Interim financial statements

Contents

Directors' report 3

Interim financial report

Income statement 8

Statement of comprehensive income 9

Balance sheet 10

Statement of changes in equity 11

Statement of cash flows 12

Notes to the financial statements 13

Additional information 22

Independent auditor's review report 25

Directors' report

The Directors present their report on the consolidated entity consisting of Bathurst Resources Limited ("Bathurst" or "BRL") and the entities it controlled for the six months ended 31 December 2018.

Directors

The following persons were directors of Bathurst at any time during the period and up to the date of this report:

• » Toko Kapea

• » Richard Tacon

• » Russell Middleton

• » Peter Westerhuis

Non-Executive Chairman

Executive Director

Executive Director

Non-Executive Director

Principal activities

Bathurst's principal activity during the period was the operation of coal mines in the North and South Islands of New Zealand.

The above record results (100% Bathurst and 65% BT Mining) have benefited from:

• » increased domestic and export sales volumes

• » continuing export prices above budget expectations

• » maintaining low unit costs of production

• » improving safety systems and performance

• » full six months of operations from BT Mining.

1 Earnings before net finance costs (including interest), tax, depreciation, amortisation, impairment, fair value movements on derivatives and deferred consideration, and movements in rehab provisioning

Profit reconciliation to EBITDA

Operations overview

Operational highlights

The table below is for the six months ended 31 December:

* Export represents BT Mining's Stockton export mine at 100%, and Domestic represents 100% BT Mining's two North Island domestic mines and Bathurst's two South Island domestic mines.

Export

The Stockton export coking coal mine benefited from strong export prices for the first six months of FY19 at an average price received of NZD $214/t, contributing $34.8m equity share of consolidated EBITDA to Bathurst. With forecast global steel demand staying strong and the current disruption to coking coal transport due to flooding in Queensland, the outlook remains positive for prices for the remainder of FY19.

Significant investment was made during the period in mining equipment replacement which will reduce unit operating costs and increase efficiencies.

The Cascade and Escarpment mines continue to remain on care and maintenance. Drilling commenced during the period as part of a wider Denniston Plateau integration project to convert resources to reserves.

Domestic

North Island domestic operations contributed $14.3m equity share of consolidated EBITDA to Bathurst. During the period the Rotowaro mine was transitioned to owner operator with significant investment made to purchase the existing mining fleet. This will enable the development of a new resource within Rotowaro's current area of operations, extending the life of the operations for a further four years.

South Island domestic operations EBITDA increased 27% to $11.2m for the six month period. This reflects an increase in sales revenue which is primarily volume driven.

New overseas joint venture

Bathurst finalised a new joint venture during the period with Jameson Resources Limited ("Jameson"), investing in the Crown Mountain coking coal project which is located in the Elk Valley in British Columbia, Canada.

Bathurst's investments to date have been used to fund the project's summer exploration programme and to continue the permitting, environmental approvals and workstreams to support the bankable feasibility study ("BFS"). Directors have been very pleased with the progress of the project. Activities over the Canadian winter months will include laboratory analyses from the summer drilling campaign, updating the resource modelling, and BFS related activities. For further information, refer to note 8 in the Notes to the Financial Statements.