Torian Resources Limited
Annual Report 2017

Plain-text annual report

A N N U A L R E P O R T 2 0 1 7 R E S O U R C E S LTD Torian Resources Limited ABN 72 002 261 565 and controlled entities C o r p o r a t e D i r e c t o r y Directors Mr. Andrew Sparke Mr. Matthew Sullivan Ms. Elissa Hansen Mr. Glenn Jardine, resigned 15 May 2017 Company Secretary Ms. Elissa Hansen Registered Office and Principal Place of Business 104 Colin Street West Perth WA 6005 Telephone: (08) 9420 8208 Fax: (08) 9322 4130 Email: info@torianresources.com.au www.torianresources.com.au Share Registry Advanced Share Registry Services 110 Stirling Highway Nedlands WA 6009 Telephone: (08) 9389 8033 Facsimile: (08) 9262 3723 www.advancedshare.com.au Auditors RSM Australia Partners Level 13, 60 Castlereagh Street Sydney NSW 2000 Telephone: (02) 8226 4500 Facsimile: (02) 8266 4501 www.rsm.global/australia Stock Exchange Listing Torian Resources Limited’s shares are listed on the Australian Securities Exchange (ASX code: TNR). C O N T E N T S Managing Director’s Letter Directors’ Report Remuneration Report Auditor’s Declaration Financial Report Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Financial Notes Directors’ Declaration Auditor’s Report Shareholder Information List of Tenements Mineral Resources Statement 3 5 11 14 15 16 17 18 19 20 40 41 45 46 48 1 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017“The company is now poised to reap the rewards of the hard work of our dedicated but small exploration and administration teams” M A N A G I N G D I R E C T O R ’ S L E T T E R My fellow shareholders, This was recognised recently by two of our ASX listed We stand at this point in the journey where we have achieved many things over recent times. The company is now poised to reap the rewards of the hard work of our dedicated but small investors who added to their holdings in the company via a $1.1m placement at a premium to the trading price at the time. It is pleasing to note that the board has maintained its goal of spending approximately 80% of all expenditure on acquiring and exploring the company’s projects. exploration and administration teams. There are I wish to thank all our supportive shareholders, the small numerous key milestones that we have achieved in the but hard working team and the board and look forward to recent months, such as drilling at Paradigm, our initial further success in our exploration in the future. drilling at Malcolm plus the efforts of the administration team in finalising the Cascade merger. Yours faithfully, Matthew Sullivan Managing Director 3 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017“The company has a stated goal of actively pursuing new aquisitions with the potential to deliver additional Shareholder value” D I R E C T O R S ’ R E P O R T The Directors of Torian Resources Limited submit the financial report of the Company for the year ended 31 December 2017, which comprises the results of Torian Resources Limited and the entities it controlled during the period. REVIEW OF OPERATIONS The Goldfields Region of Western Australia has an extensive history of gold mineralisation with several multi- million ounce discoveries, numerous producing mines and the presence of some of the world’s largest gold exploration and production companies. The projects were identified through a combination of a detailed study, deep experience in the region and strong on-ground relationships. The Company has a stated goal of actively pursuing new acquisitions with the potential to deliver additional shareholder value. Throughout the year, the Directors were primarily focussed on the Zuleika and Malcolm projects. While emphasis was Zuleika placed on these two projects, Torian continued to review all of the exploration of projects it has acquired to date, which are located in the Goldfields region of Western Australia. They include:  Zuleika  Mt Stirling  Malcolm  Bardoc  Gibraltar  Mt Monger  Mt Keith The Zuleika Project continues to be the Company’s main focus. This project covers approximately 223 km2 and is 100% owned by Torian. Torian is one of the largest tenement holders in this region and has been actively exploring numerous targets. The exploration completed to date has largely consisted of wide spaced RAB and aircore drilling, with selected targets receiving Reverse Circulation (RC) drilling. The drilling completed during the quarter has focused on the northern and southern strike extensions of the Paradigm gold deposits (Arina, Natasha, Mishka, Drago, Zorro). These zones of mineralisation vary in geology, geochemistry, orientation, width and grade and are currently being explored by our neighbour, Northern Star Resources (ASX:NST). 5 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017DIRE CTORS’ REPORT ( CONT) Paradigm South Paradigm East The target at Paradigm South covers approximately 1km Paradigm East is located towards the northern end of the of strike extensions to Northern Star’s Paradigm mine. Group’s 100% owned Zuleika Project, approximately 65km Northern Star have announced several significant North West of Kalgoorlie. discoveries in this area recently. The 2017 drill program was designed to test high-grade Previous exploration in this area dating from the 1980s historic intersections adjacent to Northern Star’s and 1990s has been quite light, with wide spaced vertical Paradigm mine and their significant recent discoveries. It RAB drilling (80m by 160m and up to 80m by 320m). This comprised seven holes for a total of 526 metres and was drilling was relatively ineffective in testing the area for the designed to infill the central portion of Paradigm East to a style of mineralisation now known. Nevertheless, several spacing of 20m by 40m. zones of 0.5-2g/t Au have been defined by the historic drilling. The Company has completed a close spaced angled RC drilling program, 142 holes for 5,443m, designed to test the oxide zone for gold mineralisation in this well endowed region. Results from this program had not been received from the labs by the end of the year. Paradigm North Drilling at the Paradigm North target commenced during Q4 2017, as announced on the 4th December 2017. Torian’s Paradigm North target is located approximately 65km North East of Kalgoorlie. Results to date show that gold mineralisation continues from Northern Star’s (ASX:NST) Paradigm Prospect onto Torian’s Zuleika Project tenure at Paradigm East and remains open at depth and along strike to the south east. There are also several other high priority targets surrounding Paradigm, particularly to the north and south, that have only been lightly explored. Further exploration is warranted and the Group has already commenced planning for the next exploration program at Paradigm East. Target 18 Paradigm North covers approximately 4km of strike Target 18 is situated at the northern end of Torian’s extensions to Northern Star’s Paradigm mine. Paradigm Zuleika project. The target is located along the Zuleika North is a high priority target for the Company. A total of Shear midway between Zijin’s Bullant mine 258 holes for 6,658m of close spaced angled RC drilling (approximately 0.5Moz Resource) and the historically was completed, testing the oxide zone for gold mined Carnage Gold Mine. Ora Banda lies approximately mineralisation. Assay results from drilling to date are 10km to the east. awaited. The program is not yet complete with further drilling planned in 2018. The 2017 drilling program comprised of 20m by 40m spaced angled RC holes was designed to test a strike length of approximately 200m of the Zuleika Shear. This program was designed to follow up previous RAB drilling conducted by the Company (announced on 27 September 2016) in 2016. The program consisted of 13 holes for 872m. Results will be announced to the market once they have been received. 6 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017DIR ECTORS’ REPORT ( CONT) Hole E GDA94 N GDA94 Azimuth Dip EOH (m) From (m) To (m) Interval (m) AU g/t DCRC003 354888 6798160 DCRC005 354936 6798093 245 245 (60) (60) 48 48 8 8 Including 16 20 40 24 12 24 8 1.05 3.57 8.52 Malcolm JV (Torian 51% earning to 90%) The drill program did not close off the mineralisation Two drilling programs were completed at Malcolm during the year. which remains open along strike and down dip. These results are very encouraging and confirm Credo Well as a priority target for the 2017 field season. The first covered the Dover Castle South area where shallow workings and historic shallow drilling defined a Bardoc Project target about 400m long. A total of 9 holes for 638m were The Bardoc Project is located 40km north of Kalgoorlie completed. The Company received extremely positive results, as outlined in the table above for the Dover Castle South area. and 16km north of the 3mtpa Paddington processing plant owned by Zijin Mining Group (HK:2899). Bardoc lies north and along strike of Excelsior Gold’s (ASX:EXG) 1.4Moz Zoroastrian and Excelsior deposits and south of Aphrodite The second drilling operation has not yielded results at the Gold’s (ASX:AQQ) 1.3Moz Aphrodite Project. Torian’s Dumbarton area, where 14 holes for 766m were completed. project area now covers 38.6km². Credo Well On 14 February 2017, Torian announced the completion of a successful RC drilling program at Targets 16 and 17 (Credo Well). The Credo Well prospect is located approximately 5km North East and along strike of Mt FINANCE AND CORPORATE On 1 May 2017, the Group announced the completion of a $1.2 million placement to sophisticated and professional investors. Pleasant (4Moz). The prospect forms part of the Group’s The equity raising received demand from two new US Zuleika project. The program consisted of a total of 32 holes for 2,221m and was designed to infill previous RC drilling and to test institutions. APP Securities Pty Limited acted as the Lead Manager to the placement and Jett Capital as North American advisor. the extent of mineralisation surrounding modest historic Approximately 11 million ordinary shares were issued for mining in the area. No holes to date have been drilled the capital raise at 10.5 cents per share. The placement deeper than 170m. Highlights from the drilling include: was conducted utilising Torian’s placement capacity as       4m @ 32.51g/t Au from 27m, including; 2m @ 57.05g/t Au from 29m; 4m @ 6.66g/t Au from 70m, including; 2m @ 12.40g/t Au from 70m; and 2m @ 15.16g/t Au from 49m. Torian also made a new discovery in the hanging wall of the main zone with the best intersection being 1m @ 68.50g/t Au from 39m. approved by Shareholders at the 2017 Annual General Meeting. In September 2017, the Group completed the issue and allotment of 23,123,353 fully paid ordinary shares at an issue price of $0.085 per share to raise $2 million. The funds will be used for working capital and to continue exploration of its Zuleika and Malcolm Projects. 