of $5.495 million to institutional and sophisticated investors. On 7 August 2017, the Company completed a 1 for 5 security consolidation. As a result, there were 238,897,103 shares on issue and 5,172,370 options outstanding after the Consolidation. On 17 August 2017, 226,170 (post-Consolidation basis) options with an exercise price of C$0.25 lapsed. On 15 September 2017, the Company changed its name to PolarX Limited. PolarX Limited 53 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 On 19 September 2017, the Company issued 400,000 (post-Consolidation basis) options, each exercisable at $0.12 on or before 18 September 2020, in lieu of cash consideration for consulting services provided since 1 July 2017. No other significant events have occurred subsequent to the balance sheet date but prior to the date of this report that would have a material impact on the consolidated financial statements. 19. Loss per share Loss used in calculating basic and dilutive EPS (924,476) (1,080,164) Consolidated 2017 $ 2016 $ Number of Shares 2017 2016 Weighted average number of ordinary shares used in calculating basic earnings / (loss) per share: 450,165,841 278,351,052 Effect of dilution: Share options Adjusted weighted average number of ordinary shares used in calculating diluted loss per share: Basic and Diluted loss per share (cents per share) - - 450,165,841 278,351,052 (0.21) (0.39) There is no impact from the 25,861,850 options outstanding at 30 June 2017 (2016: 28,845,300 options) on the loss per share calculation because they are anti-dilutive. These options could potentially dilute basic EPS in the future. 20. Auditor’s remuneration During the financial year, the following audit fees were paid or payable: Consolidated 2017 $ 3,035 40,947 43,982 2016 $ 6,817 25,000 31,817 BDO Canada LLP Stantons International Audit and Consulting Pty Ltd. 21. Key Management Personnel Disclosures (a) Details of Key Management Personnel Mr. Mark Bojanjac Chairman (appointed as Executive Chairman on 13 December 2016) Mr. Michael Haynes Managing Director (resigned 13 December 2016) Mr. Ian Cunningham Executive Director/Company Secretary/Chief Financial Officer (resigned as Executive Director on 13 December 2016) Mr. Michael Fowler Non-Executive Director Mr. Robert Boaz Non-Executive Director PolarX Limited 54 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 (b) Remuneration of Key Management Personnel Details of the nature and amount of each element of the emolument of each Director and Executive of the Group for the financial year are as follows: Consolidated 2017 $ 2016 $ 367,989 343,301 28,683 396,672 97,956 441,257 Consulting and director fees Share-based compensation Total remuneration 22. Related Party Disclosures The ultimate parent entity is PolarX Limited. Refer to Note 10 Investments in subsidiaries for a list of all subsidiaries. MQB Ventures Pty Ltd, a Company of which Mr. Michael Haynes is a Director, provided the Company with a fully serviced office including administration support for a fee totalling $33,000 up to the date of his resignation (2016: $72,000). There were no other related party disclosures for the year ended 30 June 2017 (2016: Nil). 23. Financial Instruments and Financial Risk Management Exposure to interest rate, liquidity and credit risk arises in the normal course of the Group’s business. The Group does not hold or issue derivative financial instruments. The Company uses different methods as discussed below to manage risks that arise from financial instruments. The objective is to support the delivery of the financial targets while protecting future financial security. (a) Liquidity Risk Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities. The Group manages liquidity risk by maintaining sufficient cash facilities to meet the operating requirements of the business and investing excess funds in highly liquid short term investments. The responsibility for liquidity risk management rests with the Board of Directors. Alternatives for sourcing our future capital needs include our cash position and the issue of equity instruments. These alternatives are evaluated to determine the optimal mix of capital resources for our capital needs. We expect that, absent a material adverse change in a combination of our sources of liquidity, present levels of liquidity will be adequate to meet