Mount Ridley Mines : Half Year Financial Statements

Mount Ridley Mines Limited ABN 93 092 304 964 and its controlled entity Half year report for the half-year ended 31 December 2016 Corporate directory Board of Directors

Mr Michael Pedley Non-Executive Chairman

Mr Ashley Hood Managing Director

Mr Guy Le Page Non-Executive Director

Mr Keith Bowker Non-Executive Director

Company Secretary

Mr Keith Bowker

Registered Office & Principal Place of Business

Suite 1, 56 Kings Park Road

West Perth, Western Australia 6005 Tel: [phone]

Fax: [phone]

Postal Address

PO Box 964

West Perth, Western Australia 6872

Auditors

HLB Mann Judd

Level 4, 130 Stirling Street Perth, Western Australia 6000

Share Registry

Security Transfer Australia Pty Ltd 770 Canning Highway

Applecross, Western Australia 6153 Tel: [phone]

Fax: [phone]

Stock Exchange

Australian Securities Exchange Level 40, Central Park

152-158 St Georges Terrace Perth, Western Australia 6000

ASX Code

MRD

Half year report for the half-year ended 31 December 2016 Contents

Directorsí reportÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ.. 1

Auditorís independence declarationÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ. 3 Independent auditorís review reportÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ.. 4 Directorsí declarationÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ.. 6 Condensed consolidated statement of profit or loss and other comprehensive incomeÖÖ 7 Condensed consolidated statement of financial positionÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ.. 8 Condensed consolidated statement of changes in equityÖÖÖÖÖÖ.ÖÖÖÖÖÖÖÖÖÖÖÖ... 9 Condensed consolidated statement of cash flowsÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ.. 10 Notes to the condensed consolidated financial statementsÖÖ..ÖÖÖÖÖ.ÖÖÖÖÖÖÖÖÖÖ 11

Directorsí report

The directors of Mount Ridley Mines Limited (ìMount Ridleyî or ìthe Companyî) submit herewith the financial report of Mount Ridley Mines Limited and its subsidiary (ìthe Groupî) for the half-year ended 31 December 2016. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Names of Directors

The names of Directors who held office during or since the end of the half-year are: Mr Michael Pedley

Mr Ashley Hood

Mr Guy Le Page Mr Keith Bowker Mr Robert Downey Mr Dean Goodwin

The above named directors held office during and since the end of the half-year except for: Mr Ashley Hood ñ appointed 31 August 2016

Mr Robert Downey ñ resigned 31 August 2016 Mr Dean Goodwin ñ resigned 31 August 2016

Review of operations

During the half-year ended 31 December 2016, Mr Ashley Hood was appointed as Managing Director and Mr Michael Pedley assumed the role of Non-Executive Chairman following the resignations of Mr Dean Goodwin and Mr Robert Downey.

Exploration efforts at the Companyís 100% owned Mt Ridley Project within the highly prospective Albany- Fraser Range province continued under the appointment of CSA Global headed by its nickel sulphide expert Mr Tony Donaghy and renowned geophysics specialist Mr Russell Mortimer of Southern Geoscience Australia.

A down hole electromagnetic survey (DHTEM) located an off-hole conductor at MRDD016. Modelling defined a strong (>10,000 Siemens) local conductor centred at approximately 650m downhole, immediately off-hole below and to the east of diamond hole MRDD016. Subsequently holes MRDD017 (410m) and MRD018 (732m) were drilled to test the off-hole conductor located down MRDD016. Both MRDD017 and MRDD018 missed the conductor target due to previously unknown geological conditions causing the diamond drill holes to excessively deviate off course.

The CSA Global - Mt Ridley Review was announced on 12 December 2016. The Company was proactive and had already been active in implementing exploration techniques and methods on a regional scale to best place the Mt Ridley Project and Company for success in 2017.

Regional ground gravity surveys highlighted two new priority areas immediately south of Target 19 (The Lake) and Target 2 (Tyrrellís) and are localised gravity highs/clusters that could be indicative of thicker accumulations of more dense mafic/ultramafic rocks and sulphide mineralisation (see Figure 1 below).

A combination of magnetic, gravity and geochemistry data sets are being compiled to generate new targets for exploration in 2017 with the ongoing support of CSA Global.

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