7 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017DIRE CTORS’ REPORT ( CONT) PRINCIPAL ACTIVITIES The principal activities of the Group during the course of the financial year were the exploration and evaluation of mineral interests. There were no significant changes in the nature of those activities during the financial year. RESULTS OF OPERATIONS The consolidated loss for the Group for the financial year ended 31 December 2017 is $1,438,422 (2016: $1,752,251). DIVIDENDS No dividends were paid or declared by the Group since There were no other significant changes to the Group’s state of affairs. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The Group is currently active in continuing its exploration activities and assessing the results of its recent drilling. Likely developments and expected results will be announced to the market as they emerge. MATTERS SUBSEQUENT TO YEAR END Placement to Cornerstone Investors the end of the previous financial year and the Directors do The Group secured two cornerstone investors in January not recommend dividends be paid for the year ended 2018, to raise $1.1m which will be used to fund the 31 December 2017. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Takeover of Cascade Resources Limited Company’s continued aggressive exploration programs. 11 million fully paid ordinary shares were issued to the investors at $0.10 per share, which included a free attaching option exercisable at $0.10 which expires five years from issue. This issue remains subject to shareholder approval, to be determined at the AGM on During the year, Torian completed the off-market 4 April 2018. Takeover of Cascade Resources Ltd (Cascade). Cascade is now a wholly-owned subsidiary of Torian. Consideration for the acquisition of Cascade is 1 Torian share for every 1 Cascade share held by Cascade shareholders. As a result, Torian is now: No other significant subsequent event has arisen that significantly affects the operations of the Group. DIRECTORS The following persons held office as Directors of Torian  A significant player in the Goldfields Region with over Resources Limited at any time during or since the end of 500km² of tenure; the financial year:  The 100% owner of the strategically important Zuleika Mr Andrew Sparke project (previously 12.25%);  The owner of four additional projects including Mt Keith, Mt Monger, Kanowna South and Five Mile Hill projects; and  Has added to existing tenure at the Group’s Bardoc project (~30.2km²). Completion of this significant transaction has simplified the ownership structure of all projects and has delivered on the Group’s strategy of further consolidation in the Goldfields Region of Western Australia. Mr Matthew Sullivan Ms Elissa Hansen Mr Glenn Jardine, resigned 15 May 2017 COMPANY SECRETARY Ms. Elissa Hansen 8 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017DIR ECTORS’ REPORT ( CONT) INFORMATION ON DIRECTORS MEETINGS OF DIRECTORS Mr. Andrew Sparke B.Bus (Marketing), M.Fin (Current), The number of meetings of the Company’s Board of GAICD Non-executive Chairman Appointed: 6 June 2014 Directors and of each board committee held during the financial year ended 31 December 2017 and the number of meetings attended by each Director were: Andrew Sparke has 14 years of Corporate Finance experience that includes IPO’s, private placements and Directors Meetings secondary market transactions. He has advised a number Director Held Whilst in Office Attended of ASX listed companies on capital raisings and corporate transactions. Andrew is a director of a number of public and private companies including Olive Capital Pty Ltd. Mr. Matthew Sullivan B. App. Sc (Applied Geology), Andrew Sparke Matthew Sullivan Elissa Hansen Glenn Jardine 10 10 10 3 10 10 10 2 AusIMM Managing Director Appointed: 6 June 2014 Matthew Sullivan is an experienced geologist and listed company director with 25 years’ experience working in the Goldfields Region of Western Australia. He is one of only 6 geologists in Australia to find more than 3Moz’s twice. Matthew’s significant discoveries include Kanowna Belle (6Moz’s), East Kundana (4Moz’s), Selene (800Koz’s), Safari Bore (400Koz’s), St Patricks (400Koz’s) and in the Leonora region (500Koz’s). He was second in Australian Explorer of the Year (2010) for the discovery of 500K oz’s in 5 months in Leonora with a total discovery of circa 12Moz’s Au. Ms. Elissa Hansen B.Com, ACSA, GAICD Non-executive Director, Company Secretary Appointed: 9 December 2015 Elissa Hansen is a Chartered Secretary with over 15 years’ experience advising management and boards of ASX listed companies on corporate governance, compliance, investor relations and other corporate issues. She is a director of ASX-listed Zoono Group Limited (ASX: ZMO) from 9 October 2015. She is also a director of several unlisted companies and has extensive company secretarial experience, acting as Company Secretary for a number of public, ASX listed and private companies. DIRECTORS’ INTERESTS Information on the Directors’ and their associates’ interests in shares and options of the Company at 31 December 2017 can be found in the Remuneration Report on page 11. SHARES UNDER OPTION At the date of this report, there were no unissued ordinary shares of Torian Resources Limited under option. SHARES ISSUED ON THE EXERCISE OF OPTIONS No shares were issued during the financial year ended 31 December 2017 on the exercise of options. ENVIRONMENTAL REGULATIONS The Group’s operations are subject to normal Government Environmental Regulations. There were no breaches of these regulations during the financial year and up to the date of this report. 9 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017DIRE CTORS’ REPORT ( CONT) INSURANCE OF DIRECTORS AND OFFICERS PROCEEDINGS ON BEHALF OF THE COMPANY The Company entered into an agreement to insure the No person has applied for leave of court to bring Directors and officers of the Company. The liabilities proceedings on behalf of the Company or intervene in insured and legal costs that may be incurred in defending any proceedings to which the Company is a party for the civil or criminal proceedings that may be brought against purpose of taking responsibility on behalf of the Company the officers in their capacity as officers of the entity, and for all or any part of those proceedings. any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. INDEMNIFICATION The Company has agreed to indemnify and keep indemnified the Directors against any liability: a) incurred in connection with or as a consequence of the director or officer acting in the capacity including, without limiting the foregoing, representing the Company on anybody corporate; and The Company was not party to any such proceedings during the year. CORPORATE GOVERNANCE STATEMENT A copy of the Corporate Governance Statement has not been disclosed within the Annual Report but is available on the website www.torianresources.com.au/corporate- governance in accordance with the ASX Listing Rule 4.10.3. DECLARATION BY DIRECTOR Before it approved the Company’s 2017 financial statements, the Board was satisfied that the financial records have been properly maintained and that the financial statements comply with the appropriate b) for legal costs incurred in defending an action in accounting standards and give a true and fair view of the connection with or as a consequence of the Director financial position and performance of the Group, and or officer acting in the capacity. their opinion has been formed on the basis of a sound The indemnity only applies to the extent of the amount that the Directors are not indemnified under any other indemnity, including an indemnity contained in any insurance policy taken out by the Company, under the general law or otherwise. The indemnity does not extend to any liability:  to the Company or a related body corporate of the Company; system of risk management and internal control which is operating effectively. NON-AUDIT SERVICES The Directors received the Lead Auditor’s Independence Declaration under s.307 of the Corporations Act 2001, which is set out on page 14. The external auditor did not provide any non-audit services to the Company during the year ended 31 December 2017.  