intrepid annual report 2015 - asx · intrepid’s greatest asset, ... the current board believes...

Intrepid Mines Limited Annual Report 2015building long term value

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1 2015 ANNUAL REPORT INTREPID MINES LIMITED

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2INTREPID MINES LIMITED 2015 ANNUAL REPORT

CONTENTS

03 Chairperson’s Letter

04 Chief Executive Officer’s Report, Operations and Financial Review

08 Directors

08 Company Secretaries

08 Executive Team

09 Forward Looking Statements

10 Mineral Resources / Ore Reserves Statements

12 Tenements Summary and Attributions

13 Corporate Governance Statement

17 Directors’ Report

22 Remuneration Report

35 Auditor’s Independence Declaration

36 Consolidated Statement of Profit or Loss and Other Comprehensive Income

37 Consolidated Statement of Financial Position

All amounts presented in this Annual Report are in Australian dollars unless stated otherwise.

38 Consolidated Statement of Changes in Equity

39 Consolidated Statement of Cashflow

40 Notes to the Consolidated Financial Statements

70 Directors’ Declaration

71 Independent Auditor’s Report

73 Shareholder Information

75 Corporate Information

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At the Extraordinary General Meeting on 19 November 2015, Intrepid shareholders replaced the majority of the previous board with the present one, and I was appointed Chair shortly thereafter. Copper prices have remained at historically low levels since that time. The new board has acted decisively to position the Company well for the current period of depressed prices which may last longer than many anticipate.

Intrepid’s greatest asset, apart from cash, is the Mining Licence over the Kitumba copper deposit in Zambia and surrounding exploration acreage. The forecast copper price used in the most recent Optimised Pre-Feasibility Study for Kitumba was US$3.11, some 37% higher than spot price at time of writing. The current board believes that expenditures and strategies must be revised to adapt to this new reality, and that the previous corporate strategy would have been value destructive should the copper price not rise very substantially in the medium term.

To address these adverse conditions, overhead expenditures incurred in Australia have been rethought from the ground up. This process has been driven by a Transition Committee on which I work alongside fellow non-executive director Richard Baumfield, and by Acting CEO Tony De Santis. Results are tangible: board size has been reduced from seven to three; executive headcount from five to three; and total director and executive compensation is less than half what it was before November 2015. The Sydney office is in the process of being taken virtual, which should greatly reduce overhead without compromising operations or governance. Dormant subsidiaries across multiple continents have been wound up, associated expenses discontinued and foreign domiciled funds repatriated. The substantial ongoing cost savings from all of these processes make more funds available for Kitumba, capital management, and other projects.

Our Zambian office has remained fully resourced and our 2016 drilling program for the Mumbwa exploration project is being finalised. This program will be smaller and more focussed than 2015, building on recent successes including encouraging results on the Target H satellite deposit. I have met with numerous senior government officials in Zambia to provide details on this program and affirm our commitment to the country and to our projects.

Our large cash balance increases the importance of appropriate capital management. Since the new board was appointed, over 5% of outstanding Intrepid shares have been bought back at a 20% discount to cash backing. This has been highly accretive to remaining shareholders and remains the most efficient capital allocation strategy available in the short term. The quantum of a larger capital return is being contemplated and will be announced when finalised.

Whilst we are committed to exploration work at Mumbwa, the development of the Kitumba project requires a higher copper price, significant capital expenditure, and substantial time before payback. The Company is investigating other projects that have a much lower capital requirement and capital outlay, and faster payback. Although Kitumba has huge potential value in the right circumstances, the board is exploring other

opportunities that might be more appropriate for this point of the copper commodity cycle.

Peter LoveChairperson

CHAIRPERSON’S LETTERF

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ACTING CHIEF EXECUTIVE OFFICER’S REPORT, OPERATIONS AND FINANCIAL REVIEW

Dear Shareholders,

The 2015 financial year was another challenging year for the Company, accentuated by depressed investor sentiment in the global resource sector and declining commodity prices.

The Company also underwent a significant restructure of board and management following the Extraordinary General Meeting of Shareholders (EGM) on Thursday 19 November 2015. The meeting, which was requisitioned by the single largest shareholder of the Company, resulted in the removal of all directors who held office prior to the EGM date, with the exception of Richard Baumfield (who was re-elected as a director), and were replaced by Peter Love and Peter Evans.

Michael Oppenheimer, Nicole Bowman, Derek Carter and Scott Lowe ceased to be directors of the Company following the EGM on 19 November 2015.

Peter Love was appointed Chairperson following the EGM and the new board immediately embarked on an aggressive cost reduction strategy. In particular, board, administrative and executive employee costs have been significantly reduced, with directors’ fees down by over 60% from A$535,000 to A$205,000 annually.

The executive team has also been reduced, with Vanessa Chidrawi’s employment terminated effective 10 December 2015, and Scott Lowe’s position as Chief Executive Officer being made redundant on 31 December 2015.

Following the departure of Ms Chidrawi and Mr Lowe, Andrew Crawford was appointed Company Secretary and Tony De Santis, formerly the Chief Operating Officer of Intrepid, was appointed to the new position of Acting Chief Executive Officer.

The substantial reduction in board fees and a reduced and reorganised management team will contribute to significant ongoing cost savings for the Company and will bring the corporate overhead costs down to a level commensurate with the current level of activity and size of the Company.

Intrepid’s principal operational focus for 2015 was Kitumba and the associated exploration activities on the surrounding Mumbwa licence areas. More detail on these activities is presented below.

Financial Review

The consolidated financial statements include the consolidated entity consisting of Intrepid Mines Limited, (“the Company”) and its subsidiaries together referred to as the consolidated entity or “Group”.

The priority coming into the 2015 year was the integration of the Blackthorn Resources business and systems into Intrepid Mines. Whilst the Group incurred significant restructuring costs during the year associated with the integration, the benefits of lower administration costs and salaries in particular, assisted in reducing the ongoing cash burn.

Financial Results

The board has formed the view that the functional and presentation currency most appropriate to apply to the report was Australian dollars. The Company is listed on the Australian Stock Exchange and it’s most significant asset is the cash that is being held in Australian dollars in Australian banks. Further, the Company has no material operating assets in any jurisdictions other than the exploration licences and a mining licence in Zambia, thus the majority of the users of the financial statements would benefit from the reports being presented in Australian dollars. The Group recorded a loss after tax for the year of $15,294,000. This compared to a net profit in 2014 of $118,572,000.

The loss this year is predominantly related to $11,938,000 spent on exploration and further feasibility work in Zambia including the Options Study reported to the market on 8 October 2015. In addition, there were one off costs related to integration and restructuring of $3,212,000 which were incurred due to the merger with Blackthorn and subsequent realignment of the business and staff redundancies. General administration costs of $3,202,000 were incurred. Interest revenue was $1,209,000, well below prior year interest income of $3,565,000 mainly due to lower cash on hand following the equal access buyback of $110,000,000 in December 2014.

The 2014 profit included US$80,000,000 proceeds received from the settlement of the Tujuh Bukit Project dispute, as well as a $13,700,000 gain resulting from the reversal of the litigation claim provision provided for in 2013. The settlement in April 2014 brought to an end the Company’s interests in Indonesia. In addition, the 2014 profit included a $29,274,000 accounting gain on the acquisition of Blackthorn which was completed in December 2014.

Financial Position

The net assets of the Group decreased by $30,046,000, from $114,431,000 in 2014 to $83,385,000 in 2015. This decrease was principally due to the lower cash balance following payment of costs related to the merger with Blackthorn Resources and current year exploration and feasibility study spend of $11,938,000. Also, the carrying value of the Mining Property mainly related to Kitumba was revalued down by $14,780,000 to $27,707,000 as a result of devaluation in the Zambian currency against the Australian dollar during 2015.

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Cash Flows

As at 31 December 2015, the group had aggregate cash and term deposits of $55,932,000 (2014: $71,709,000).

The Group received $2,604,000 from the disposal of exploration licences in Burkina Faso and spent $18,560,000 (2014: $14,106,000) on operating activities including exploration activities, feasibility study, administration and taxes, net of interest received.

Health and Safety

Intrepid Mines is committed to establishing and maintaining health, safety and environment standards and performance in accordance with industry best practices. There was one lost time injury reported at the Kitumba Project during the year. A contractor employee suffered a contusion when the drill rod he was handling dropped onto his foot. The employee lost two day’s work as a result. This was the only injury or serious incident reported for the entire 2015 drilling season.

The Company continues to work with its employees and contractors to ensure that the highest standard of safety and environmental management are maintained.

Management remains confident that the safety systems and culture established at the Kitumba Project site are of a high standard. Our commitment is to continue to improve on this as the project continues to develop.

Environment, Social and Community

Intrepid sees commitment to sustainable development and building responsible relationships with the communities around us as fundamental to our success. The Company continues to fulfil its obligations to the communities by actively supporting a range of specific social and community projects aimed at benefiting the local people.

As part of the Kitumba Pre-Feasibility study, community engagement in the Mumbwa District as a whole and specifically in the Kitumba area was expanded through local community consultations as part of the Environmental Impact Assessment process, as well as an increase in practical assistance for local schools and communities.

A needs assessment was finalised which developed an in-depth profile of the surrounding communities, including their challenges, needs and suggested interventions (projects) for community development, which will form the base knowledge for the further development of our long-term community investment strategy. The assessment undertaken included analysis of the Mumbwa District Strategic plans for development, community needs assessment (through interviews and focus group discussions), and research on other community development operators in the area.

Investigations of the potential social and environmental impacts of the Kitumba Project were also completed utilising feedback from numerous public consultations with the surrounding stakeholders and local authorities. A number of other specialist environmental, social and technical studies were completed (including a baseline HIV/AIDs study), with the resulting Environmental Impact Statement being submitted to the Zambian Environmental Management Authority (ZEMA) in support of the mining licence application over the Kitumba Project.

Whilst the Kitumba Project has been delayed as a result of the depressed copper price and the equity markets in general, Intrepid has continued its community support program in the Kitumba area with the primary focus being on the local Kitumba and Kafwikamo Community Schools, with ongoing contributions to the building of an additional classrooms and on-site accommodation.

In a recent visit to Zambia, Chairperson Peter Love also authorised the purchase of 20 tarpaulins for the Mumbwa community to assist residents with covering their houses that were damaged by a recent storm event.

Kitumba Project - Zambia (Intrepid100%)

Kitumba Feasibility Study

During 2015 an Options Study (updated Pre-Feasibility study) was initiated by the former board of Intrepid. The primary purpose of the Options Study was to conduct a critical review of the mining, processing and engineering assumptions contained in the Kitumba Pre-Feasibility study to improve the economics of the project. The results of the Options Study were published on 8 October 2015, along with an updated Ore Reserve for the Kitumba Project.

Further detailed information on the updated prefeasibility study can be found in our market announcement titled “Intrepid Mines Limited: Kitumba Project – Updated PFS Results and Reserves”, lodged with ASX on 8 October 2015 and also available to be viewed on the Company’s website, www.intrepidmines.com.

Ore Reserve

Coffey Mining Pty Ltd estimated Ore Reserves for Kitumba, which are reported in accordance with the 2012 Edition of the JORC Code.

A detailed summary of the supporting data and modifying factors is provided in Appendix A (Table 1 of the JORC Code 2012) as contained in the report titled “Intrepid Mines Limited: Kitumba Project – Updated PFS Results and Reserves”, lodged with ASX on 8 October 2015 and available to view on the Company’s website, www.intrepidmines.com).

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The Ore Reserve estimate is based on the Kitumba Pre-Feasibility Studies and the Reserve Statement should be read in conjunction with the study reports.

Table 1 - Kitumba Ore Reserves Estimate, 23 September 2015.

Category Tonnes (Mt) Grade (% Cu) Contained Metal (kt Cu)

Proved 10.0 2.6% 262

Probable 11.9 1.9% 230

Total 21.9 2.2% 492

The table is subject to rounding errors.

Note: Approximately 3% of the Inferred Resources are included in the mining inventory and in the economic analysis. This has occurred only to the extent that it is unavoidable and the material will be drawn into the cave when mining. Given its relatively small quantity and that the Inferred Resource appears to have marginal grade, it is expected to be cost neutral to the economics of the Kitumba Ore Reserves estimate as stated. Inferred Resources are excluded from the Ore Reserve estimation as is required by the guidelines of the 2012 edition of the JORC Code.

All stated Ore Reserves are completely included within the quoted Mineral Resources and are quoted in dry tonnes.

Following the release of the results of the Options Study, the new board of directors have subsequently announced the initiation of an external review of the Project. The primary objective of the review is to determine whether the mining and processing concept that is contemplated is consistent with the most recent geological information and current market environment.

The board has confirmed that the Company is committed to the project, and following an assessment of the 2015 drilling program and the external review of the project as discussed above, a plan for the 2016 drilling season will be developed, along with future exploration and project development.

Mumbwa Exploration, Zambia (Intrepid100%)

2015 (Phase 9) Drilling Program

The 2015 drilling program was completed during the final quarter of CY 2015. Approximately 12,200 metres of diamond core and RC drilling were completed. Clear priority targets in Target H, Kantonga and Lulu have been generated in this field season.

The best results from the 2015 drilling campaign were from Target H, which is located approximately 6 km from the Kitumba deposit, and are listed below:

Highlights from “Target H” drilling

Copper highlights from HDD_001 include:

7 metres at 1.23% copper from 42 metres including

1 metre at 2.09% copper from 45 metres

2 metres at 1.85% copper from 130 metres

58 metres at 0.61% copper from 185 metres including

16 metres at 1.02% copper from 193 metres

Gold highlights from HDD_001 include:

5 metres at 0.65 g/t gold from 204 metres including

1 metre at 1.14 g/t gold from 206 metres

Highlights from HDD_004 include:

51 metres at 0.91% copper and 0.32 g/t gold from 229 metres including;

23 metres at 1.60% copper and 0.58 g/t gold from 233 metres


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Highlights from HDD_005 (released subsequent to year end) include:

38.5 metres at 1.58% copper from 8.5 metres including;

17.5 metres at 2.03% copper and 0.01 g/t gold from 8.5 metres


For further information on the 2015 drilling results, please refer to the announcements lodged with ASX and available to be viewed on the Company’s website, www.intrepidmines.com.

The Company is now reviewing the outcomes of the 2015 drilling program and other related data in order to develop the 2016 exploration program, with a focus clearly on Target H.

During the reporting period the Company also announced the conclusion of an access and option agreement in respect of a mining licence over land adjacent to the Kitumba Project.

African Deposits Limited (“ADL”) holds a small-scale mining licence of approximately 4 square kilometres over land adjacent to Kitumba. Intrepid has entered into an agreement with ADL which allows the Company access to ADL’s mining rights for a period of one year, with an option to extend for an additional year. During this period, the Company may elect to purchase the shares in the Company holding the ADL mining rights, subject to statutory approvals being obtained. The Zambian Minister of Mines has granted his consent to the terms of the agreement.

For further details on the option and access agreement, please refer to ASX Announcement “Intrepid Mines Limited – New Access and Option Agreement on Licence Adjacent to Kitumba”, released to the market on 14 October 2015.

Company Outlook

Key focus areas for the coming 12 months are:

Prudent management of our cash and control of our rate of expenditure in recognition of difficult market conditions

Review of the Kitumba Project

A targeted mineral exploration program to increase the Mumbwa area mineral inventory

Tony De SantisActing Chief Executive Officer

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DIRECTORS

Peter Love BA Chairperson, Independent Non-executive Director Appointed Director 19 November 2015.

Mr Love joined the board following the EGM on 19 November 2015 and was appointed Chairperson on 24 November 2015.

Mr Love is currently a Director of Talon Petroleum Limited. He is also managing capital raising and investor relations for Byron Energy Limited (formerly Trojan Equity Limited) and was Vice President of Operations for Maverick Drilling and Exploration Limited from 2008 to 2011. Prior to his role at Maverick, Peter was Assistant Fund Manager at ASX Listed company Trojan Equity Limited from 2006 to 2008. Peter is also a former director of DMX Corporation Limited.

Peter Evans BComm, Dip Adv AccountingIndependent Non-executive Director Appointed Director 19 November 2015.

Mr Evans joined the board following the EGM on 19 November 2015.

Mr Evans has over 30 years experience as a stockbroker with Paul E Morgan & Co and subsequent entities including Morgans Stockbroking, ABN Amro Morgans and RBS Morgans. He was Director – sales at Morgans entities from 1984 until 2013 and remained a Director until his retirement in 2013. He is currently Chairman of Sleepy’s Pty Ltd, QEnergy Limited, Talon Petroleum Limited and Right at Home Australia and serves on a number of other boards.

Richard Baumfield BBus, LLB, LLM Independent Non-executive Director Appointed Director 1 July 2015.

Mr Baumfield is currently an adjunct assistant professor of law at Bond University, having previously practised for ten years as a partner with the New York law firm Andrews Kurth LLP. He is a strategic investment specialist, who brings with him experience in investment and corporate governance advisory.

Ian McMaster, AM, BE (Metallurgy), ME Former Chairperson and Independent Non-executive Director Appointed director 11 March 2008, appointed Chairperson 1 September 2013, ceased 31 October 2015.

