09/08/2016 :2016 Annual Report to Shareholders

Copper Strike Limited

ABN 16 108 398 983

Annual Report - 30 June 2016

Contents 30 June 2016

Corporate directory 2

Review of operations 3

Directors' report 4

Auditor's independence declaration 12

Statement of profit or loss and other comprehensive income 13

Statement of financial position 14

Statement of changes in equity 15

Statement of cash flows 16

Notes to the financial statements 17

Directors' declaration 33

Independent auditor's report to the members of Copper Strike Limited 34

Shareholder information 36

Copper Strike Limited Corporate directory 30 June 2016

Directors	Tom Eadie (Non-Executive Chairman)
Brendan Jesser (Non-Executive Director)
Mark Hanlon (Non-Executive Director)

Company secretary

Melanie Leydin

Registered office	Level 4,
100 Albert Road
South Melbourne Victoria 3205
Telephone: [phone]

Principal place of business	Level 4
100 Albert Road
South Melbourne Victoria 3205
Telephone: [phone]

Share register	Security Transfer Registrars Pty Ltd
Alexandra House
Suite 1, 770 Canning Highway
Applecross WA 6153

Auditor	Grant Thornton Audit Pty Ltd
The Rialto
Level 30, 525 Collins Street
Melbourne Victoria 3000

Stock exchange listing

Copper Strike Limited shares are listed on the Australian Securities Exchange (ASX code: CSE)

Website

www.copperstrike.com.au

Review of operations 30 June 2016 Overview

Copper Strike's main asset continues to be 11 million shares in ASX-listed Syrah Resources Limited (SYR or Syrah). The primary objective of the Board is to maximise Copper Strike shareholder value in this asset. This may be done by disposal of the shares or by being a long term holder. Either direction will lead to a large proportion of the available cash being returned to shareholders.

The Year in Review

To meet the Board's main objective as listed above, a clear strategy has been enunciated based on an analysis of the tax situation, and the Board's view on the potential of Syrah and its world class Balama graphite project in Mozambique.

To understand the value of Copper Strike's investment in Syrah Resources, the tax situation must be fully understood in the event of a sale of the Syrah shares by Copper Strike. Having looked at many options, Copper Strike believes that in the event of a sale, a franked dividend would be in the best interest of most shareholders.

For Copper Strike to generate sufficient franking credits to pay a fully franked dividend, it must:

1. Dispose of the Syrah shares in the income tax year prior to the income tax year that it franks a dividend; and

2. Return the proceeds as cash and not as an in-specie distribution.

Based on this analysis, the next step was to enunciate a clear strategy for maximising the value of Copper Strike's key asset.

The Company notes that Syrah completed a raising of $211 million in equity capital via an underwritten placement and rights issue in August 2015, and a further $194 million via a placement in June 2016. These raisings have allowed Syrah to progress immediately into construction of its mine, processing plant and associated infrastructure to ensure production is targeted for Q2 2017. In addition, the more recent raising will allow Syrah to accelerate its spherical graphite strategy in response to significant market demand.

Copper Strike strongly supports the Syrah strategy in relation to the development of the Balama Project and furthering studies in relation to its proposed spherical graphite processing facilities in the United States and Mozambique.

Copper Strike believes that the share price of Syrah has considerable upside now that the equity capital raising has been completed, construction has commenced and Syrah continues to release further details in relation to its dealings with its offtake partners and other stakeholders. As such the directors are of the view that it is in shareholders' best interests for the Company to continue to hold this investment to ensure that the potential upside in relation to the development of the world class Balama Project is reflected within the Syrah share price.

During the year, Copper Strike Limited renounced its entitlements in the Syrah Resources Institutional Entitlement Offer. The renounced entitlements were sold via the institutional bookbuild, with the proceeds from the sale in excess of the Offer Price returned to renouncing shareholders. Copper Strike received proceeds of $578,948 on 13 August 2015 in relation to the renounced entitlements.

In October 2015, Keybridge Capital Limited (ASX: KBC), announced that it had become a substantial shareholder in Copper Strike. KBC continued to increase its ownership of CSE shares until March 2016, when it and its wholly owned entities owned 11.24% of the Company.

In April 2016, Gasmere Pty Limited announced that it had become substantial shareholder in Copper Strike Limited. Gasmere continued to increase its ownership in CSE shares until June 2016, when it announced that it holds a 19.99% interest in the Company.

Copper Strike's efforts to lower expenditure have been effective with quarterly expenditure lowered to significantly less than

$100,000 per quarter. This has been accomplished by having no exploration expenditure, no executives and no dedicated office.