arising out of conduct of the Directors or officers involving a lack of good faith; or Signed in accordance with a resolution of the Board of Directors, made pursuant to s.298(2) of the  which is in respect of any negligence, default, breach Corporations Act 2001. of duty or breach of trust of which the directors or officers may be guilty in relation to the Company or related body corporate. No liability has arisen under these indemnities as at the date of this report. Andrew Sparke Non-executive Chairman Sydney, 29 March 2018 10 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017 R E M U N E R AT I O N R E P O R T This report outlines the remuneration arrangements in place for Directors and executives of Torian Resources Limited. The information in this report has been audited as required by 308(3C) of the Corporations Act 2001. DIRECTORS AND KEY MANAGEMENT PERSONNEL The full Board of Directors set remuneration policies and practices generally and makes specific recommendations on remuneration packages and other terms of employment for Executive Directors, other Senior Executives and Non-Executive Directors (if any). Executive remuneration and other terms of employment are reviewed annually having regard to performance against goals set at the start of the year, relevant comparative In considering the Company’s performance and its effect on shareholder wealth, the Board has regard to a broad range of factors, some of which are financial and others of which relate to the progress on the Company’s projects, results and progress of exploration and development activities, joint venture agreements, etc. The Board also gives consideration to the Company’s result and cash consumption for the year. It does not utilise earnings per share as a performance measure or contemplate payment of any dividends in the short to medium term given that all efforts are currently being expended to develop the Company. Details of the nature and amount of each element of the emoluments of each Director of Torian Resources Limited are set out below. DIRECTORS Names and positions held of key management personnel information and independent expert advice as well as basic in office at any time during the financial year are: salary, remuneration packages include superannuation. Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the Group’s operations. Remuneration of Non-Executive Directors is determined by the Board within the maximum amount approved by shareholders from time to time. Fees for Non-Executive Mr. Andrew Sparke Non-executive Chairman Mr. Matthew Sullivan Managing Director Ms. Elissa Hansen Non-executive Director and Company Secretary Directors are not linked to the Company’s performance. Mr. Glenn Jardine It is the Board’s intention to undertake an annual review of its performance and the performance of the Board Committees against goals set at the start of the year. Non-executive Director, resigned 15 May 2017 11 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017 REM UN ERATION REPORT ( CONT) KEY MANAGEMENT PERSONNEL COMPENSATION Salary and directors fees Bonus Non-monetary benefits Other employee entitlements 2017 Andrew Sparke Matthew Sullivan Elissa Hansen Glenn Jardine $ 120,000 120,800 48,000 12,000 Total Compensation 300,800 $ - - - - - $ - - - - - $ - - - - - Salary and directors fees Bonus Non-monetary benefits Other employee entitlements 2016 Andrew Sparke Matthew Sullivan Elissa Hansen Glenn Jardine $ 120,000 120,000 48,000 24,000 Total Compensation 312,000 $ - - - - - $ - - - - - $ - - - - - Total $ 120,000 120,800 48,000 12,000 300,800 Total $ 120,000 120,000 48,000 24,000 312,000 SHARES HELD BY KEY MANAGEMENT PERSONNEL AND THEIR ASSOCIATES Balance 1 Jan 2017 Purchases Disposals Received under Cascade takeover Balance 31 Dec 2017 Andrew Sparke 3,613,696 131,579 - 6,401,000 10,146,275 Matthew Sullivan 4,904,172 Elissa Hansen Glenn Jardine - - - - - (105,000) 4,437,501 9,236,673 - - - - - - Total 8,517,868 131,579 (105,000) 10,838,501 19,382,948 12 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017LOANS TO DIRECTORS AND KEY MANAGEMENT PERSONNEL There were no loans made to directors or key management personnel of the Company and the Group during the period commencing at the beginning of the financial year and up to the date of this report. REMUNERATION REPORT ( CONT) CONSULTANCY AGREEMENTS Andrew Sparke - Director • Agreement commenced on 6 June 2014; • Consultancy fee of $10,000 per month; • Agreement is terminated upon cessation of directorship/employment with the Company; • No performance based remuneration incentive has been included. Matthew Sullivan - Director • Agreement commenced on 6 June 2014; • Consultancy fee of $10,000 per month; • Agreement is terminated upon cessation of directorship/employment with the Company; • No performance based remuneration incentive has been included. Elissa Hansen – Director/Secretary • Agreement commenced on 9 December 2015; • Consultancy fee of $4,000 per month; • Agreement is terminated upon cessation of directorship/employment with the Company; • No performance based remuneration incentive has been included. Glenn Jardine - Director • Agreement commenced on 24 May 2016, terminating on 15 May 2017; • Consultancy fee of $3,000 per month; • Agreement is terminated upon cessation of directorship/employment with the Company; • No performance based remuneration incentive has been included. 13 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017AUDITOR’S DECL ARATION AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of Torian Resources Limited for the year ended 31 December 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. RSM AUSTRALIA PARTNERS G N Sherwood Partner Sydney, NSW Dated: 29 March 2018 14 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017F I N A N C I A L R E P O R T PROFIT AND LOSS CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR YEAR ENDED 31 DECEMBER 2017 Other revenue Depreciation and amortisation expense Impairment expense Employee benefits expense Due diligence and professional services Finance costs Exploration expenditure Administration Other expenses Loss before income tax expense Income tax expense Loss attributable to members of the parent entity Other comprehensive income Total comprehensive income for the period Basic earnings per share (cents) Note 2 3 3 5 4 7 2017 $ 36,837 (4,897) (11,745) (321,439) (319,056) - (57,915) (760,207) - 2016 $ 106,073 (6,509) - (486,042) (403,282) (2,317) (179,075) (764,458) (16,641) (1,438,422) (1,752,251) - - (1,438,422) (1,752,251) - - (1,438,422) (1,752,251) (0.97) (2.04) These financial statements should be read in conjunction with the accompanying notes. 16 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANCIAL POSIT ION CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017 ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Available-for-sale financial asset Property, plant and equipment Exploration and evaluation expenditure TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Borrowings TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Accumulated losses TOTAL EQUITY These financial statements should be read in conjunction with the accompanying notes. Note 2017 $ 2016 $ 8 9 10 13 14 15 16 17 1,100,953 283,594 1,384,547 1,429 10,809 18,029,340 18,041,578 19,426,125 478,086 129,146 607,232 607,232 1,037,422 247,303 1,284,725 228,205 14,898 10,188,487 10,431,590 11,716,315 755,662 281,128 1,036,790 1,036,790 18,818,893 10,679,525 79,792,247 (60,973,354) 18,818,893 70,214,457 (59,534,932) 10,679,525 17 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017EQUI TY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 31 DECEMBER 2017 Note Shares on Issue Accumulated Losses Options Reserve Balance at 1 January 2016 Loss for the period Other comprehensive income for the period Total comprehensive income for the period $ $ 66,009,823 (57,782,681) - - - (1,752,251) - (1,752,251) Shares issued during the period net of costs 4,204,634 - Balance at 31 December 2016 70,214,457 (59,534,932) Balance at 1 January 2017 Loss for the period Other comprehensive income for the period Total comprehensive income for the period 70,214,457 (59,534,932) - - - (1,438,422) - (1,438,422) Shares issued during the period net of costs 17 9,577,790 - Balance at 31 December 2017 79,792,247 (60,973,354) $ - - - - - - - - - - - - Total $ 8,227,142 (1,752,251) - (1,752,251) 4,204,634 10,679,525 10,679,525 (1,438,422) - (1,438,422) 9,577,790 18,818,893 These financial statements should be read in conjunction with the accompanying notes. 18 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017CASH FLOWS CONSOLIDATED STATEMENT OF CASH FLOWS FOR YEAR ENDED 31 DECEMBER 2017 CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Finance charges Interest received Note 2017 $ 2016 $ (1,444,782) (1,315,274) - 16,837 (2,317) 6,073 Net cash used in operating activities 18 (1,427,945) (3,543,713) CASH FLOWS FROM INVESTING ACTIVITIES Payments to acquire property, plant and equipment Payments to acquire mining tenements Payments for exploration Cash in subsidiary on acquisition Investment in related party Deposits refunded by government bodies Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares, net of raising costs 17 Repayment of related party loan Net cash provided by financing activities Net (decrease)/increase in cash held Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year 8 These financial statements should be read in conjunction with the accompanying notes. - - (14,354) (6,033) (1,514,708) (2,232,195) 4,261 - 20,000 (1,490,447) 2,981,922 - 2,981,922 63,531 1,037,422 1,100,953 - (212,476) 100,000 (132,863) 3,276,821 (104,834) 3,171,987 (504,589) 1,542,011 1,037,422 19 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANC IAL NOTES NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial report includes the consolidated financial statements and notes of Torian Resources Limited and controlled entities (‘Consolidated Group’ or ‘Group’). The separate financial statements and notes of Torian Resources Limited as an individual parent entity (‘Company’) have not been presented within the financial report as permitted by the Corporations Act 2001. The financial statements were authorised for issue on 29 March 2018 by the directors of the company. Basis of Preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are reported below. They have been consistently applied unless stated otherwise. All applicable new accounting standards have Accounting Policies a. Principles of Consolidation A controlled entity is any entity Torian Resources Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities. A list of controlled entities is contained in Note 11 to the financial statements. All controlled entities have a 31 December 2017 financial year-end for this current year. As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year ended. Where controlled entities have entered (left) the Group during the year, their operating results have been included (excluded) from the date control was obtained (ceased). All inter-company balances and transactions between entities in the Group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the Company.Where controlled entities have entered or left the Group during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased. Minority interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity interests held by persons outside the Group, are shown separately within the Equity section of the Consolidated Statement of Financial Position and in the Consolidated Statement of Profit or Loss and Other Comprehensive been adopted for the year ended 31 December 2017 Income. unless otherwise stated and their adoption did not have a b. Going Concern significant impact on the financial performance or position of the consolidated entity The financial report has been prepared on an accruals basis and is based on historical costs, modified, where The Directors have prepared the financial report on a going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of applicable, by the measurement at fair value of selected business. non-current assets, financial assets and financial liabilities. 