our expected capital needs. PolarX Limited 55 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 Maturity analysis for financial liabilities Financial liabilities of the Group comprise trade and other payables. As at 30 June 2017 and 30 June 2016, all financial liabilities are contractually matured within 60 days. (b) Interest Rate Risk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value of financial instruments. The Group’s exposure to market risk for changes to interest rate risk relates primarily to its earnings on cash and term deposits. The Group manages the risk by investing in short term deposits. Cash and cash equivalents Interest rate sensitivity Consolidated 2017 $ 54,856 2016 $ 2,137,481 The following table demonstrates the sensitivity of the Group’s statement of profit or loss and other comprehensive income to a reasonably possible change in interest rates, with all other variables constant. Consolidated Change in Basis Points Judgements of reasonably possible movements Increase 100 basis points Decrease 100 basis points Effect on Post Tax Loss Effect on Equity Increase/(Decrease) including accumulated losses 2017 $ 549 (549) 2015 $ 21,375 (21,375) Increase/(Decrease) 2017 $ 549 (549) 2016 $ 21,375 (21,375) A sensitivity of 100 basis points has been used as this is considered reasonable given the current level of both short term and long term interest rates. The change in basis points is derived from a review of historical movements and management’s judgement of future trends. The analysis was performed on the same basis in 2016. (c) Credit Risk Exposures Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation and cause the Group to incur a financial loss. The Group’s maximum credit exposure is the carrying amounts on the statement of financial position. The Group holds financial instruments with credit worthy third parties. At 30 June 2017, the Group held cash deposits. Cash deposits were held with financial institutions with a rating from Standard & Poors of A or above (long term). The Group has no past due or impaired debtors as at 30 June 2017 (2016: Nil). (d) Foreign Currency Risk Exposure As a result of operations in the USA and expenditure in US dollars, the Group’s statement of financial position can be affected by movements in the USD$/AUD$ exchange rates. The Group seeks to mitigate the effect of its foreign currency exposure by holding cash in US dollars to match expenditure commitments. PolarX Limited 56 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 Sensitivity analysis: The table below summarises the fx exposure on the net monetary position of parent and the subsidiary against its respective functional currency, expressed in group’s presentation currency. If the AUD/ USD rates moved by +10%, the effect on comprehensive loss would be as follows: Consolidated 2017 $ 2016 $ Loan to subsidiary – Aldevco Pty Ltd and Aldevco Inc. (in AUD) 5,404,011 3,101,102 Percentage shift of the AUD / USD exchange rate Total effect on comprehensive loss of positive movements Total effect on comprehensive loss of negative movements 10% A$ 540,401 (540,401) 10% A$ 310,110 (310,110) The table below summarises the fx exposure on the net monetary position of parent and the subsidiary against its respective functional currency, expressed in group’s presentation currency. If the AUD/ CAD rates moved by +10%, the effect on comprehensive loss would be as follows: Consolidated Loan from subsidiary – Coventry Minerals. (in AUD) Percentage shift of the AUD / CAD exchange rate Total effect on comprehensive loss of positive movements Total effect on comprehensive loss of negative movements (e) Fair Value 2017 $ 690,900 10% A$ 69,090 (69,090) 2016 $ 240,877 10% A$ 24,088 (24,088) The aggregate net fair values of the Consolidated Entity’s financial assets and financial liabilities both recognised and unrecognised are as follows: Carrying Carrying Amount in Aggregate Amount in the Aggregate the Financial Net Fair Financial Net Fair Statements Value Statements 2017 $ 2017 $ 2016 $ Value 2016 $ 54,856 18,101 54,856 2,137,481 2,137,481 18,101 40,888 40,888 123,934 123,934 993,990 993,990 108,863 108,863 - - Financial Assets Cash Assets Receivables Financial Liabilities Payables Borrowings PolarX Limited 57 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 The following methods and assumptions are used to determine the net fair value of financial assets and liabilities. Cash assets and financial assets are carried at amounts approximating fair value because of their short term nature to maturity. Receivables and payables are carried at amounts approximating fair value. 