Ann: Half Year Accounts, page-3

Going Concern
The half-year financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The Company incurred a loss from ordinary activities of $767,114 for the half-year ended 31 December 2015 (2014: $13,418,665) and net cash outflows from operating and investing activities of $1,871,523 (2014: $1,081,153). In addition, there is a working capital deficiency of $814,325 as at 31 December, 2015.
The Directors are of the opinion that the Company is a going concern for the following reasons:

• The company has raised equity capital of $451,500 through its share purchase plan and $60,000 through its share
  placements since 31 December 2015
• The company has awarded a two year underground mining services contract for its A1 Gold Mine to experienced
  underground mining contractor PYBAR Mining Services Pty Limited (PYBAR) and mining works commenced on 11 January 2016. PYBAR is to invest $1,000,000 in the Company via an equity for services agreement to be directed to the decline development and ore access drives to allow production from the 1400 stockworks to commence.
• These initiatives place the Company in a position to bring the A1 Gold Mine into full time production by the end of the first quarter of 2016.
  The Directors anticipate that the Company will be cash flow positive from operations as a result of its gold mining activities and will enable the Company to continue as a going concern. In the event that additional funds are required, the Company will actively pursue further fundraising activities.
  If the Company is unable to raise sufficient funds as noted above or from other sources, there exists a material uncertainty that may cast significant doubt whether the Company will be able to continue as a going concern and, therefore, whether it will realise its assets (especially its exploration, evaluation and development assets and its property, plant and equipment) and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.