Golden Saint Resources Regulatory News (GSR)

28 September 2016

Golden Saint Resources Ltd

("GSR" or the "Company" or "Group")

Interim Results

The Board of Directors of Golden Saint Resources Ltd is pleased to announce the Company's unaudited results for the six months ended 30 June 2016.

Highlights within the six month period to 30 June 2016

· The first six months was a period of consolidation and planning for the way forward.

· Focus was placed on obtaining the renewal of the Company's three exploration licences in Baja, Tongo and Moa and the restarting of the bulk sampling operations in the Tongo licence area.

· Retrofitting work on the Dove Explorer was completed under the supervision of the Company's technical and exploration consultants, Rock Forage Consulting Services ("Rock Forage").

· Improvements in operational and reporting procedures surrounding the bulk sampling operations in Tongo were implemented to ensure that samples that have been treated are properly accounted for and grade estimates are accurate.

· Security measures surrounding the sorting of concentrates were assessed to ensure they were satisfactory.

· Site visits by Rock Forage and the Perth management team were carried out to review operations and reinforce the Company's commitment to the Sierra Leone Ministry of Mines and landowners to continue with the operations.

· On 10 February 2016, the Company appointed Mr. Alimamy Rassin Wurie, based in Sierra Leone as an Executive Director. Mr. Cyril D Silva resigned from the Board continuing in his position as CEO until 1 April 2016.

· On 13 June 2016, the Company appointed SVS Securities as joint broker alongside existing joint broker and nominated adviser, Beaumont Cornish Limited.

· For the six months to 30 June 2016, the Group recorded a total comprehensive loss of USD $1,073,000 (2015: USD $1,459,000). The reduced loss of USD $386,000 or 26.5% compared to the previous corresponding period is an indication of the continuing efforts by management to operate more efficiently and to cut costs where possible.

Highlights of operations post 30 June 2016

· Following the acceptance of the approval by the National Minerals Agency (NMA) in July 2016 to renew all three exploration licences, Baja, Tongo and Moa pursuant to terms announced in the RNS dated 19 July 2016, the Company paid in August 2016 the annual licence fees for the periods to 11 December 2016, 23 November 2016 and 26 January 2017 respectively. Going forward, the Company will be required to pay annual licence payments until the final licence expiry on 12 December 2020 for Baja, 24 November 2020 for Tongo and 14 December 2020 for Moa.

· The consultancy agreement entered into between the Company and Cyril D'Silva (through Cyril D'Silva's wholly owned consultancy company, Clayhill Capital Consultants Pty Ltd) was terminated on 11 August 2016 following the appointment of SVS Securities as joint broker to the Company.

· During the initial bulk sampling operations in Tongo, the Company reported that for the first sample of 140 tonnes (dry weight) of gravels, washed between 27 June 2016 and 10 August 2016, it yielded 27 diamonds weighing 12.79 carats, giving an initial grade of 9.1 carats per hundred tonnes and 5.37 grams of gold giving a grade of 0.04 grams per tonne

· On 18 August 2016, the Company reported that with the subsequent washing of the second sample in Tongo, from 11 August 2016 to 22 August 2016, comprising 66 tonnes (dry weight) of gravels, it recovered a further 37 diamonds weighing 13.99 carats giving a grade of 21.2 carats per hundred tonnes. This was an improved diamond grade compared to the previous 9.1 carats per hundred tonnes from the first sample. The second sample also yielded 3.12 grams of gold giving a grade of 0.05 grams per tonne.

· The Company announced on 18 August 2016 the report submitted by Rock Forage following their site visit conducted at the end of June 2016. The report was positive and in relation to the outcome of the diamond recoveries from the bulk sampling operations in Tongo, Rock Forage commented that "this represents the start of systematic exploration to determine the alluvial diamond and gold resource potential of the Woa River valley deposits on the Tongo licence area".

· On 24 August 2016, the Company announced it will be focusing on modifying and transporting the local washing plant to Baja site 2. As access to this site was not possible during the wet season, bulk sampling of the Sewa River low terrace alluvial gravels at Baja site 2 was expected to commence with the onset of the dry season towards the end of September 2016.

