Crusader Resources : Half Yearly Report and Accounts

CRUSADER RESOURCES LIMITED

A B N: 94 106 641 963

Half year Financial Report

For the half-year ended 30 June 2017

Stephen Copulos Non-Executive Chairman Robert Smakman Managing Director

Paul Stephen Executive Director

John Evans Non-Executive Director Mauricio Ferreira Non-Executive Director Jim Rogers Non-Executive Director

Andrew Beigel

Suite 1, Level 1

35 Havelock Street West Perth WA 6005 Australia

Telephone: +61 8 9320 7500

Facsimile: +61 8 9320 7501

Internet: www.crusaderresources.com

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 Ltd

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 68 Aberdeen Street

Applecross WA 6959 Northbridge WA 6003

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

Facsimile: +61 8 9315 2233

Ordinary shares - CAS

The directors present their report together with the financial report of Crusader Resources Limited ("the Company" or "Crusader") and its subsidiaries (the Group) for the half-year ended 30 June 2017, and the auditor's review report thereon.

The directors of the company at any time during or since the end of the half-year are set out below. Directors were in office for the entire period unless otherwise stated.

Mr. S. Copulos Chairman

Mr. R. Smakman Managing Director

Mr. P. Stephen Executive Director

Mr. J. Evans Non-executive Director

Mr. M. Ferreira Non-executive Director

Mr. J. Rogers Non-executive Director

The Group incurred an after tax loss for the half-year ended 30 June 2017 of $3,857,996 (30 June 2016: loss of

$4,586,125).

On the 15 June 2017, Crusader announced to the ASX that it had entered into a binding Scheme Implementation Deed ("SID") with London AIM-listed Stratex International plc (AIM:STI) ("Stratex").

The SID allows for Stratex to acquire Crusader Resources Limited (and its controlled entities) in an all scrip transaction that will be effected by an Australian scheme of arrangement under the Corporations Act 2001 ("Transaction" or "Scheme").

In accordance with the SID, each Crusader share will be exchanged for 6.60 common shares of Stratex ("Stratex Shares") or 6.60 Stratex Shares in the form of ASX-listed CHESS Depository Interests (CDIs).

At the date of this report, a draft Scheme Booklet setting out the terms of the Scheme, notice of Scheme Meeting, Independent Expert's report and the reasons for the Crusader directors' recommendation has been submitted to the Australian Securities and Investments Commission ("ASIC") for review in accordance with the requirements of the Corporations Act 2001.

A general meeting of shareholders to approve the Scheme is expected to be convened in November 2017, subject to change, and the full implementation will be effective December 2017.

On the execution of the SID, Stratex and Crusader also entered into a secured convertible note agreement, pursuant to which Stratex agreed to make available to Crusader an interim funding solution in the principal of $1,000,000. In addition, under the terms if the convertible note agreement Crusader may request additional funding which Stratex may, in its absolute discretion, agree to provide on such terms as may be agreed in writing between the parties.

In 2017, work on the Borborema Gold Project initially focussed on achieving the key environmental permit (Licença Previa or 'LP'). The LP approved the Environmental and Social Impact Assessment Report for Borborema and followed submission of an updated project plan to the environmental authorities in 2016, which was developed in conjunction with IDEMA (the State Environmental Agency). The updated project plan proposed a reduced project footprint, dry stacked tailings and restricts project infrastructure to Crusader's owned farm area (see ASX releases 16 May 2016 and 20 July 2016 and 28 April 2017).

More recently, work at Borborema included updating the Borborema Mineral Resource estimate and Ore Reserve to comply with the 2012 version of the JORC code (ASX Announcement 24 July 2017). This was done to maintain compliance with the Australian Securities Exchange (ASX) and Australian Securities and Investments Commission (ASIC).

The Mineral Resource estimate for Borborema was previously reported in July of 2012 and the Ore Reserve in November 2012 under the 2004 version of the JORC code. There are no differences in the numbers between the versions, however the current version has additional background information and disclosures around the Mineral Resource and current explanations and discussion for the Ore Reserve.

Additional metallurgical sampling for the Borborema Project has been put on hold until the Scheme with Stratex is completed.

The Juruena Project (100% Crusader owned) is located in Central Brazil on the southern fringe of the Amazon basin, situated on the western end of the prospective Juruena-Alta Floresta Gold Belt.

Crusader has advanced the Juruena Project over 2017, working with Stratex and their consultants to assess the various development options and exploration priorities for the project. The Stratex merger will see additional funding made available to the Juruena Project with the potential to significantly increase the overall scale and value of the project. This work is ongoing and further updates will be made available as the merger completes.

Over the first half of 2017 Crusader continued its commitment to focusing on its gold assets. Prior to the end of the Half Year, the Company initiated a plan to dispose of the Posse mine and actively engaged with several parties looking for a beneficial way to realise value for Posse.

The auditor's independence declaration is included on page 24 of the half-year report.

Signed in accordance with a resolution of the directors made pursuant to s.306(3) of the Corporations Act 2001. On behalf of the directors

R. Smakman Managing Director

Perth, 13 September 2017