Axiom Mining 2015 Annual Report

COMPANY FINANCIAL REPORT

Directors’ report

75

The directors present their report and the audited financial statements for the Company consisting of Axiom Mining Limited (the ‘Company’ or ‘Axiom’) for the year ended 30 September 2015. Principal activity The principal activity of the Company is investment holding and there was no significant changes in the nature of the Company’s principal activity during the year. Share issued Details of movements in the Company’s share capital during the year ended 30 September 2015, together with the reason therefor, are set out in Note 19(a) to the financial statements. Directors The directors during the year were: – Stephen Ray Williams (Chairman and Non-Executive Director) – Ryan Richard Mount (Executive Director and Chief Executive Officer) – Jeremy Robin Gray (Non-Executive Director – appointed 12 July 2015) In accordance with articles 114 and 115 of the Company’s articles of association, Mr Stephen Ray Williams and Mr Ryan Richard Mount were re-elected at the last Annual General Meeting. The non-executive directors and executive directors are appointed for a period of three years. Directors’ interests Details of share options scheme of the Company and performance rights are set out in the 2014/15 annual report of the Company. Link: http://www.asx.com.au/asxpdf/20150306/ pdf/42x3pdvglh2t83.pdf Save as disclosed above, at no time during the year was the Company or any of its subsidiaries a party to any arrangement to enable the Company’s directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, nor were any such rights exercised by them. Directors’ interests in transactions, arrangements or contracts Save as disclosed in Note 22 to the financial statements, no director had a material interest, either directly or indirectly, in any transactions, arrangements or contracts of significance to the business of the Company to which the Company’s subsidiaries was a party during the year.

Business review Review of the Company’s business The Company’s vision and strategy is to: – develop mineral deposits in the Asia Pacific region into medium and long term tier 1 assets – partner with Australian communities and governments – provide and implement effective sustainability programs in communities where it operates – maximise shareholder returns through cost effective exploration and growth through robust project development. The Company’s investments are still in the exploration phase of mineral deposit development, and it has accordingly recorded a net loss of AU$10,390,000 for the year. It has no other source of income. The financial position of the Company showed a strong improvement, with net assets increasing during the year from AU$1,158,000 to AU$5,201,000 at 30 September 2015. Funding for the net operational cash outflows of AU$4,359,000 was provided through successful capital raisings of AU$7,920,000, and increased borrowings of AU$6,080,000. During the year AU$10,525,000 was advanced to certain subsidiaries for their ongoing operations, mainly in exploration activity. The Company is confident of its ability to continue to raise additional share capital by share placements, options, convertible notes, or rights issues. The Company has a low gearing ratio (borrowings:equity) of only 22%, a substantial improvement from 2014 (59%). Principal risks and uncertainties facing The Company is exploring a nickel laterite deposits in the Solomon Islands (‘Isabel Nickel Project’). A major risk to the value of the Company’s major investment’s (Isabel Nickel Project) immediate development future is the outcome of the appeal with SMM Solomon Limited (‘Sumitomo’) related to the Solomon Islands Court Case 258/2011. The Court of Appeal has reserved judgement and no ruling has been handed down at the date of this report. Low nickel prices are not expected to adversely impact the economic viability of the Isabel Nickel Project due to the low cost nature of the proposed operation. The ability to attract suitable staff to remote areas can be uncertain, but three industry experts were appointed to the Axiom Mining executive management team to position for growth in the Solomon Islands.

AXIOM MINING LIMITED ANNUAL REPORT 2015