· The Company announced the promotion of Mohamed A.S.Deen ("Sallau Deen") to Geologist Manager in Sierra Leone with effect from 1 August 2016. Sallau Deen has taken over the geological project responsibilities from Ernest Gbappi who has recently resigned as the Company's Chief Resident Geologist.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

A copy of the interim results are available on the Company's website www.goldensaintresources.com.

For further information, please contact:

Golden Saint Resources Ltd Keng Hock Seah +618 61454400

Beaumont Cornish Limited Roland Cornish / Emily Staples +44 (0) 20 7628 3396

Cassiopeia Services Limited Stefania Barbaglio +44 (0) 79 4969 0338

SVS Securities Plc Tom Curran / Ben Tadd +44 (0) 20 7710 9612

Executive Chairman's Statement

Operations

The Company managed to successfully renew its three exploration licences at Baja, Tongo and Moa, notwithstanding the challenging environment surrounding the post Ebola mining industry in Sierra Leone. It was reported by Africanews.com on 1 June 2016 that in Sierra Leone, 57 mine operating and exploration licences have been cancelled because some companies failed to comply with their obligations under the Mines and Minerals Act 0f 2009 and some companies were reported to have not engaged in any activity at all. The Company's Baja licence area was reduced from 240.11sq km to 59.51 sq km at the Company's request following consultation with the Company's technical consultants, Rock Forage Consulting Services (Rock Forage). Both the licence areas for Tongo and Moa remained the same size as previously granted.

As at the date of this report, the current annual licence fees have been paid to the National Minerals Agency (NMA). On the ground, the Company progressed its bulk sampling operations in Tongo after the retrofit and modification of the Dove Explorer under the supervision of Rock Forage. Between June 2016 and August 2016, approximately 206 tonnes of gravels were washed in the Tongo licence area and at the end of that process, the Company recovered a total of 26.78 carats of diamonds and 8.5 grams of gold.

From the site visit report by Rock Forage, that was announced on 24 August 2016, it is noteworthy to highlight that Rock Forage indicated that results of the washing of that small sample in Tongo represents the start of systemic exploration to determine more accurately the diamond and gold resource potential of the deposits in the Company's Tongo licence area. This provides further impetus to the Company's push to further its alluvial bulk sampling work in the Tongo licence area. Maintenance work is being carried out on the Dove Explorer to prepare for the next bulk sampling operations in Tongo. In preparation for the washing of the gravels stockpiled at Baja site 2, the Company has transported back from Zimmi and Makali its local washing plant and other equipment such as generators and pumps. The local washing plant is in the process of being modified by our technicians and will be relocated to Baja site 2 to commence gravel washing as soon as the modification work is complete and the vehicular access to Baja site 2 has been created.

In view of the Company's plans and exploration strategy for the prospective Baja area, management have decided to invest in building the vehicular road access to Site 2. As this will also benefit the local community living in the area, we believe support from the community will be forthcoming in helping the Company carry out its operations smoothly. Work on building the road access has already started as at the date of this report and it is expected to be completed during the fourth quarter of 2016 when the wet weather conditions are expected to have ended, allowing the Company to commence its bulk sampling operations at Baja site 2.

Sales of gold and diamonds

As noted above, although the bulk sampling operations in Tongo completed in August 2016 yielded promising results, the total amount of gold and diamonds recovered from the small sample was insufficient to form an economically viable quantity for export sales. The plan going forward is to accumulate further gold and diamond recoveries from the bulk sampling operations both in Baja and Tongo before they are exported for sales. Subject to the availability of funds to continue operations and the consequent discovery of further gold and diamonds, sales of gold and diamond, which were anticipated to be made in the second half of 2016 are now anticipated to be made in the first half of 2017.

Corporate

On 10 June 2016, the Company appointed SVS Securities as joint broker alongside existing joint broker and nominated adviser, Beaumont Cornish Limited. The service agreement with the Cornhill Capital as joint broker was terminated on 14 June 2016.

On 10 February 2016, the Company appointed Mr. Alimamy Rassin Wurie as Executive Director to the Board of Golden Saint Resources Ltd. Mr. Wurie, based in Sierra Leone has been the Group's Mining and Business Development Consultant since the Company's admission to trading on AIM in July 2013 and in addition to this role has now taken on the additional responsibilities of an Executive Director.