20 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANCIAL NOT ES ( CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) For the financial year ended 31 December 2017, the Group Deferred tax is calculated at the tax rates that are expected incurred a net loss after tax of $1,438,422 and utilised cash to apply to the period when the asset is realised or liability from operating and investing activities of $1,427,945 and is settled. Deferred tax is credited in the income statement $1,490,447 respectively. The directors have reviewed the Group’s overall position and outlook in respect of the matters identified above and except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. are of the opinion that the use of the going concern basis Deferred income tax assets are recognised to the extent is appropriate in the circumstances for the following that it is probable that future tax profits will be available reasons: against which deductible temporary differences can be • In February 2018, the Group secured two cornerstone utilised. investors to raise $1.1 million. A total of 11,000,000 fully Torian Resources Limited formed an income tax paid shares were issued and allotted at $0.10 per share consolidated group under the tax consolidation regime together with a free attaching option exercisable at with its domestic subsidiaries listed under Note 11. $0.10 and expiring in five (5) years from issue, subject to shareholder approval; d. Plant and Equipment • The Group has cash resources of $1,100,953 as at 31 December 2017; Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. • The Group has net assets of $18,818,893 and net current assets of $777,315; Depreciation • The Group has the ability to dispose some of its assets as and when required; and • The Group has the ability to scale back its exploration activities should funding not be available continue exploration at its current levels. c. Taxes The depreciable amount of all fixed assets is 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 Office equipment and furniture 25% 25% The charge for current income tax expense is based on the Plant and equipment results for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. arising between the tax bases of assets and liabilities and Gains and losses on disposals are determined by their carrying amounts in the financial statements. No comparing proceeds with the carrying amount. These deferred income tax will be recognised from the initial gains and losses are included in the Statement of Profit or recognition of an asset or liability, excluding a business Loss and Other Comprehensive Income. combination, where there is no effect on accounting or taxable profit or loss. 21 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017 FI NANC IAL NOTES (CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) e. Exploration, Development and Evaluation f. Impairment of Assets Expenditure At each reporting date, the Group reviews the carrying Exploration, development and evaluation expenditure values of its tangible and intangible assets to determine incurred is accumulated in respect of each identifiable whether there is any indication that those assets have area of interest. These costs are only carried forward to been impaired. If such an indication exists, the the extent that they are expected to be recouped through recoverable amount of the asset, being the higher of the the successful development of the area or where activities asset’s fair value less costs to sell and value in use, is in the area have not yet reached a stage that permits compared to the asset’s carrying value. Any excess of the reasonable assessment of the existence of economically asset’s carrying value over its recoverable amount is recoverable reserves. expensed to the Statement of Profit or Loss and Other Currently the practice is to capitalise all expenses that Comprehensive Income. have been incurred and are in direct relation to the Where it is not possible to estimate the recoverable exploration of resources. Indirect costs such as administrative and general operational costs will be expensed on the basis that they amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. are necessarily incurred. g. Investments in Joint Ventures Accumulated costs in relation to an abandoned area are Investments in joint venture companies are recognised in written off in full against profit in the year in which the the financial statements by applying the equity method of decision to abandon the area is made. accounting. The equity method of accounting recognised When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the Group’s share of post-acquisition reserves of joint ventures. the area according to the rate of depletion of the h. Financial Instruments economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Carrying value The licences held in respect of the Group’s exploration operations comprise a large number of licenses across a large geographic area. There are however only eight projects that the Group is currently exploring and Recognition, initial measurement and derecognition Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument, and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below. developing. Management has applied their judgement and Financial assets are derecognised when the contractual determined that all of these license are to be treated as rights to the cash flows from the financial asset expire, or eight separate and distinct areas for the purposes of when the financial asset and all substantial risks and considering ‘abandoned areas’ or impairment. The costs of rewards are transferred. A financial liability is acquiring the licenses as well as all subsequent costs have derecognised when it is extinguished, discharged, been ascribed to these eight projects, and consequently, cancelled or expires. there are no impairment expenses for expired licenses in unexplored areas outside these eight projects. 22 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017 FI NANCIAL NOT ES ( CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) Classification and subsequent measurement of calculated using the effective interest method and financial assets dividends are recognised in profit or loss within ‘finance For the purpose of subsequent measurement, financial income’. assets other than those designated and effective as Reversals of impairment losses for AFS debt securities are hedging instruments are classified into the following recognised in profit or loss if the reversal can be categories upon initial recognition: objectively related to an event occurring after the • • loans and receivables financial assets at Fair Value Through Profit or Loss (FVTPL) • Held-To-Maturity (HTM) investments • Available-For-Sale (AFS) financial assets All financial assets except for those at FVTPL are subject to review for impairment at least at each reporting date to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below. impairment loss was recognised. For AFS equity investments impairment reversals are not recognised in profit loss and any subsequent increase in fair value is recognised in other comprehensive income. i. Employee Benefits Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash flows to be made for those benefits. Those cash flows All income and expenses relating to financial assets that are discounted using market yields on national are recognised in profit or loss are presented within government bonds with terms to maturity that match the finance costs, finance income or other financial items, expected timing of the cash flows. except for impairment of trade receivables which is presented within other expenses. j. Equity-settled Compensation AFS financial assets There has been no equity based compensation with the exception of that described at Note 20. The capital AFS financial assets are non-derivative financial assets that subscribed to as per this note was acquired at fair value at are either designated to this category or do not qualify for the time of purchase. inclusion in any of the other categories of financial assets. The Group’s AFS financial assets include listed securities and debentures. Options issues have their fair value determined with reference to an approved valuation methodology, such as the Black-Scholes valuation method. On issue, the fair AFS financial assets are measured at fair value. Gains and value of an option is taken to the Income Statements losses are recognised in other comprehensive income and equity settled compensation, with a corresponding credit reported within the AFS reserve within equity, except for to the options reserve. This is then disclosed as other impairment losses and foreign exchange differences on comprehensive income in the Statement of monetary assets, which are recognised in profit or loss. Comprehensive Income to show other net profit position When the asset is disposed of or is determined to be of the Group from a third party perspective. impaired the cumulative gain or loss recognised in other comprehensive income is reclassified from the equity reserve to profit or loss and presented as a reclassification adjustment within other comprehensive income. Interest Shares have their value determined using the direct method of share price at date of issue multiplied by the number of shares issued. 