Michael (Mike) Oppenheimer, BSc Chemical Engineering (Hons)Former Chairperson and Independent Non-executive Director Appointed Director 11 December 2014, appointed Chairperson 1 November 2015, ceased 19 November 2015.

Nicole (Nicki) Bowman, BEc, LLB (Hons), MAICDFormer Independent Non-executive Director Appointed Director 11 December 2014, ceased 19 November 2015.

Derek Carter, BSc, MSc, FAusIMM (CP) Former Independent Non-executive and Former Director Appointed Director 11 December 2014, ceased 19 November 2015.

Scott Lowe, Grad Dip (Coal), Mine Manager’s Certificate of Competency, MBA, MAICDFormer Executive Director and CEOAppointed Director 1 November 2013, ceased 19 November 2015.

Alan Roberts, BAppMinSc (Hons), FAusIMMFormer Non-executive DirectorAppointed Director 11 November 2008, ceased 30 September 2015.

COMPANY SECRETARIES

Andrew Crawford BCom, Dip Fin Servs, CAAppointed Company Secretary 10 December 2015.

Mr Crawford is a Chartered Accountant and Registered Tax Agent who has considerable experience working with boards of ASX listed Companies to minimise corporate overheads. Mr Crawford commenced his career with KPMG in 2001. He currently holds the office of company secretary for three listed ASX companies and is a director of one ASX listed company whilst also delivering specialist accounting, taxation and corporate services to his private clients.

Kathleen E. Skerrett, BCom, LLBAppointed Canadian Corporate Secretary 4 July 2006.

Ms Skerrett has been practising as a corporate and securities lawyer for 18 years. Ms. Skerrett has been with Gardiner Roberts LLP since February 2005 and was appointed partner in 2008. Ms Skerrett was Corporate Secretary to Intrepid Minerals Corporation prior to the Nustar merger in July 2006 and subsequently accepted the role with Intrepid.

Vanessa Chidrawi, BCom, LLBFormer General Counsel and Company SecretaryAppointed Company Secretary 11 March 2008, ceased 10 December 2015.

EXECUTIVE TEAM

Tony De Santis, Grad Dip (Coal), Mine Manager’s Certificate of Competency, MBA, GradAICDActing Chief Executive Officer

Mr De Santis joined Intrepid Mines Limited following the merger with Blackthorn Resources Limited. Mr De Santis has over 30 years’ experience in the mining industry having held senior operational and general management roles with BHP Billiton, Anglo American and Peabody Pacific. Mr De Santis is a mining engineer who holds an MBA from the University of Wollongong and is a graduate member of the Australian Institute of Company Directors.

Ravi Underwood, B.Ec, MTax, CA, MBAChief Financial Officer

Prior to joining Intrepid Mines Limited, Mr Underwood was CFO of Blackthorn Resources Limited. Mr Underwood has over 20 years’ experience in senior finance roles with ASX listed companies.

This has included significant experience in the mining sector having worked for Normandy Mines, SinoGold and mining services company Mine Site Technologies, all which have major mining projects and operations both in Australia and overseas. In addition, he has held senior finance and accounting roles at ASX listed companies AGL and Salmat. Mr Underwood is a qualified Chartered Accountant and holds a Bachelor of Economics degree from Sydney University, a Master of Taxation from the University of NSW and has an MBA from the Australian Graduate School of Management.

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FORWARD LOOKING STATEMENTS

This report contains certain forward-looking statements, relating to, but not limited to, Intrepid’s expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as ‘anticipate’, ‘believe’, ‘expect’, ‘goal’, ‘plan’, ‘intend’, ‘estimate’, ‘may’ and ‘will’ or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future outcomes, or statements about future events or performance. Forward-looking information may include ore reserve and mineral resource estimates, estimates of future production, unit costs, costs of capital projects, and timing of commencement of operations and is based on current expectations that involve a number of business risks and uncertainties.

Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated mineral resources and ore reserves, the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied. Shareholders and potential investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward- looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Intrepid undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Statements relating to mineral resource and ore reserve estimates are expressions of judgement based on knowledge and experience and may require revision based on actual production experience. Such estimates are necessarily imprecise and depend to some extent on statistical inferences and other assumptions, such as commodity prices, cut-off grades and operating costs, which may prove to be inaccurate. Information provided relating to projected costs, capital expenditure, production profiles and timelines are expressions of judgement only and no assurances can be given that actual costs, production profiles or timelines will not differ materially from the estimates contained in this report.

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MINERAL RESOURCES AND ORE RESERVES STATEMENTS

Mumbwa Project, ZAMBIA

Mineral Resources - Kitumba

31 December 2015

Category Tonnes(Mt)

Cu(%)

Acid Soluble

Cu(%)

Co(ppm)

Au(g/t)

Ag(g/t)

U(ppm)

Density(t/m3)

Measured 9.6 2.95 0.94 221 0.03 1.3 25 2.62

Indicated 15.3 1.93 0.60 239 0.03 1.1 27 2.66

Total Measured and Indicated

24.9 2.32 0.73 232 0.03 1.1 26 2.64

Inferred 3.0 1.23 0.32 247 0.05 0.8 29 2.74

Total Mineral Resources

27.9 2.20 0.69 234 0.04 1.1 27 2.65

All tabulated data have been rounded to one decimal place for tonnage and to either, no, one or two decimal places for grades, so minor computational errors may occur.

Review of material changes

There was a material change to Mineral Resource estimate report from the last reporting period.

The December 2013 estimate (as reported in the last reporting period ending 31 December 2014) was based on interpolation of high grades to the north and south into gaps between drillholes along the north to south steeply dipping mineralised trend, based on continuity analysis. Infill of these gaps by the Phase 8 drilling (KITDD_040 to KITDD_070) now shows that the higher grades are less extensive to the north and south than modelled in December 2013. Grades intersected by drilling in the western fringe areas adjacent to the high grade areas of the deposit proved to be lower than predicted by the model. As a result, the high grade area was well constrained in the west by the Phase 8 drillholes resulting in a decrease in the quantity of the Mineral Resource above cut-off grade.

The Phase 8 drilling increased the number of data for estimation considerably and allowed for better modelling of grade continuity. This resulted in adjustments to the estimation parameters that produced a more constrained estimate in the north-south direction.The grade shell in which the grades are estimated was modelled at a 0.30% Cu threshold in December 2013. This was changed to a 0.50% Cu threshold in 2015. The result is less dilution at the edges of the deposit, although the change in the grade threshold does not impact significantly on the Mineral Resource overall above the 1% cut-off grade.

Geological interpretation carried out by Intrepid and its associates since December 2013 identified a flat lying trend to areas of the mineralisation outside of the steeply dipping core area. This interpretation has been reflected in the block model and changes to the shape of the mineralised envelope have occurred, particularly in the low grade northern areas of the deposit. The interpretation of the steep dipping high grade core area is unchanged.

The Phase 8 drilling confirmed that the high grade core of the deposit, which has been classified as Measured Mineral Resources, is robust and there has been no significant change in the model in these areas. Some of the Mineral Resources reported as Indicated in December 2013 were down-graded to Inferred in 2015 as a result of the lower continuity found from the Phase 8 drilling. The Inferred Mineral Resource area was also reduced due to less extrapolation allowed.

31 December 2014

Category Tonnes(Mt)

Cu(%)

Acid Soluble

Cu(%)

Co(ppm)

Au(g/t)

Ag(g/t)

U(ppm)

Density(t/m3)

Total Mineral Resources

38.8 2.19 0.86 222 0.03 0.9 27 2.68

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Ore Reserves - Kitumba

31 December 2015

Category Tonnes(Mt)

Copper grade

(%)

Contained copper (‘000 tonnes)

Proved 10.0 2.6 262

Probable 11.9 1.9 230

Total Ore Reserves 21.9 2.2 492

31 December 2014 Tonnes(Mt)

Coppergrade

(%)

Contained copper(‘000 tonnes)

Total Ore Reserves 31.5 2.04 641

The table is subject to rounding errors

Note: Approximately 3% of the Inferred Resources are included in the mining inventory and in the economic analysis. This has occurred only to the extent that it is unavoidable and the material will be drawn into the cave when mining. Given its relatively small quantity and that the Inferred Resource appears to have marginal grade, it is expected to be cost neutral to the economics of the Kitumba Ore Reserves estimate as stated. Inferred Resources are excluded from the Ore Reserve estimation as is required by the guidelines of the 2012 edition of the JORC Code.

All stated Ore Reserves are completely included within the quoted Mineral Resources and are quoted in dry tonnes.

Mineral Resource Governance

The 31 December 2015 Mineral Resource and Ore Reserve estimates are reported in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012) and ASX Listing Rules. Further supporting information is available in the Company’s announcement dated 17 August 2015 entitled “Intrepid Mines Limited: Mumbwa Project- Kitumba Mineral Resource Update”.

Mineral Resources are inclusive of Ore Reserves.The Mineral Resource estimates follow standard industry methodology using geological interpretation and assay results from drilling samples. They are completed by a Competent Person prior to each announcement.

The 31 December 2015 Mineral Resources are reported at cut-off grade of 1% copper and is dated 29 July 2015.

The 31 December 2015 Ore Reserves is dated 23 September 2015.

The Kitumba mining schedule includes approximately 90kt of inferred mineral resources that is not included in the Ore Reserve estimate. There is a low level of geological confidence associated with this inferred mineral resource and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that any production target relating to the inferred mineral resource itself will be realised.

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ATTRIBUTIONS

Mumbwa Project, Zambia

The information in this report relating to Mineral Resources at the Mumbwa Project in Zambia is extracted from the report titled “Intrepid Mines Limited: Mumbwa Project - Kitumba Mineral Resource Update”, lodged with ASX on 17 August 2015 and available to view on the Company’s website, www.intrepidmines.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

The information in this report that relates to Ore Reserves is extracted from the report titled “Intrepid Mines Limited: Kitumba Project -Updated PFS Results and Reserves”, lodged with ASX on 8 October 2015 and available to view on the Company’s website, www.intrepidmines.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

The information in this report relating to exploration results at the Mumbwa Project in Zambia is extracted from the following reports that were lodged with ASX and available to view on the Company’s website, www.intrepidmines.com.

“Mumbwa Project –Target H Delivers Encouraging Copper and Gold Results” lodged with the ASX on 28 July 2015.

“Intrepid Mines Limited: Mumbwa Project –Target H Delivers Further Encouraging Copper and Gold Results” lodged with the ASX on 16 November 2015, and

“Intrepid Mines Limited: Mumbwa Project –Final Assays, Target H Delivers More Shallow Copper Intercepts” lodged with the ASX on 8 February 2016.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements.

TENEMENTS SUMMARY

Concession Tenement Number 2015 2014

Guido Exploration Licence(1) Burkina Faso 13-118 - 100%

Poa Exploration Licence(1) Burkina Faso 13-119 - 100%

Kitumba Mining Licence Zambia 19820-HQ-LML 100% 100%

Musafwa Permit Zambia 14265-HQ-LPL 100% 100%

Kachindu Permit Zambia 14266-HQ-LPL 100% 100%

Kabwera Permit Zambia 14267-HQ-LPL 100% 100%

Nyoko Permit Zambia 16385-HQ-LPL 100% 100%

(1) Disposed of during the year to Glencore Plc with the sale completing 5 March 2015.

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CORPORATE GOVERNANCE STATEMENT

In accordance with the ASX Corporate Governance Council’s 3rd Edition Corporate Governance Principles and Recommendations (Corporate Governance Principles and Recommendations), Intrepid has made it a priority to ensure that the corporate governance practices and principles adopted by the Company reflect a high standard of corporate governance. The Board continues to review the Company’s Corporate Governance framework and practices to ensure they meet the interests of shareholders.

The following table summarises the Corporate Governance Principles and Recommendations and the practices and the principles adopted by the Company in respect of these Corporate Governance Principles and Reccommendations.

Principles and Recommendations Notes

1. Lay solid foundations for management and oversight

1.1 A listed entity should disclose:(a) the respective roles and responsibilities of its’ board and management; and

(b) those matters expressly reserved to the board and those delegated to management.

A copy of the board Charter is available on the Company’s website.

The charter also contains information on various duties, roles and responsibilities to be performed by directors. Non-executive directors appointed to the board receive a formal letter of appointment which sets out the terms and conditions of their appointment including director roles and responsibilities, duties and entitlements.

All management receive a letter of appointment which set out their terms and conditions including roles and responsibilities.

1.2 A listed entity should:(a) undertake appropriate checks before appointing a person or putting forward to security holders a candidate for election as a director; and

(b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.

Background checks are performed on each director that is put forward for election. Full details of current directors are outlined in the directors report on page 17 of this Annual Report.

The Company has provided security holders with relevant biographical details including qualification, experience and skills and any other details relevant to their directorship. This information is provided to all security holders at the time of election, as required in any other periodical reporting requirements and also at subsequent re-elections.

1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.

Each director is given a formal letter of appointment setting out the terms and conditions of employment. All executives also have a written employment agreement.

1.4 The Company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

The company secretary works very closely with the board on all matters to do with the functioning of the board through the Chair.

1.5 A listed entity should:(a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them;

(b) disclose that policy or a summary of it; and

(c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them and either:

(1) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or

(2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.

A copy of the Diversity Policy is available on the Company’s website.The measurable objectives for achieving gender diversity which have been set by the board pursuant to the Company’s Diversity Policy and the progress made by the Company towards achieving those objectives are detailed in the following table:

Metric Target Target Date FY2015 Status

Number of women on the board

a. a. a.

% women in senior positions

15 - 25% Dec 2015 17%

Number of female staff

30 - 40% Dec 2015 25%

a. The board has been reduced to three directors following the EGM on 19 November 2015. The sole female director ceased office during the year following the EGM. The new board will review their targets in 2016.As at 31 December 2015, 25% of the Group’s employees were female, with one woman employed as a senior member of staff in Zambia.

1.6 A listed entity should:(a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and

(b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

The board is responsible for assessing its performance each year and examining ways of performing its duties more effectively. Each committee of the board is responsible for conducting its own performance review and reporting results of the review to the full board. The board and each committee conducted a performance evaluation in the 2015 reporting period.

As part of the board’s review process, it considers the appropriate criteria for board membership, including the mix of skills and diversity required to fulfil its obligations to shareholders.

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1.7 A listed entity should:(a) have and disclose a process for periodically evaluating the performance of its senior executives; and

(b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

Details of the principles used to determine executive remuneration and performance are set out in the Remuneration Report on pages 22 - 34 of this Annual Report.

The performance of executives of the Company is reviewed annually against appropriate performance measures (KPI’s) as part of the Company’s formal performance management system. Actual performance against these KPI’s is reviewed annually by the Remuneration and Nomination Committee.The performance evaluation for executives for the 2015 year has been completed in accordance with the defined process.

2. Structure the Board to add value

2.1 The board of a listed entity should:(a) have a nomination committee which:

(1) has at least three members, a majority of whom are independent directors; and

(2) is chaired by an independent director,and disclose:

(3) the charter of the committee;

(4) the members of the committee; and

(5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings.

The Remuneration and Nomination Committee comprises the board as there are only three directors. Mr Love is Chair of the Remuneration and Nomination Committee.The number of meetings of the Remuneration and Nomination Committee held during the year and the attendance at those meetings are set out in the directors’ report on page 18 of this Annual Report. The charter of the committee is on the Company’s website.

2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.

While the board has undertaken a review of the mix of skills and experience of members on the board in light of the Company’s principal activities, due to the board’s current size it has not prepared a board skills matrix setting out the mix of skills and diversity that it currently has or is looking to achieve and as such has not complied with recommendation 2.2.

2.3 A listed entity should disclose:(a) the names of the directors considered by the board to be

independent directors;

(b) if a director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and

(c) the length of service of each director.

All three directors are considered to be independent.

Details of length of service of each director are disclosed in the directors report on page 17 of this Annual Report.

2.4 A majority of the board of a listed entity should be independent directors.

The board currently has a majority of independent directors. Messrs Evans, Baumfield and Love are all considered independent directors.

2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.

The Chairperson Mr Love is an independent director.Mr Love is the Chairperson and Mr De Santis is the Acting Chief Executive Officer. Prior to Mr De Santis being appointed Acting Chief Executive Officer on 31 December 2015, Mr Lowe was the Chief Executive Officer.

2.6 A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.

Similar to senior executives, newly appointed directors go through a process of induction which allows them to gain an understanding of the nature of the Company’s business, current industry issues, the board’s strategy and expectations concerning the performance of directors. In order to achieve continuing improvement in board performance, all directors are encouraged to undergo continuing professional development. However, the Company does not have a program for professional development for its directors. Members of the board are expected to provide for their own professional development.

3. Promote ethical and responsible decision-making

3.1 A listed entity should: (a) have a code of conduct for its directors, senior executives and employees and:

(b) disclose that code or a summary of it.

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4 Safeguard integrity in corporate reporting

4.1 The board of a listed entity should:(a) have an audit committee which:

(1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and

(2) is chaired by an independent director, who is not the chair of the board, and disclose:


(4) the relevant qualifications and experience of the members of the committee; and

(5) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings.

The Company has an Audit and Risk Committee made up of the three directors, all of which are independent. The Audit and Risk Committee is chaired by Mr Love who is also the Chair of the board and as such the Company has not complied with recommendation 4.1 as a consequence of the small size of the committee and the board.

A copy of the Audit and Risk Committee Charter is available on the Company’s website.