Mr Cyril D'Silva resigned as a director from the Board on 10 February 2016 and continued his role as a non-board CEO until 1 April 2016 when he also relinquished that position to commence his services as a consultant to the Company. This consultancy engagement was terminated on 11 August 2016.

 For the first six months of the current financial year, the Company raised a total GBP1,086,930 by way of placings to institutional and other investors of 2,030,232,142 new Ordinary Shares at placing prices between 0.03 to 0.07 pence per share.

In keeping with the strategy of cost cutting and streamlining efficiencies across the Group, for the six months ended 30 June 2016, the Group's total comprehensive loss of USD 1,073,000 was lower by USD 386,000 or 26.5% when compared to the previous corresponding period comprehensive loss of USD 1,459,000. As at 30 June 2016, the Group's cash and cash equivalents stood at USD 722,000.

Going concern

This report has been prepared on the going concern basis, which contemplates the continuation of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The Directors believe that, with due consideration to the Group's future plans, there are sufficient funds to meet the Group's working capital requirements.

The Group recorded a loss of USD$1,073,000 for the year ended 30 June 2016 and had net assets of USD$2,107,000 as at 30 June 2016 (June 2015: loss of USD$1,459,000 and Dec 2015: net assets of USD$1,354,000).

This Going Concern statement is primarily dependent on an ongoing capital raising as well as on the continuing shipment and possible sale of diamonds and gold from stockpiles. The Company intends to continue with its fundraising efforts and will inform shareholders of further raises as and when they occur.

Outlook

With the completion of the bulk sampling operations in Tongo, the key focus for the team in the coming months is to get the bulk sampling operations at Baja Site 2 started and to generate the momentum required to execute the Company's alluvial and exploration development plans for the Company's three licence areas at Baja, Tongo and Moa. While the Board is excited about the plans going forward, it remains cautiously optimistic about the prospect of creating value for the Company under challenging operating and resource market conditions.

David McDonald

Executive Chairman

Consolidated Interim Statement of Comprehensive Income for the period 1 January 2016 to 30 June 2016

Consolidated Interim Statement of Financial Position as at 30 June 2016

Consolidated Interim Statement of Cash Flows for the period 1 January 2016 to 30 June 2016

Consolidated Interim Statement of Changes in Equity for the period 1 January 2016 to 30 June 2016

Notes to the Financial Statements

Accounting Policies

1.1 Corporate information

The consolidated financial statements of Golden Saint Resources Ltd for the period 1 January 2016 to 30 June 2016 were authorised for issue in accordance with a resolution of the Directors on 28 September 2016.

The registered office of Golden Saint Resources Ltd, the ultimate parent of the Group, is 171 Main Street, Road Town Tortola VG 1110 British Virgin Islands.

The principal activity of the Group is early stage diamond and gold exploration with three Exploration Licences in Sierra Leone.

1.2 Basis of preparation

The consolidated financial statements of Golden Saint Resources Ltd and its controlled entities ("the Group") have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and adopted by the European Union (EU) as they apply to the financial statements of the Group for the period 1 January 2016 to 30 June 2016.

The consolidated financial statements have been prepared on a historical cost convention basis, except for certain financial instruments that have been measured at fair value. The consolidated financial statements are presented in US dollars and all values are rounded to the nearest thousand except when otherwise indicated.

1.3 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group as at 30 June 2016, and for the period then ended.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting.

All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full.

Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if it results in a deficit balance. A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

Pooling of Interests on Incorporation of Parent Entity

On incorporation of the entity, subsidiaries have been consolidated using the pooling of interests method on the basis that the entities being combined are ultimately controlled by the same parties, both before and after the combination.

Under this method the assets and liabilities of the acquiree are recorded at book value and intangible assets and contingent liabilities are only recognised if they were previously recognised by the acquiree. No goodwill is recorded and expenses of the combination are written off immediately in profit or loss.

The excess of consideration over the value of the acquiree's net assets is recognised in the merger reserve, a negative reserve within equity.

Any non-controlling interest in the acquiree is recognised as the proportion of the assets and liabilities of the acquiree at the date of acquisition. From the date of acquisition forward, a proportionate share of profits, or losses, in the related subsidiary is then attributed to the non-controlling interest.

Subsequent Business Combination

Business combinations occur where an acquirer obtains control over one or more businesses. A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exceptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not re-measured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is re-measured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to business combinations are expensed to the statement of comprehensive income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

1.4 Significant accounting judgements, estimates and assumptions

The preparation of the Group's consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes would differ from these estimates if different assumptions were used and different conditions existed.

