Crusader Resources : Full Year Statutory Accounts

Crusader Resources Limited

31 DECEMBER 2016

Contents to Annual Report

Corporate Information 2

Chairman's Letter 3

Directors' Report 4

Consolidated Statement of Profit or Loss 26

and Other Comprehensive Income

Consolidated Statement of Financial Position 27

Consolidated Statement of Changes in Equity 28

Consolidated Statement of Cash Flows 30

Notes to the Financial Statements 31

Directors' Declaration 70

Independent Audit Report 71

Auditor's Independence Declaration 75

Additional ASX Information 76

This annual report covers both Crusader Resources Limited and its subsidiaries. The Group's functional and presentation currency is Australian dollars ($).

A description of the Group's operations and of its principal activities is included in the Review of Operations and Activities in the Directors' Report on pages 4 to 25. The Directors' Report is not part of the financial report.

Stephen Copulos (Chairman)

Robert Smakman (Managing Director) Paul Stephen (Executive Director) John Evans (Non-executive Director)

Mauricio Ferreira (Non-executive Director)

Jim Rogers (Non-executive Director) - appointed 2 March 2016

Andrew Beigel

Suite 1, Level 1,

35 Havelock Street West Perth WA 6005 Australia

Telephone: +61 8 9320 7500

Facsimile: +61 8 9320 7501

Avenida do Contorno, 2090 Pilotis, Floresta, 30.110-012 Belo Horizonte - MG

Brazil

Telephone: +55 31 2515 0740

Deloitte Touche Tohmatsu Bank of Western Australia Limited

Tower 2, Brookfield Place Perth Business Banking Centre

123 St Georges Terrace Level 30, Bank West Tower

Perth WA 6000 108 St Georges Terrace

Telephone: +61 8 9365 7000 Perth WA 6000

Facsimile: +61 8 9365 7001

Security Transfers Registrars Pty Ltd GTP Legal

770 Canning Highway Level 1, 28 Ord Street

Applecross WA 6959 West Perth WA 6005

Telephone: +61 8 9315 0933 Telephone: +61 8 6555 1867

Facsimile: +61 8 9315 2233

Ordinary shares - CAS

Dear Shareholder,

I am pleased to advise that 2016 has been another significant year for Crusader Resources Ltd where we moved closer to bringing our suite of Brazilian gold projects into near-term production.

Among the milestones over the past 12 months was the announcement of an updated JORC-compliant mineral resource estimate for our wholly-owned Juruena Gold Project which delivered a significant increase in grade at the Querosene and Dona Maria prospects.

Total combined JORC compliant indicated and inferred resources for Querosene, Dona Maria and Crentes are now estimated at 1.28 million tonnes at 6.3 grams per tonne gold for 260,900 ounces. In particular, the updated mineral resource estimates for Querosene and Dona Maria include 100,000t @ 18.3 g/t for 58,300oz in the Indicated category.

The granting of a Trial Mining Licence for the Querosene prospect along with additional high-grade gold results from the resource-infill and expansion drilling program at Dona Maria were also highlights for 2016.

In a further sign of the company's intentions to become a near-term gold producer, Crusader signed a non‐binding option to purchase and install a refurbished crushing and screening plant from Brazilian equipment supplier GNA (Minerales equipamentos e Acos Especiais Ltda.), for Juruena.

Crusader also significantly bolstered its Brazilian gold team with the appointment of highly experienced mineral process engineer Carlos Fonseca as an engineering consultant and senior geologist Luis Navarro to the position of exploration manager at Crusader.

During the period, Crusader also fully repaid its debt facility with Macquarie Bank Limited, repaying the final $5 million outstanding on its general purpose debt facility, originally put in place on 26 March 2013.

Looking ahead, our primary focus for 2017 is on construction and development of Juruena and completing a revised Bankable Feasibility Study for Borborema.

I look forward to providing shareholders with updates on both these projects during the course of what promises to be a significant year for Crusader.

In closing, I would like to thank the Board and the Crusader team led by our Managing Director, Rob Smakman in Brazil and Executive Director, Paul Stephen in Australia over the past 12 months.

We are putting the building blocks in place to become a gold miner that will ultimately flow through to shareholders as the company continues to grow. There remains a very strong focus on cost-effective exploration and project development, designed to provide Crusader with a suite of projects that will deliver growth options well into the future. I am very confident we have the team and the skills to deliver on Crusader's potential.

I would also like to thank all our shareholders for their continued support. We remain extremely optimistic for 2017 and beyond with our gold division expected to deliver significant growth. I hope that you will continue with us on what has been an exciting journey to date.

Yours faithfully

Stephen Copulos Chairman