24. Share Based Payment Plans (a) Recognised share based payment expenses Total expenses arising from share based payment transactions recognised during the year as part of share based payment expense were as follows: Consolidated 2017 $ 2016 $ Operating expenditure Options issued to employees and directors 28,683 142,970 (b) Share based payment to employees The Group has established an employee share option plan (ESOP) and also issues options to executive officers, directors, consultants and employees outside the Plan (collectively the Options). The objective of the Options is to assist in the recruitment, reward, retention and motivation of the recipients and/or reduce the level of cash remuneration that would otherwise be paid to the recipient. An eligible person may receive the options or nominate a relative or associate to receive the options. Details of Options granted are as follows: 2017 Grant date Expiry date Exercise Balance at Granted Exercised Expired Balance at Exercisable price start of the during the during the during the end of the at end of the year year year year year year Number Number Number Number Number Number Jan 8, 2013 Dec 1, 2016 C$0.05 1,507,800 Jan 8, 2013 Aug 17, 2017 C$0.05 1,130,850 Jan 8, 2013 Mar 8, 2017 C$0.05 125,650 Nov 28, 2013 Nov 28, 2016 C$0.05 3,350,000 Feb 20, 2015 Feb 19, 2020 A$0.0143 20,000,000 Jun 18, 2015 Jun 17, 2020 A$0.035 2,000,000 Jun 18, 2015 Jun 30, 2018 A$0.026 731,000 - - - - - - - Aug 31, 2016 Aug 30, 2019 A$0.039 - 2,000,000 28,845,300 2,000,000 - - - - - - - - - (1,507,800) - - - 1,130,850 1,130,850 (125,650) (3,350,000) - - - - - 20,000,000 20,000,000 - - - 2,000,000 2,000,000 731,000 731,000 2,000,000 2,000,000 (4,983,450) 25,861,850 25,861,850 Weighted remaining contractual 2.97 2.47 2.41 life (years) Weighted average exercise price $ 0.02 $ 0.02 $ 0.02 During the 2017 financial year, 2,000,000 Options were issued. The fair value at grant date of options was determined using the Black Scholes option pricing model that takes into account the exercise price ($0.039), the term of the option (3 years), the share price at grant date ($0.03) and expected price volatility (162%) of the underlying share and the risk free interest rate (1.4%) for the term of the Option. The expense of $49,197 had been accrued for at 30 June 2016. PolarX Limited 58 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 2016 Grant date Expiry date Exercise Balance at Granted Exercised Expired Balance at Exercisable price start of the during during the during the end of the at end of the year the year year year year year Number Number Number Number Number Number Jan 8, 2013 Jan 31, 2016 C$0.05 200,000 Jan 8, 2013 Dec 1, 2016 C$0.05 1,507,800 Jan 8, 2013 Aug 17, 2017 C$0.05 1,130,850 Jan 8, 2013 Mar 8, 2017 C$0.05 125,650 Nov 28, 2013 Nov 28, 2016 C$0.05 3,350,000 Feb 20, 2015 Feb 19, 2020 A$0.0143 20,000,000 Jun 18, 2015 Jun 17, 2020 A$0.035 2,000,000 Jun 18, 2015 Jun 30, 2018 A$0.026 860,000 29,174,300 - - - - - - - - - - - - - - - - (129,000) (200,000) - - - - - - 1,507,800 1,507,800 1,130,850 1,130,850 125,650 125,650 3,350,000 3,350,000 - 20,000,000 10,000,000 - - 2,000,000 2,000,000 731,000 731,000 (129,000) (200,000) 28,845,300 18,845,300 Weighted remaining contractual 3.94 2.97 2.61 life (years) Weighted average exercise price $ 0.02 $ 0.02 $ 0.03 During the 30 June 2016 financial year no Options were issued. 25. Contingent Liabilities The Company entered into an option agreement with Coronel Oviedo Mining Company SA dated April 16, 2007, whereby it had an option to earn up to a 70% interest in the Oviedo uranium project in Paraguay (Oviedo Project). A Paraguayan company, Semin SA (Semin), was retained to manage the exploration program on the Oviedo Project. On June 15, 2007, Semin entered into a drill contract (the Oviedo Drill Contract) with a drilling company, Copami, with respect to exploration drilling to be conducted by Copami at the Oviedo Project. The Company guaranteed the obligations of Semin under the Oviedo Drill Contract. Copami’s performance under the Oviedo