23 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017 FI NANC IAL NOTES (CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) k. Cash and Cash Equivalents such time as the assets are substantially ready for their Cash and cash equivalents include cash on hand, intended use or sale. deposits held at call with banks and other short-term All other finance costs are recognised in the period in highly liquid investments with original maturities of three which they are incurred. months or less. l. Trade and Other Payables o. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the Liabilities for creditors and other amounts are carried at amount of GST, except where the amount of GST incurred amortised cost, which is the present value of the is not recoverable from the Australian Tax Office. In these consideration to be paid in the future for goods and circumstances the GST is recognised as part of the cost of services received, whether or not billed to the Company. acquisition of the asset or as part of an item of the The carrying period is dictated by market conditions but expense. Receivables and payables in the Statement of is generally less than 30 days. Financial Position are shown inclusive of GST. m. Revenue and Other Income Cash flows are presented in the Statement of Cash Flows Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. There is provision made in the Statement of Cash Flows to disclose the applicable GST refunds/payments that have been remitted to the ATO to accurately show the cash position of Torian Resources Limited. ultimately received is interest revenue. p. Earnings Per Share Revenue from the sale of goods is recognised at the point Basic earnings per share is calculated by dividing the of delivery as this corresponds to the transfer of profit or loss attributable to the owners of the Group significant risks and rewards of ownership of the goods excluding any costs of servicing equity other than and the cessation of all involvement in those goods. ordinary shares, by the weighted average number of Interest revenue is recognised using the effective interest ordinary shares outstanding during the financial year. rate method, which, for floating rate financial assets, is the Diluted earnings per share adjusts the figures used in the rate inherent in the instrument. Dividend revenue is determination of basic earnings per share to take into recognised when the right to receive a dividend has been account the after income tax effect of interest and other established Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting. n. Finance Finance costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until financial costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to the dilutive potential ordinary shares. q. Comparative Figures Comparative figures have been derived from the audited financial statements for Torian Resources Limited for the year ended 31 December 2016, and changes in presentation are made where necessary to comply with accounting standards. 24 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANCIAL NOT ES ( CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) r. Critical Accounting Estimates and Judgements Key Judgements — Doubtful Debts Provision The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key Judgements - Exploration and Evaluation Expenditure As a result of no trading throughout the period, Torian Resources Limited has no questionable receivables. s. New and Revised Accounting Standards The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting The Group capitalises expenditure relating to exploration period. and evaluation where it is considered likely to be recoverable or where the activities have not reached a stage Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been that permits a reasonable assessment of the existence of early adopted. reserves. There is significant judgement required on the part of the management and the Board in determining whether exploration assets are impaired. To this extent they t. New and Revised Accounting Standards and Interpretations not yet mandatory or early adopted have considered the exploration activities, the current At the date of authorisation of the financial statements the market conditions, the political climate in the jurisdiction in following new standards and interpretations have not which the assets exists, as well as numerous other factors in been early adopted. Below are a list of the standards and their determination that the assets are not impaired. the likely impact. Standard/ Interpretation Effective for annual reporting periods beginning on or after Expected to be initially applied in the financial year ending Likely impact on initial application ASB 9 ‘Financial Instruments’ (December 2014) AASB 15 Revenue from Contracts with Customers 1 January 2018 31 December 2019 1 January 2018 31 December 2019 AASB 16 Leases 1 January 2019 31 December 2020 The entity is yet to undertake a detailed assessment of the impact of AASB 9. However, based on the entity’s preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2019. The entity is yet to undertake a detailed assessment of the impact of AASB 15. However, based on the entity’s preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2019. The entity is yet to undertake a detailed assessment of the impact of AASB 16. However, based on the entity’s preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2020. 25 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANC IAL NOTES (CONT) NOTE 2: REVENUE Other revenue — Interest received — Other revenue — Reversal of prior period impairment Total other income NOTE 3: RESULTS FOR THE YEAR Expenses: Impairment Depreciation of plant and equipment NOTE 4: INCOME TAX EXPENSE The components of tax expense comprise: Current tax Deferred tax Total Prima facie tax benefit on loss from ordinary activities before income tax at 27.5% (2016: 30%): Add tax effect of: — Other non-allowable items Subtotal Less tax effect of: — Items not assessable for taxation — Items deductible for taxation but not accounting Deferred tax assets not brought to account: Income tax expense 2017 $ 16,837 20,000 - 36,837 2 016 $ 6,073 - 100,000 106,073 11,745 4,897 - 6,509 - - - - - - (395,566) (525,675) 12,840 (382,726) (5,500) (503,107) 891,333 - 16,254 (509,421) 30,000 (695,429) 1,174,850 - The Group has carried forward tax losses, calculated according to Australian income tax legislation of $43,739,367 (2016: $41,713,671), which will be deductible from future assessable income provided that income is derived, and: a. The Company and its controlled entities carry on prescribed mining operations as defined in the income Tax Assessment Act, as appropriate; or b. The Company and its controlled entities carry on a business of, or a business that includes exploration or prospecting in Australia, for the purpose of discovering or extracting minerals, as appropriate; and c. No change in tax legislation adversely affects the Company and its controlled entities in realising the benefit from the deduction for the losses. The benefit of these losses will only be recognised where it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. 26 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017 FI NANCIAL NOT ES ( CONT) NOTE 5: EMPLOYEE BENEFITS EXPENSE Employee benefits incurred during the year: — Salaries and wages — Superannuation Total: NOTE 6: AUDITOR REMUNERATION Remuneration of the auditor of the Group for: — auditing or reviewing the financial report Total: NOTE 7: EARNINGS PER SHARE a. b. c. d. Reconciliation of earnings: Loss Weighted average number of ordinary shares outstanding during the year used in calculating EPS Basic EPS Diluted EPS NOTE 8: CASH AND CASH EQUIVALENTS 2017 $ 316,037 5,402 321,439 2016 $ 446,887 39,155 486,042 40,000 40,000 28,000 28,000 (1,438,422) (1,752,251) No. No. 148,408,134 85,834,312 Cents (0.97) (0.97) Cents (2.04) (2.04) Cash at bank and on hand Total 1,100,953 1,100,953 1,037,422 1,037,422 27 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANC IAL NOTES (CONT) NOTE 9: TRADE AND OTHER RECEIVABLES CURRENT Trade and other receivables from third parties: — — Total current assets Trade receivables Other receivables 2017 $ 1,847 281,747 283,594 2016 $ 53,590 193,713 247,303 There is no expectation of the directors that any of the above amounts are required to be impaired as all amounts are anticipated to be fully recoverable. Whilst the above amounts are unsecured, there is no question as to the creditworthiness of the Group’s debtors. Allowance for impairment loss Trade receivables and other receivables are non-interest bearing and are generally on 30-60 day terms. A provision for impairment loss is recognised when there is objective evidence that an individual receivable is impaired. No impairment has been recognised by the Group and Company in the current year. No receivable is past due. Fair value and credit risk Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value. The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security, nor is it the Group’s policy to transfer on-sell receivables to special purpose entities. Interest rate risk Detail regarding interest rate risk exposure is disclosed in Note 22. NOTE 10: FINANCIAL ASSETS Available-for-sale financial assets Total Fair Value Measurement Valuation Techniques 1,429 1,429 228,205 228,205 In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation techniques to measure the fair value of the asset or liability. The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. 