ABN 20 109 361 195

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015

Corporate Directory

Directors

Mr Andrew Viner Executive Chairman

Mr Kevin Hart Non-Executive Director Mr Andre Marschke Non-Executive Director

Company Secretary

Mr Kevin Hart

Principal and Registered Office

Suite 6, 7 The Esplanade

Mt Pleasant, Western Australia 6153 Telephone: (08) 9316 9100

Facsimile: (08) 9315 5475 Website: www.alloyres.com

Auditor

KPMG

235 St George's Terrace Perth, Western Australia 6000

Share Registry

Security Transfer Registrars Pty Ltd 770 Canning Highway

Applecross, Western Australia 6153 Telephone: (08) 9315 2333

Facsimile: (08) 9315 2233

Stock Exchange Listing

The Company's shares are quoted on the Australian Securities Exchange. The Home Exchange is Perth, Western Australia.

ASX Code

AYR - Ordinary shares

Contents Page

Chairman's Letter

Dear Fellow Shareholders,

It was a positive year for Alloy Resources notwithstanding low levels of market support for junior resource companies against the backdrop of a softening of the gold price and general weakness amongst commodities.

Alloy was able to maintain drilling activity on our principal project Horse Well by way of funding from our strong Joint Venture partner Doray Minerals Limited, who have this year committed to the second stage of their earn-in which will see a further one million dollars of exploration expenditure before May 2016. Drilling is underway and results are eagerly awaited.

One of the bright lights in the resource industry that has gone largely unnoticed is the Australian dollar gold price which has remained strong over the last year and seen consolidation within the Australian producers and active exploration occurring at mines and brownfields projects. The Horse Well Gold Project is very well located being adjacent to Northern Star's Jundee Gold Mine and hence has strategic value in the region especially if a major discovery is made.

We and our Joint Venture partner believe there is a major gold system present at Horse Well which has potential to yield a new stand-alone gold Project, and we believe the coming year will be very exciting as exploration continues.

Doray has confirmed extensive gold mineralisation at the Dusk til Dawn prospect which will now see pattern RC drill testing during the September quarter. This prospect has illustrated the potential of the regional Crack of Dawn target area and initial regional air-core drill testing has located numerous new targets which are to be followed up during the second year of the Joint Venture.

The Company has actively been looking for a new project that can add value for shareholders. This task has been difficult given current market conditions so low entry costs and inexpensive testing of targets have been primary parameters.

One such opportunity has been advanced in South Australia with the acquisition of 830 square kilometers of land containing an under-tested copper target at Martins Well. Sampling of historical drill core has been very encouraging, defining copper mineralization within a highly weathered gossan structure of over two kilometers strike length. This project justifies deeper drill testing either by a farm-in partner or by the Company should market conditions improve.

The Company will continue with project generation in the search for value-adding opportunities.

Thank you for your continued support and we look forward in anticipation of the results to flow from Horse Well and new project acquisitions.

Andy Viner

Executive Chairman

Review of Operations

HORSE WELL GOLD PROJECT

Farm-in partner Doray Minerals has actively explored this project during the year, and has now committed to the second stage of the Farmin which will see a further $1 million of expenditure prior to May 2016 to earn a 60% interest in the Horse Well project (Figure 1). The project is located in the north-eastern goldfields of Western Australia and is located about 50 kilometres north of the 6 million ounce Jundee Gold Mine.

Figure 1 Horse Well location on regional geology

COMPLETED EXPLORATION

Dusk til Dawn RC drilling

Completed work during the year saw two phases of RC drilling at the Dusk til Dawn prospect testing the mineralised structure defined by an oriented diamond hole ACDD001, along strike to the north- west and south-east, testing the potential for a south easterly plunging orebody.

Initial follow-up RC drilling in November 2014 targeted the structure between holes ACDD001 and DDAC054 (air-core hole explained in section below) with two holes drilled towards the south west (azimuth 225 degrees), aiming to intersect the interpreted Dusk til Dawn mineralised shear structure at right angles for the first time (Figure 3) (refer December 2014 ASX quarterly report).

DDRC001 intersected a wide zone of alteration and mineralisation and returned 65m @ 2.6g/t Au from 50m, including a zone of high-grade gold in oxide material which returned 13m @ 8.17g/t Au from 50m (Figure 2).

DDRC002, collared approximately 50m to the NE of DDRC001, intersected the Dusk til Dawn shear approximately 55m down dip and returned 21m @ 0.7 g/t Au from 140m.

High-grade gold mineralisation has so far been confirmed from DDAC054, at the northern end, towards ACDD001, ACDR002 and 003 at the southern end with the NW-SE trending mineralised structure interpreted to continue further along strike in both directions and at depth.

Figure 2. Dusk til Dawn cross section showing results from initial RC drilling.

A second phase of RC drilling for a total of 5 holes for 930m was drilled in December and January 2015 (see Figure 2). All holes intersected the structure, which appears to host gold mineralisation over at least 300m of down-plunge length (see Figure 3). Assay results received confirmed the presence of thick zones of moderate grade Au mineralisation (see ASX release 12 March 2015).