Drill Contract was considered not acceptable and, after Semin provided notice to Copami that Copami was not properly performing its obligations under the Oviedo Drill Contract, Semin terminated the Oviedo Drill Contract in early 2008. The Company had heard nothing on this matter since late 2008; however, in May 2011, it was requested to attend a mediation meeting in Paraguay to discuss Copami's claim for payment under the Oviedo Drill Contract. The mediation meeting did not proceed and the Company heard nothing further on this matter until October 4, 2012, when it was informed that Copami has initiated arbitration proceedings at the Paraguay Center for Arbitration and Mediation, in which both the Company and Semin have been named as defendant parties in a breach of contract claim for US$1,505,782. In August 2016, Coventry received notice from its Paraguayan legal counsel that the Arbitration Tribunal has determined that the drilling contract had been incorrectly terminated by Semin. However, the Tribunal also held that the Copami was concurrently negligent in its execution of the contract. Based on its review of the Tribunal’s judgement and advice from its Paraguayan legal counsel, the Company has assessed the quantum of damages that may be payable by it to Copami to be approximately US$40,000 plus interest. The Company does not anticipate making any damages payment until it has received further advice in relation to the Tribunal decision, including the enforceability of the judgement in Australia and the Company’s rights to challenge such enforcement. The Company also notes that it has not received any further official correspondence in relation to the matter since August 2016. PolarX Limited 59 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 26. Operating Segment For management purposes, the Group is organised into one main operating segment, which involves mineral exploration, predominantly for copper. All of the Group’s activities are interrelated, and discrete financial information is reported to the Board (Chief Operating Decision Makers) as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statements of the Group as a whole. The Group currently operates in Australia and the USA. The following table shows the assets and liabilities of the Group by geographic region: Assets Australia United States Total Assets Liabilities Australia United States Total Liabilities Operating Result Australia Canada United States Total loss from operations 27. Dividends Consolidated 30 June 30 June 2017 $ 122,164 6,011,884 6,134,048 2016 $ 2,226,042 3,986,716 6,212,758 223,407 9,390 232,797 770,446 223,544 993,990 30 June 2017 30 June 2016 $ $ (921,368) - (3,108) (314,013) (749,203) (16,948) (924,476) (1,080,164) No dividend was paid or declared by the Company in the period since the end of the financial year and up to the date of this report. The Directors do not recommend that any amount be paid by way of dividend for the financial year ended 30 June 2017 (2016: Nil). The balance of the franking account as at 30 June 2017 is Nil (2016: Nil). 28. Agreements over the Caribou Dome Copper Project On November 5, 2014, the Company announced it had entered into agreements that provided it the right to acquire 80% of the Caribou Dome Project via the acquisition of Aldevco Pty Ltd (Aldevco) (the Transaction). On February 20, 2015, shareholders approved the Transaction, with completion taking place on February 25, 2015 following the issue of 60,000,000 Shares to Aldevco’s shareholders in consideration for the acquisition of 100% of the issued capital of Aldevco. PolarX Limited 60 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 Aldevco holds the right to acquire an 80% interest in the Caribou Dome Project from Hatcher Resources Inc (Hatcher) by: (i) maintaining the claims (licenses) at the Caribou Dome Project in good standing, including making annual claim rental payments and ensuring minimum expenditure commitments are met; (ii) expending a minimum of US$100,000 on the Caribou Dome Project for each of the 12 month periods ending 1 September 2015, 2016 and 2017; (iii) expending a minimum of US$2,000,000 (inclusive of payments in (ii) above) in each of the three year periods (i) 2 September 2014 to 1 September 2017; (ii) 2 September 2017 to 1 September 2020; and (iii) 2 September 2020 to 6 June 2023 (unless the Earn-in deadline of 6 June 2023 is extended); (iv) expending a total of US$9,000,000 on the Caribou Dome Project (inclusive of the payments in (ii) and (iii) above) or completing a feasibility study on the Project by 6 June 2023 (unless the Earn-in deadline of 6 June 2023 is extended); and (v) making annual payments to the underlying vendors of the Caribou Dome Project, who are not related parties of Hatcher or Aldevco, in the amounts of (remaining payments only): Due Date 6 June 2017 6 June 2018 6 June 2019 6 June 2020 6 June 2021 6 June 2022 Payment US$50,000 US$100,000 US$100,000 US$100,000 US$100,000 US$100,000 Earn-in deadline (currently 6 June 2023) US$1,360,000 Subject to Aldevco exercising its right to acquire an 80% interest in the Caribou Dome Project, Hatcher will retain a 10% interest in the Project with the remaining 10% held by SV Metals LP. The current owner of the Caribou Dome Project, C- D Development Corporation, would retain a 5.0% Net Smelter Returns royalty, with Coventry retaining the right to purchase this royalty for US$1million for each 1.0%. Related parties of former directors, Michael Haynes and Ian Cunningham retain a majority shareholding in Hatcher post Transaction. 29. Agreements over the Uncle Sam Gold Project On December 15, 2010, Millrock Resources Inc. and Millrock Alaska LLC (collectively Millrock) entered into an option agreement with Coventry (the Millrock Option), whereby Coventry was granted (and subsequently exercised in April 2013) an option to purchase an undivided 100% interest the Uncle Sam Gold Project. Pursuant to the Millrock Option, during such time as Coventry retains an interest in the Uncle Sam Project it has the following obligations (the Resource Share Payments) in relation to any future mineral resource estimate for the Uncle Sam Gold Project: (i) (ii) the issue of 300,000 Shares to Millrock in the event that a gold mineral resource of 1,000,000 ounces or more is defined, in accordance with NI 43-101 on the Uncle Sam Project; and the issue of a further 200,000 Shares to Millrock in the event that a gold mineral resource of 2,000,000 ounces or more is defined, in accordance with NI 43-101 on the Uncle Sam Project, plus an additional 200,000 shares for every additional 1,000,000 ounces of resources in excess of 2,000,000 ounces. Pursuant to the Millrock Option, Coventry also remains obligated to pay a 2% net smelter return royalty to a third party in relation to any future production from the Uncle Sam Project. On 27 July 2015, a mineral lease and purchase agreement was finalized between Coventry and Great American Minerals PolarX Limited 61 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 Exploration Inc. (GAME), pursuant to which GAME will lease the Uncle Sam Project for up to 10 years with an option to purchase the Project outright at any time during the lease period. Details of the transaction are as follows: (i) GAME has paid an upfront deposit of US$30,000 to undertake exploration and development activities on the Uncle Sam Project; $25,000 of which constitutes the first lease payment; (ii) GAME will thereafter pay further annual lease payments of US$25,000; (iii) (iv) all property holding costs will be paid by GAME including annual rents, permitting costs and all other costs associated with exploration and development activities; during the term of the Agreement, GAME will have an option (the GAME Option) to purchase a 100% interest in the Uncle Sam Project by:   paying an exercise price of US$500,000 in the event the GAME Option is exercised at any time prior to the fifth anniversary of the Agreement; paying an exercise price of US$750,000 in the event the GAME Option is exercised at any time following the fifth anniversary and expiring on the date of the tenth anniversary of the Agreement;  prior annual lease payments will be credited to the exercise price payable; and (v) subject to GAME exercising the GAME Option:   GAME will reimburse Coventry for any Resource Share Payments; and Coventry will be granted a 1% net smelter return royalty on future production and GAME will assume responsibility for Coventry’s other third party obligations in relation to the Uncle Sam Project. A 2% net smelter return royalty is also payable to a third party in relation to any future production from the Uncle Sam Gold Project. PolarX