28 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANCIAL NOT ES ( CONT) NOTE 10: FINANCIAL ASSETS (CONT) Recurring Fair Value Measurement Amounts and the Level of the Fair Value Hierarchy within which the Fair Value Measurements are categorised Fair Value Measurements at 31 December 2017 Using: Quoted Prices in Active Markets for Identical Assets $ (Level 1) Significant Observable Inputs $ (Level 2) Significant Unobservable Inputs $ (Level 3) Investment in shares of unlisted corporation Elsmore Resources Limited - - 1,429 NOTE 11: CONTROLLED ENTITIES Controlled Entities Consolidated PARENT ENTITY: Torian Resources Limited Subsidiaries of TORIAN RESOURCES LIMITED Cascade Resources Limited Cluff Minerals (Aust) Pty Limited NSW Gold Pty Ltd Who Are They Pty Ltd Zuleika JV Management Pty Ltd (100% owned by Cascade Resources Limited) * Percentage of voting power is in proportion to ownership Country of Incorporation Percentage Owned (%)* 2017 2016 Australia Australia Australia Australia Australia Australia 100 100 100 100 100 - 100 100 100 - 29 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANC IAL NOTES (CONT) NOTE 12: EXPLORATION AND EVALUATION ASSETS ACQUIRED On 20 April 2017, Torian wholly acquired Cascade Resources Ltd. Details of the assets acquired are as follows: Consideration Transferred Fair value of shares issued Net assets acquired in Cascade at date of acquisition Attributable costs of acquisition Attributed fair value of exploration and evaluation assets Assets and liabilities at date of acquisition Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets acquired Contribution to the Group’s results Cascade contributed $4,139 to the Group’s loss from the date of the acquisition to 31 December 2017. NOTE 13: PLANT AND EQUIPMENT 2017 $ 20,865 (10,056) 10,809 2,800 (2,800) - 10,809 OFFICE EQUIPMENT At cost Accumulated depreciation Total office equipment PLANT AND EQUIPMENT At cost Accumulated depreciation Total property, plant and equipment Total 30 2017 $ 5,850,065 (34,889) 360,192 6,175,368 4,261 228,085 232,346 68,311 129,146 197,457 34,889 2016 $ 19,147 (4,249) 14,898 2,800 (2,800) - 14,898 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017 FI NANCIAL NOT ES ( CONT) Movements in Carrying Amounts Balance at 1 January 2016 Acquisition in the year Depreciation expense Balance at 31 December 2016 Acquisitions in the year Acquired as part of Cascade transaction Depreciation expense Balance at 31 December 2017 Office Equipment Plant and Equipment $ 7,053 11,554 (3,709) 14,898 - 808 (4,897) 10,809 NOTE 14: EXPLORATION AND EVALUATION EXPENDITURE Exploration expenditure capitalised Provision for impairment Total Balance at beginning of financial year Additions Impairment recognised during the financial year Balance at end of financial year NOTE 15: TRADE AND OTHER PAYABLES CURRENT Accounts payable Employee benefits payable Directors’ accruals Other payables Total NOTE 16: BORROWINGS CURRENT Loans from related parties (i) (Note 19) Total (i) This loan is at call, unsecured and is non-interest bearing. $ - 2,800 (2,800) - - - - - 2017 $ 18,029,340 - 18,029,340 10,188,487 7,852,598 (11,745) 18,029,340 Total $ 7,053 14,354 (6,509) 14,898 - 808 (4,897) 10,809 2016 $ 10,188,487 - 10,188,487 7,682,700 2,505,787 - 10,188,487 404,086 - 74,000 - 478,086 655,257 3,423 93,800 3,182 755,662 129,146 129,146 281,128 281,128 31 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANC IAL NOTES (CONT) NOTE 17: ISSUED CAPITAL Ordinary shares Fully Paid At the beginning of reporting period Shares issued during the year Shares issued for Cascade acquisition Shares issued to acquire capital assets Shares issued in payment for services Cost of raising capital At reporting date 2017 2016 No of Shares $ No of Shares $ 97,528,851 35,198,224 50,870,133 2,134,092 4,958,390 - 190,689,690 70,214,457 3,223,935 5,850,065 222,500 522,432 (241,142) 79,792,247 74,295,492 18,918,920 - 1,786,435 2,528,004 - 97,528,851 66,009,823 3,500,000 - 367,076 560,737 (223,179) 70,214,457 Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. At the shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. Capital Management Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the group can fund its operations and continue as a going concern. The Group’s capital includes ordinary share capital, shares and financial liabilities, supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the Group’s capital by assessing the group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distribution to shareholders and share issues. NOTE 18: CASH FLOW INFORMATION Reconciliation of Cash Flow from Operations with Profit after Income Tax 2017 $ (1,438,422) 2016 $ (1,752,251) 4,897 11,745 - 67,190 (27,724) 278,541 (324,172) (1,427,945) 6,509 - 16,641 - (22,651) 166,880 (1,958,841) (3,543,713) Loss after income tax Non-cash flows in profit: Depreciation Impairment expense Bad debts written off Expenses classified to investing cash flows Changes in current assets and liabilities: (Increase)/decrease in trade and other receivables Increase in accounts payable and accruals (Increase) in exploration assets Net cash used in operating activities 32 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANCIAL NOT ES ( CONT) NOTE 19: RELATED PARTY DISCLOSURES Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Transactions with related parties: — — — — Market Capital Pty Ltd (director fees) Jemda Pty Ltd (director fees) Olive Capital Pty Ltd (director fees) Jardine Mining Pty Ltd (director fees) 2017 $ 48,000 120,800 120,000 12,000 2016 $ 48,000 120,000 120,000 24,000 Ms. Elissa Hansen is a director of Market Capital Pty Ltd trading as CoSec Services, which throughout the year has provided consultancy and corporate management services to the Group. All fees tendered have been on an arm’s length basis. Mr Matthew Sullivan is a director of Jemda Pty Ltd, which throughout the year has provided consultancy and corporate management services to the Group. All fees tendered have been on an arm’s length basis. Mr Andrew Sparke is a director of Olive Capital Pty Ltd, which throughout the year has provided consultancy and corporate services to the Group. All fees tendered have been on an arm’s length basis. Mr Glenn Jardine is a director of Jardine Mining Pty Ltd, which throughout the year has provided consultancy and corporate services to the Group. All fees tendered have been on an arm’s length basis. Loans from related parties: Jemda Pty Ltd — Shaun Richardson — Cascade Resources Limited — Key Management Personnel 110,245 18,900 - - - 281,128 The following were key management personnel of the Company at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period: Mr Andrew Sparke Mr Matthew Sullivan Ms Elissa Hansen Mr Glenn Jardine, resigned 15 May 2017 Shares Held by Key Management Personnel and Their Associates Andrew Sparke Matthew Sullivan Elissa Hansen Glenn Jardine Total Balance 1 Jan 2017 3,613,696 4,904,172 - - 8,517,868 Purchases Disposals Received under Cascade Takeover Balance 31 Dec 2017 131,579 - - - 131,579 - (105,000) - - (105,000) 6,401,000 4,437,501 - - 10,838,501 10,146,275 9,236,673 - - 19,382,948 33 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANC IAL NOTES (CONT) NOTE 19: RELATED PARTY DISCLOSURES (CONT) Directors’ and Executive Officers’ Remuneration The Board sets all remuneration packages. The broad remuneration policy is to ensure that each senior staff member’s remuneration package properly reflects the person’s duties and responsibilities. Current market conditions are also taken into account in determining the appropriate remuneration package. Salary and directors fees Bonus Non-monetary benefits Other employee entitlements $ 120,0001 120,8002 48,0003 12,0004 300,000 $ - - - - - $ - - - - - $ - - - - - Total $ 120,000 120,800 48,000 12,000 300,000 2017 Andrew Sparke Matthew Sullivan Elissa Hansen Glenn Jardine Total Compensation 1 2 3 4 Fees incurred for services provided as per the consultancy agreement between the Company and Mr Sparke. Fees paid in the year were $130,000 and $10,000 remains unpaid at 31 December 2017. Fees incurred for services provided as per the consultancy agreement between the Company and Mr Sullivan. Fees paid in the year were $130,800 and $40,000 remains unpaid at 31 December 2017. Fees incurred for services provided as per the consultancy agreement between the Company and Ms Hansen. Fees paid in the year were $48,000 and $4,000 remains unpaid at 31 December 2017. Fees incurred for services provided as per the consultancy agreement between the Company and Mr Jardine. Fees paid in the year were $18,000 and no amount is outstanding at 31 December 2017. Salary and directors fees Bonu s Non-monetary benefits Other employee entitlements 2016 Andrew Sparke Matthew Sullivan Elissa Hansen Glenn Jardine Total Compensation $ 120,000 120,000 48,000 24,000 271,000 $ - - - - - $ - - - - - $ - - - - - Total $ 120,000 120,000 48,000 24,000 271,000 34 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANCIAL NOT ES ( CONT) NOTE 20: SHARE BASED PAYMENTS The follow table presents information on the fair values of Ordinary Shares issued in the financial year by the Group. Date Description 17/01/2017 17/01/2017 17/02/2017 17/02/2017 17/02/2017 17/02/2017 17/02/2017 08/05/2017 13/06/2017 21/07/2017 21/07/2017 21/07/2017 21/07/2017 14/09/2017 14/09/2017 28/11/2017 28/11/2017 28/11/2017 Issue of shares in consideration for corporate advisory services Issue of shares in consideration for corporate advisory services Issue of shares in consideration for rent Issue of shares in consideration for drilling services Issue of shares in consideration for drilling services Issue of shares in consideration for drilling services Issue of shares in consideration for drilling services Issue of shares as partial consideration for tenement Issue of shares in consideration of marketing services Issue of shares in consideration of marketing and investor support services Issue of shares in settlement of tenements Issue of shares for partial consideration of Diorite transaction Issue of shares for partial consideration of Broad Arrow tenure Issue of shares in consideration for drilling services Issue of shares in consideration of marketing services Issue of shares in consideration of marketing services Issue of shares in consideration of land consulting services Issue of shares in consideration for drilling services Total NOTE 21: EVENTS AFTER THE BALANCE SHEET DATE Placement to Cornerstone Investors No of Ordinary Shares 171,204 139,120 69,061 203,347 178,812 64,457 44,132 909,090 690,667 700,000 100,000 325,000 800,000 460,953 690,667 275,000 50,250 1,220,630 Value per security $ 0.175 0.216 0.181 0.160 0.170 0.175 0.189 0.110 0.105 0.100 0.100 0.100 0.100 0.085 0.105 0.080 0.100 0.073 Total $ 29,960 30,050 12,500 32,550 30,398 11,280 8,341 100,000 72,520 70,000 10,000 32,500 80,000 39,181 72,520 22,000 5,025 86,106 744,931 The Group has secured two cornerstone investors in January 2018, to raise $1.1m which will be used to fund the continued aggressive exploration programs. 