In particular, the Group has identified the following areas where significant judgements, estimates and assumptions are required, and where actual results were to differ, may materially affect the financial position or financial results reported in future periods. Further information on these and how they impact the various accounting policies is located in the relevant notes to the consolidated financial statements.

1.4.1 Key Judgements

In the process of applying the Group's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the consolidated financial statements.

Going concern

This report has been prepared on the going concern basis, which contemplates the continuation of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The Directors believe that, with due consideration to the Group's future plans, there are sufficient funds to meet the Group's working capital requirements.

The Group recorded a loss of USD$1,073,000 for the year ended 30 June 2016 and had net assets of USD$2,107,000 as at 30 June 2016 (June 2015: loss of USD$1,459,000 and Dec 2015: net assets of USD$1,354,000).

This Going Concern statement is primarily dependent on an ongoing capital raising as well as on the continuing shipment and possible sale of diamonds and gold from stockpiles. The Company intends to continue with its fundraising efforts and will inform shareholders of further raises as and when they occur.

Accruals

The management have used judgement and prudence when estimating certain accruals for contractor claims. The accruals recognised are based on work performed but are before settlement.

Contingencies

By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events. Please refer to Note 20 for further details.

Impairment of assets

The Group assesses each asset or cash generating unit (CGU) every reporting period to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the fair value less costs to sell, or the value in use. These assessments require the use of estimates and assumptions such as long-term commodity prices (considering current and historical prices, price trends and related factors), discount rates, operating costs, future capital requirements, closure and rehabilitation costs, exploration potential, reserves and operating performance (which includes production and sales volumes). These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a possibility that changes in circumstances will impact these projections, which may impact the recoverable amount of assets and/or CGUs. Please refer to Note 11 for further details.

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested 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.

1.4.2 Key estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Exploration and evaluation expenditure

The application of the Group's accounting policy for exploration and evaluation expenditure requires judgement in determining whether future economic benefits will arise either from future exploitation or sale or where activities have not reached a stage which permits a reasonable assessment of the existence of reserves. The determination of a Joint Ore Reserves Committee (JORC) resource is itself an estimation process that requires varying degrees of estimation depending on sub-classification and these estimates directly impact the point of deferral of exploration and evaluation expenditure. The deferral policy requires management to make certain estimates and assumptions about future events or circumstances, in particular whether an economically viable extraction operation can be established. Estimates and assumptions made may change if new information becomes available. If, after expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalised is written off in the consolidated statement of comprehensive income in the period when the new information becomes available. Exploration and evaluation assets are carried at historical cost less any impairment losses recognised. Please refer to Note 12 for further details.

1.5 New standards and amendments and interpretations adopted by the Group

The accounting policies applied are consistent with those adopted and disclosed in the Group financial statements for the year ended 31 December 2015, except for changes arising from the adoption of the following new accounting pronouncements which became effective in the current reporting period:

· Annual Improvements to IFRSs 2010-2012 cycle;

· Annual Improvements to IFRSs 2011-2013 cycle.

The adoption of these new accounting pronouncements has not had a significant impact on the accounting policies, methods of computation or presentation applied by the Group. The Group has not early adopted any other amendment, standard or interpretation that has been issued but is not yet effective. It is expected that where applicable, these standards and amendments will be adopted on each respective effective date.

1.6 New standards and amendments and interpretations not yet adopted

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2015, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Group, except the following set out below:

· IFRS 9 - 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through OCI and fair value through P&L. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI not recycling. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the 'hedged ratio' to be the same as the one management actually use for risk management purposes. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted. The group is yet to assess IFRS 9's full impact. At this stage, the directors of the Company have not evaluated the impact of the changes to IFRS 9 on their financial statements going forward. They will do so at an appropriate time in the future.

· IFRS 15 - 'Revenue from contracts with customers' deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 'Revenue' and IAS 11 'Construction contracts' and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2017 and earlier application is permitted. The group will be assessing the impact of IFRS 15.