Details of number of meetings of the Audit and Risk Committee are outlined in the directors report on page 18 of this Annual Report.

4.2 The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

The Acting CEO and CFO are required to sign S295A declarations at the time of approving the accounts.

The Company also has an Audit and Risk Committee as detailed in section 4.1 but does not have an internal audit function due to the size of the organisation. The Audit and Risk Committee manages risk and oversee the application and reporting of the effectiveness of the Company’s internal controls via the risk register.

4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.

The board and management require the auditor to be present at the AGM. The auditor attended both the last AGM and the EGM on 19 November 2015 and was available to answer questions.

5. Make timely and balanced disclosure

5.1 A listed entity should:(a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and

(b) disclose that policy or a summary of it.

A copy of the Continuous Disclosure Policy is available on the Company’s website.

The Acting CEO and the Company Secretary are responsible for the compliance and disclosure issues in accordance with the policy.

6. Respect the rights of shareholders

6.1 A listed entity should provide information about itself and its governance to investors via its website.

The Company provides information about itself, and its governance policies on its website. Copies of policies are available on the Company’s website: www.intrepidmines.com.

6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.

The Company’s website outlines its communication practices and provides a separate Investor Relations section which contains relevant information to be communicated to its stakeholders.

6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.

Shareholders are invited to all meetings of all security holders in accordance with ASX listing rules and encourage to participate, however due to the Company’s size no formal participation policy exists.

6.4 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.

The Company gives all security holders the option to receive and send all communications both to and from the Company as well as its security registry Computershare Investor Services electronically. Details of how to access the communications are available on the website on www.intrepidmines.com and requests can be emailed via [email protected].

7. Recognised and manage risk

7.1 The board of a listed entity should:(a) have a committee or committees to oversee risk, each of which:


(2) is chaired by an independent director, and disclose:




The Company has an Audit and Risk Committee made up of the three directors, all of which are independent. The Audit and Risk Committee is chaired by Mr Love who is also the Chair of the board.

A copy of the Audit and Risk Committee Charter is available on the Company’s website.

Details of number of meetings of the Audit and Risk Committee are outlined in the directors report on page 18 of this Annual Report.

7.2 The board or a committee of the board should:(a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and

(b) disclose, in relation to each reporting period, whether such a review has taken place.

The Company’s management has reported to the board on the effectiveness of the Company’s management of its material business risks covering the 2015 year. The Company utilised the services of KPMG to conduct a full risk review during the first half of 2015 which included updating both the risk policy and the risk register.This was reported to the board in the second half of the year.

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7.3 A listed entity should disclose:(a) if it has an internal audit function, how the function is structured and what role it performs; or

(b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.

Due to its present size, the Company does not consider that an internal audit function is warranted. The Board relies on system controls in place in the Company.

The Company has a Risk Policy and maintains a risk register with the intent of continually updating the register of actions and outcomes to reduce risk.

7.4 A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.

The board does not believe it has any material exposure to economic, environmental and social sustainability risks not otherwise disclosed to the market. Due to its present size and scale of operations, the Company does not publish a sustainability report.

8. Remunerate fairly and responsibly

8.1 The board of a listed entity should:(a) have a remuneration committee which:


(2) is chaired by an independent director, and disclose:




The Remuneration and Nomination Committee consists of the three independent directors. Peter Love is the Chair of this committee.

A copy of the Remuneration and Nomination Committee Charter is available on the Company’s website.

The Remuneration and Nomination Committee consists of all three independent directors. The number of meetings of the committee held during the year and the attendance at those meetings are set out in the directors report on page 18 of this Annual Report.

8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.

Fees and payments to the non-executive directors reflect the demands which are placed on them and the responsibilities of the non-executive directors. Non-executive directors are not entitled to participate in the Company’s short-term or long-term incentive programs. There are no schemes for retirement benefits for non-executive directors other than payment by the Company of statutory superannuation contributions.

The Company has adopted an Executive Remuneration Strategy covering executive remuneration structures. A copy of the Executive Remuneration Strategy is available on the Company’s website. There is also a policy governing the trading in securities that is detailed below.

Full details of all payments made to non-executive directors and key management personnel are disclosed in the Remuneration Report on pages 22- 34 of this Annual Report.

8.3 A listed entity which has an equity-based remuneration scheme should:(a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and

(b) disclose that policy or a summary of it.

The Company has a policy for Dealing in Securities. The Dealing in Securities Policy prohibits entering into transactions in associated products which limit the economic risk of participating in entitlements under any equity-based incentive scheme. A copy of the Dealings in Securities Policy is available on the Company’s website.

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DIRECTORS’ REPORT

The directors of Intrepid Mines Limited (the ‘Company’) are pleased to present their report together with the financial report of the consolidated entity of Intrepid Mines Limited (the ‘Group’), being the Company and the entities it controlled for the year ended 31 December 2015, and the auditor’s report thereon.

The names and details of directors who held office during the year ended 31 December 2015 and up to the date of this report (unless otherwise stated), are: Peter Love BA Chairperson, Independent Non-executive Director Appointed Director 19 November 2015.

Mr Love joined the board following the EGM on 19 November 2015 and was appointed Chairperson on 24 November 2015.

Mr Love is currently a Director of Talon Petroleum Limited. He is also managing capital raising and investor relations for Byron Energy Limited (formerly Trojan Equity Limited) and was Vice President of Operations for Maverick Drilling and Exploration Limited from 2008 to 2011. Prior to his role at Maverick, Peter was Assistant Fund Manager at ASX Listed company Trojan Equity Limited from 2006 to 2008. Peter is also a former director of DMX Corporation Limited.

Peter Evans BComm, Dip Adv AccountingIndependent Non-executive Director Appointed Director 19 November 2015.

Mr Evans joined the board following the EGM on 19 November 2015.

Mr Evans has over 30 years experience as a stockbroker with Paul E Morgan & Co and subsequent entities including Morgans Stockbroking, ABN Amro Morgans and RBS Morgans. He was Director – sales at Morgans entities from 1984 until 2013 and remained a Director until his retirement in 2013. He is currently Chairman of Sleepy’s Pty Ltd, QEnergy Limited, Talon Petroleum Limited and Right at Home Australia and serves on a number of other boards.

Richard Baumfield BBus, LLB, LLM Independent Non-executive Director Appointed Director 1 July 2015.

Mr Baumfield is currently an adjunct assistant professor of law at Bond University, having previously practised for ten years as a partner with the New York law firm Andrews Kurth LLP. He is a strategic investment specialist, who brings with him experience in investment and corporate governance advisory.

Ian McMaster, AM, BE (Metallurgy), ME Former Chairperson and Independent Non-executive Director Appointed director 11 March 2008, appointed Chairperson 1 September 2013, ceased 31 October 2015.

Michael (Mike) Oppenheimer, BSc Chemical Engineering (Hons)Former Chairperson and Independent Non-executive Director Appointed Director 11 December 2014, appointed Chairperson 1 November 2015, ceased 19 November 2015.

Nicole (Nicki) Bowman, BEc, LLB (Hons), MAICDFormer Independent Non-executive Director Appointed Director 11 December 2014, ceased 19 November 2015.

Derek Carter, BSc, MSc, FAusIMM (CP) Former Independent Non-executive and Former Director Appointed Director 11 December 2014, ceased 19 November 2015.

Scott Lowe, Grad Dip (Coal), Mine Manager’s Certificate of Competency, MBA, MAICDFormer Executive Director and CEOAppointed Director 1 November 2013, ceased 19 November 2015.

Alan Roberts, BAppMinSc (Hons), FAusIMMFormer Non-executive DirectorAppointed Director 11 November 2008, ceased 30 September 2015.

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MEETINGS OF DIRECTORS

The meetings of the Company’s board of directors held during the year ended 31 December 2015, and the numbers of meetings attended by each director were:

Full meetings of directors (A)(B)

Audit and Risk Committee (A)(B)

Remuneration and Nomination Committee

(A)(B)

A B A B A B

P Love 6 6 - - - -

R Baumfield 15 14 - - - -

P Evans 6 6 - - - -

I. McMaster 15 15 2 2 3 3

M. Oppenheimer 16 16 2 2 - -

N. Bowman 16 15 - - 3 3

D. Carter 16 10 2 2 3 3

S. Lowe 16 16 - - - -

A. Roberts 13 13 - - 3 3

A = Number of meetings held during the time that the director held office or was a member of the committee during the year.

B = Number of meetings attended in person or by conference call.

The Safety and Social Responsibility Committee remained suspended during the year.

PRINCIPAL ACTIVITIES

The Group is a for-profit entity and its principal activities during the year ended 31 December 2015 were the receipt of the settlement proceeds (in March 2015) with respect to the exploration licences previously held in Burkina Faso and exploration and development of base metals with a focus on assets currently held in Zambia.

OPERATIONS AND FINANCIAL REVIEW

A detailed review of the Group’s operations and financial position for the year ended 31 December 2015 is set out on pages 4 to 7 of the Annual Report.

MATTERS SUBSEQUENT TO THE END OF THE YEAR

Other than as noted below, no events have arisen subsequent to 31 December 2015 that have significantly affected or may affect the operations of the Group:

On 4 January 2016, the Company announced it had commenced the on-market share buy-back. As at 9 March 2015, 20,406,289 shares had been bought back.

On 8 February 2016, the Company announced final results of the 2015 exploration program.

On 17 February 2016, the Company concluded an agreement with Aura Silver Resources Inc. with respect to its 26.5% joint venture interest in the Taviche project located in Oaxaca State, Mexico. The Company disposed of its interest in the Taviche project in exchange for 1 million shares in Aura Silver Resources Limited.

LIKELY DEVELOPMENTS

Further information about likely developments in the operations of the Group and the expected results of those operations in the future financial years have not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Group.

DIVIDENDS

No dividends were paid during the year (2014: nil). No dividend is proposed for the current year.

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SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS AND COMPANY ANNOUNCEMENTS

In the opinion of the directors, there have been no significant changes in the state of the affairs of the Group during the financial year under review not otherwise disclosed in this report.

The following table summarises significant announcements made by the Company during the year:

January Quarterly Activities Report (December 2014) released

February Investor Presentation and Company Strategy Update released

March Mark Mitchell announces resignation as CEO, Scott Lowe appointed CEO.

Sale of Burkina Faso exploration licences to Glencore finalised

Company announces intention to conduct an on market share buyback

Annual Report for 2015 released to the market

April Notice of AGM/Proxy Form dispatched

Quarterly Activities Report (March 2015) released

Interim Unaudited Financial Report (March 2014) released

May Letter to Shareholders released

Shareholders vote at AGM in favour of the share buy-back

June Richard Baumfield appointed Director commencing 1 July

July Quarterly Activities Report (June 2015) released

Target H drilling results announced

August Kitumba Mineral Resource Update announced reducing Measured and Indicated Resource

September Interim Financial Report (June 2015) released

Alan Roberts announced retirement as Director effective 30 September

Ian McMaster announced retirement as Chairman and Director effective 31 October

Michael Oppenheimer announced as Chairman effective 1 November

Company received notice of requisition from Lloyd I. Miller III to call an EGM

October Kitumba Option Study Report released

Access agreement with neighbouring property in Kitumba announced

Notice of EGM dispatched

Quarterly Activities Report (September 2015) released

November Chairman letter to Shareholders issued

EGM held – M Oppenheimer, D Carter, S Lowe and N Bowman all replaced as Directors with Peter Love and Peter Evans. Richard Baumfield is re-elected as Director

Peter Love elected Chairperson

December Andrew Crawford appointed Company Secretary replacing Vanessa Chidrawi

Scott Lowe’s position as CEO is made redundant

Small parcel purchase announced by the Company

Company provides market update

ENVIRONMENTAL REGULATIONS AND PERFORMANCE

The Group has conducted exploration and development activities on mineral tenements. The right to conduct these activities is granted subject to environmental conditions and requirements. The Group aims to ensure a high standard of environmental care is achieved, and as a minimum, to comply with relevant environmental regulations in the jurisdictions in which it operates. The directors are not aware of any significant breaches of environmental conditions during the year.

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PRESENTATION CURRENCY

During the year, the Company changed its presentation currency from United States dollars to Australian dollars. The Directors formed the view the most appropriate presentation currency is Australian dollars; the change also reflected an alignment of the functional currency with the presentation currency. In addition, the Company is an Australian listed company and as such the majority of users of the financial reports would benefit from adopting an Australian dollar presentation currency. Prior year comparatives were restated to Australian dollars based on the following exchange rates. Any significant transactions were restated based on the exchange rate at the transaction date.

The exchange rates applied were as follows:

31 Dec2015

31 Dec2014

31 Dec2013

Annual average exchange rates usedAustralian dollars (A$) to United States dollars (US$)

0.75220.9028 0.9685

Year-end closing exchange rates usedAustralian dollars (A$) to United States dollars (US$)

0.72990.8202 0.8948

DIRECTORS’ INTERESTS

Particulars of directors’ interests in shares of the Company as at the date of this report are as follows:

Directors Number of shares Number of options Number of share rights

P. Love - - -

P. Evans 200,000 - -

R. Baumfield 31,234 - -

UNISSUED SHARES UNDER OPTIONS

Options over ordinary shares of the Company granted under the terms of the Employee Option Scheme (‘EOP’) at the date of this report are as follows:

Grant date Fair value at grant date Expiry date Exercise price(A$)

Number of options

18-Feb-12 A$0.58 1-Jan-17 1.18 83,900

11-Sep-12 A$0.10 1-Jun-17 0.56 233,902

317,802

No option holder has any right under the options to participate in any other share issue of the Company or of any other controlled entity. Options granted under the EOP carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share.

The exercise price of options is no less than the weighted average price at which the Company’s shares are traded on the Australian Securities Exchange (‘ASX’) during the five trading days immediately before the options are granted.

The amounts disclosed for emoluments relating to options are the assessed fair values at grant date of options granted, allocated equally over the period from grant date to vesting date.

Fair values at grant date are determined using a Monte Carlo Simulation option pricing model for options granted on or after 1 January 2011 that takes into account the exercise price, the term of the option, the share price at grant date, expected price volatility of the underlying share, risk of forfeiture and the risk-free rate for the term of the option.

UNISSUED SHARES UNDER SHARE RIGHTS

There are no unissued shares as a result of the share rights granted under the Senior Executive Share Plan at the date of this report. No new grants were made this year. All outstanding share rights at the start of the year, either vested, and shares were issued, or lapsed because they did not meet vesting conditions or employment service conditions.

SHARES ISSUED ON THE EXERCISE OF OPTIONS AND SHARE RIGHTS

There were no shares issued as a result of the exercise of options during or subsequent to the end of the year. 169,100 shares were issued on the exercise of share rights (at an average price of nil) during the year. There were no shares issued on the exercise of share rights granted under the ESP subsequent to the end of the year.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in or on behalf of the Company with leave of the court under section 237 of the Corporations Act 2001.

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LOANS TO DIRECTORS AND EXECUTIVES

There were no loans to directors or executives.

OFFICERS’ INDEMNITIES AND INSURANCE

The Company and its wholly-owned subsidiary Blackthorn Resources Pty Limited have agreed to indemnify certain current and former directors and officers of the Company and Blackthorn Resources Pty Limited against all liabilities to another person and the Company that may arise from their position as directors and officers of the Company and its controlled entities, except where the liability arises out of conduct involving a wilful breach of duty. These agreements stipulate that the Company or Blackthorn Resources Pty Limited will meet the full amount of such liabilities including costs and expenses.

The Company and its wholly-owned subsidiary Blackthorn Resources Pty Limited have agreed to pay a premium in respect of contracts insuring directors and officers of the Group. The contracts of insurance prohibit the Company or Blackthorn Resources Limited disclosing the nature of the liability insured against and the amount of the premiums paid. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premiums between amounts relating to the insurance against legal costs and those relating to other liabilities.

NON-AUDIT SERVICES

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Group are considered important.

During the year the Group’s auditor, KPMG Australia provided certain other services in addition to its statutory duties as auditor. Amounts paid or payable to KPMG Australia for non-audit services during the year were:

31 Dec2015

31 Dec2014

Non-audit services

EGM costs 8,500 -

Risk management review 14,000 -

Investigating accountant services - 61,355

22,500 61,355

The board of directors has considered the position and, in accordance with the advice received from the Audit and Risk Committee, is satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services have been reviewed by the Audit and Risk Committee to ensure they do not impact the impartiality and objectivity of the auditor; and

none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.

Details of the amounts paid or payable to the Group’s auditor and other auditors for audit and non-audit services provided during the year are set out in Note 30 of the financial statements.

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the lead auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 35 following this Directors’ Report.

ROUNDING OF AMOUNTS

The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the Directors’ Report. Amounts in the Directors’ Report have been rounded off in accordance with that class order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

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Non-executive directors

P. Love Chairperson appointed Director 19 November 2015; appointed Chairperson 24 November 2015

P. Evans Director appointed 19 November 2015

R. Baumfield Director appointed 1 July 2015

Former directors

I. McMaster Chairperson ceased 31 October 2015

M. Oppenheimer Deputy Chairperson/Chairperson appointed 11 December 2014; appointed Chairperson 1 November 2015; ceased 19 November 2015

N. Bowman Director appointed 11 December 2014; ceased 19 November 2015

D. Carter Director appointed 11 December 2014; ceased 19 November 2015

A. Roberts Director ceased 30 September 2015

REMUNERATION REPORT - AUDITED Your directors are pleased to present the Remuneration Report for the Group for the year ended 31 December 2015. This Remuneration Report forms part of the Directors’ Report and has been prepared in accordance with section 300A of the Corporations Act 2001. This information has been audited as required by section 308(3C) of the Corporations Act 2001.

