Model Financial Accounts
Axiom Mining Limited
ARBN 81 119 698 770
Interim Financial Report
for the half-year ended 31 March 2016
This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual financial report for the year ended 30 September 2015 and any public announcements made by Axiom Mining Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
All amounts in this interim financial report are in Australian dollars unless stated otherwise.
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Your directors submit the financial report of the consolidated group for the half-year ended 31 March 2016.
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Directors
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The names of directors who held office during or since the end of the half-year:
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Mr Ryan R Mount
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Executive Director and Chief Executive Officer
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Mr Stephen R Williams
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Non-Executive Director and Chairman (resigned 18 February 2016)
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Mr Jeremy R Gray
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Non-Executive Director
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Mr Robert L Barraket
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Non-Executive Director and Chairman (appointed 18 February 2016)
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Review of operations Solomon Islands Isabel Nickel Project
On 29 December 2015, Axiom Mining Limited (Axiom) announced an update to the independent JORC Mineral Resource estimate for Prospecting Licence 74/11 area (Kolosori tenement). This JORC Mineral Resource estimate upgrade followed the addition of 527 drill holes from the second phase of drilling completed since the maiden JORC Mineral Resource estimate announced on 30 September 2015.
Site infrastructure development was on track to achieve Axiom's first bulk shipment of ore in line with customer requirements, until work was ceased in March 2016 due to the Solomon Islands Court of Appeal decision (see below).
West Guadalcanal Project
A technical review of the West Guadalcanal Project in the north west of Guadalcanal Island in Solomon Islands was completed. Axiom is proceeding through the renewal process of the project's Prospecting Licence.
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Litigation proceedings
The Solomon Islands Court of Appeal delivered judgment in relation to the Isabel Nickel Project on 21 March 2016, and ordered that the land where the Kolosori deposit is located remains customary land and that Axiom KB Limited's (Axiom KB) registered lease and Prospecting Licence be set aside.
The judgment also held that SMM Solomon Limited ought not to be awarded a letter of intent for a Prospecting Licence for the tenement, as it had breached Solomon Islands' land banking provisions by holding too many Prospecting Licences.
No adverse findings were made about the conduct of Axiom KB or its officers, and Axiom's partnership with landowners remains strong. The company has submitted its application for a Prospecting Licence for the Kolosori tenement, and is awaiting formal feedback on its application from the Solomon Islands Government.
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Corporate
In November 2015, Axiom entered into a convertible note facility agreement with InCoR Holdings Plc (InCoR) for an amount up to AU$15 million to fund the initial phase of mine development at the Isabel Nickel Project. Axiom also entered into a strategic partnership with InCoR and its 70% owned subsidiary InCoR Technologies Limited (InCor Technologies).
This was followed by an off-take and ore pre-payment agreement with global independent trading house Gunvor for production from the Isabel Nickel Project in December 2015.
In March 2016, InCoR converted $5 million of its Convertible Note to equity, giving Axiom the flexibility over future project financing. InCoR is now a significant and strategic shareholder in Axiom. President of InCoR Technologies Professor David Dreisinger, co-inventor of the Starved Acid Leaching Technology, was appointed as Technical Advisor to Axiom.
Following the Solomon Islands Court of Appeal judgment, Axiom's strategic partners confirmed their ongoing commitment to the long-term development of the Isabel Nickel Project.
On the 4 December 2015, an Extraordinary General Meeting was held with all resolutions passed.
Axiom's Annual General Meeting was held on 31 March 2016 in Hong Kong with all resolutions passed.
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Rounding of amounts
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The consolidated group has applied the relief available to it in ASIC Class Order 98/100 and accordingly certain amounts in the financial report and the directors' report have been rounded off to the nearest thousand dollars.
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Auditor's independence declaration
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The lead auditor's independence declaration under S 307C of the Corporations Act 2001 is set out on page 5 for the half-year ended 31 March 2016.
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This directors' report is signed in accordance with a resolution of the Board of Directors.
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Director
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Robert Barraket
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Dated this 10th day of June 2016
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HALL CHADWICK ,(NSW)
Chartered Accountants and Business Advisers
AXIOM MINING LIMITED ABN 81 119 698 770
AND ITS CONTROLLED ENTITIES
AUDITOR'S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF AXIOM MINING LIMITED
SYDNEY
Level 40
2 Park Street
Sydney NSW 2000 Australia
I declare that, to the best of my knowledge and belief, during the half year ended 31 March 2016 there have been no contraventions of:
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the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review, and
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any applicable code of professional conduct in relation to the review.
HALL CHADWICK
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 10 June 2016
GPO Box 3555
Sydney NSW 2001
Ph: (612) 9263 2600
Fx : (612) 9263 2800
A member of AGN International Ltd, a worldwide association of separate and independent accounting
and consulting firms
www.hallchadwick.com.au
SYDNEY • NEWCASTLE • PARRAMATIA • PENRITH • MELBOURNE • PERTH • BRISBANE • GOLD COAST • DARWIN
Liability limited by a scheme approved under Professional Standards Legislation.