· IFRS 16 - 'Leases' replaces the following standards and interpretations: IAS 17 Leases and IFRIC 4 Determining whether an Arrangement contains a Lease. The new standard provides a single lessee accounting model for the recognition, measurement, presentation and disclosure of leases. IFRS 16 applies to all leases including subleases and requires lessees to recognise assets and liabilities for all leases, unless the lease term is 12 months or less, or the underlying asset has a low value.

Lessors continue to classify leases as operating or finance. IFRS 16 was issued in January 2016 and applies to annual reporting periods beginning on or after 1 January 2019. The Group will evaluate the potential impact of IFRS 16 on the financial statements and performance measures. This will include an assessment of whether any arrangements the Group enters into will be considered a lease under IFRS 16.

· There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

1.7 Summary of significant accounting policies

Exploration and evaluation assets

It is the Group's policy to capitalise the cost of acquiring rights to explore areas of interest. All other exploration and evaluation expenditure is expensed to the statement of profit or loss and other comprehensive income.

The costs of acquisition are carried forward as an asset provided one of the following conditions are met:

· Such costs are expected to be recouped through the successful development and exploitation of the area of interest, or alternatively, by its sale; or

· Exploration activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence of otherwise of recoverable reserves, and active and significant operations in relation to the area are continuing.

When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated then any capitalised exploration and evaluation expenditure is reclassified as capitalised mine development. Prior to reclassification, capitalised exploration and evaluation expenditure is assessed for impairment.

Impairment

An impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. Any impairment losses are recognised in the statement of profit or loss and other comprehensive income.

The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the cash generating unit level whenever facts and circumstances (from an impairment review) suggest that the carrying amount of the asset may exceed its recoverable amount.

Impairment reviews for exploration and evaluation costs are carried out on a project-by-project basis, as each project has the potential to be an economically viable cash generating unit. An impairment review is undertaken when indicators of impairment arise but normally when one of the following conditions applies:

· unexpected geological occurrences render a deposit uneconomic

· title to an asset is compromised

· variations in commodity prices render the project uneconomic

· variations in the currency of operation

· variations to the fiscal and tax legislation in the country of operation.

Property, plant and equipment

Plant and equipment are shown at cost less accumulated depreciation and impairment losses. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, any incidental cost of purchase, and associated borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Directly attributable costs include employee benefits, professional fees and costs of testing whether the asset is functioning properly. Capitalised borrowing costs include those that are directly attributable to the construction of mining and infrastructure assets.

Property, plant and equipment relate to plant, machinery, fixtures and fittings and are shown at historical cost less accumulated depreciation and impairment losses.

The depreciation rates applied to each type of asset are as follows:

· Plant and machinery 10%

· Motor Vehicles 15%

· Fixtures and fittings 10-20%

· Lease Improvements 5 years

Subsequent expenditure is capitalised when it is probable that future economic benefits from the use of the asset will be increased. All other subsequent expenditure is recognised as an expense in the period in which it is incurred. Assets that are replaced and have no future economic benefit are derecognised and expensed through profit or loss. Repairs and maintenance which neither materially add to the value of assets nor appreciably prolong their useful lives are charged against income. Gains/(losses) on the disposal of fixed assets are credited/(charged) to income. The gain or loss is the difference between the net disposal proceeds and the carrying amount of the asset.

The asset's residual values, useful lives and methods of depreciation are reviewed at each reporting period, and adjusted prospectively if appropriate.

Inventories

Inventories are valued at the lower of cost and net realisable value.

Financial instruments: initial recognition and measurement

a. Financial assets

The Group's financial assets include trade and other receivables, and cash and cash equivalents.

Trade and other receivables

Trade and other receivables are stated at amortised cost less provision for doubtful debts. Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Trade receivables are generally due for settlement between 30 and 90 days. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is used when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.

Cash and cash equivalents

Cash and cash equivalents are measured at fair value, based on the relevant exchange rates at the balance sheet date. Cash and cash equivalents comprise cash, cash at hand and short-term deposit amounts with original maturity of less than three months. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Impairment

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. A financial asset is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (a loss event) and that loss event has an impact on the estimated future cash flows of the financial asset that can be reliably estimated.

 b. Financial liabilities

The Group's financial liabilities include trade and other payables and interest-bearing loans and borrowings. All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, less directly attributable transaction costs.

