Gindalbie Metals : Full Year Statutory Accounts

The Directors present their report together with the financial statements of the Company, Gindalbie Metals Ltd ('the Company', 'Gindalbie') for the financial year ended 30 June 2016 and the Auditor's Report thereon.

The Directors of the Company at any time during or since the end of the financial year were:

Mr Keith F Jones The Chair of Deloitte Australia

B.Bus, FCA, FAICD Extensive resource industry experience

Non-Executive Chairman Director since March 2013 Appointed as Chairman April 2013

Mr Andrew R Marshall Former Project Director for Vale Inco

I. Eng, MAICD Former Vice President - Asset Development Projects for BHP Billiton Iron Ore

Independent Non-Executive Director Former Project Manager for North Limited

Former Project Director of Iron ore Company for Canada

Former Manager Projects for Forrestainia Gold/LionOre Australia Former Project Manager and Manager of Engineering & Project Services for Western Mining Corporation

Former Project Manager for Nedpac/Signet Engineering

Former Non-Executive Director Sundance Resources NL (Oct 10- Jan 15)

Director since December 2010

Mr Paul D Hallam Former Director - Operations of Fortescue Metals Group Limited

BE (Hons) Mining, Grad Cert Mineral Economics, FAICD, FAUSIMM

Former Executive General Manager - Development & Projects of Newcrest Mining Limited

Independent Non-Executive Director Former Director - Victorian Operations of Alcoa

Former Executive General Manager - Base and Precious Metals of North Limited

Former Chairman Powertrans

Former Non-Executive Director of Enterprise Metals Limited Former Director - Karara Mining Limited

Non-Executive Director of Altona Mining Limited (Mar 13) Non-Executive Director of Sandfire Resources NL (May 13) Non-Executive Director of Tintina Resources Inc (Sept 14) Director since 14 December 2011

Mr Shao An Lin General Manager of Ansteel Consolidated entity Mining Company

PHD Mining President of the Metallurgical Mine Association of China

Non-Executive Director Former Chief Engineer of Dong An Shan Iron Ore Mine Former General Manager of Yan Qian Shan Iron Ore Mine Former Deputy General of Gong Chang ling Iron Ore Co Director since March 2015

Mr Li Ge Deputy Director of financial operations department at Ansteel

B.Fin Supervisor of the board of supervisors in two sub-corporations of Ansteel

Non-Executive Director Director since March 2015

1. DIRECTORS (Continued)

Mr Michael J O'Neill Board member of the Perth Market Authority

Dip Bus Admin, SFFin, FAICD Board Member P&N Bank (Oct 13)

Independent Non-Executive Director Former Non-Executive Director Gryphon Minerals Ltd (Mar 13 - Jul

13)

Acting Chief Executive Officer Former Western Australian General Manager of ANZ Bank

Extensive banking and finance experience Director since April 2006

Acting Chief Executive Officer April 2014 Resigned October 2015

Mr Chen Ping Vice President of Ansteel Group Corporation

B.Eng Former Chairman of Ansteel Mining Company

Non-Executive Director Former General Manager of Ansteel Mining Company Director since June 2009

Resigned November 2015

1. COMPANY SECRETARY

   Mr Gerrard resigned as Company Secretary on 5 October 2015 and is no longer employed by the Company.

   Ms Rebecca Moylan was appointed Company Secretary from 25 May 2015. Ms Moylan has worked for Gindalbie since May 2011 and has corporate experience working with listed and unlisted companies in varied industries.

2. PRINCIPAL ACTIVITIES

   The principal activities of the Company during the year were the exploration for and evaluation of projects and potential joint ventures with other mining companies to explore for minerals. During the year the Company retained its 47.84% Equity Interest in the Karara Project ("Karara"), and exploration and potential development of its 100% owned projects. There has been no significant change in the nature of these activities during the year.

3. RESULT OF OPERATIONS

   The net loss for the year ended 30 June 2016 was $6.2 million, (2015 - net loss of $15.7 million).

   The net loss for Gindalbie represented corporate overheads ($3 million), non-cash impairment charge related to assets ($4.6 million), which was partially offset by interest income ($1.1million) and other income ($0.3 million).

   As at the reporting date, the Company has $38.9 million of cash reserves, including $25 million in term deposits.

4. DIRECTORS' MEETINGS

   The number of Directors' meetings and number of meetings attended by each of the Directors of the Company during the financial year were:

   Director Directors Meetings

   A B

   Mr MJ O'Neill 2 2

   Mr K F Jones 7 7

   Mr R Marshall 6 7

   Mr P Chen 4 4

   Mr G Li 5 7

   Mr P Hallam 7 7

   Mr A Shao 3 7

5. Number of meetings attended

6. Number of meetings held during the time the Director held office during the year

7. CORPORATE STRATEGY & LIKELY DEVELOPMENTS

   The Company's primary short term focus will be on iron ore exploration and development opportunities through joint ventures, sole funded exploration activity and acquisitions.

8. EVENTS SUBSEQUENT TO REPORTING DATE

   The company confirms that there have been no material subsequent events to alter the reporting date.

9. ENVIRONMENTAL REGULATION

   The Company's current exploration and development activities are conducted in accordance with environmental regulations under both Commonwealth and State legislation.

   As stated in the Environmental Policy, the Company is committed to achieving superior standards in its environmental performance. It has employed environmental professionals to monitor this area of operating performance, with responsibility for monitoring of environmental exposures and compliance with environmental regulations.

   Compliance with the requirements of environmental regulations and with specific requirements of the relevant managing authorities including the Department of Environment and Conservation, and the Department of Industry and Resources was achieved across all aspects of the current operations.

   There were no instances of non-compliance in relation to any instructions or directions from the relevant governing agencies. The Board is not aware of any significant breaches during the period covered by this report.

10. REMUNERATION REPORT - Audited
11. Key management personnel disclosures

    The following were key management personnel of the Company at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period:

    Executive Directors

    Mr M J O'Neill - Acting Chief Executive Officer (resigned 26 October 2015)

    Non-Executive Directors Mr K F Jones - Chairman Mr A R Marshall

    Mr C Ping (resigned 27 November 2015) Mr P Hallam

    Mr L Ge

    Mr S An Lin

    Executives

    Mr C Stevens - Chief Executive Officer (CEO) (commenced Acting CEO 23 November 2015 and CEO 23 May 2016)

    Mr C Gerrard - Legal Counsel and Company Secretary (resigned 5 October 2015) Ms R Moylan - Chief Financial Officer and Company Secretary

12. Principles of compensation

13. Remuneration is referred to as compensation throughout this report.

    Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company. Key management personnel include the Directors of the Company and senior executives for the Company, in accordance with S300A of the Corporations Act 2001.

    Compensation levels for Directors and key management personnel of the Company are competitively set to attract and retain appropriately qualified and experienced Directors and executives. The Board obtains independent data on compensation packages and trends in comparative companies, and this information is used as one of the determinants in deciding the appropriateness of the Company's compensation strategy.

    The compensation structures explained below are designed to attract suitably qualified candidates, reward the achievement of strategic objectives, and achieve the broader outcome of creation of value for shareholders. The compensation structures take into account:

    • the capability and experience of the key management personnel; and

    • the key management personnel's assessed contribution to the Company's financial and operational performance.