11 million fully paid ordinary shares were issued to the investors at $0.10 per share, which included a free attaching option exercisable at $0.10 and expiring in five years from issue. This issue remains subject to shareholder approval, to be determined at the AGM on 4 April 2018. No other significant subsequent event has arisen that significantly affects the operations of the Group. 35 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017 FI NANC IAL NOTES (CONT) NOTE 22: FINANCIAL INSTRUMENTS General Objectives, Policies and Processes The Group is exposed to risks that arise from its use of financial instruments. This note describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements. There have been no substantive changes in the Groups’ exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note. The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. The Group’s risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the results of objectives where such impacts may be material. The Board periodically reviews the effectiveness of the process put in place and the appropriateness of the objectives and policies it sets. The overall objective of the Board is to set policies that seek to reduce risk as far as possible. Further details regarding these policies are set out below: Credit Risk Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting in the Group incurring a financial loss. This usually occurs when debtors or counterparties to derivative contracts fail to settle their obligations owing to the Group. The Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Group. The maximum exposure to credit risk at balance date is as follows: Trade receivables Liquidity Risk 2017 $ 1,847 2016 $ 53,590 Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet commitments associated with financial instruments due to creditors. The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are maintained. The Group’s operations require it to raise capital on an on-going basis to fund its planned exploration program and to commercialise its tenement assets. 36 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANCIAL NOT ES ( CONT) NOTE 22: FINANCIAL INSTRUMENTS (CONT) Maturity Analysis of Financial Liabilities 2017 CURRENT LIABILITIES Accounts payable Employee benefits payable Other payables Borrowings 2016 CURRENT LIABILITIES Accounts payable Employee benefits payable Other payables Borrowings Interest Rate Risk Carrying Amount $ Contractual Cash Flows $ 404,086 54,000 20,000 129,146 655,257 97,223 3,182 281,128 404,086 54,000 20,000 129,146 655,257 97,223 3,182 281,128 < 6 Months $ 404,086 54,000 20,000 129,146 655,257 97,223 3,182 281,128 The Group is constantly monitoring its exposure to trends and fluctuations in interest rates in order to manage interest rate risk. The following tables demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables held constant. Change in Cash and Cash Equivalents Increase in interest rate by 1% Decrease in interest rate by 1% 2017 $ 11,010 (11,010) 2016 $ 10,374 (10,374) 37 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANC IAL NOTES (CONT) NOTE 23: OPERATING SEGMENTS Identification Of Reportable Operating Segments The Group operates in the mineral exploration and mining industry in Australia. The consolidated entity has adopted AASB 8 Operating Segments whereby segment information is presented using a ‘management approach’. Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions. The consolidated entity operated predominantly in one geographical location. The consolidated entity does not have any operating segments with discrete financial information. The consolidated entity does not have any customers and all the consolidated entity’s assets and liabilities are located within Australia. The Board of Directors review internal management reports on a monthly basis that is consistent with the information provided in the statement of profit or loss and other comprehensive income, statement of financial position and statement of cashflows. As a result, no reconciliation is required because the information presented is what is used by the Board of Directors to make strategic decisions including assessing performance and in determining the allocation of resources. Accounting Policy for Operating Segments Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Maker (‘CODM’), the CODM is responsible for the allocation of resources to operating segments and assessing the performance. NOTE 24: PARENT ENTITY DISCLOSURES 2017 $ 2016 $ 1,235,808 18,066,506 19,302,314 479,282 479,282 79,792,247 (60,969,215) 18,823,032 1,284,725 10,431,590 11,716,315 1,036,790 1,036,790 70,214,457 (57,784,708) 12,429,749 (1,434,282) - (1,434,282) (1,750,225) - (1,750,225) Financial position Assets Total current assets Total non-current assets Total assets Liabilities Total current liabilities Total liabilities Equity Contributed equity Accumulated losses Total equity Financial performance Loss for the year Other comprehensive income Total comprehensive loss 38 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017FI NANCIAL NOT ES ( CONT) NOTE 25: CONTINGENT ASSETS AND LIABILITIES There are no contingent liabilities or contingent assets at balance date. NOTE 26: CAPITAL COMMITMENTS The total capital commitment for exploration in the 12 months from this report amount to $400,891. NOTE 27: COMPANY DETAILS The registered office of the Company is: Torian Resources Limited 104 Colin Street West Perth WA 6005 The principal place of business is: Torian Resources Limited 104 Colin Street West Perth WA 6005 39 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017 DIRE CTORS’ DECL ARAT ION The Directors of the Company declare that: 1. the financial statements and notes, as set out on pages 16 to 39, are in accordance with the Corporations Act 2001 and: a. comply with Accounting Standards and the Corporations Regulations 2001; and b. give a true and fair view of the financial position as at 31 December 2017 and of the performance for the year ended on that date of the Company and Consolidated Group. 2. the Company has included in note 1 to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards; 3. the Directors have been given the declaration required by Section 295A of the Corporations Act from the Chief Executive Officer for the financial year ended 31 December 2017; 4. in the Director’s opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and 5. the remuneration disclosures included on pages 11 to 13 of the Directors’ Report (as part of the Audited Remuneration Report) for the year ended 31 December 2017, comply with section 300A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Board of Directors. Andrew Sparke Non-executive Chairman Sydney, 29 March 2018 40 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017 AUDI TOR’S REPORT INDEPENDENT AUDITOR’S REPORT To the Members of Torian Resources Ltd Opinion We have audited the financial report of Torian Resources Ltd (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 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) ii) giving a true and fair view of the Group's financial position as at 31 December 2017 and of its financial performance for the year then ended; and 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 Group 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 to provide a basis for our opinion. 41 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017AUDITOR’S REPORT ( CONT) Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Key Audit Matter How our audit addressed this matter Acquisition of Cascade Resources Limited Refer to Note 12 in the financial statements TNR acquired 100% of Cascade Resources Limited on 20 April 2017 through a consideration of 50,870,133 fully paid ordinary shares at 11.5 cents per share. The transaction is non-routine and considered complex from an accounting perspective. Our audit procedures in relation to accounting for acquisition of Cascade included the following: • Reviewing the various Sale and Purchase Agreements in order to obtain an understanding of the transaction and the related accounting considerations. • Discussing the transaction with the various management personnel who were involved in the transaction in order to evaluate what the key considerations were in relation to the transaction. • Critically evaluating the key assumptions used by management the proposed in determining accounting treatment having consideration of the various related documents and agreements as well as the requirements of the Australian Accounting Standards. • We reviewed the consolidation workings and the resultant journal entries for consistency with our and Australian Accounting expectations Standards. • We reviewed and evaluated the appropriateness of the related financial statement disclosures. 