Axiom Mining 2015 Annual Report

COMPANY FINANCIAL REPORT

Notes to the financial statements for the year ended 30 September 2015

100

The Court of Appeal has reserved judgement and no ruling has been hand down at the date of this report. Subsequent to the year end, on 4 November 2015 the Company announced that it had entered into a convertible note facility agreement for up to AU$15 million to project fund the development of the Isabel Nickel Project through a strategic partnership with experienced resource venture capitalist and project incubator InCor Holdings Plc (‘InCoR’). As part of the agreement, Axiom issued one secured convertible note with a face value of AU$5,000,000, convertible to a maximum issue of 13,513,514 fully paid ordinary shares based on a conversion price of AU$0.37 per share. The note is for the period of 24 months with interest rate of 6% per annum payable in advance for the first 12 months and thereafter quarterly in advance. Interest has been satisfied by Axiom by issuing shares at a fixed price of AU$0.37. The facility is secured through the first ranking charge over Axiom’s assets in Australia and Hong Kong. Apart from the matters mentioned above, no other matters or circumstances have arisen since 30 September 2015 that significantly affected or could significantly affect the operations of the Consolidated Group in future years. Apart from the matters discussed, no person has applied for leave of court to bring proceedings on behalf of the Company or 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 any part of such proceedings.

24. Contingent asset and contingent liabilities Contingent assets On 24 September 2014 the High Court of the Solomon Islands dismissed all of SMM Solomon Limited’s claims and enabled Axiom to recommence exploration activities on the Isabel nickel deposit. On 29 October 2014, Axiom filed submissions and supporting evidence to recover costs from SMM Solomon Limited (‘Sumitomo’) related to the Solomon Islands Court Case 258/2011. On 16 January 2015, Sumitomo provided two irrevocable and unconditional bank guarantees with a commercial bank in Solomon Islands for the full sums of: – USAU$3.9 million for Axiom’s costs relating to the original High Court case – USAU$177,200 as security for Axiom’s costs of the appeal. Axiom will be entitled to recover the costs upon obtaining a favourable judgment in the appeal in the Court of Appeal of Solomon Islands, which was heard by a panel of three Commonwealth judges from 26 May 2015 to 5 June 2015. The Court of Appeal has reserved judgement and no ruling has been hand down at the date of this report. Contingent liabilities As at the date of this report there are no contingent liabilities. 25. Events after the reporting period Axiom had a resounding High Court victory against SMM Solomon Limited (‘Sumitomo’) in September 2014 in relation to the validity of the Prospecting Licence and 50-year registered lease over the land covering the Isabel Nickel Project. On 27 October 2014, Sumitomo filed a notice of appeal in response to the High Court trial judgement, which was heard between 26 May 2015 and 5 June 2015 in the Court of Appeal of Solomon Islands.

AXIOM MINING LIMITED ANNUAL REPORT 2015