Limited 62 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Notes to the financial statements for the financial year ended 30 June 2017 30. Information relating to PolarX Limited (“the parent entity”) Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets Issued capital Retained losses Reserves (Loss) of the parent entity Total comprehensive (loss) of the parent entity Guarantees entered into by the parent entity in relation to the debts of its subsidiaries Guarantees provided Contingent liabilities of the parent entity Commitment for the acquisition of property, plant and equipment by the parent entity Not longer than one year Longer than one year and not longer than five years Longer than five years 2017 $ 76,997 5,414,129 5,491,126 223,406 - 223,406 5,267,720 2016 $ 1,551,139 3,740,539 5,291,678 566,136 240,877 807,013 4,484,665 56,331,189 54,670,095 (54,272,450) (53,316,531) 3,208,981 5,267,720 (955,919) (955,919) 3,131,101 4,484,665 (8,524,096) (8,524,096) - - - - - - - - - - - - - - PolarX Limited 63 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) DIRECTORS' DECLARATION In accordance with a resolution of the directors of PolarX Limited, I state that: In the opinion of the directors: (a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; (b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 3(a); (c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and (d) this declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2017. On behalf of the Board Mark Bojanjac Executive Chairman 28 September 2017 PolarX Limited 64 2017 Annual Report PO Box 1908 West Perth WA 6872 Australia Level 2, 1 Walker Avenue West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204 ABN: 84 144 581 519 www.stantons.com.au Stantons International Audit and Consulting Pty Ltd trading as Chartered Accountants and Consultants 28 September 2017 Board of Directors PolarX Limited Suite 9, 5 Centro Avenue, SUBIACO WA 6008 Dear Directors RE: POLARX LIMITED In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of PolarX Limited. As Audit Director for the audit of the financial statements of PolarX Limited for the year ended 30 June 2017, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) (ii) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and any applicable code of professional conduct in relation to the audit. Yours sincerely STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (Trading as Stantons International) (An Authorised Audit Company) Martin Michalik Director Liability limited by a scheme approved under Professional Standards Legislation Stantons International Audit and Consulting Pty Ltd trading as Chartered Accountants and Consultants PO Box 1908 West Perth WA 6872 Australia Level 2, 1 Walker Avenue West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204 ABN: 84 144 581 519 www.stantons.com.au INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF POLARX LIMITED Report on the Audit of the Financial Report Opinion We have audited the financial report of PolarX Limited (formerly Coventry Resources Limited) the Company and its subsidiaries (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration. In our opinion, the accompanying financial report of the Group is 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 2017 and of its financial performance for the year then ended; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. 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 Company in accordance with the auditor independence requirements of 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 also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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. Liability limited by a scheme approved under Professional Standards Legislation Key Audit Matters How the matter was addressed in the audit Carrying Value of Exploration and Evaluation Assets As at 30 June 2017, Exploration and Evaluation Assets totals $6,031,415 (refer to Note 11 of the financial report). The carrying value of exploration and evaluation assets is a key audit matter due to: • • • The significance of the total balance (98% of total assets); to assess management’s The necessity the requirements of the application of accounting standard Exploration for and Evaluation of Mineral Resources (“AASB 6”), in light of any indicators of impairment that may be