Hunter Resources : Annual Results 31st December 2015

0005d9a1-2016-4218-80fc-565fbbeaa4ef.pdf Hunter Resources Plc Annual Report and Accounts for the year ended 31 December 2015

HUNTER RESOURCES Plc

Contents

Company Information and Advisers 1

Report of the Executive Chairman 2

Directors' Report 4

Statement of Directors' Responsibilities 7

Independent Auditor's Report to the Members of Hunter Resources Plc 8

Consolidated and Company Income Statements 9

Consolidated and Company Statements of Comprehensive Income 9

Consolidated and Company Statements of Financial Position 10

Consolidated and Company Statements of Changes in Equity 11

Consolidated and Company Cash Flow Statements 12

Notes to the Financial Statements 13

Terms used in this report 31

HUNTER RESOURCES Plc

Company Information and Advisers

Directors Simon Hunt

John Molyneux David Paull Andrew Richards

Registered address 24 Athol Street Douglas

Isle of Man IM1 1JA

Registered number 011261V Registered Agent Sanctuary Trust Limited 24 Athol Street Douglas

Isle of Man IM1 1LA

Nominated Advisor and Broker Allenby Capital Limited 3 St. Helen's Place London EC3 A 6AB Auditors Mazars LLP

Tower Bridge House St Katharine's Way London E1W 1DD

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HUNTER RESOURCES Plc

Report of the Executive Chairman

Dear Shareholder,

I am pleased to announce the results of the Hunter Resources Plc ('Hunter' or the 'Company') group (the 'Group') for the year ended 31 December 2015.

This is the second full set of audited financial statements following the Company's successful re-admission to AIM on 4 July 2014. As set out in the Admission Document published on 6 June 2014 (available on the Company's website at www.hunter-resources.com) the Company acquired 100% of the issued share capital of Gold Hunter SAC in Peru through a reverse takeover. Gold Hunter had entered into a Farm In agreement with the owners of the Pampamali Project in Peru by which it could acquire up to 100% of the Pampamali Project - full details of the Farm In agreement (as amended) are provided in note 20.

The Pampamali Project consists of 8 exploration concessions with a total area of 3,500 hectares and is located in central Peru in the Department of Huancavelica, approximately 550 km by road from the City of Lima. The Pampamali project is a potentially high grade gold, silver and base metal project, consisting of 36 mineralised veins identified to date from surface outcrops. Outcrops of between 100 and 2,000 metres in length exist with mineralised widths ranging from 0.20 to over 3.00 metres.

On 1 July 2015 the Company announced the exercise of its option to acquire a 51% interest in the Pampamali Project (the "Option") under the terms of the Farm In agreement (as amended) (as announced on 8 April 2015) with the owners of the Pampamali Project (the "Vendors"). This was to satisfy the first two AIM Rule 9 Conditions (as set out in the announcement of 3 July 2014) to which the Company was subject following its re-admission to AIM. Under the terms of the Farm In agreement (as amended), the Vendors are legally obliged to transfer the title of the tenements to a new locally incorporated company ("HOLDCO"), whose shares are to be held 51% by Gold Hunter SAC and 49% by the Vendors.

On 2 March 2016 the Company announced that it had not yet reached agreement with the Vendors following the Company legally exercising the Option because the Vendors continued to obstruct the legal process in Peru. As a consequence the Company commenced formal arbitration proceedings through the American Chamber of Commerce of Peru (the "Arbitration"). In addition to the Arbitration the Company has continued to negotiate with the Vendors to try to reach a settlement and thus complete the legal formalities of the transfer of the title of the Pampamali tenements to HOLDCO.

The Board has been working towards reaching an agreement with the Vendors in connection with the exercise of the Option but the Vendors have been delaying the legal process. The Company and the Vendors currently have a draft agreement in hand to consider but there is no guarantee that the draft agreement will be finalised and the Board stresses that there can be no certainty that an agreement will be executed as a binding contract, nor that any agreement will be executed within the timeline outlined below.

In the event that:

1. the Vendors fail to transfer title of the tenements at Pampamali to HOLDCO; and

2. Gold Hunter SAC does not own a 51% interest in HOLDCO

by 4 July 2016 the Company's Ordinary Shares will be suspended from trading on AIM at 07.30 hrs on 5 July 2016.

If suspension occurs, trading in the Ordinary Shares will remain suspended until the Vendors transfer title of the tenements at Pampamali to HOLDCO and Gold Hunter SAC holds a 51% interest in HOLDCO (together the "Conditions") or another transaction is completed (which would require the Company to publish an admission document). In the event that neither of these are concluded within six months of suspension then the admission to trading on AIM of the Ordinary Shares will be cancelled.

Shareholders should be aware that if no significant progress is made with the Vendors in the near future the Board may conclude that it is in the best interests of Shareholders to withdraw from the Pampamali Project and the Company is considering its legal options in this regard. Should the Board decide to withdraw from the Pampamali Project then trading in the Company's Ordinary Shares will immediately be suspended from trading on AIM.

Prospero

As announced on 19 June 2015, and following further regional exploration in the Pampamali area, the Group acquired additional tenements covering 5,000 hectares near and to the north west of the Pampamali project within a prospective silver-gold-base metal belt. The location of these tenements can be seen on the Company's website at www.hunter-resources.com.

The acquisition of the Prospero tenements approximately doubled the size of the Group's mining tenements in the area and provides new geological targets over ground not previously subject to modern geological exploration.

The Prospero area is directly along strike of the Pampamali Project from which the trend of mineralisation continues into this new area. Preliminary mapping of the Prospero area by the Group's technical team identified prospective geological structures and quartz veining with associated hydrothermal activity and breccias. Numerous anomalies and prospect areas have been identified for further assessment.

Funding

In June 2016 the board has secured additional unconditional funding of £50,000 from Marine; a further £50,000 has been made available, subject to the passing of certain resolutions at the Company's forthcoming annual general meeting (refer to note 23.2) to restructure the Company's share capital by removing the par value of the Company's Ordinary Shares. This funding is sufficient for the immediate needs of the

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