42 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017AUDI TOR’S REPORT (CONT) Carrying Value of Capitalised Exploration Expenditure Refer to Note 14 in the financial statements The Group has capitalised exploration expenditure with a carrying value of $18m. We determined this to be a key audit matter due to the significant management judgement involved in assessing the in accordance with AASB 6 carrying value Exploration for and Evaluation of Mineral Resources, including: • Determination of whether expenditure can be finding specific mineral associated with resources, and that expenditure is allocated to an area of interest; the basis on which • Assessing whether impairment are present; any indicators of • Determination of whether exploration activities have progressed to the stage at which the existence of an economically recoverable mineral reserve may be determined. • • Our audit procedures in relation to the carrying value of capitalised exploration costs included: • Ensuring that the right to tenure of the areas of interest was current through confirmation with the relevant government departments; • Critically assessing evaluating management’s assessment that no indicators of impairment existed; and Agreeing a sample of the additions to capitalised exploration expenditure during to supporting documentation, and ensuring that the amounts were capital in nature; the year discussions with Through the Group’s management team, and review of the Group’s ASX announcements and other relevant documentation, assessing management’s determination that exploration activities have not yet progressed to the point where the existence or otherwise of an economically recoverable mineral resource may be determined. 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 31 December 2017, but does not include the financial report and the 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 conclusion 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. 43 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017AUDITOR’S REPORT ( CONT) 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. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/Pronouncements/Australian-Auditing- Standards/Auditors-Responsibilities.aspx. This description forms part of our auditor's report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 11 to 13 of the directors' report for the year ended 31 December 2017. In our opinion, the Remuneration Report of Torian Resources Ltd, for the year ended 31 December 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. RSM Australia Partners G N Sherwood Partner Sydney, 29 March 2018 44 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017SHAREHOLDER INFORMATION Spread of Shareholders At 5 April 2018, Torian Resources Limited had 1,718 shareholders. At a general meeting every shareholder present in person or by proxy, attorney or representative has one vote on a show of hands and, on a poll, one vote for each fully paid share held. Spread of Holdings Range 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Total No of Holders 548 246 133 484 308 1,718 No of Units % of Total Issued Capital 0.05% 0.36% 0.51% 10.98% 88.11% 100% 97,436 726,657 1,025,601 22,171,091 177,976,113 201,996,898 There were 830 shareholders holding less than a marketable parcel of 6,249 shares as at 5 April 2018. Substantial Shareholders The following organisations have disclosed substantial shareholder notices. Holder Name TRIBUNE RESOURCES LTD TURKEY INVESTMENTS PTY LTD SIERRA RESOURCES LTD Top 20 Holdings as at 5 April 2018 Number of Shares 13,598,842 10,014,969 10,111,500 % voting power 6.73 6.20 6.26 Holder Name TURKEY INVESTMENTS PTY LTD SIERRA RESOURCES LTD UBS NOMINEES PTY LTD RAND MINING LTD TRIBUNE RESOURCES LTD R&R VENTURE PARTNERS II LLC JEMDA PTY LTD OURO PURA PTY LTD DOBEROTTO PTY LIMITED JEMDA PTY LTD JOHNS CORPORATION PTY LTD BNP PARIBAS NOMINEES PTY LTD ORBIT DRILLING PTY LTD CS FOURTH NOMINEES PTY LIMITED MR GREGORY CLYDE CAMPBELL + MRS DIANE SUE CAMPBELL ASIA INSURANCE HOLDINGS PTE LTD KATSUN FINANCIAL PTY LTD LEET INVESTMENTS PTY LIMITED MR TIMOTHY MCGOWEN + MRS DANIELLE MCGOWEN TASMAN TECHNOLOGY PTY LIMITED TOTAL Shares 10,146,275 10,111,500 9,345,476 6,529,421 6,529,421 5,716,485 4,437,500 4,000,000 3,745,245 3,634,172 2,958,204 2,637,671 2,549,681 2,206,375 2,150,000 1,979,797 1,947,022 1,875,000 1,655,000 1,500,000 41,579,577 % 5.02 5.01 4.63 3.23 3.23 2.83 2.2 1.98 1.85 1.8 1.46 1.31 1.26 1.09 1.06 0.98 0.96 0.93 0.82 0.74 42.4 45 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017LI ST OF TENEMENTS LOCATION Sapphire, QLD Sapphire, QLD Sapphire, QLD Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Wiluna, WA Coolgardie, WA Coolgardie, WA Coolgardie, WA Coolgardie, WA Coolgardie, WA Coolgardie, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Bardoc, WA Bardoc, WA Bardoc, WA Bardoc, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Zuleika, WA Bardoc, WA Bardoc, WA Zuleika, WA Bardoc, WA LOCATION Bardoc, WA Zuleika, WA Bardoc, WA Zuleika, WA NAME OF JV Queensland Queensland Queensland Zuleika Zuleika Zuleika Zuleika Zuleika Malcolm JV Mt Stirling Well Mt Stirling JV Mt Cutmore JV Mt Keith Gibraltar South Gibraltar South Gibraltar South Gibraltar South Gibraltar South Gibraltar South Zuleika Zuleika Zuleika Zuleika Zuleika Zuleika Zuleika Zuleika Zuleika Zuleika Zuleika Zuleika Zuleika Bardoc Bardoc Bardoc Bardoc Zuleika Zuleika Zuleika Zuleika Zuleika Zuleika Broad Arrow Zuleika Bardoc Bardoc Zuleika Bardoc NAME OF JV Bardoc Zuleika Bardoc Bardoc TENEMENT ML 70094 ML 70095 ML 70096 E 24/190 M 16/229 M 16/491 M 24/975 M 26/572 M 37/475 M 37/1305 M 37/1306 M 37/1311-1313 M 53/490-491 P 15/5560 P 15/5672 P 15/5914 P 15/5922-5924 P 15/6074-6078 P 15/6114-6115 P 16/2621-2623 P 16/2837-2841 P 16/2843-2856 P 16/2874-2887 P 16/2896 P 16/2901-2902 P 16/2913-2915 P 16/2943-2953 P 16/2959-2960 P 16/2964-2967 P 16/3024-3026 P 24/4418-4429 P 24/4468 P 24/4471 P 24/4487 P 24/4512 P 24/4583 P 24/4679 P 24/4749 P 24/4827-4831 P 24/4865-4874 P 24/4917-4923 P 24/4925-4942 P 24/4941-4942 P 24/4996 P 24/4998 P 24/5003-5009 P 24/5013 P 24/5021 TENEMENT P 24/5023-5035 P 24//5078-5081 P 24/5082-5086 P 24/5089-5093 46 INTEREST 100% 100% 100% 100% 100% 90% 100% 100% 51% 100% 51% 51% Option to earn 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% INTEREST 100% 100% 100% 100% TORIAN RESOURCES LIMITED ANNUAL REPORT 2017LI ST OF TENEMENTS (CONT) TENEMENT P 24/5103-5105 P 24/5247 P 25/2348-2349 P 25/2493 P 26/4011-4013 P 26/4086 P 26/4101-4104 P 26/4106-4115 P 26/4139 P 26/4141-4143 P 26/4152-4155 P 26/4209-4219 P 26/4275-4276 P 26/4292 P 26/4310 P 27/2202-2203 P 27/2261 P 37/8073-8075 P 37/8116 P 37/8225-8227 P 37/8240-8243 P 37/8368 P 37/8523-8524 P 37/8568 P 37/8623-8624 P 37/8625-8632 P 37/8646-8647 P 37/8648 P 37/8649 P 37/8650 P 37/8651 P 37/8652-8653 P 37/8659-8661 P 37/8662 P 37/8663 P 37/8664-8665 P 37/8712 P 37/8730-8733 P 37/8745-8748 P 37/8754 P 37/8791-8793 P 37/8820-8826 P 37/8831-8834 P 37/8838-8840 P 37/8845-8861 P 37/8862-8863 P 37/8864-8866 P 37/8881-8889 P 37/8890-8891 P 37/8892-8900 P 37/8928 P 37/9105 LOCATION Zuleika, WA Zuleika, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Kalgoorlie, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA Leonora, WA NAME OF JV Bardoc Zuleika Mt Monger Mt Monger Kanowna South Mt Monger Mt Monger Mt Monger Mt Monger Mt Monger Five Mile Hill Boorara Mt Monger Mt Monger Mt Monger Kanowna South Kanowna South Mt Stewart JV Malcolm JV Mt George JV Mt Cutmore JV Mt Stirling Malcolm JV Mt Stirling Mt Stewart JV Mt Stewart JV Mt Cutmore JV Mt George JV Braemore JV Rabbit Warren South Braemore JV Rabbit Warren South Braemore JV Mt George JV Rabbit Warren South Braemore JV Mt Stirling Malcolm JV Malcolm JV Malcolm JV Calypso Malcolm JV Mt Cutmore JV Mt Cutmore JV Mt Stiriling Mt George JV Malcolm JV Mt Stiriling Malcolm Malcolm JV Mt George JV Calypso INTEREST 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 51% 51% 51% 51% 100% 51% 100% 51% 51% 51% 51% 51% 100% 51% 100% 51% 51% 100% 51% 100% 51% 51% 51% 100% 51% 51% 51% 100% 51% 51% 100% 100% 51% 51% 100% 47 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017MINE RAL RESOURCES STAT EMENT As at 31 December 2017, Torian Resources had total Inferred JORC Resources of 37,477 oz Au. Project JORC Category Total Project Resources Tonnes g/t Au Oz Torian’s Interest (On completion of the Acquisition Agreements) Mt Stirling1 Mt Stirling Well2 Malcolm Total Inferred Inferred Inferred Inferred 259,750 41,250 48,000 349,000 2.44 8.54 3.72 3.34 20,400 11,327 5,750 37,477 51-90%1 100% 51-90%1 Notes: 1. 2. Cascade holds a contractual right to acquire 51% and has the right to earn up to a 90% pursuant to the relevant joint venture agreements. Mt Stirling Well is a prospect within the Mt Stirling Project. The Mt Stirling Project is located approximately 40 kilometres north west of Leonora. The Malcolm Project is located approximately 20 kilometres east of Leonora. There were no changes to the Company’s JORC Resources as at 31 December 2016. Governance arrangements and internal controls The Company’s resource estimates are prepared by the Managing Director who is a qualified geologist with more than 25 years’ experience and is a member of the Australian Institute of Mining and Metallurgy and is a Competent Person as defined by the 2012 edition of the JORC Code. The resource estimates are prepared in accordance with the 2012 edition of the JORC Code. The resources are subject to internal peer review from time to time, which have not highlighted any errors, omissions or changes. Competent Person Statement Information in this report pertaining to mineral resources and exploration results was compiled by Mr MP Sullivan who is a member of Aus.I.M.M. Mr Sullivan is the chief geologist of Jemda Pty Ltd, consultants to the Company. Mr Sullivan has sufficient experience which is relevant to the style of mineralisation and the type of deposit that is under consideration and to the activity that he is undertaking to qualify as a competent person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Sullivan consents to the inclusion in the report of the matters based on his information in the form and context in which is appears 48 TORIAN RESOURCES LIMITED ANNUAL REPORT 2017R E S O U R C E S LTD Torian Resources Limited ABN 72 002 261 565 and controlled entities 104 Colin Street West Perth WA 6005 Telephone: (08) 9420 8208 Fax: (08) 9322 4130 Email: info@torianresources.com.au www.torianresources.com.au 

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