present; and The assessment of significant judgements made by management in relation to the evaluation capitalised expenditure. exploration and Inter alia, our audit procedures following: included the i. Assessing the Group’s right to tenure over exploration assets by corroborating the ownership of the relevant licences for mineral resources to government registries and relevant third-party documentation; ii. Reviewing the directors’ assessment of the carrying value of the exploration and evaluation the veracity of costs, ensuring the data presented and that management have considered the effect of potential impairment indicators, commodity prices and the stage of the Group’s projects also against AASB 6; iii. Evaluation of Group documents for consistency with the intentions for continuing exploration and evaluation activities in certain areas of interest and interviews with management. The documents we evaluated included: corroborated with ▪ Minutes of the board and management; and ▪ Announcements made by the Group to the Australian Securities Exchange; iv. Consideration of the requirements of accounting standard AASB 6 and reviewed the financial statements to ensure appropriate disclosures are made. Other Information The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2017, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance opinion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, 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. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report Our objectives are 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 the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and 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 this financial report. As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report. We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in Internal control that we identify during our audit. The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 21 to 26 of the directors’ report for the year ended 30 June 2017. In our opinion, the Remuneration Report of PolarX Limited for the year ended 30 June 2017 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (Trading as Stantons International) (An Authorised Audit Company) Martin Michalik Director West Perth, Western Australia 28 September 2017 PolarX Limited (formerly Coventry Resources Limited) ASX Additional Information Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report. The additional information was applicable as at 21 September 2017. Information in relation to the Company’s securities is provided on a post-Consolidation basis. Distribution of Security Holders Analysis of numbers of listed equity security holders by size of holding: Holding Number of shareholders 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 64 159 101 260 172 756 There are 268 shareholders holding less than a marketable parcel of ordinary shares. Statement of Restricted Securities There are no restricted securities on issue. Substantial Shareholders The substantial shareholders of the Company are as follows: Shareholder Number of shares JP Morgan Chase & Co and its affiliates Ruffer LLP Orogen Investments Pty Ltd 23,400,000 18,234,000 13,631,832 Voting Rights The voting rights attached to each class of equity security are as follows: Ordinary Shares Each ordinary share is entitled to one vote when a poll is called otherwise each member present at a meeting or by proxy has one vote on a show of hands. Options These securities have no voting rights. PolarX Limited 70 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Quoted Equity Security Holders The names of the twenty largest ordinary shareholders of the Company as at 21 September 2017 are as follows: Shareholder HSBC Custody Nominees (Australia) Limited Millrock Resources Inc J P Morgan Nominees Australia Limited Orogen Investments Pty Ltd Aetas Global Markets Limited Equity Trustees Limited Mr William Willoughby Mr Adam Leslie Hajek + Mrs Lisa Gaye Hajek Mr Lauritz Alexander Barnes + Mr Daniel Murray Davis Bullseye Geoservices Pty Ltd Mr Gregory William Fry Mr Richard Offer CS Fourth Nominees Pty Limited Anita Cunningham Dr Charles Frazer Tabeart Mui Choo Chng BNP Paribas Nominees Pty Ltd Citicorp Nominees Pty Limited Mr Frank Violi Mr Andrew John Pearson Number of Shares 30,000,320 25,653,968 22,164,986 13,631,832 