Trade and other payables

Trade and other payables are non-derivative financial liabilities that are not quoted in an active market. It represents liabilities for goods and services provided to the Group prior to the year end and which are unpaid. These amounts are unsecured and have 7-30 day payment terms. Trade and other payables are presented as current liabilities unless payment is not during within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

Interest-bearing loans and borrowings

Interest-bearing loans and borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost using the effective interest (EIR) method. The fair value implies the rate of return on the debt component of the facility. This rate of return reflects the significant risks attaching to the facility from the lenders' perspective.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds e.g. arrangement fees.

The Group capitalises borrowing costs for all eligible assets. Where funds are borrowed specifically to finance the project, the amount capitalised represents the actual borrowing costs incurred. Early repayment of borrowings, specifically for reasons of refinancing do not qualify for capitalising as borrowing costs under IAS 23 and are recognised as a loss on de-recognition in the statement of comprehensive income.

c. Fair value of financial instruments

The following methods and assumptions are used to estimate the fair values:

· Cash and short-term deposits, trade and other receivables, trade and other payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

· Initial fair value of interest-bearing borrowings is normally the transaction price, i.e. the fair value of the consideration received. When part of the consideration is for something other than the loan, the fair value is estimated using an appropriate valuation technique.

· For disclosure purpose only, the fair value of unquoted instruments, such as loans and other financial liabilities, is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

d. Other accounting policies

Provisions

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax amount that reflects current market assessments of the time value of money, and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

Finance income

Interest income is made up of interest received on cash and cash equivalents.

Deferred taxation

Deferred income tax is provided using the balance sheet method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences.

Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses, can be utilised, except:

· In respect of deductible temporary differences associated with investments in subsidiaries, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will be available to allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Foreign currencies

i) Functional and presentation currency

The consolidated financial statements are presented in US dollars, which is the Group's presentation currency.

ii) Transaction and Balances

Transactions in foreign currencies are initially recorded in the functional currency at the respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the spot rate of exchange ruling at the reporting date. All differences are taken to the profit or loss, should specific criteria be met.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

iii) Group Companies

The results and financial position of foreign operations (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 as translated at the closing rate at the date of the statement of financial position.

· Income and expenses for each income statement and 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 transactions 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

Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable.

The Group recognises when the amount of revenue can be reliably measured, it is probably that future economic benefits will flow to the entity and specific criteria have been met as described below.

i) Interest Income

Interest income is recognised using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.

2. Net Operating Expenses

3. Key Management Personnel

4. Employee costs

5. Earnings per share

6. Segment Reporting

The consolidated entity's operating segments have been determined with reference to the monthly management accounts used by the chief operating decision maker to make decisions regarding the consolidated entity's operations and allocation of working capital.

Due to the size and nature of the consolidated entity, the Board as a whole has been determined as the chief operating decision maker.

The consolidated entity operates in one business segment and one geographical segment, namely mineral exploration industry in Sierra Leone.

The revenues and results of this segment are those of the consolidated entity as a whole and are set out in the statement of profit and loss and other comprehensive income. The segment assets and liabilities of this segment are those of the consolidated entity and are set out in the Statement of Financial Position.

7. Cash and Cash Equivalents

There are no restrictions on the cash currently held by the Group.

8. Trade and Other Receivables

Prepayments for the period ended 30 June 2016 relate to payments made in advance for services from the AIM Nominated Adviser and Broker as well as legal retainer for Golden Saint Resources (Africa) Ltd .

9. Deposits Paid

10. Inventories

Inventories consist of 97.15 carat of cut, gem quality diamonds and 70.74 of uncut industrial use grade diamonds that have since been exported from Sierra Leone.

11. Property, Plant and Equipment

Additions to furniture and fixtures comprise of renovation of Sierra Leone office.

12. Exploration and Evaluation Assets

The board of directors regularly assesses the potential of each mineral licence. There was no impairment during the period to 30 June 2016.

13. Intangible Assets

There was no impairment during the period to 30 June 2016.

14. Subsidiaries

Details of the Company's subsidiaries at 30 June 2016 are as follows:

15. Taxation

Unrecognised tax losses

Where the realisation of deferred tax assets is dependent on future taxable profits, losses carried forward are recognised only to the extent that business forecasts predict that such profits will be available to the companies in which losses arose.