The Remuneration Report is set out under the following main headings:

A. Introduction

B. Principles used to determine the nature and amount of executive remuneration

C. Details of remuneration

D. Service agreements

E. Share-based compensation

F. Other key management personnel disclosures

All remuneration is presented in Australian dollars (unless otherwise stated). Reported remuneration is paid in Australian dollars.

During the year, the Company changed its presentation currency from United States dollars to Australian dollars. The directors formed the view the most appropriate presentation currency is Australian dollars; the change also reflected an alignment of the functional currency with the presentation currency. In addition, the Company is an Australian listed company and as such the majority of users of the financial reports would benefit from adopting an Australian dollar presentation currency. Prior year comparatives were restated to Australian dollars. Any significant transactions were restated based on the exchange rate at the transaction date.

A. Introduction

The Remuneration Report sets out information relating to the remuneration of the non-executive directors of the Company and the senior executives of the Group, collectively termed ‘Key Management Personnel’ or ‘KMP’, who are the persons primarily accountable for planning, directing and controlling the affairs of the Group.

The following table outlines the KMP of the Group during the year ended 31 December 2015. Unless otherwise indicated, the individuals were KMP for the entire financial year.

Former executive director

S. Lowe Executive Director & CEO stepped down as Managing Director/CEO effective 11 December 2014; appointed executive director, business development 11 December 2014; appointed CEO 1 April 2015; ceased 19 November 2015 as Director; ceased 31 December 2015 as CEO

Executives

T. De Santis Chief Operating Officer & Acting

CEO

appointed 11 December 2014; appointed Acting CEO 31 December 2015

R. Underwood Chief Financial Officer appointed 11 December 2014

Former executives

M. Mitchell Chief Executive Officer appointed 11 December 2014; ceased 31 March 2015

V. Chidrawi General Counsel, Company

Secretary

ceased 10 December 2015

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B. Principles used to determine the nature and amount of executive remuneration

The Remuneration and Nomination Committee (‘REMCO’) is responsible for developing the Company’s remuneration framework for approval by the Board. The objective of the Company’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. Currently, remuneration is based on industry standards and set to attract appropriately qualified and experienced people.

When considered necessary the Board is able to seek advice from independent external remuneration consultants (‘ERC’) to provide remuneration advice on relevant positions and appointments. This selection and appointment of any ERC to provide remuneration advice must be approved by the Board having established that the ERC is independent. In addition, any remuneration advice in relation to executive and non-executive directors subsequently provided by an ERC engaged by the Company must be sought by and provided directly to the REMCO or the Board.

The Board appointed Egan & Associates (‘EA’) as its ERC to assist in determining remuneration levels for various executive positions. Consideration paid for these services in 2015 was A$30,954. The Board is satisfied that EA was free from undue influence from Key Management Personnel (‘KMP’). EA provided its advice and recommendations to the Chairman of the board. Neither the Chief Executive Officer nor executives whose positions were reviewed were directly involved with EA throughout this review process.


Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the non-executive directors. Non-executive directors’ fees and payments are reviewed annually by the Board. The Chairperson is not present at any discussions relating to determination of his own remuneration. Other than statutory superannuation contributions, there are no retirement allowances for non-executive directors. Other than the Company’s Non-Executive Directors’ Share Plan under which non-executive directors may elect to take a portion of their remuneration in shares, non-executive directors do not receive share-based compensation. The Company’s Senior Executive Share Plan (‘ESP’) and its Employee Option Scheme (‘Scheme’) do not apply to non-executive directors of the Company.

Total aggregate non-executive director fees payable to all non-executive directors, which is required to be approved by the shareholders and was last voted on at a Special General Meeting on 3 March 2008, is set at a maximum of A$750,000. In accordance with the Company’s constitution, the aggregate maximum sum may be distributed among the non-executive directors in a quantity and manner that is determined by the board.

Non-executive directors’ remuneration was last amended following the Extraordinary General Meeting on 19 November 2015.

The revised remuneration fees payable for non-executive director positions effective 19 November 2015 are:

Effective from 19 November 2015 Effective up to 19 November 2015

Fixed fees 1 Fixed fees 1

Chairperson A$85,000 A$150,000

Transition Committee member A$45,000 -

Committee chair - A$90,000

Committee member - A$88,000

Board member A$60,000 A$85,000

(1) Excludes superannuation contributions payable.

Under the terms of the Non-Executive Directors’ Share Plan re-approved at the Company’s Annual General Meeting in May 2012, non-executive directors can elect to take a portion of their fees in Company shares. This scheme was discontinued from 31 December 2014.

The following percentages reflect the portion of their pre-tax remuneration elected by the non-executive directors to be received in the form of Company’s shares for 2014:

Former Non-executive directors 2014

I. McMaster 50.00%

M. Oppenheimer n/a

N. Bowman n/a

D. Carter n/a

A. Roberts 60.00%For

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Executive pay

The objectives of the Executive Remuneration Strategy are to:

provide market competitive levels of remuneration having regard to the level of work and the impact executives can potentially have on the performance of the business;

attract, motivate, reward and retain a workforce capable of delivering the business plan and substantially growing the business;

align performance incentives for executives with shareholder interests; and

comply with the Company’s standards of Corporate Governance.

Competitive Compensation

It is REMCO’s responsibility to ensure that executive compensation remains competitive. Compensation practices are reviewed annually and each element of compensation is monitored for market competitiveness against similar organisations that operate within the mining industry, prior to making decisions.

The current benchmark used for fixed remuneration is the McDonald’s Gold and General Mining Industry Remuneration Report which collates data from mining companies in Australasia, the Pacific Rim and Africa.

The purpose of making the comparisons is to:

understand the competitiveness of current pay levels for each executive position relative to companies with similar characteristics;

identify and understand any gaps that may exist between actual compensation levels and market compensation levels; and

establish the basis for developing salary adjustments and short and long-term incentive rewards for REMCO approval. The executive pay and reward framework has five components:

base pay;

non-financial benefits;

superannuation;

long-term incentives through participation in the Company’s Scheme and ESP; and

short-term performance incentives.

Base pay

Executives are offered a competitive base pay that comprises a fixed cash component. The Company uses benchmark data from external consultants to ensure base pay is set to reflect the market for a comparable role. Base pay for senior executives is reviewed annually to ensure executives’ pay is competitive with the market. An executive’s pay is also reviewed on promotion.

There are no guaranteed base pay increases included in any senior executive’s contracts.

Non-financial benefits

Executives may receive non-financial benefits including car parking and health insurance, life and personal accident insurances.

Superannuation

Superannuation contributions are made to employees’ chosen superannuation fund in accordance with regulatory requirements of each jurisdiction.

Long-term incentives

The purpose of the long-term incentive plan (‘LTI Plan’) for the CEO and Eligible Employees is to create alignment amongst key executives with longer term shareholder interests. The LTI Plan includes the Company’s Scheme and ESP. The Board has determined that given the nature of Intrepid’s business and the long term focus on growth it will provide a significant portion of the remuneration for key executives through equity in Intrepid but the current plans are under review following the new Board’s appointment on 19 November 2015. The Board is guided by the principles laid out in the Company’s Executive Remuneration Strategy.

The Company does not have a long-term non-equity incentive remuneration plan. No share rights or options were issued under the existing Plan during 2015.

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Long-term incentives (continued)

The prior LTI Plan in operation was initially designed for a fixed 5 year period from 2008 to 2012. This plan was amended in 2015 to operate on a 3 year cycle and is structured around eligible employees being issued share rights equivalent to a percentage of their (‘TFR’), (Total Fixed Remuneration) over a three year period. The notional value of the options and share rights granted under the previous plan was based on a multiple (the equity multiplier) of the Eligible Employee’s Total Fixed Remuneration (‘TFR’). The equity multiplier varies with the seniority of role held by the Eligible Employee in the Company. There are currently no share rights outstanding under the plan but some options remain outstanding due to the application of the plan rules on vesting and expiry of options.

Short-term performance incentives

REMCO is responsible for assessing short-term incentives for senior executives. The CEO establishes the short-term incentive measures applicable to each individual executive. Key Performance Indicators (‘KPIs’) are set annually for executives and results are assessed by the REMCO in conjunction with the CEO. To help make this assessment, REMCO receives a variety of detailed reports and presentations on various aspects of the performance of the business from management and benchmark data from external consultants.

The Short-Term Incentive Scheme (‘STI Scheme’) is the primary remuneration tool to motivate and drive superior annual performance through establishing demanding KPI’s for executives that are aligned to the strategic and operational focus of the business. The current board is continuing to review the application and assessments process within the STI Scheme.

For executive team members apart from the CEO, the STI Scheme entitles members to receive an annual bonus of 30% up to 45% of each member’s TFR. The allocation of the annual bonus is weighted 56% to applied shared team performance measures and 24% to individual performance (KPIs) as determined by the Board in consultation with the CEO. A 20% proportion of the executive team members’ bonus in relation to individual performance is subject to CEO or Board discretion.

The CEO is entitled to receive an annual bonus of 40% up to 60% of TFR, based on achieving or outperforming certain performance indicators as established by the Board. The allocation of the annual bonus is weighted 56% to applied shared team performance measures and 24% to individual performance (KPIs). A 20% proportion of the CEO’s bonus in relation to individual performance is subject to Board discretion.

Consequences of performance on shareholder wealth

In considering the Group’s performance and the benefits derived by shareholders, REMCO has regard to the impact that the Group’s business performance has on shareholder value. No grants in shares or options were made to executives in the current year. It is considered that the achievement of individual KPIs established for each executive under the STI Scheme will positively impact on shareholder value over time. The current options and share rights granted to executives under the previous LTI Plan have been structured to provide key management with meaningful retention incentives, whilst ensuring that the ultimate value of the options and share rights to these executives will only be realised through growth in the Company’s share price and/or relative increases in shareholder returns as measured by TSR. The current LTI plans are being reviewed by the new Board. Other measures of corporate performance, such as company earnings and capital management, will have more relevance in future years as the Company matures from its current exploration and development focus to profitability.

The following is the key metric which is currently considered relevant in assessing the Company’s performance over the last five years and the potential consequences on shareholder value:

2015 2014 2013 2012 2011

IAU share price ($) (at 31-Dec) 0.12 0.14 0.31 0.21 1.09

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C. Details of remuneration

Details of the remuneration of the non-executive directors of the Company and each named executive of the Group (KMP) for the year are set out in the following tables.

Short-term benefits Post-employment benefits

2015 Salary and fees Superannuation Total

$ $ $


P. Love (1) 13,851 1,316 15,167

P. Evans (1) 5,000 475 5,475

R. Baumfield (2) 38,358 3,644 42,002

Former Non-executive directors

I. McMaster (4) 83,417 55,451 138,868

M. Oppenheimer (3) 79,708 7,572 87,280

N. Bowman (3) 77,188 7,336 84,524

D. Carter (3) 77,188 7,336 84,524

A. Roberts (5) 62,812 5,967 68,779

Total 437,522 89,097 526,619

(1) Appointed 19 November 2015.(2) Appointed 1 July 2015.(3) Ceased 19 November 2015.(4) Ceased 31 October 2015.(5) Ceased 30 September 2015.

Short-term benefits Post-employment benefits

Share-based payment

2014 Salary and fees Superannuation Shares (1) Total

$ $ $ $


I. McMaster (2) 75,000 14,063 75,000 164,063

A. Roberts (3) 34,000 7,969 51,000 92,969

Total 109,000 22,032 126,000 257,032

(1) The amounts stated represent the portion of remuneration the director has elected to receive in shares under the Non-Executive Directors’ Share Plan.

(2) Ceased 31 October 2015.

(3) Ceased 30 September 2015.

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D. Service agreements

Remuneration and other terms of employment for senior executives are formalised in service agreements. Each of these agreements contains provisions setting out components of compensation including payment of performance-related cash bonuses, other employment benefits, termination benefits and participation when eligible, in the Company’s LTI Plan. The material provisions of executive service agreements at the date of this report are set out below.

Executives at the date of this report

Tony De Santis, Acting Chief Executive Officer

No fixed employment term, subject to nine months’ notice and a lump sum termination payment of an amount equal to six months TFR where the employment is terminated by the Company and three months’ notice by the employee.

TFR of A$361,800 pa (inclusive of superannuation contribution), subject to annual review.

STI award of 30% up to 45% of TFR, based on achieving or outperforming established KPIs.

LTI award in accordance with the Company’s Executive Remuneration Policy.

Termination due to redundancy in accordance with the Company’s Redundancy Policy.

Ravi Underwood, CFO

No fixed employment term, subject to three months’ notice of termination by either party;

TFR of A$310,000 pa (inclusive of superannuation contribution), subject to annual review;

STI award of 30% up to 45% of TFR, based on achieving or outperforming established KPIs;


Under certain circumstances of termination by the Company a termination payment equivalent to one month of TFR for each completed year of service up to nine months of TFR.


Senior executives during the current financial year but not at the date of this report

Scott Lowe, Former Executive Director Business Development & Former CEO

TFR of A$525,000 pa (inclusive of superannuation contribution).

STI award of up to 60% of TFR in cash, based on achieving established KPIs.

No entitlement to participate in LTI schemes.

Retention payment equivalent to one year’s TFR paid on redundancy in December 2015.

Mark Mitchell, Former CEO

No fixed employment term, subject to six months’ notice of termination by the Company and three months’ notice of termination by the employee.

TFR of A$475,000 (inclusive of superannuation contribution), subject to annual review.

STI award of 60% up to 90% of TFR, based on achieving or outperforming established KPIs.



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Vanessa Chidrawi, Former General Counsel and Company Secretary

No fixed employment term, subject to twelve months’ notice of termination by the Company and six months’ notice of termination by the employee.

Annual salary (inclusive of superannuation contribution) of A$361,000.

Non-cash benefits include Medical, Personal Accident and Group Life Insurances.

STI award of 30% up to 45% of TFR.


Termination due to redundancy, payment in lieu of notice of six months’ base salary and otherwise in accordance with the Company’s Redundancy Policy.

Termination benefits

In relation to the various service agreements entered into by the Company with certain executives, the Company is required to make certain payments upon termination without cause, redundancy due to change of control, redundancy or a deemed termination as outlined in the Company’s Redundancy Policy. Key provisions of the Company’s Redundancy Policy are as follows:

1. Termination Without Cause

Executives, apart from the CEO, Acting CEO and General Counsel, are given three months’ notice for terminations without cause. The Acting CEO and General Counsel are provided with nine months’ and twelve months’ notice respectively. The CEO had a twelve month retention amount payable on termination. The Company may require the executive to remain with the Company for all or part of the notice period, or provide payment in lieu of notice.

2. Change of Control

To provide reassurance to particular Intrepid employees in the event that Intrepid becomes the subject of market speculation and to minimize the risk of resultant turnover of key personnel at such a critical time, the Company’s Redundancy Policy provides for an inducement for those key personnel to remain with Intrepid in such a period of uncertainty by providing a minimum payout of the equivalent of six months’ TFR as a redundancy payment. This inducement will not apply to all employees and it is at the discretion of the CEO to identify those key personnel to whom it may apply. This payment is not in addition to the normal payment provided by the Redundancy Policy. Instead a top up payment will be made to ensure that any payment made under the policy for redundancy notice and severance is at least equivalent to six months’ TFR. Executives are entitled to pro-rata STI payments for a redundancy due to a change of control.

The circumstance that will trigger the top up payment is a redundancy due to change of control.

Change of control means circumstances where control (direct or indirect) of the Company is altered from that subsisting at the date of the employee’s job offer to initially join Intrepid. The change must arise by way of share sale, share issue, merger or consolidation, reconstruction, asset acquisition or disposal, exercise of rights under Joint Venture Documents or any other agreement, arrangement or understanding, or by any other means whatsoever (including agreement to enter into any of these transactions).

In these circumstances redundancy shall also be triggered by:

A. The CEO determining that there is no position available for the employee at a level similar to that held by the employee immediately prior to the change of control occurring;

B. The employee not having the appropriate skills, qualifications or experience, in the opinion of the CEO to continue in the position held by him/her immediately prior to the change of control occurring; or

C. The employee’s position being substantially altered with respect to remuneration, locality, duties or reporting hierarchy, any of which is unacceptable to the employee.

Redundancy

A redundancy is defined as a circumstance where a particular role is no longer required. The Company’s Redundancy Policy sets forth executive entitlements in the event of a redundancy.

Executives are entitled to redundancy notice commensurate with their period of continuous service as outlined in the Redundancy Policy. Redundancy notice may be required to be wholly or partially worked. Executives are entitled to severance pay commensurate with their period of continuous service as outlined in the Redundancy Policy.

In addition to redundancy and severance pay, upon redundancy executives will also be entitled to payment of unused annual leave, long service leave accumulated, and pro-rata STI bonus in accordance with months worked and subject to meeting performance targets. Executives may also be entitled to payment for all or part of their contractual notice period.