9,618,099 8,550,000 5,169,427 4,777,945 4,378,841 3,893,248 3,872,471 3,815,916 3,800,000 3,720,931 3,447,368 3,412,557 3,273,617 3,061,379 3,009,184 2,943,446 % of Issued Capital 12.56% 10.74% 9.28% 5.71% 4.03% 3.58% 2.16% 2.00% 1.83% 1.63% 1.62% 1.60% 1.59% 1.56% 1.44% 1.43% 1.37% 1.28% 1.26% 1.23% 162,195,535 67.89% PolarX Limited 71 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Unquoted Equity Security Holders Class Number of options Number of holders Holders with more than 20% Unlisted stock options each exercisable at $0.13 on or before 30/6/2018 Unlisted stock options each exercisable at $0.0715 on or before 19/2/2020 Unlisted stock options each exercisable at $0.175 on or before 17/6/2020 Unlisted stock options each exercisable at $0.195 on or before 30/8/2019 Unlisted stock options each exercisable at $0.12 on or before 18/9/2020 146,200 4,000,000 400,000 400,000 400,000 3 3 1 1 2 Richard Offer (60,200) Peter Hyland (60,200) Denise Worthington (2,000,000) Robert Boaz (1,000,000) Michael Fowler (1,000,000) Julie Lai (400,000) Anthony Violi (400,000) Jayart Funds Management Pty Ltd (200,000) Borsa Enterprises Pty Ltd (200,000) PolarX Limited 72 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Tenement Schedule Project Location Licence(s) Ownership Interest Caribou Dome Copper Project Alaska, USA Uncle Sam Gold Project** Alaska, USA Option to earn 80% Option to earn 80% Option to earn 80% Option to earn 80% Option to earn 90% Option to earn 80% Option to earn 90% 100% Caribou 1 – Caribou 20 ADL# 563243 - 563262 Copper 1 – Copper 6 ADL# 588461 – 588466 Copper 7 – Copper 11 ADL# 645375 – 645379 CD 1 – CD66 ADL# 664859 – 664924 CD 001 – 040 ADL# 719909 – 719948 CDS 001 – 038 ADL# 719949 – 719986* CDE-01 – 27 ADL# 722216 – 722242 Claim US 2 US 3 US 8 US 9 US 10 US 13 US 17 US 18 US 19 US 20 US 23 US 24 US 27 US 28 US 35 US 36 US 37 US 38 US 39 US 40 ADL # 631481 631482 631487 631488 631489 631492 631496 631497 631498 631499 631502 631503 631506 631507 631514 631515 631516 631517 631518 631519 US 41 *Claims numbered CDS 007 (ADL# 719955), CDS 008 (ADL# 719956), CDS 009 (ADL# 719957), CDS 015 (ADL# 719963), CDS 016 (ADL# 719964) and CDS 017 (ADL# 719965), overlap prior existing active claims. Hence no exploration activity has been undertaken on these claims to date and no work will be undertaken on these claims unless they are abandoned by the original locator. The claims are not considered material to the overall Caribou Dome Project. 631520 PolarX Limited 73 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Project Location License(s) Ownership Interest Uncle Sam Project** (cont) Alaska, USA 100% Claim US 56 US 57 US 58 US 59 US 60 US 76 US 79 US 80 US WEST 2 US WEST 5 US WEST 6 US WEST 22 US WEST 26 US WEST 27 US WEST 46 US WEST 47 US WEST 66 US WEST 67 US WEST 85 US WEST 86 US WEST 97 US WEST 98 US WEST 155 US WEST 160 US WEST 161 US WEST 166 US WEST 167 US WEST 168 US WEST 170 ADL # 631535 631536 631537 631538 631539 631555 631558 631559 631862 631865 631866 631882 631886 631887 631906 631907 631926 631927 631945 631946 631957 631958 632015 632020 632021 632026 632027 632028 632030 US WEST 171 **Subject to a mineral lease and purchase agreement with Great American Minerals Exploration Inc. (GAME), pursuant to which GAME will lease the Uncle Sam Gold Project for up to 10 years with an option to purchase outright at any time during the lease period on the terms and conditions detailed in the ASX announcement of 30 July 2015. 632031 PolarX Limited 74 2017 Annual Report PolarX Limited (formerly Coventry Resources Limited) Project Location Licence(s) Ownership Interest Stellar Copper Gold Project Alaska, USA 100% Claim SB 154 SB 155 SB 167 SB 168 ZK 3 ZK 4 ZK 5 ZK 14 ZK 19 ZK 20 ZK 21 Z 1 Z 2 Z 3 Z 4 Z 5 Z 6 Z 7 Z 8 Z 9 Z 10 SB 281 SB 282 SB 283 SB 297 SB 298 SB 299 SB 317 SB 318 SB 319 SB 346 SB 347 SB 348 SB 364 SB 365 SB 366 SB 367 SB 368 SB 376 SB 377 SB 379 SB 389 SB 390 SB 417 ADL # 704562 704563 704575 704576 704621 704622 704623 704632 704637 704638 704639 709427 709428 709429 709430 709431 711728 711729 711730 711731 711732 714079 714080 714081 714095 714096 714097 714115 714116 714117 714144 714145 714146 714162 714163 714164 714165 714166 714174 714175 714177 714187 714188 715392 PolarX Limited 75 2017 Annual Report 

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