Axiom Mining 2015 Annual Report

COMPANY FINANCIAL REPORT

Notes to the financial statements for the year ended 30 September 2015

104

26. Directors remuneration (continued) At the extraordinary general meeting held on 15 October 2015, the shareholders approved the issue of the 150,000 Performance Rights at an exercise price of AU$0.50. The Rights may not be exercised before 31 December 2015 and will expire on 30 June 2017.

Fair value per share at approval date

Number of

Exercise Price

Number Vested

rights Expiry date

Jeremy Gray

150,000 30 June 2017 0.067 cents 0.50 cents

–

Once the Rights become exercisable, the Rights may be exercised at any time prior to either their lapsing or being forfeited but subject to the following restrictions on their transfer: a. 20% may be sold immediately

b. 15% restricted from transfer for 3 months c. 15% restricted from transfer for 6 months and d. the balance restricted from transfer whilst Mr Gray remains the Director of the Company.

The Rights are subject to such other terms and conditions in relation to participation in share issues and bonus issues, takeover of the Company and other matters in accordance with the Director and Executive Performance Rights Plan and the invitation provided in connection with the Rights. The fair value at grant date is independently determined using a Monte Carlo pricing model that takes into account the exercise price, the term of the rights, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the rights. 27. Fair 7alue and fair value hierarchy of financial instruments The following tables illustrate the fair value measurement hierarchy of the Company’s financial instruments: Assets/(liabilities) measured at fair value:

AXIOM MINING LIMITED ANNUAL REPORT 2015

31 October 2015

Fair value measurement using

Level 1 AU$

Level 2 AU$

Level 3 AU$

Total AU$

Embedded derivative liability (at fair value)

581

–

–

581

28. "pproval of the financial statements The financial statements were approved and authorised for issue by the Board of Directors on 12 January 2016.