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Deemed Termination

Six months’ base salary plus superannuation is payable to executives in the event that an executive’s terms of employment become materially less favourable in terms of responsibilities, reporting line, or status of position becoming materially diminished, or, if the Company requires the executive to relocate to an alternative place of employment which is greater than 50 kilometres from the current place of employment (or such other place of employment at the time the deemed termination has been agreed by the executive) and that requirement is not accepted by the executive. In addition, a pro-rated payment will be made in respect of long and short-term incentives that may have accrued at the date of the deemed termination, subject to any applicable performance threshold being met.

Resignation or Retirement

Executives are entitled to resign at any time on giving three months’ notice, other than the General Counsel who is required to give six months’ notice, during which time they may be required to work all or part of the notice period. In the event of resignation or retirement the Company is required to make payment on termination for outstanding base salary and all accrued statutory leave entitlements owing.

E. Share-based compensation

Options

Options outstanding were granted under the Company’s Scheme which was last approved by shareholders at the Company’s 2012 Annual General Meeting.

Options granted on or after 1 January 2011 vest between thirty-six months and forty-eight months after the options are granted. The options vest on completion of a specified service period and are subject to TSR performance tests. Intrepid has used a Monte Carlo Simulation analysis to always value the options granted on or after 1 January 2011.

Options are granted for no consideration and expire after a period of five years.

Mr. Lowe was issued 4,320,276 options under the Company’s Scheme in November 2013. The granting of these options was subject to shareholder approval. This approval was never sought from shareholders. Accordingly the issue of these options was reversed during the 2014 year.

No options granted as compensation have been exercised during the year, or subsequent to the end of year.

Share rights

Mr. Lowe was issued 2,160,138 share rights under the Company’s ESP in November 2013. The granting of these share rights was subject to shareholder approval. This approval was never sought from shareholders. Accordingly the issue of these share rights was reversed during the 2014 year.

In addition, certain members of senior management were granted share rights during the years ended 31 December 2011 and 2012 under the terms of the ESP.

All share rights issued to executives are conditional on the employee continuing in employment and will automatically vest into fully-paid ordinary shares upon specific performance conditions being achieved. The performance condition is a market hurdle, being TSR. Intrepid has used a Monte Carlo Simulation analysis to value the TSR component of the share rights.

Any share rights which have not vested at the vesting date will expire.

Analysis of options and share rights over equity instruments granted as compensation

There were no options or share rights granted during the current year or prior year.

The movement during the reporting period, by values, of options and share rights over ordinary shares held by each KMP of the Group are detailed below:

Value exercised during the year Value expired/cancelled during the year

A$(1) A$(2)

Options

V. Chidrawi (3) - 177,274

Share rights

V. Chidrawi - 144,333

(1) The value of options/share rights exercised during the year is calculated as the market price of a share of the Company as at the close of trading on the date the options/share rights were exercised after deducting the price paid to exercise the option.

(2) The value of the options/share rights that expired/cancelled during the year represents the benefit forgone and is calculated at the date the options/share rights were granted using a Monte Carlo Simulation analysis assuming the performance criteria had been achieved.

(3) In accordance with the plan rules, V.Chidrawi’s share and options which did not vest on termination on 10 December 2015 and were deemed to have lapsed.

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Share rights (continued)

Details of vesting profiles of the options and share rights granted in 2011 to 2013 and outstanding at any part of the year as remuneration to each KMP of the Group are detailed below:

Number of

options / share rights

granted

Grant date

Expiry date

Fair value per share at

grant date

Exercise price

Year in which

options or share rights

vest

Number vested during

2015

Former Executive

V.Chidrawi 93,898 27-Sep-11 17-Jul-16 A$0.289 A$1.72 Jul-15* -

46,949 27-Sep-11 17-Jul-21 A$0.623 - Jul-15* -

127,235 18-Feb-12 1-Jan-17 A$0.597 A$1.18 Jan-15* -

127,234 18-Feb-12 1-Jan-17 A$0.583 A$1.18 Jan-16** -

63,618 18-Feb-12 1-Jan-22 A$0.931 - Jan-15* -

63,617 18-Feb-12 1-Jan-22 A$0.878 - Jan-16** -

* These options lapsed during the year having failed to meet the TSR performance tests in accordance with the plan rules.

** These shares or options lapsed on termination of the employee in accordance with the plan rules. V.Chidrawi was terminated on 10 December 2015.

Movement in options and share rights

The movement during the reporting period, by number of options and share rights over ordinary shares in the Company held, directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:

Balance at 31 Dec 2014

Granted as compensation

Exercised Other changes*

Balance at 31 Dec 2015

Vested during the year

Vested and exercisable at

31 Dec 2015

Options

Former Executive

V. Chidrawi 348,367 - - (348,367) - - -

Share rights

Former Executive

V. Chidrawi 174,184 - - (174,184) - - -

*Options/Share rights lapsed/cancelled/expired.

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F. Other key management personnel disclosures

Shareholdings

The number of shares in the Company held during the year by each KMP directly, indirectly or beneficially, including associated parties, is set out below. Movements between the opening and closing balances pertain to the period which each person was a director or executive during the year. There were no shares granted during the reporting period as compensation except for those shares granted to non-executive directors as part of the Non-Executive Directors’ Share Plan:

Opening balance

Shares received in lieu of cash

Shares purchased

Exercised options/

share rights

Shares disposed

Closing balance (9)


P. Love (1) - - - - - -

P. Evans (1) - - 200,000 - - 200,000

R. Baumfield (7) - - 31,234 - - 31,234

Former Non-executive directors

I. McMaster (2) 264,860 - - - (50,525) 214,335

M. Oppenheimer (3) 1,531,376 - - - - 1,531,376

N. Bowman (3) 1,280,000 - - - - 1,280,000

D. Carter (3) 32,400 - - - - 32,400

A. Roberts (8) 169,937 - - - - 169,937

Executives

T. De Santis 1,122,158 - - - - 1,122,158

R. Underwood 219,200 - - - - 219,200

Former Executives

S. Lowe (4) 1,562,760 - 166,666 - - 1,729,426

V. Chidrawi (6) 138,583 - - - - 138,583

M. Mitchell (5) 472,000 - - - - 472,000

(1) Appointed as a director on 19 November 2015.

(2) Ceased to be a director on 31 October 2015.

(3) Ceased to be a director on 19 November 2015.

(4) Ceased to be a director on 19 November 2015, ceased to be CEO on 31 December 2015.

(5) Ceased as CEO on 31 March 2015.

(6) Ceased as executive on 10 December 2015.

(7) Appointed as Director on 1 July 2015.

(8) Ceased to be a Director on 30 September 2015.

(9) Closing balance for the directors/executives who are no longer employed by the Company is shown at date they ceased employment.

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Analysis of STI bonuses included in remuneration

Short-term bonuses

Amount included in remuneration

$

Percentage of ‘target’ received

Percentage of ‘target’ forfeited

2015

Executives

T. De Santis 82,800 75% 25%

R. Underwood 75,000 75% 25%

Former executives

S. Lowe 40,000 7.6% 92.4%

V. Chidrawi - - -

M. Mitchell - - -

2014

Executives

T. De Santis (1) 9,494 100% -

R. Underwood (1) 6,199 76% 24%

Former Executives

S. Lowe 361,120 100% -

M. Mitchell (1) 14,129 66% 34%

V. Chidrawi 74,628 66% 34%

1 Amount included in remuneration represents a prorated portion of the STI bonus payable to the executive for the period the executive was an employee of the Group.

Signed in accordance with a resolution of the Board of Directors:

Peter Love Chairperson

Sydney, 18 March 2016

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AUDITOR’S INDEPENDENCE DECLARATION

ABCD

KPMG, an Australian partnership and a member

firm of the KPMG network of independent member

firms affiliated with KPMG International Cooperative Liability limited by a scheme approved under

(“KPMG International”), a Swiss entity. Professional Standards Legislation

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of Intrepid Mines Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial

year ended 31 December 2015 there have been:

(i) no contraventions of the auditor independence requirements as set out in the

Corporations Act 2001 in relation to the audit; and

(ii) no contraventions of any applicable code of professional conduct in relation to the

audit.

KPMG

Caoimhe Toouli

Partner

Sydney

18 March 2016

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015 (presented in Australian dollars)

31 Dec2015

Restated (1) 31 Dec

2014

Notes $000 $000

Revenue and other income

Other income 6 1,209 3,565

Gain on acquisition 5 - 29,274

Tujuh Bukit settlement proceeds 5 - 84,980

Foreign exchange gain 1,949 -

3,158 117,819

Expenses

Exploration and evaluation expenditure (11,938) (2,873)

General expenses 7(a) (3,202) (11,815)

Share-based payments expenses 31(c) (100) (547)

Integration and restructuring costs 7(b) (3,212) (359)

Unrealised change in fair value of other financial assets

- (155)

Reversal of/(provision) for litigation - 13,700

Foreign exchange loss - (1,252)

Profit/(loss) before income tax (15,294) 114,518

Income tax benefit 9 - 4,054

Profit/(loss) after tax attributable to members of the Company

(15,294) 118,572

Other comprehensive income/(loss)

Items that may be reclassified subsequently to profit or loss:

Exchange differences on translation of foreign controlled entities and translation to presentation currency

(14,852) 306

Total comprehensive income/(loss) attributable to members of the Company

(30,146) 118,878

Earnings per shareCents per

share

Basic profit/(loss) per share 24 (4.1) 21.7

Diluted profit/(loss) per share 24 (4.1) 21.7

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

(1) Comparative balances have been restated to AUD as a result of change in presentation currency. Refer to Note 4.

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31 Dec2015

Restated (1)

31 Dec2014

Restated (1) 31 Dec

2013

Notes $000 $000 $000

Assets

Current assets

Cash and cash equivalents 10 55,932 24,144 10,904

Other financial assets 11 - 47,565 87,944

Trade and other receivables 12 1,876 2,347 1,254

Assets held for sale 13 - 2,424 -

Total current assets 57,808 76,480 100,102

Non-current assets

Other financial assets 11 - 137 556

Property, plant and equipment 14 90 216 -

Mining properties 15 27,707 42,487 -

Total non-current assets 27,797 42,840 556

Total assets 85,605 119,320 100,658

Liabilities

Current liabilities

Trade and other payables 16 829 1,583 1,169

Current tax payable 17 - 1,078 112

Provisions 18 391 2,094 110

Total current liabilities 1,220 4,755 1,391

Non-current liabilities

Provisions 18 - 134 13,780

Total non-current liabilities - 134 13,780

Total liabilities 1,220 4,889 15,171

Net assets 84,385 114,431 85,487

Equity

Contributed equity 19 268,499 268,499 358,577

Reserves 20 38,798 53,550 7,344

Accumulated losses 21 (222,912) (207,618) (280,434)

Total equity 84,385 114,431 85,487

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2015 (presented in Australian dollars)

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

(1) Comparative balances have been restated to AUD as a result of change in presentation currency. Refer to Note 4.

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31 Dec 15 Share capital

Translation reserve

Equity compensation

reserve

Profitappropriation

reserve

Accumulated losses

Total equity

$000 $000 $000 $000 $000 $000

Balance at 1 Jan 15 (Restated) (3) 268,499 110 7,684 45,756 (207,618) 114,431

Total comprehensive loss for the year

Profit for the year - - - - (15,294) (15,294)

Other comprehensive loss:

Foreign currency translation differences - (14,852) - - - (14,852)

Total comprehensive income for the period

- (14,852) - - (15,294) (30,146)

Transactions with owners, recorded directly in equity:

Share-based payments made (options and share rights)

- - 100 - - 100

Balance at 31 Dec 15 268,499 (14,742) 7,784 45,756 (222,912) 84,385

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2015 (presented in Australian dollars)

(Restated) (3)

31 Dec 14Share

capitalTranslation

reserve Equity

compensation reserve

Profitappropriation

reserve

Accumulated losses

Total equity

$000 $000 $000 $000 $000 $000

Balance at 1 Jan 14 358,577 (196) 7,540 - (280,434) 85,487

Total comprehensive loss for the year

Profit for the year - - - - 118,572 118,572

Other comprehensive loss:

Foreign currency translation differences - 306 - - - 306

Total comprehensive income for the period

- 306 - - 118,572 118,878

Shares issued - business combination(1) (2) 21,442 - - - - 21,442

Transaction cost arising from issue of shares (net of tax)

(1,935) - - - - (1,935)

Transactions with owners, recorded directly in equity:

Share buy-back(2) (110,000) - - - - (110,000)

Shares issued to settle part of directors fees

248 - - - - 248

Share-based payments made (options and share rights)

- - 311 - - 311

Transfer profits to profit appropriation reserve

- - - 45,756 (45,756) -

Transfer to share capital on exercise ofoptions and share rights

167 - (167) - - -

Balance at 31 Dec 14 268,499 110 7,684 45,756 (207,618) 114,431

(1) refer Note 27.(2) refer Note 19.(3) Comparative balances have been restated to AUD as a result of change in presentation currency. Refer to Note 4.

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31 Dec2015

Restated (1) 31 Dec

2014

Notes $000 $000

Cash flows from operating activities

Payment for exploration activities (11,327) (3,157)

Payments to suppliers and employees (8,069) (12,851)

Interest received 1,936 3,566

Income taxes paid (1,100) (193)

Other - 2

Net cash flows used in operating activities 23 (18,560) (12,633)

Cash flows from investing activities

Cash balance acquired through business combination

- 12,525

Proceeds from the disposal of exploration licenses 2,604 -

Cost of disposals of subsidiaries (814) 225

Purchase of assets (11) -

Proceeds from Tujuh Bukit settlement - 84,980

Proceeds from maturity of bank term deposits greater than three months

47,565 40,378

Net cash flows from investing activities 49,344 138,108

Cash flows from financing activities

Payments for share buy-back - (110,000)

Transaction cost on share issue - (1,679)

Net cash flow used in financing activities - (111,679)

Net increase in cash and cash equivalents 30,784 13,796

Cash and cash equivalents at the beginning of the period

24,144 10,904

Effects of exchange rate changes on cash and cash equivalents

1,004 (556)

Cash and cash equivalents at the end of the financial year

10 55,932 24,144

CONSOLIDATED STATEMENT OF CASH FLOWFOR THE YEAR ENDED 31 DECEMBER 2015 (presented in Australian dollars)

The above consolidated statement of cashflows should be read in conjunction with the accompanying notes.

(1) Comparative balances have been restated to AUD as a result of change in presentation currency. Refer to Note 4.For

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 (presented in Australian dollars)

1. Reporting entity 41

2. Summary of significant accounting policies 41

3. Critical accounting estimates and judgements 48

4. Foreign currency translation 49

5. Segment information 49

6. Other income 52

7. General expenses 52

8. Employee benefits expenses 53

9. Income tax benefit/expense 53

10. Cash and cash equivalents 54

11. Other financial assets 54

12. Trade and other receivables 54

13. Assets held for sale 55

14. Property, plant and equipment 55

15. Mining properties 56

16. Trade and other payables 56

17. Current tax payable 56

18. Provisions 57

19. Contributed equity 58

20. Reserves 58

21. Accumulated losses 59

22. Commitments for expenditure 59

23. Reconciliation of profit/(loss) after tax to net cash flows from operating activities 59

24. Earnings per share 60

25. Financial instruments - financial risk management 60

26. Subsidiaries 65

27. Business combination 65

28. Parent entity disclosures 66

29. Related party transactions 67

30. Remuneration of auditors 67

31. Share-based payments 68

32. Joint venture 69

33. Events occurring after reporting date 69

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2015 (presented in Australian dollars)

1. REPORTING ENTITY

Intrepid Mines Limited (‘Company’ or ‘Intrepid’) is domiciled in Australia. The address of the Company’s registered office during the year was Suite 502, Level 5, 78-80 William Street, Woolloomooloo, Sydney, New South Wales 2011.

The consolidated financial statements include the consolidated entity consisting of Intrepid Mines Limited and its subsidiaries (together referred to as the consolidated entity or Group).

The Group is a for-profit entity and its principal activities during the year ended 31 December 2015 were the receipt of the settlement proceeds (in March 2015) with respect to the exploration licences previously held in Burkina Faso and exploration and development of base metals with a focus on assets currently held in Zambia.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies adopted in the preparation of the consolidated financial report are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(a) Basis of preparation

The consolidated financial statements are general purpose financial statements and have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.

Compliance with IFRS

The consolidated financial statements comply with the International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board (IASB).

The consolidated financial statements were authorised for issue by the Board of Directors on 18 March 2016.

Historical cost convention

The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of listed equity securities at fair value (refer to Note 11).

Critical accounting estimates and judgements

The preparation of consolidated financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.

(b) Principles of consolidation

(i) Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Intrepid Mines Limited as at 31 December 2015 and the results of all subsidiaries for the year then ended. Subsidiaries are all those entities (including special purpose entities) over which the Group has control. Control over an entity exists where the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through the power over the investee. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is obtained by the Group. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between Group entities are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(ii) Joint arrangements

The Group has classified its interests in joint arrangements as either joint operations, where the Group has the rights to the assets and obligations relating to the arrangement or joint ventures if the Group has only the rights to the net assets of an arrangement. When making this assessment, the Group considers the structure of the arrangements, the legal form of any specific vehicles, the contractual terms of the arrangement and other facts and circumstances.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 DECEMBER 2015 (presented in Australian dollars)

(ii) Joint arrangements (continued)

The interest of the Group in unincorporated joint ventures are brought to account by recognising in its financial statements the assets it controls, the liabilities that it incurs, the expenses it incurs and its share of income that it earns from the sale of goods or services by the joint operation.

