LEYSHON RESOURCES LIMITED

ABN 75 010 482 274

ANNUAL REPORT FOR THE YEAR ENDED

31 DECEMBER 2015

CORPORATE DIRECTORY

Directors

Paul Atherley- Non-Executive Chairman Corey Nolan - Non-Executive Director Richard Seville - Non-Executive Director

Company Secretary

Murray Wylie

Principal and Registered Offices Australia

Suite 3, Level 3

1292 Hay Street

West Perth WA 6005 Telephone: +618 9321 0077

Facsimile: +618 9322 4073

Auditor

RSM Australia Partners

Bankers

National Australia Bank

Corporate Governance

The Company has adopted the 3rd Edition of the ASX Corporate Governance Recommendations.

A summary statement which has been approved by the Board together with current policies and charters is available on the Company website at www.leyshonresources.com.

Share Register

Computershare Investor Services Pty Ltd Level 11

172 St Georges Terrace Perth WA 6000 Australia

Telephone: 1300 787 272

International: +618 9323 2000

Facsimile: +618 9323 2033

Solicitors

Hopgood Ganim Lawyers - Brisbane

Stock Exchange Listing Australian Securities Exchange Home Branch - Perth

2 The Esplanade

Perth WA 6000

ASX Code

LRL

Index

Chairman's Statement 3

Directors' Report 5

Auditor's Independence Declaration 17

Directors' Declaration 18

Consolidated Statement of Profit or Loss and Other Comprehensive Income 19

Consolidated Statement of Financial Position 20

Consolidated Statement of Changes in Equity 21

Consolidated Statement of Cash Flows 22

Notes to the Financial Statements 23

Independent Auditor's Report 49

ASX Additional Information 51

CHAIRMAN'S STATEMENT

Dear Shareholder,

The Company's primary focus during the year has been on simplifying the corporate structure and positioning the Company to pursue an investment opportunity, and ultimately seek re-listing of its securities on the Australian Securities Exchange ("ASX").

Over the last two years, the Company has been engaged with the stakeholders in the Mt Leyshon mine as part of a strategic review to reduce the long term costs of holding this legacy asset. The Directors resolved that a restructure of the Mt Leyshon asset was a priority focus such that Leyshon would be a viable entity that can go through a recapitalization and stock exchange listing process. This process has taken some time given the scale of the project and number of stakeholders involved.

At Mt Leyshon, the Company holds five Mining Licenses ("ML's"), an Environmental Authority ("EA") and land covering the historical mining operations which are now subject to long-term rehabilitation. Newmont Australia Pty Ltd performed management services related to the site closure (including rehabilitation) in 2002-2003.

The Company has been incurring significant and growing costs associated with holding Mt Leyshon including, ML and EA fees, Council rates, land taxes and other administration costs. The ML and EA cannot be relinquished until the rehabilitation is completed and the ML is cancelled by the Queensland Department of Mines and Natural Resources, and the EA by the Queensland Department of Environment and Heritage Protection.

During the period, the Company also terminated its investment in International Tungsten Services ("ITS"). A loan that was provided to ITS was fully provided for in the Company's financial accounts for the year ending 31 December 2014. The Company remains in touch with the directors of ITS and will seek repayment should their financial position improve.

In order to preserve capital during this restructuring phase, Leyshon has also implemented cost-saving initiatives during the year, including a restructuring of the Board and a 50% cut in directors' fees. After obtaining shareholder approval at the 2015 AGM, admission to trading of Leyshon's shares on AIM was cancelled from 8 June 2015, with estimated cost savings of more than AUD$140k per annum as well as reducing the costs of implementing a new transaction when identified.

The Company continues to review investment opportunities whilst its works through its corporate restructuring initiatives. The directors anticipate forging a new strategic direction for the Company once its restructuring initiatives are completed.