Flinders Mines : Annual Report to shareholders

ABN 46 091 118 044

Corporate Directory 3

Chairman's Report 4

Directors' Report 5

Auditors Independence report 15

Financial Statements 16

Directors' Declaration 39

Independent auditor's report to the members 40

Additional Information 43

Corporate Governance Statement 45

Interest in Mining Tenements 46

Mineral Resources and Ore Reserves Information 47

Board of Directors

Neil Warburton Independent Non-Executive Chairman David McAdam Interim Executive Director

Robert Kennedy Independent Non-Executive Director Michael Wolley Non-Executive Director

Evan Davies Non-Executive Director

Company Secretary

Shannon Coates

Registered Office 45 Ventnor Avenue West Perth WA 6005

Telephone: 08 9389 4483 Email: info@flindersmines.com

Website: www.flindersmines.com

Flinders Mines Limited Corporate Directory

30 June 2017

Share Registry

Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace

Perth WA 6000

Telephone: 08 9323 2000

Website: www.computershare.com.au

Auditors

Grant Thornton Audit Pty Ltd Level 3, 170 Frome Street

Adelaide SA 5000

Securities Exchange Listing

Shares in Flinders Mines Limited are quoted on the Australian Securities Exchange under trading code FMS.

Flinders Mines Limited Chairman's Report

Dear Shareholders,

The financial year ending 30 June 2017 was a year of significant change for the company and a year where we were able to define a strategic development pathway for the Pilbara Iron Ore Project ("PIOP") asset. After TIO (NZ) Limited, a wholly owned subsidiary of Todd Corporation, taking a controlling interest in Flinders Mines Limited in August 2016, the company restructured the board of directors in October 2016. The new board commissioned a detailed strategic review of the company with a focus on the development constraints and options for the PIOP asset. This review was conducted in the first quarter of CY17 and the strategic review concluded that:

• the potential of the PIOP to be an economic asset;

• the economic development of the asset being dependent on the development of a financeable infrastructure solution; and,

• the requirement for an asset maturation phase to further define the project's commercial viability ahead of any pre-feasibility study.

The commencement of this asset maturation work was funded through a non-renounceable Rights Issue capital raise that was available equally on a pro rata basis to all shareholders. With approximately 60% of the shareholders (based on shares held) taking up their rights, a total of approximately $9.5m (before costs) was raised. This has enabled the commencement of the field work and the results of this work are scheduled for release in the first quarter of CY18.

During the year the company relocated its corporate office from Adelaide to Perth to better align the operations with relevant iron ore market advisors, consultants and technical skills.

The company looks forward to completion of the asset maturation work and being able to better define the quantity and quality of the PIOP resource in order to inform an accurate basis for further feasibility work.

Neil Warburton Chairman

Perth, Western Australia 14 September 2017