(c) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The Company’s functional currency is Australian dollars. The consolidated financial statements are presented in Australian dollars. Following the decision to exit Tujuh Bukit and subsequent board changes on 19 November 2015, the Directors formed the view that the reporting currency most appropriate was Australian dollars. Prior year balances have been restated accordingly. Refer to Note 4.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences on the non-monetary assets such as equities classified as available-for-sale financial assets are included in the fair value reserve in equity.

(iii) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

income and expenses for each statement of profit or loss and other comprehensive income are translated at average exchange rates unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions; and

all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold, a proportionate share of such exchange differences is reclassified to profit or loss, as part of the gain or loss on sale where applicable.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entities and translated at the closing rate.

(d) Revenue

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognised as follows:

(i) Interest

Interest revenue is recognised on a time proportion basis using the effective interest method.

(ii) Royalties

Royalty income is recognised in profit or loss when the royalty becomes due under the terms of the contract. Royalty income is recognised as other income.

2. Summary of significant accounting policies (continued)

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(e) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax payable also includes any tax liability arising from the declaration of dividends.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future; and

taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional income tax expenses that arise from the distribution of cash dividends are recognised at the same time that the liability to pay the related dividend is recognised.

The Group does not distribute non-cash assets as dividends to its shareholders.

The Company and its wholly-owned Australian resident entities formed a tax consolidated group effective from 1 October 2010. As a consequence, all members of the tax consolidated group are taxed as a single entity from this point in time. Following the scheme of arrangement with Blackthorn Resources Limited (Blackthorn), Blackthorn’s Australian tax consolidated group also became a member of the Intrepid tax consolidated group. The head entity within the tax consolidated group is Intrepid Mines Limited.

(f) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

(g) Business combinations

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control over an entity exists where the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through the power over the investee. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable.

The Group measures goodwill at the acquisition date as the fair value of the consideration transferred; plus the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.




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When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service.

(h) Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for impairment. Prepayments are included in receivables. A provision is raised for any impairment when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms or receivables. Bad debts are written off during the year in which they are identified.

(i) Mining properties

(i) Exploration and evaluation

All exploration and evaluation costs incurred by or on behalf of the Group up to the establishment of a commercially viable mineral deposit (as approved by the Board) are expensed as incurred except for the cost of acquiring exploration properties (where the expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale).

(ii) Mining development assets

Mining development assets consist only of acquired exploration assets and mineral properties currently under development or in production together with related mine development costs and capital assets. The cost of mining properties includes the cash consideration and/or the fair value of shares issued on the date the property is acquired.

The recoverability of amounts shown for mining development assets is dependent upon the existence of economically recoverable ore reserves; the acquisition and maintenance of appropriate permits, licenses and rights; the ability of the Group to obtain financing to complete the development of the properties where necessary and upon future profitable production; or, alternatively, upon the consolidated entity’s ability to recover its spent costs through a disposition of its interests.

Mine development costs relating to mining development assets are deferred until the properties are brought into commercial production, at which time they are amortised over the estimated useful life of the related property or on a unit-of production basis over ore reserves.

Mining development assets are assessed for impairment if sufficient data exists to determine the technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount. Where potential impairment is indicated the Group performs impairment testing in accordance with the accounting policy set out in Note 2(k).

(j) Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.

Depreciation of operational assets is calculated using a diminishing value method based on production levels over the ore reserve life of the operation. Depreciation of other assets is calculated using the straight line method to allocate their cost, net of their residual values, over their estimated useful lives, which for the motor vehicles, leashold assets and other sundry assets is five years. Leasehold improvements are depreciated over the life of the lease.

Land is not depreciated. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the profit or loss.

The directors have considered the economic life of plant and equipment with due regard to both the physical life limitations, assessments of economically recoverable ore reserves of the mine property at which the items are located, and to possible future variations in those assessments. The estimated remaining useful life for all such assets is reviewed regularly with annual re-assessments being made for major items.


(g) Business combinations (continued)

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(k) Impairment of assets

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

(l) Financial assets

The consolidated entity classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition and, in the case of assets classified as held-for-maturity, re-evaluates this designation at each reporting date.

(i) Bank term deposits greater than three months to maturity

Bank term deposits greater than three months to maturity are those term deposits that do not meet the Group accounting policy in relation to cash and cash equivalents as set out in Note 2(f). Bank term deposits are initially recognised at fair value. Subsequent to initial recognition the bank term deposits are measured at amortised cost using the effective interest method.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than twelve months after the reporting date which are classified as non-current assets. Loans and receivables are included in trade and other receivables in the statement of financial position.

Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.

(iii) Other financial assets

Other financial assets, comprising principally marketable equity securities, are non-derivatives that are designated at fair value through profit or loss or available-for-sale financial assets. They are included in non-current assets unless management intends to dispose of the investment within twelve months of the reporting date.

Purchases and sales of investments are recognised on trade date - the date on which the consolidated entity commits to purchase or sell the asset. Investments are initially recognised at fair value. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.

Financial assets at fair value through profit or loss and available-for-sale financial assets are subsequently carried at fair value. Realised and unrealised gains and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are included in the profit or loss in the period in which they arise.

Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available-for-sale are recognised in other comprehensive income. When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified from equity and recognised in profit or loss.

The consolidated entity assesses at each balance date whether there is objective evidence that a financial asset is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss is reclassified from equity and recognised in profit or loss as a reclassification adjustment. Impairment losses recognised in profit or loss on equity instruments classified as available-for-sale are not reversed through the profit or loss.

(m) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.

(n) Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within thirty days of recognition.

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(o) Employee benefits

(i) Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within twelve months of the reporting date, are recognised in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

(ii) Long service leave

The liability for long service leave expected to be settled within twelve months of the reporting date is recognised in the current provision for employee benefits and is measured in accordance with (i) above. The liability for long service leave expected to be settled more than twelve months from the reporting date is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than twelve months after reporting date are discounted to present value.

(iv) Employee benefit on-costs

Employee benefit on-costs, including payroll tax and contributions to the employee’s defined contributions superannuation plan, are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities.

(v) Equity-based compensation benefits - share options

Equity-based compensation benefits are provided to employees through the Company’s Employee Option Scheme (‘Scheme’). Information relating to this scheme is set out in Note 31.

The fair value of options granted under the Scheme is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date of options granted before 1 January 2011 was determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

The fair value of the options granted excludes the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each reporting date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate.

The fair value at grant date of options on or after 1 January 2011 is determined using a Monte Carlo analysis that also takes into account any market based vesting conditions, the exercise price, the term of the option, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital.

(vi) Equity-based compensation benefits - share rights

Equity-based compensation benefits are provided to eligible Senior Executives via the Company’s Senior Executive Share Plan (‘ESP’). Information relating to this scheme is set out in Note 31.

The fair value of share rights under the ESP is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees becomes unconditionally entitled to the shares.

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(vi) Equity-based compensation benefits - share rights (continued)

The fair value at grant date is determined using Monte Carlo Simulation analysis to value the Total Shareholder Return (‘TSR’) component of the share rights that takes into account the exercise price, the term of the share rights, the market vesting criteria, the impact of dilution, the non-tradeable nature of the shares, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the share rights.

For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

If the performance conditions are satisfied at the vesting date, the relevant shares will be automatically exercised. Any share rights which have not vested at the vesting date will expire.

Upon the exercise of share rights, the balance of the share-based payments reserve relating to those share rights will be transferred to share capital.

(p) Share-based payments

The fair value of equity settled transactions are recognised as an expense with a corresponding increase in equity. Where the counterparty is not required to complete a specified period of service, the Group recognises the services received in full, with a corresponding increase in equity. Unidentifiable services received are measured at grant date.

The Group recognises goods and services received or acquired in an equity-settled share-based payment transaction at the fair value of the goods and services received, unless that fair value cannot be estimated reliably. Where the fair value cannot be estimated reliably, the value of goods or services received shall be measured at the fair value of the equity instruments granted.

Where identifiable consideration received by the Group appears to be less than the fair value of the equity instrument granted, then typically this indicates that other consideration (ie unidentifiable goods or services) has been (or will be) received. In such a case the Group measures the unidentifiable goods or services received as the difference between the fair value of the share-based payment and the fair value of any identifiable goods or services received or to be received.

For transactions measured by reference to the fair value of the equity instruments granted, the Group measures the fair value of the equity instruments based on market prices. Where market prices are not available, the Group uses a valuation technique that is consistent with generally accepted valuation methodologies for pricing financial instruments and incorporates all factors and assumptions that knowledgeable, willing market participants would consider in setting the price.

(q) Leases

Leases of property, plant and equipment where the consolidated entity has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the asset’s useful life and the lease term.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight line basis over the period of the lease.

(r) Contributed equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, for the acquisition of a business, are not included in the cost of the acquisition as part of the purchase consideration.

(s) Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the result attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(t) Rounding of amounts

The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

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(u) New accounting standards and interpretations

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2016, and have not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out below. The Company does not plan to adopt these standards early.

(i) AASB 9 Financial Instruments

AASB 9 Financial Instruments introduces changes in the classification and measurement of financial assets and financial liabilities, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financials instruments from AASB 139. This standard becomes mandatory for the Group from 1 January 2018. The potential effects on adoption of these amendments are yet to be determined.

(ii) AASB 15 - Revenue from contracts with customers

AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces revenue recognition guidance, including AASB 118 Revenue, AASB 111 Construction Contracts and IFRIC 13 Customer Loyalty Programmes. AASB 15 is mandatory for the Group from 1 January 2018. The potential effects on adoption of these amendments are yet to be determined.

(v) Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are regularly reviewed by the Group’s CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

(w) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.

(x) Discontinued operation

A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale or distribution, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of profit or loss and other comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative year.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The consolidated entity makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. In preparing this financial report, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty are as follows:

(i) Impairment of Mining Properties

Determining the recoverability of mining properties capitalised in accordance with the Group’s accounting policy (see Note 2(i)), requires estimates and assumptions as to future events and circumstances, in particular, whether successful development and commercial exploitation, or alternatively sale, of the respective mining property will be achieved. Critical to this assessment is estimates and assumptions as to economically recoverable ore reserves which represent the estimated quantity of product in an area-of-interest that can be expected to be profitably extracted, processed and sold under current and foreseeable economic conditions. Changes in these estimates and assumptions as new information about the presence or recoverability of an ore reserve becomes available, may impact the assessment of the recoverable amount of mining properties. If, after having capitalised the expenditure under accounting policy 2(i), a judgement is made that recovery of the expenditure is unlikely, an impairment loss is recorded in profit or loss in accordance with accounting policy 2(k). The carrying amounts of mining properties are set out in Note 15.

(ii) Deferred Tax

In accordance with the Group’s accounting policies for deferred taxes, a deferred tax asset is recognised for unused tax losses only if it is probable that future taxable profits will be available to utilise those losses. Determination of future taxable profits requires estimates and assumptions as to future events and circumstances, in particular, whether successful development and commercial exploitation, or alternatively sale, of the respective areas of interest will be achieved.

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31 Dec2015

31 Dec2014

31 Dec2013

Annual average exchange rates used

Australian dollars (A$) to United States dollars (US$) 0.7522 0.9028 0.9685

Year end closing exchange rates used

Australian dollars (A$) to United States dollars (US$) 0.7299 0.8202 0.8948



This includes estimates and judgements about commodity prices, exchange rates, future capital requirements, future operational performance and the timing of estimated cash flows. Changes in these estimates and assumptions could impact on the amount and probability of estimated taxable profits and accordingly the recoverability of deferred tax assets.

The Group has not recognised a net deferred tax asset for temporary differences and tax losses as at 31 December 2015 on the basis that the ability to utilise these temporary differences and tax losses cannot yet be regarded as probable.

4. FOREIGN CURRENCY TRANSLATION

During the year, the Company changed its presentation currency from United States dollars to Australian dollars. The Directors formed the view the most appropriate presentation currency is Australian dollars; the change also reflected an alignment of the functional currency with the presentation currency. In addition, the Company is an Australian listed company and as such the majority of users of the financial reports would benefit from adopting an Australian dollar presentation currency. Prior year comparatives were restated to Australian dollars based on the following exchange rates. Any significant transactions were restated based on the exchange rate at the transaction date.

The exchange rates applied were as follows:

3. Critical accounting estimates and judgements (continued)

(ii) Deferred Tax (continued)

5. SEGMENT INFORMATION

For the year ended 31 December 2015 the Group manage its operations as a single business operation and there are no parts of the business that qualify as operating segments under AASB8 Operating Segments. The Board assesses the financial performance of the Group on an integrated basis only and accordingly, the Group is managed on the basis of a single segment.

The prior year comparatives have been included based on the previous view of the business for information purposes only.

For the year ended 31 December 2014 the consolidated entity operated predominantly in the segments as described below:

Tujuh Bukit

The consolidated entity was previously conducting exploration activity under a Joint Venture Alliance agreement in respect of the Tujuh Bukit gold-silver-copper project in eastern Java (Indonesia). All site activities were suspended on 19 July 2012. All studies activities were suspended in June 2013. On 9 April 2014 shareholders approved the Tujuh Bukit Settlement (details of which were announced on 19 February 2014). The completion of the settlement marked the end of various streams of disputes in relation to Tujuh Bukit in which the Group was involved.

Africa

On 11 December 2014, the Company acquired 100% interest in Blackthorn. Blackthorn’s main operation is the Mumbwa Project in Zambia in which it undertakes gold and base metals exploration.

Other

Other activities mainly represent the Group’s investigation of mineral exploration projects for potential investment purposes.

Unallocated items comprise mainly corporate assets, head office expenses, and income tax assets and liabilities.For

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31 December 2014

Operating segment Tujuh Bukit Africa Other Consolidated

$000 $000 $000 $000

Revenue

Other income - - - -

Tujuh Bukit settlement proceeds (a) 84,980 - - 84,980

Total segment revenue 84,980 - - 84,980

Reportable segment profit/(loss) before income tax (b) 98,680 (585) (2,338) 95,757

Reportable segment assets - 46,706 244 46,950

Reportable segment liabilities - (678) (452) (1,130)

Reconciliation of reportable segment profit before income tax

Total profit for reportable segments 95,757

Unallocated amounts:

Other income 3,565

Gain on acquisition 29,274

General and administrative expenses (12,671)

Unrealised changes in fair value of other financial assets (155)

Foreign exchange loss (1,252)

Profit before income tax 114,518

Income tax benefit 4,054

Profit after income tax 118,572

(a) On 19 February 2014 the Company, announced that it had signed agreements to settle all disputes surrounding the ownership of theTujuh

Bukit Project which upon completion would result in the Company receiving US$80 million in cash. The completion of the settlement outlined

in the signed agreements was subject only to Intrepid shareholder approval being obtained. At a meeting held on 9 April 2014, shareholders

approved the Tujuh Bukit settlement. The completion of the settlement marked the end of various streams of disputes in relation to the Tujuh

Bukit in which the Group was involved.

(b) Includes $13.7 million reversal of the Tujuh Bukit costs previously accrued.

5. Segment information (continued)

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31 Dec2014

$000

Revenues

Total revenues for reportable segments 84,980

Other income -

Interest income 3,565

Gain on acquisition 29,274

Total consolidated revenue 117,819

Assets

Total assets for reportable segments 46,950

Cash and cash equivalents 24,144

Other assets 48,226

Total consolidated assets 119,320

Liabilities

Total liabilities for reportable segments (1,130)

Other liabilities (3,759)

Total consolidated liabilities (4,889)


Reconciliations of reportable revenues, assets and liabilities and other material items

Reportable segment totals

Unallocated items Consolidated

$000 $000 $000

Other material items 2014

Tujuh Bukit settlement proceeds 84,980 - 84,980

Gain on acquisition - 29,274 29,274

Other income - 3,565 3,565

Depreciation and amortisation (11) (1) (12)

Reversal of provision for litigation expense 13,700 - 13,700

GEOGRAPHICAL AREAS

Africa

On 11 December 2014, the Company acquired a 100% interest in Blackthorn Resources Limited (Blackthorn). Blackthorn’s main operation is the Mumbwa Project in Zambia in which it undertakes gold and copper exploration.

Australia

The consolidated entity maintained a registered office in Brisbane prior to the merger with Blackthorn.The registered office moved to Sydney in January 2015 as part of the implementation of the merger with Blackthorn.

South East Asia

The consolidated entity previously conducted exploration activites under a Joint Venture Alliance agreement in respect of the Tujuh Bukit gold-silver-copper project in eastern Java (Indonesia). All site activities were suspended on 19 July 2012. All study activities were suspended in June 2013.

In presenting information on the basis of geographical areas, segment revenues and segment assets are based on geographical location of therelevant projects.

