ANNUAL

R E P O RT

Chairman's Statement 3

Strategic Report 15

Board of Directors 19

Directors' Report 21

Corporate Governance Statement 26

Statement of Directors' Responsibilities 28

Independent Auditor's Report to the Members of Churchill Mining Plc 29

Consolidated Statement of Comprehensive Income 31

Statement of Financial Position 32

Statement of Changes In Equity 33

Statement of Cash Flows 35

Notes to the Financial Statements 36

Directors Solicitors

David Quinlivan Clifford Chance

Nicholas Smith Level 7

Gregory Radke 190 St Georges Terrace

Fara Luwia Perth WA 6000

Kiran Vadlamani

Nikita Rossinsky Ronaldsons LLP

55 Gower Street

Company Secretaries London WC1E 6HQ

Stephen Ronaldson United Kingdom

Russell Hardwick

Registered Office

Registrar 55 Gower Street

Share Registrars Ltd London WC1E 6 HQ

The Courtyard, United Kingdom

17 West Street,

Farnham, Surrey GU9 7D Indonesian Subsidiary Office

United Kingdom Wisma Kosgoro Building

18th Floor, Jl M H Thamrin 53

Bankers Jakarta Pusat 10350

HSBC Bank Plc Republic of Indonesia

94 Kensington High Street

London W8 4SH Auditors

United Kingdom BDO LLP

55 Baker Street

Australian Office London W1U 7EU

Suite 1, 346 Barker Road United Kingdom Subiaco WA 6008

Australia

Nominated Adviser and Broker Northland Capital Partners Limited 131 Finsbury Pavement

London EC2A 1NT United Kingdom

Dear Shareholder

I present Churchill Mining Plc's ("Churchill" or the "Company") Full Year Report for the 12 months ended 30 June 2016.

Introduction

During the year the Company continued to actively pursue its claim - currently quantified at US$1.315 billion (plus interest from July 2014) - against the Republic of Indonesia ("Indonesia") for unlawful measures taken by Indonesia against Churchill's interests in the East Kutai Coal Project ("EKCP").

The unlawful measures taken by Indonesia include Indonesia's revocation (without justification, compensation or due process) of the mining licences that underpinned the EKCP (the "EKCP licences"), which were held by Churchill and its local partner in the project, the Ridlatama Group.

At the time the EKCP licences were illegally revoked, Churchill and its wholly-owned subsidiary Planet Mining Pty Ltd ("Planet") held a 75% interest in the EKCP. The area covered by the EKCP licences (i.e. the EKCP) contained a JORC Resource of 2.8 billion tonnes and incorporated a JORC Reserve of 980 million tonnes.

Churchill brings its claims against Indonesia under the United Kingdom-Indonesia Bilateral Investment Treaty (the "UK BIT"); Planet's claim - which is being run in consolidation with Churchill's case - is brought under the Australia-Indonesia Bilateral Investment Treaty (the "Australia BIT"). In the summary that follows, unless otherwise indicated, where I refer to Churchill or the Company I am also referring to Planet.

The consolidated Churchill/Planet arbitration is being conducted at the International Centre for Settlement of Investment Disputes ("ICSID"). The arbitral tribunal hearing the case comprises highly- credentialed arbitrators: Professor Gabrielle Kaufmann-Kohler (Chairperson) from Switzerland, Professor Albert Jan van den Berg from the Netherlands and Judge Michael Hwang SC from Singapore.

In legal terms, Churchill and Planet's causes of action are brought primarily under the expropriation and Fair and Equitable Treatment ("FET") provisions of the respective treaties.

I am pleased to report on developments in the ICSID arbitration both during the financial year and post

30 June 2016. These developments relate to Indonesia's Forgery Dismissal Application and the associated hearing, briefs and call for further submissions.

Developments in the ICSID arbitration during the year

1. Document Authenticity - Hearing

   Pursuant to ICSID Procedural Order 15, Indonesia's Forgery Dismissal Application was heard in Singapore between 3 and 10 August 2015. Churchill and Planet were represented by Clifford Chance LLP and Robert Richter QC with members of the Churchill board and management also in attendance at the hearing.

   The conduct of the hearing included fact witnesses, oral presentations and expert witnesses. All of the witnesses for Churchill whom Indonesia requested for cross-examination attended the hearing. With the exception of the very person responsible for the revocation of the Ridlatama mining licences in

   which Churchill held a 75% interest - former Regent of East Kutai, Mr Isran Noor - all of the witnesses for Indonesia whom Churchill requested for cross-examination attended the hearing.

   As the party that brought the Forgery Dismissal Application, Indonesia went into the August 2015 document authenticity hearing with a lot to prove. It was for Indonesia to:

2. firstly establish, with clear and convincing evidence, that the disputed mining licences were forged by Ridlatama (as alleged by Indonesia);

3. secondly then prove, again with clear and convincing evidence, the "massive, systematic and sophisticated scheme to defraud Indonesia" alleged in the Forgery Dismissal Application; and

4. finally address the legal consequences in the event that a finding of forgery were to be made.

At the hearing the Company and its solicitors argued that the evidence contradicting the dismissal application was overwhelming. It is Churchill's view that Indonesia categorically failed step 1.) and barely attempted steps 2.) and 3.). The key points that lead Churchill to this view include:

• Isran Noor - who Churchill considers to be a key figure in this dispute - refused to attend the hearing and as a result of his refusal to attend, the Tribunal formally excluded his evidence, effectively disposing of Indonesia's allegation that Mr Noor was "tricked" into hand signing the long-term (initial term of 20 years with options to extend for a further 20 years) Exploitation Licences.

• the most senior of Indonesia's witnesses was evasive and repeatedly called for people including Mr Noor, his lawyer and his "friend" General Prabowo to answer questions about the events that took place;

• a number of Indonesia's other witnesses freely acknowledged the existence of important documents that Indonesia refused to provide or earlier said either never existed or had been lost;

• not one of Indonesia's witnesses gave any direct evidence that Ridlatama either:

  • owned or operated the device alleged to have been used in the application of the impugned signatures to the disputed documents; or more generally

  • engaged in acts of forgery or fraud.

• no documentary evidence was introduced by Indonesia to show that the first of Ridlatama's mining licence applications - the General Survey licence applications - were rejected at this stage by a number of senior officials from the East Kutai Regency government. Further, these same senior officials admitted their direct involvement in the subsequent administration preceding the grant of the later exploration and exploitation phases of the East Kutai Coal Project licences;

• both Indonesia and its witnesses conceded that if for the sake of argument the disputed documents were forged, the forging of these documents could only have occurred with assistance from an "insider" - the immediate legal consequence of which would be that Indonesia would be responsible for the criminal wrongdoing of its public officials;

• evidence was introduced (supported by Indonesia's witnesses) that showed Nusantara did not have valid title to the EKCP area at the time Ridlatama was granted its general survey licences;

• evidence was introduced that extensive survey, exploration and pre-development work was undertaken at the EKCP by Ridlatama / Churchill while complying with the East Kutai Regency and the Ministry of Energy and Mineral Resources ("MEMR") filing and payment requirements. Indonesia on the other hand failed to introduce any evidence that Nusantara performed any work or complied with any of its payment and reporting obligations between 2006 and July 2008, when Nusantara's exploration licences were extended or revised (unlawfully, in Churchill's view) by Mr Noor; and