Doray Minerals : 2016 Full Year Statutory Accounts

Corporate Directory 2

Chairman's Letter 3

Company Highlights 5

Operations Review 6

Corporate Governance Statement 27

Directors' Report 35

Statement of Profit or Loss and Other Comprehensive Income 51

Statement of Financial Position 52

Statement of Changes in Equity 53

Statement of Cash Flows 54

Notes to the Financial Statements 55

Directors' Declaration 88

Auditor's Independence Declaration 89

Independent Audit Report to the Members of Doray Minerals Limited 90

Shareholder Information 92

Tenement Schedule 94

Peter Lester Non‐Executive Chairman

Allan Kelly Managing Director Peter Alexander Non‐Executive Director Jay Stephenson Non‐Executive Director Leigh Junk Non‐Executive Director COMPANY SECRETARY:

Iain Garrett

Level 1, 1292 Hay Street West Perth WA 6005

Telephone (08) 9226 0600

Facsimile (08) 9226 0633 Website www.dorayminerals.com.au

Nexia Perth Audit Services Pty Ltd Level 3

88 William Street GPO Box 2570

PERTH, Western Australia 6001

Telephone (08) 9463 2463

Facsimile (08) 9463 2499

Computershare Investor Services Pty Ltd Level 11

172 St George's Terrace PERTH, WA 6000

Telephone 1300 850 505

Facsimile +61 (3) 9473 2500

ASX Limited

Level 40, Central Park 152‐158 St George's Terrace PERTH, WA 6000

ASX Code: DRM

On behalf of the Board of Directors of Doray Minerals Limited ("Doray" or "the Company"), it is my pleasure to present the 2016 Annual Report.

The last 12 months have truly been transformational for the Company with the introduction of the Deflector Gold Project ("Deflector" or "the Project") into our operating portfolio. In just 14 months since completing the acquisition of Mutiny Gold the Company has funded, built and commissioned the Project, culminating in a maiden gold pour in May 2016 and a first shipment of concentrate to our offtake partner ready by the end of June 2016 ‐ a truly remarkable feat.

The delivery of Deflector represents a significant milestone for Doray. Not only does the Project significantly increase our annual production, it lowers our cost profile, increases our operating margins and extends our mine life. As I write to you now, the Project continues its ramp‐up phase, steadily progressing through the orebody's oxide and transitional levels before reaching the primary underground ore where approximately 84% of the current mineral Reserve and initial 6‐year mine life is derived.

However, this first 6 years is just the beginning of what we are confident will be a long‐life project. To date, exploration efforts at Deflector have largely been restricted to historical data compilation and target identification. With construction now complete, our exploration team looks forward to undertaking a systematic exploration programme of the underexplored "Deflector corridor" and commencing drilling below the current Deflector underground Reserve which presently extends to a depth of only 350m. The Board has approved a 2016/17 budget of $4 million to further these endeavours.

While Deflector has received most of the limelight over these last 12 months I would also like to acknowledge the performance of our foundation asset, Andy Well. For FY2016 Andy Well produced 84,135oz at a C1 cost of A$665/oz and an AISC of A$1,229/oz, marking the third consecutive year Andy Well has delivered a production result in excess of the Project's BFS (Bankable Feasibility Study). Having benefitted from two high‐ grade open pits at Wilber and Suzie over its first three years of production, Andy Well is now transitioning to a purely underground operation. Over the course of the last 6 months, additional capital development expenditure has been incurred at the Project to access new areas of mineralisation at Wilber Deeps and Judy, where drilling programs during the year have revealed extensions to depths of at least 750m below surface.

With the cessation of open pit mining at Andy Well and production output forecast to revert back towards its BFS levels, the Company has intensified it focus on the nearby Gnaweeda Project located 15km from the Andy Well processing plant. During the year the Company acquired the residual 12% interest in the Project from Chalice Gold Mines Limited taking its interest to 100% and has recently released a maiden Resource for the Project with the view to rapidly advancing it towards production and an alternative source of ore feed to the Andy Well mill.

In additional to exploration success at Andy Well and Gnaweeda, the Company has remained committed to its active greenfield exploration endeavours. As well as continuing to advance its Horse Well and West Gawler prospects, FY2016 saw the Company consolidate its position in the north‐eastern goldfields by farming into the highly prospective Mt Fisher Gold Project through a staged joint‐venture arrangement with Rox Resources Limited.

As always, safety remains a major focus across all our activities. Pleasingly during FY2016 the Company surpassed 1,000 consecutive days with no mining‐related Lost Time Injuries ("LTI's") since construction and mining commenced in 2012. Similarly, the Deflector Project has also achieved an unblemished record of 357 days LTI‐free since work began on site in April 2015.

Finally, I would like to thank Managing Director, Mr Allan Kelly, his senior management team and all of the Company's staff, contractors and service providers for their efforts over what has been an incredibly busy year. I would also like to acknowledge Mr Allan Brown, who joined the Company from Mutiny Gold Limited and whose knowledge and experience made a significant contribution to the successful development of Deflector before his recent retirement from the Company's Board.