Other Material items

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2015 2014

Revenues Non-current assets

Revenues Non-current assets

$000 $000 $000 $000

Geographical Areas

Africa 804 27,778 - 42,840

Australia 2,354 19 - -

South East Asia - - 117,819 -

3,158 27,797 117,819 42,840

31 Dec2015

31 Dec2014

$000 $000

Interest 1,209 3,563

Other - 2

1,209 3,565

6. OTHER INCOME

7. GENERAL EXPENSES

(1) Australian offices’ costs consist mainly of salaries and wages, occupancy, travel, audit and accounting costs in respect of the Brisbane, Sydney and Perth offices.

(2) These are mainly one-off redundancy and other termination payments made.

(3) Costs associated with restructuring subsidiaries in foreign jurisdictions.

Corporate development 144 -

General and administrative costs in respect of the Jakarta office

- 1,586

General and administrative costs in respect of the Australian offices (1) 3,058 6,753

Tujuh Bukit legal expenditure - 3,476

3,202 11,815

a. General Expenses

b. Integration restructure costs


Wages and terminations (2) 2,431 -

Other corporate restructure and disposal costs (3) 781 -

Business acquisition costs - 359

3,212 359

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31 Dec2015

31 Dec2014

$000 $000

Total employee benefits expenses(1) 4,437 4,787

1. Employee benefits expenses are split between Exploration & evaluation expenditure and General and administration expenses for disclosure in the consolidated statement of profit or loss and other comprehensive income and include redundancy and termination costs paid.



8. EMPLOYEE BENEFITS EXPENSES

(a) Income tax benefit/(expense)

Current tax - (1,232)

Deferred tax - 5,286

- 4,054

Deferred income tax benefit included in income tax benefit comprises:

Increase/(decrease) in deferred tax assets (3,842) 7,698

Increase/(decrease) in deferred tax liabilities 3,842 (12,984)

- (5,286)

(b) Numerical reconciliation of income tax expense to prima facie tax payable

Profit/(loss) before income tax (15,294) 114,518

(Expense)/benefit at Australian tax rate of 30% (2013 – 30%) 4,588 (34,355)

Tax effect of amounts which are not (taxable) in calculating taxable income:

Change in unrecognised movements in temporary differences (2,366) (52,742)

Tujuh Bukit settlement - 84,692

Option remuneration - (90)

Gain on acquisition - 5,130

De-recognition of current period tax loss (1,755) -

Recognition of previously unrecognised tax losses - 3,407

Non deductabe exploration expenses - (939)

Other non-temporary differences (467) (1,049)

- 4,054

(c) Tax losses and temporary differences

Deferred tax assets have not been recognised in respect of the following items:

Net assessable temporary differences - 3,285

Tax losses (70,278) (124,465)

(70,278) (121,180)

9. INCOME TAX BENEFIT/EXPENSE

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31 Dec2015

31 Dec2014

$000 $000

Cash at bank 55,932 22,772

Cash at bank (restricted) - 1,372

55,932 24,144

The above figures are shown as cash and cash equivalents at the end of the financial year in the cash flow statement. Cash at bank includes interest-bearing amounts. The average rate applicable to the consolidated entity’s balance at 31 December 2015 was 2.23% (2014: 0.62%).Approximately 25% of cash and cash equivalents are denominated in United States dollars (2014: 34%).

10. CASH AND CASH EQUIVALENTS

11. OTHER FINANCIAL ASSETS

Current

Bank term deposit greater than three months maturity (1) - 47,565

- 47,565

Non-current

Listed Equity securities – at fair value through profit and loss - 105

Other financial assets - 32

- 137

(1) The bank term deposits are subject to an average fixed interest rate of 2.23% (2014: 3.41%). Current year bank deposits are under 3 months and shown as cash at bank.

Current

GST receivable (1) 868 1,216

Other receivables (2) 1,008 987

Prepayments - 144

1,876 2,347

12. TRADE AND OTHER RECEIVABLES

(1 ) GST receivable - These amounts generally arise from transactions within the usual operating activities of the consolidated entity. Amounts are expected to be received within a year.

(2) Other receivables are comprised of interest accrued on term deposits, funds held in Trust account in PNG and receivable from Troy Resources.For

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31 Dec2015

31 Dec2014

$000 $000

Current

Burkina Faso exploration licences - at fair value - 2,424

- 2,424

Recognised at fair value as at 31 December 2014 based on an independent valuation included in the independent expert’s report released by Blackthorn on 14 July 2014. The sale completed on 5th March 2015 with the Group having received settlement proceeds of $US 2million.

Non-current

Plant and equipment - at cost 472 1,171

Less: Accumulated depreciation (407) (1,011)

65 160

Motor vehicles - at cost 171 443

Less: Accumulated depreciation (146) (387)

25 56

Total property, plant and equipment - at cost 643 1,614

Less: Accumulated amortisation (553) (1,398)

90 216

13. ASSETS HELD FOR SALE

14. PROPERTY, PLANT AND EQUIPMENT



Plant and equipment Motor vehicles Total

Reconciliations $000 $000 $000

2015

Balance at the beginning of the year 160 56 216

Acquisitions 32 32 64

Depreciation(1) (60) (42) (102)

Exchange differences (67) (21) (88)

Carrying amount at the end of the year 65 25 90

2014

Balance at the beginning of the year - - -

Acquired on business combination 168 60 228

Depreciation(1) (8) (4) (12)

Exchange differences - - -

Carrying amount at the end of the year 160 56 216

(1) Depreciation is split between Exploration & evaluation expenditure and General and administration expenses.

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15. MINING PROPERTIES

31 Dec 31 Dec

2015 2014

$000 $000

Non-current

Mining Properties – at cost 27,707 42,487

27,707 42,487

Reconciliation

Balance at the beginning of the year 42,487 -

Acquisition through business combinations - 42,345

Exchange differences (14,780) 142

Balance at the end of the year 27,707 42,487

Mining properties consists of the following:

Exploration properties (Zambia - Mumbwa) 27,707 42,487

Current

Trade payables - 340

Accrued expenses 779 878

Other payables 50 365

829 1,583

Current

Income tax payable - 1,078

- 1,078

16. TRADE AND OTHER PAYABLES

17. CURRENT TAX PAYABLE

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31 Dec 31 Dec

2015 2014

$000 $000

Current

Balance at the beginning of the year 2,094 110

Additions - employee leave 186 399

Employee leave taken (327) (253)

Other employee provisions 276 -

Other employee provisions - paid (1,521) 1,521

Burkina Faso assets disposed (317) 317

Balance at the end of the year (2) 391 2,094

Non-current

Balance at the beginning of the year 134 13,780

Additions - employee leave - 54

Usage/reversal employee leave (134) -

Litigation - reversed(1) - (13,700)

Balance at the end of the year - 134

18. PROVISIONS

(1) A tort action was lodged in Indonesia by Mr. Paul Willis, IndoAust Mining Limited and IndoAust Mining Pty Limited against the Intrepid

Parties and IMN Parties in December 2012. The claim related to the execution of a Termination and Settlement Agreement between the

Plaintiff Parties and the IMN Parties and a Deed of Termination and Release between Emperor Mines Pty Limited and the Plaintiff Parties.

In November 2013 the South Jakarta District Court made an award in favour of the Plaintiff Parties in the law suit initiated against the Intrepid

Parties. The Company filed an appeal against the decision, which was not final and binding until the appeals process has been finalised.

Notwithstanding this, the Company recorded a provision of $13.7 million in the 2013 year following this decision of the Court in favour of the

Plaintiff Parties. The provision was reversed as a consequence of the Tujuh Bukit settlement being approved by shareholders on 9 April 2014.

(2) Consists of employee annual leave provision and provision for short term incentives (STI).

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31 Dec2015

31 Dec2014

$000 $000

Ordinary Shares

Issued and paid up 268,499 268,499

Movements in contributed equity

Number of ordinary shares

`000 `000

Balance at the beginning of the year 369,869 556,426

Share issue – non-executive directors(1) - 977

Share issue – exercise of share rights 169 448

Share issue - scheme of arrangement(2) - 178,685

Share buy-back(3) - (366,667)


(1) As re-approved by the shareholders at the 15 May 2012 Annual General Meeting, the Company’s Non-executive Directors Share Plan allows non-executive directors of the Company with the ability to sacrifice part of their director fees to acquire ordinary shares of the Company. The scheme has been discontinued from 31 December 2014.

(2) Refer note 27.

(3) As part of the scheme of arrangement, Intrepid shareholders voted for a share buy-back which was capped at $110 million.

Ordinary shares

These shares have no par value and are fully paid ordinary shares. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Equity compensation reserve(1)


Share based payments granted as compensation 100 311

Rights exercised (transferred to share capital) - (167)


Profit appropriation reserve

Balance at the beginning of the year 45,756 -

Current year profit transferred - 45,756


Foreign currency translation reserve(2)

Balance at the beginning of the year 110 (196)

Currency translation differences arising during the year (14,852) 306

Balance at the end of the year (14,742) 110

Total reserves 38,798 53,550

(1) The equity compensation reserve is used to record the fair value of options, warrants and share rights issued but not exercised.

(2) Exchange differences arising on translation of foreign operations and translation to presentation currency are taken to the foreign currency translation reserve. The reserve is recognised in profit or loss when the foreign operation is disposed.

19. CONTRIBUTED EQUITY

20. RESERVES

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Operating leases

Within one year 272 28

Later than one year but not later than five years 152 54

424 82

Operating profit/(loss) after income tax (15,294) 118,572

Depreciation and amortisation 12 1

Changes in fair value of other financial assets - 156

Tujuh Bukit settlement proceeds - (84,980)

Gain on acquisition - (29,274)

Deferred tax asset arising on acquisition - (5,286)

Share-based payments 100 299

Cost of disposal of investment 814 -

Unrealised foreign exchange loss/(gain) (945) 1,850

Changes in operating assets and liabilities:

(Increase) /decrease in trade and other receivables 472 140

(Increase)/decrease in other assets - (289)

(Decrease) in trade and other payables (1,882) (1,962)

(Decrease)/increase in legal claim provision - (13,700)

Increase/(Decrease) in other provisions (1,837) 1,840

Net cash used in operating activities (18,560) (12,633)

31 Dec2015

31 Dec2014

$000 $000


Net loss/(profit) attributable to members of the Company 15,294 (118,572)

Profit transferred to profit appropriation reserve - 45,756


21. ACCUMULATED LOSSES

22. COMMITMENTS FOR EXPENDITURE

23. RECONCILIATION OF PROFIT/(LOSS) AFTER TAX TO NET CASH FLOWS FROM OPERATING ACTIVITIES

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Twelve months ended

31 Dec2015

31 Dec2014

Cents Cents

Basic earnings/(loss) per share (4.1) 21.7

Diluted earnings/(loss) per share (4.1) 21.7

Number Number

Weighted number of ordinary shares used in the calculation of basic EPS: 369,975,752 546,892,931

Weighted number of ordinary shares used in the calculation of diluted EPS: 369,975,752 546,892,931

$000 $000

Profit/(loss) attributable to the ordinary equity holders of the Company used in calculating the basic /diluted loss per share (15,294) 118,572

Options and rights on issue have not been included in the calculation of diluted earnings per share as they are anti-dilutive for the periods presented.

25. FINANCIAL INSTRUMENTS - FINANCIAL RISK MANAGEMENT

The consolidated entity holds the following financial instruments:

31 Dec2015

31 Dec2014

$000 $000

Financial assets

Cash and cash equivalents 55,932 24,144

Other financial assets - 47,702

Trade and other receivables 1,876 2,347

57,808 74,193

Financial liabilities

Trade and other payables 829 1,583

829 1,583

(a) Financial instruments used

The consolidated entity during the year did not enter into and was not part of any derivative financial instruments used in the normal course of business in order to hedge exposure to fluctuations in foreign exchange rates, interest rates and the gold price in accordance with the consolidated entity’s Financial Risk Management Policy.

(b) Fair values of financial assets and liabilities

The net fair value of financial assets and liabilities of the consolidated entity approximates their carrying value.

The consolidated entity’s financial assets and liabilities are included in the consolidated statement of financial position at amounts that approximate their fair values. The consolidated entity does not have any financial assets and liabilities that are categorised as Level 2 or Level 3 in the fair value hierarchy. There have been no transfers within the fair value hierarchy during the period.

Fair Value Hierarchy

In valuing financial instruments, the consolidated entity uses the following fair value measure hierarchy that reflects the significance of the inputs used in making the measurements.

24. EARNINGS PER SHARE

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(i) Credit risk

The consolidated entity’s significant concentrations of credit risk are shown below. Cash transaction counterparties are limited to high credit quality financial institutions. The consolidated entity has policies that limit the amount of credit exposure to any one financial institution.

Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures on outstanding receivables and committed transactions.For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. In relation to other credit risk areas, if there is no independent rating, management assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.

For derivative financial instruments, the Financial Risk Management Policy approved by the Board establishes limits and credit worthiness requirements, and an approved list of counterparties. The Group has not entered into any derivatives in the current or prior financial year.

The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised above.

As at reporting date the Group was not exposed to any debts which were past due.

25. Financial instruments - financial risk management (continued)

Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs, either directly (ie as prices) or indirectly (ie derived from prices).

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation.

(c) Financial risk management

The consolidated entity’s activities expose it to a variety of risks including;

credit risk;

liquidity risk;

market risk;

operational risk; and

capital management.

This note presents information about the Group’s exposure to each of the above risks, as well as its objectives, policies and procedures for measuring and managing risk. The overall aim of risk management within the consolidated entity is to ensure that organisational capabilities and resources are employed in an efficient and effective manner to manage both opportunities and threats. Risks are those factors that influence the achievement of business objectives, either positively or negatively.

The Board is ultimately responsible for the establishment and oversight of the risk management framework.The Audit and Risk Committee is responsible for monitoring the implementation of the risk management framework and subsequently monitoring the processes within which the management of key risks occur. The Audit and Risk Committee will, amongst other things, rely on assessments and reports of the Intrepid Leadership Team in discharging these responsibilities.

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31 Dec 31 Dec

2015 2014

$000 $000

Cash and cash equivalents

AA2 55,927 18,980

A+ - 5,151

Petty cash 5 13

Bank term deposits greater than three months maturity

AA- - 47,565

Trade and other receivables

AAA(1) 185 407

AA-(2) 22 617

B+(3) - 806

B(3) 683 -

B-(4) - 85

Other receivable(5) 986 432

(1) Primarily relate to refunds due from the Australian government.(2) Interest receivable.(3 VAT due from the Zambian government.(4) Bonds held with the Bukina Faso government.(5) Other receivables are comprised of interest accrued on term deposits, funds held in Trust account in PNG and receivable from Troy Resources.

(ii) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close-out market positions. The consolidated entity manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

All financial assets and liabilities are current and are expected to be received or paid within a year.

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AUD CAD PGK EUR(i) USD ZAR ZMW

$000 $000 $000 $000 $000 $000 $000

2015

Cash and cash equivalents 41,863 - - - 13,803 231 35

Trade and other receivables 498 - 670 - - - 708

42,361 - 670 - 13,803 231 743

Sensitivity to change in FX Rates

Plus 10% - - - - (1,255) (21) (68)

Minus 10% - - - - 1,534 26 83

2014

Cash and cash equivalents 14,199 16 1,398 - 8,111 18 402

Bank term deposits greater than three months maturity 47,565 - - - - - -

Trade and other receivables 1,128 - - 118 263 - 838

62,892 16 1,398 118 8,374 18 1,240

Sensitivity to change in FX Rates

Plus 10% - (1) (127) (11) (761) (2) (113)

Minus 10% - 1 155 13 931 2 138

(i) Includes foreign currency exposure to the West African CFA franc (XOF), the currency of Burkina Faso which is fixed to the Euro.

(iii) Market risk

(a) Foreign exchange risk

The consolidated entity operates internationally and manages foreign exchange risk arising from various currency exposures. Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency.

The consolidated entity’s exposure reported in Australian dollars to foreign currency (which is primarily from Group entities with an Australian dollar functional currency) was as follows:

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(iv) Operational risks

Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the consolidated entity’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the consolidated entity’s operations.

The consolidated entity’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.

The primary responsibility for the development and implementation of controls to address operational risk is assigned to the Intrepid Leadership Team.

(v) Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The funds are managed by maintaining a diversified cash management portfolio with a minimum investment grade of ’A’ and targeted to split cash and bank term deposits holdings between US$ and A$.


(b) Price risk

The consolidated entity is exposed to equity securities price risk. This arises from investments classified on the statement of financial position either as available-for-sale or at fair value through profit or loss. Other financial assets are not significant assets of the consolidated entity.

During the year the consolidated entity’s equity investments were publicly traded on the ASX. The Company was de-listed from the TSX on 3 July 2014, from which date the Company’s shares were only listed on the ASX.

Sensitivity

Based on the other financial assets held at 31 December 2015, had the realisable price of the assets been 10% higher or lower at year end with all other variables held constant, the consolidated entity’s post-tax profit for the year would not be significantly affected as a result of gains/losses on other financial assets (equity securities).

(c) Cash flow and fair value interest rate risk

The consolidated entity has no interest rate risk exposure on borrowings.