Holes DDRC006 and DDRC007 intersected what is interpreted to represent a down plunge extension. Significant results returned from the RC programme include:

• 23m @ 1.2g/t Au from 220mdh (DDRC007)

  
  

• 13m @ 0.9g/t Au from 73mdh (DDRC003)

  
  

• 21m @ 0.7g/t Au from 200mdh (DDRC006)

Figure 3 Dusk til Dawn prospect, showing plan view of recent drilling Air core drilling

As part of Doray's commitment to complete a planned and permitted program of air-core drilling to test the regional Crack of Dawn area, a large program was completed during September and early October 2014.

At Dusk til Dawn three traverses of 64 closely spaced air-core holes were drilled to the north west of the diamond hole to intersect the trend of gold mineralisation for a total of 2908 metres. The vast majority of holes intersected the expansive outer pyritic alteration zone.

Regional traverses of holes were also completed testing the granite contact along its entire 14 kilometre contact, and also the 4 kilometre long T-06 'de-magnetised zone' target. This program included 83 holes for 4,264 metres and logging has confirmed extensive areas with outer pyritic alteration as expected, including the T-06 target. The location of holes and anomalous results is shown on Figure 4 and is very encouraging given the wide spaced nature of the drill lines.

Figure 4 Significant intervals from the air core drilling programme at the Horse Well JV Project shown over magnetic image

PLANNED EXPLORATION

Doray recently commenced RC drilling at Dusk 'til Dawn in July 2015 following Heritage and environmental approval. A program of 18 holes for 3,940 metres on an 80 x 40 metre oblique pattern perpendicular to the mineralised structure is planned. RC drilling to the north west of DDAC 054 still requires Heritage clearance and offers additional strike extension potential to the Dusk til Dawn mineralisation

A large reconnaissance and infill air-core drill program targeting regional trends at Crack of Dawn is pending Heritage clearance to be completed in late August 2015. It is expected that this drilling will occur during early October.

The northern most regional air-core drill line intersected shallow impenetrable Proterozoic cover rocks and may require RC drilling once mineralised trends have been located to the south.

MARTINS WELL PROJECT

The Martins Well Project is located in the north-eastern Flinders Ranges of South Australia (Figure 5). The Company is targeting high-grade copper-silver-gold and also lead-zinc in mesothermal structural deposits. The Company has one granted Exploration Licence of 850 square kilometres.

Figure 5 Martins Well project location

The primary target is the Mammoth Black Ridge prospect where three outcropping iron rich structures have been confirmed as gossans formed from strong weathering of sulphide rich material and hydrothermal siderite.

Historical rock chip sampling shows anomalous copper and arsenic values associated with the gossans and a historical shaft reported a sample of high-grade copper-silver-gold (Figure 6).

Figure 6 Location of historical drill holes on satellite image with rock chip samples and copper values

EXPLORATION COMPLETED

Historic Diamond Core Analyses (see ASX release 16 June 2015)

During initial field inspection by the Company, two historical drill hole sites were located, however the government was not able to locate any records for these. As reported to the ASX on 12 March and 23 April 2015, drill core dated from 1959-60 was subsequently discovered by the government at their Whyalla storage facility and bought to Adelaide where the Company has now logged and sampled the core from the two holes (DD-1 and DD-2) regarded as intersecting the Mammoth Black Ridge iron gossans.

A total of 86 core samples were collected by cutting half the available core and selecting intervals coinciding where core blocks were available. Samples were analysed for 65 multi-elements by four acid digestion or fire assay and ICP-AES/ICP-MS finish.

DD-1

DD-1 was sampled from 17.53 metres to 122.22 metres (e.o.h).

The main gossan was intersected over 16 metres between 71.5 metres and 87.5 metres and was observed to be very iron rich and obviously gossanous from massive sulphides. The sulphides have created very strong acid leaching and no sulphur was recorded in the samples. A significant intersection of copper (>0.1%) was recorded from the gossan (see Figure 7 below), interpreted to be across the dip of structure;

• 20.27 metres @ 0.26% copper, 0.83 g/t silver and 648 ppm arsenic from 68.99 metres down hole

DD-2

DD-2 was sampled from 53 metres to 221.21 metres (e.o.h).

The main gossan was intersected over 15.36 metres between 66.5 metres and 81.86 metres and was observed to be very iron rich with very strong botryoidal textures and some remnant gossanous zones. Oxidation may be stronger within this structure probably because sulphides have created very strong acid leaching and no sulphur was recorded in the samples.

No significant copper was intersected within the iron rich structure although arsenic was anomalous.

Siderite mineralisation was anomalous as expected however in general copper and arsenic showed levels of only 200-1000 ppm and a peak value of 2960 ppm (0.29%) for copper and 6480 ppm (0.64%) for arsenic. These values mean the mineralisation is too disseminated to be nearing economic levels.

Figure 7 Hole DD-1 cross section with geology and assays

Geological model

Figure 8 below presents a map of the prospect with observations and interpretation of geological strata, sulphide gossans and siderite units at the Mammoth Black Ridge prospect. A very simple low to moderate temperature structurally controlled hydrothermal mineralisation style can be invoked to explain the observed mineralisation. The semi-massive sulphide (and quartz veining) appears to be a later phase in the system and requires further work to define the controls on its location and orientation.

Figure 8 Mammoth Black Ridge mapped geology on satellite image

PLANNED EXPLORATION

The Company has reviewed the historical drill core analyses and related geology and is of the opinion that better definition of the location of the semi-massive sulphides containing elevated copper assays is required prior to drilling. Two techniques to achieve this are under consideration, being either a detailed surface soil sampling program or a ground geophysical survey.