As at the reporting date, the consolidated entity had exposure to cash flow interest rate on cash and cash equivalents and bank term deposits:

Weighted average

interest rate

Balance

% $000

2015

Cash and cash equivalents 2.23 55,932

Bank term deposits greater than three months maturity - -

Net exposure to cash flow interest rate risk 2.23 55,932

2014

Cash and cash equivalents 0.62 24,144

Bank term deposits greater than three months maturity 3.41 47,565

Net exposure to cash flow interest rate risk 2.47 71,709

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26. SUBSIDIARIES

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 2:

Equity holding

Name of entity Country of incorporation

Class of shares

31 Dec 2015

31 Dec 2014

% %

African Investments Pty Ltd (1) Australia Ordinary 100 100

African Platinum Limited (1) Mauritius Ordinary 100 100

Blackthorn Exploration Burkina Faso SA (1) (4) Burkina Faso Ordinary 100 100

Blackthorn Investments Pty Ltd (1) (3) Australia Ordinary - 100

Blackthorn Resources Burkina Faso SA (1) (4) Burkina Faso Ordinary 100 100

Blackthorn Resources Pty Limited (1) Australia Ordinary 100 100

Intrepid Mines (Zambia) Limited (1) (5) Zambia Ordinary 100 100

DRD (Porgera) Limited (2) Papua New Guinea Ordinary - 100

DRD Australasia Services Pty Ltd (2) Australia Ordinary - 100

DRD Isle of Man Limited (2) Isle of Man Ordinary - 100

Emperor Mines Pty Limited Australia Ordinary 100 100

Fortis Limited (2) Papua New Guinea Ordinary - 100

Intrepid Mines México SA de C.V. Mexico Ordinary 100 100

Intrepid Mines (Isle of Man) Ltd (2) Isle of Man Ordinary - 100

Intrepid NuStar Exchange Corporation Canada Ordinary 100 100

Minera Planicie S.A. de C.V. El Salvador Ordinary 100 100

Minera Sierra S. A. de C.V. Mexico Ordinary 100 100

Mountain Exploration Limited (2) Papua New Guinea Ordinary - 100

Nantou Mining Limited B.V. (1) Netherlands Ordinary 100 100

Nustar Mining Corporation Pty Ltd (3) Australia Ordinary - 100

(1) Acquired effective 11 December 2014 (note 27).

(2) Disposed on 25th February 2015.

(3) Deregistered in December 2015.

(4) Currently being dissolved.

(5) Name changed from Blackthorn Resources (Zambia) Limited on 8 April 2015.

On 11 December 2014 Intrepid completed the acquisition of Blackthorn under the Scheme of Arrangement between Blackthorn and the holders of fully paid ordinary shares and option holders in Blackthorn. Consideration paid for the acquisition consisted of 178,684,897 ordinary shares of Intrepid at an issue price of $0.12 per share pursuant to the Scheme of Arrangement by acquiring 100% percent of its shares and voting interests.

Following purchase there were no material adjustments required to the acquisition value of assets and liabilities.

27. BUSINESS COMBINATIONS

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28. PARENT ENTITY DISCLOSURE

As at, and throughout the financial year ended 31 December 2015, the parent entity of the Group was Intrepid Mines Limited.

31 Dec2015

31 Dec2014

$000 $000

Result of parent entity

Profit/(loss) for the period (6,458) 45,756

Other comprehensive (loss)/income - -

Total comprehensive income/(loss) for the period (6,458) 45,756

Financial position of parent entity at year end

Current assets 51,284 35,015

Total assets 79,930 40,182

Current liabilities 815 2,608

Total liabilities 48,798 2,691

Total equity of the parent entity comprising of:

Share capital 268,499 268,499

Reserves 53,539 53,440

Accumulated losses (290,906) (284,448)

Total equity 31,132 37,491

Parent entity commitments

(a) Operating commitments

Within one year 272 18

One year or later and no later than five years 152 31

Total operating commitments 424 49

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29. RELATED PARTY TRANSACTIONS

(a) Parent entity

The ultimate parent entity and controlling party is Intrepid Mines Limited.

(b) Subsidiaries

Interests in subsidiaries are set out in Note 26.

(c) Key management personnel

Key management personnel compensation comprised the following:

31 Dec2015

31 Dec2014

$ $

Short-term employee benefits 2,224,052 2,885,507

Post-employment benefits 225,992 154,894

Termination benefits 981,024 726,554

Share-based payments 42,844 538,593

Other long term benefits 7,339 1,314

3,481,251 4,306,862

30. REMUNERATION OF AUDITORS

During the period the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms:

(a) Audit services

KPMG Australia:

- Audit and review of financial reports and other audit work under the Corporations Act 2001 165,000 105,479

Overseas KPMG:

- Audit and review of financial report 10,946 16,929

Total remuneration for audit services 175,946 122,408

(b) Other services

KPMG Australia:

- Investigating accountants report in connection with the scheme of arrangement - 61,355

- Risk management review and EGM scrutineering services 22,500 -

Overseas KPMG:

- Due diligence and other services 23,264 -

Total remuneration of other services 45,764 61,355

(d) Other related party transactions

Box One Corporate

The Groups Company Secretary, Mr Andrew Crawford is a Director of Box One Corporate Pty Ltd. Box One Corporate Pty Ltd charges the Group for Mr Crawford’s services as Company Secretary on normal commercial terms. For the year ended 31 December 2015, fees paid to Box One Corporate were $6,632 (2014: nil). Box One Corporate Pty Ltd charges $4,150 per month for the provision of Company Secretary services to the Group.

Gardiner Roberts LLP

The Canadian Corporate Secretary. Ms Kathleen Skerret is a Partner of Gardiner Roberts LLP. Gardiner Roberts LLP has provided legal services to the Group on normal commercial terms. Fees paid for the year ended 31 December 2015 were $22,474 (2014: $76,975).

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31. SHARE-BASED PAYMENTS

(a) Employee option plan

Options are granted under the Company’s Scheme which was re-approved by shareholders at the Company’s 2012 Annual General Meeting.

All Intrepid employees (excluding non-executive directors) are eligible to participate in the Scheme once they have been continuously employed by the Company for a period.

Options are granted for a five-year term under the Scheme for no consideration.

Options vest in accordance with an employee’s option offer. Options granted prior to 1 January 2011 vest between zero and thirty-six months after the options were granted. These options vest on completion of a specified service period and are not subject to any other performance conditions. Options granted on or after 1 January 2011 vest between thirty-six months and forty-eight months after the options were granted. The options vest on completion of a specified service period and are subject to TSR performance tests.

Options granted under the Scheme carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share. The exercise price of options is based on the higher of the weighted average price at which the Company’s shares are traded on the Australian Securities Exchange and the Toronto Stock Exchange during the five trading days immediately before the options are granted.

The weighted average remaining contractual life of employee share options outstanding at 31 December 2015 was 1.3years (2014 – 2.8years).

Set out below are movement of options granted to employees under the Scheme during the year.

Balance at start of period

Expired/forfeited during year

Balance at end of year

Exercisable at end of year

Number Number Number Number

2015

Total 2,107,458 (1,789,656) 317,802 317,802

Weighted average exercise price A$0.71 A$1.42 A$0.72 A$0.72

2014

Total 11,388,552 (9,281,094) 2,107,458 895,616

Weighted average exercise price A$0.43 A$0.36 A$0.71 A$0.45

(b) Employee share rights plan

At the end of the year, there were no share rights over ordinary shares of the Company outstanding under the terms of the ESP.

The share rights granted before 1 January 2011 were issued in three equal tranches while share rights granted on or after 1 January 2011 were issued in two equal tranches. The share rights will automatically vest into fully paid ordinary shares upon specific performance conditions being achieved. The performance condition is a market hurdle, being TSR. Intrepid has used a Monte Carlo simulation analysis to value the TSR component of the share rights.

Share rights at the start of the year

Exercised during the year

Cancelled/forfeited during the year

Balance at the end of the year

605,922 (169,100) (436,822) -

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31. Share based payements (continued)

(c) Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows:

31 Dec2015

31 Dec2014

$000 $000

Shares issued under the Non executive Directors Share Plan - 248

Options issued under the Employee Option Scheme 51 164

Share rights issued under the Senior Executive Share Plan 49 135

100 547

32. JOINT VENTURE

On 27 April 2012, the Company entered into a joint venture agreement (JV Agreement) with Aura Silver Resources Inc (Aura Silver) over properties held in Oaxaca State, Mexico (Taviche Project). As at balance date, the Company’s priority interest in the JV was fully written down, the Company was in discussion with Aura Silver to transfer its interest in the Taviche Project in exchange for fully paid common shares in Aura Silver.

33. EVENTS OCCURRING AFTER REPORTING DATE

Other than as note below, no events have arisen subsequent to 31 December 2015 that have significantly affected or may affect the operations of the Group:

On 4 January 2016, the Company announced it had commenced the on-market share buy-back. As at 9 March 2015, 20,392,653 shares had been bought back.

On 8 February 2016, the Company announced final results of the 2015 exploration program.

On 17 February 2016, the Company concluded an agreement with Aura Silver Resources Inc. with respect to its 26.5% joint venture interest in the Taviche project located in Oaxaca State, Mexico. The Company disposed of its interest in the Taviche project in exchange for 1 million shares in Aura Silver Resources.

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DIRECTORS’ DECLARATION

1. In the opinion of the Directors of Intrepid Mines Limited (the Company):

(a) the consolidated financial statements and notes set out on pages 36 to 69 and the Remuneration Report in the Directors’ Report set out on pages 22 to 34, are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Group’s financial position as at 31 December 2015 and of its performance for the financial year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

2. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer of the Company for the financial year ended 31 December 2015.

3. The Directors draw attention to Note 2 to the consolidated financial statements, which includes a statement of compliance with International Financial Reporting Standards.

This declaration is signed in accordance with a resolution of the Board of Directors:

Peter Love Chairperson

Sydney, 18 March 2016

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INDEPENDENT AUDITOR’S REPORT

ABCD

Independent auditor’s report to the members of Intrepid Mines Limited

Report on the financial report

We have audited the accompanying financial report of Intrepid Mines Limited (the Company),

which comprises the consolidated statement of financial position as at 31 December 2015, and

consolidated statement of profit or loss and other comprehensive income, consolidated

statement of changes in equity and consolidated statement of cash flow for the year ended on

that date, notes 1 to 33 comprising a summary of significant accounting policies and other

explanatory information and the directors’ declaration of the Group comprising the Company

and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report

The directors of the Company are responsible for the preparation of the financial report that

gives a true and fair view in accordance with Australian Accounting Standards and the

Corporations Act 2001 and for such internal control as the directors determine is necessary to

enable the preparation of the financial report that is free from material misstatement whether

due to fraud or error. In Note 2, the directors also state, in accordance with Australian

Accounting Standard AASB 101 Presentation of Financial Statements, that the financial

statements of the Group comply with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We

conducted our audit in accordance with Australian Auditing Standards. These Auditing

Standards require that we comply with relevant ethical requirements relating to audit

engagements and plan and perform the audit to obtain reasonable assurance whether the

financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial report. The procedures selected depend on the auditor’s judgement,

including the assessment of the risks of material misstatement of the financial report, whether

due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation of the financial report that gives a true and fair view in order

to design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of accounting

estimates made by the directors, as well as evaluating the overall presentation of the financial

report.

We performed the procedures to assess whether in all material respects the financial report

presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting

Standards, a true and fair view which is consistent with our understanding of the Group’s

financial position and of its performance.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

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INDEPENDENT AUDITOR’S REPORT

ABCD

Independent auditor’s report to the members of Intrepid Mines Limited

(continued)

Independence

In conducting our audit, we have complied with the independence requirements of the

Corporations Act 2001.

Auditor’s opinion

In our opinion:

(a) the financial report of the Group is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Group’s financial position as

at 31 December 2015 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards and the Corporations

Regulations

2001.

(b) the financial report also complies with International Financial Reporting Standards as

disclosed in Note 2.

Report on the remuneration report

We have audited the Remuneration Report included in pages 22 to 34 of the directors’ report for

the year ended 31 December 2015. The directors of the Company are responsible for the

preparation and presentation of the remuneration report in accordance with Section 300A of the

Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report,

based on our audit conducted in accordance with auditing standards.

Auditor’s opinion

In our opinion, the remuneration report of Intrepid Mines Limited for the year ended 31

December 2015, complies with Section 300A of the Corporations Act 2001.

KPMG

Caoimhe Toouli

Partner

Sydney

18 March 2016For

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SHAREHOLDER INFORMATION

Shareholdings

(a) Voting rights:

Ordinary sharesEvery holder of ordinary shares has the right to receive notices of, to attend and to vote at general meetings of the Company. On a show of hands every shareholder present at a meeting in person or by proxy, attorney or representative is entitled to one vote and upon a poll each share is entitled to one vote.

Options and share rightsOptions and share rights are unlisted and holders have no voting rights.

(b) The names of the twenty largest registered shareholders of ordinary shares as at 9 March 2016:

No. of Shares % of Total

ABN Amro Clearing Sydney Nominees Pty Ltd (Custodian A/C) 41,833,240 11.96

JP Morgan Nominees Australia Ltd 37,150,671 10.62

Lloyd I Miller TR A4 35,601,172 10.18

Mr Surya Paloh 27,680,017 7.91

Singpac Investment Holding Pty Ltd 22,902,321 6.55

Citicorp Nominees Pty Ltd 21,243,866 6.07

HSBC Custody Nominees (Australia) Ltd 18,829,102 5.38

Lloyd I Miller III 14,234,492 4.07

CH Global Pty Ltd (The ABC Investment A/C) 5,003,600 1.43

Klip Pty Ltd (Beirne Super Fund A/C) 4,100,000 1.17

Milfam II L P 3,819,238 1.09


Limfam LLC 2,705,840 0.77

Milfam II L P 2,556,036 0.73

Singpac Investment Holding Pte Ltd 2,268,000 0.65


Love Super Services Pty Ltd (J&A Love Super Fund A/C) 1,800,000 0.51

High River Gold Mines Ltd 1,790,941 0.51

Mr Christopher Effield Brown 1,698,657 0.49

Merrill Lynch (Australia) Nominees Pty Ltd 1,665,776 0.48

252,356,047 72.13

(c) Shareholders who have given notice of being substantial shareholders in the Company at the date of this report, where their relevant interest in the number of fully paid ordinary shares are as follows:

Substantial shareholder No. of Shares %

Lloyd I. Miller III 58,612,094 16.76

Brahman Pure Alpha Pte Ltd 32,210,547 9.21Mr Surya Paloh 27,680,017 7.91Glencore Plc 25,170,321 7.20

(d) Analysis of shareholdings as at 9 March 2016:

Number of holders Units

1-1,000 255 68,134

1,001-5,000 650 2,363,245

5,001-10,000 1,008 7,271,615

10,001-100,000 1,515 40,643,833

100,001 and over 189 299,372,786

3,617 349,719,613

Less than marketable parcels 554 817,023

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(e) Restricted shares:

As at the date of this report the Company has no ordinary shares on issue which are subject to voluntary escrow (December 2014: 236,000 shares).

(f) On-market buy-back

The Company is currently undergoing an on-market buy-back which commenced on 4 January 2016. As at 9 March 2015 20,406,289 of the Company’s shares had been bought back.

(g) Canadian shareholders Intrepid Mines Limited advises that as of January 1, 2015:

(i) it is a designated foreign issuer as that term is defined in National Instrument 71-102 - Continuous Disclosure and Other Exemptions Relating to Foreign Issuers; and

(ii) it is subject to the foreign regulatory requirements of the Australian Securities Exchange, which is a foreign regulatory authority.

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BOARD OF DIRECTORS

Peter Love – Chairperson

Richard Baumfield – Non-executive Director

Peter Evans – Non-executive Director

COMPANY SECRETARY

Andrew Crawford

EXECUTIVE MANAGEMENT

Tony De Santis – Acting Chief Executive Officer

Ravi Underwood – Chief Financial Officer

OFFICES

Corporate and Registered Office

Suite 502, Level 5

78-80 William Street

Woolloomooloo NSW 2011

Australia

Telephone: +61 2 9357 9000

Facsimile: +61 2 9332 1336

[email protected]

www.intrepidmines.com.au

ZAMBIA

Suite 1A, Al Jahazi Villas

155 Kabulonga Road

PO Box 50005 Lusaka 15101

Zambia

Telephone: +260 211 250 397

Facsimile: +226 211 250 248

STOCK EXCHANGE LISTING

Australian Securities Exchange

ASX Code: IAU

www.asx.com.au

SHARE REGISTRAR

Computershare Investor Services

117 Victoria Street

West End QLD 4101

GPO Box 2975 Melbourne VIC 3001

Telephone: 1300 850 505 (within Australia)

Telephone: +61 3 9415 4000 (from overseas)

Facsimile: +61 3 9473 [email protected]

www.computershare.com.au

AUDITOR

KPMG

10 Shelley Street

Sydney NSW 2000

Australia

Telephone: +61 2 9335 7000

Facsimile: +61 2 9335 7001

www.kpmg.com.au

CORPORATE INFORMATION F

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ABN 11 060 156 452

intrepidmines.com

I. [email protected]

INTREPID MINES LIMITED

A. Level 5, Suite 502, 78 - 80 William Street,Woolloomooloo, NSW 2011, Australia

P. 61 2 9357 9000F. 61 2 9332 1336

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ABN 11 060 156 452

intrepidmines.com

I. [email protected]

INTREPID MINES LIMITED

A. Level 5, Suite 502, 78 - 80 William Street,Woolloomooloo, NSW 2011, Australia

P. 61 2 9357 9000F. 61 2 9332 1336

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