The parent, Golden Saint Resources Ltd, is not liable to corporation tax in BVI, so it has no provision for deferred tax. However, Golden Saint Resources (Australia) Pty Ltd is liable to tax in Australia and Golden Saint Resources (Africa) Ltd is liable to tax in Sierra Leone, so potential deferred tax in respect of those companies is noted as follows:

For the six months ended 30 June 2016, GSR (Australia) Pty Ltd had losses of USD 272,380, while GSR Africa had losses of USD 358,358 upon which deferred tax assets are not recognised. These losses are available indefinitely for offset against future taxable profits.

16. Share Capital and Reserves

The share capital of the Company is denominated in UK Pounds Sterling. Each allotment during the period was then translated into the Group's functional currency, US Dollars at the spot rate on the date of issue.

17. Non-Controlling Equity Interest

On 1 July 2013, the Group acquired a 75% interest in Golden Saint Resources (Africa) Ltd. At this date, the Group recognised a non-controlling interest of USD $21,646, which represented the non-controlling interest's share of net assets in Golden Saint Resources (Africa) Ltd at that date.

As at 30 June 2016, the non-controlling interest's share of losses in Golden Saint Resources (Africa) Ltd was USD 89,590

18. Trade and Other Payables

Trade payables are non-interest bearing and are normally settled on 7-30 day terms.

Accruals relate to salaries & wages and exploration expenses.

Other payables relate to superannuation and tax withheld from salaries payable to the tax office.

19. Financial liabilities

20. Commitments and Contingencies

The Group is subject to the following commitments in the 2016 financial year on their exploration sites: Baja USD$240,432, Tongo USD$220,944, Moa USD$198,640.

Aside from those mentioned above, the Group is subject to no commitments or contingent liabilities.

21. Subsequent Events

· Licence renewal applications for all three exploration licences were approved on 19 July 2016 by the National Minerals Authority ("NMA").

22. Related Party Transactions

During the period 1 January 2016 to 30 June 2016, commission expenses totalling GBP 34,900 were paid to Mr Cyril D Silva ( via his wholly owned consultancy company Clayhill Capital Consultants Pty Ltd in relation to services rendered on a placing.

Under an arrangement announced on 30 March 2016, the Company paid salaries of both David McDonald( Executive Chairman) and Cyril D'Silva accruing from 1 August 2015 to 31 March 2016 in shares. David McDonald and Cyril D Silva were issued with 74,200,000 and 207,762,222 respectively new ordinary shares of no par value in the Company in settlement of accrued salaries of GBP 33,390 and GBP 93,493 respectively. The said shares were issued at a price of GBP0.00045 per share which was a premium of 20 per cent. to the closing middle market price per ordinary share on 29 March 2016.

23. Financial risk management objectives and policies

The Group's activities expose it to a variety of financial risks. The Group's Board provides certain specific guidance in managing such risks, particularly as relates to credit and liquidity risk. Any form of borrowings requires approval from the Board and the Group does not currently use any derivative financial instruments to manage its financial risks. The key financial risks and the Group's major exposures are as follows:

Credit risk

The maximum exposure to credit risk is represented by the carrying amount of the financial assets. In relation to cash and cash equivalents, the Group limits its credit risk with regards to bank deposits by only dealing with reputable banks. In relation to sales receivables, the Group's credit risk is managed by credit checks for credit customers and approval of letters of credit by the Group's advising bank for offtake customers.

Foreign Currency Risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The table below indicates the currencies to which the Group had significant exposure at 30 June 2016 on its monetary assets and liabilities. The analysis calculates the effect of a reasonably possible movement of the currency rate against the US dollar, with all other variables held constant on the statement of comprehensive income (due to the fair value of currency sensitive non-trading monetary assets and liabilities). A positive amount in the table reflects a potential net increase in the consolidated statement of comprehensive income.

24. Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Numbers in the table below represent the gross, contractual, undiscounted amount payable in relation to the financial liabilities.

The Group monitors its risk to a shortage of funds using a combination of cash flow forecasts, budgeting and monitoring of operational performance.

25. Capital management

Capital includes equity attributable to the equity holders of the parent. Refer to the statement of changes in equity for quantitative information regarding equity.

The Group's primary objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders. For details of the capital managed by the Group as at 30 June 2016, please see Note 16.

The Group is not subject to any externally imposed capital requirements.

26. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. A sensitivity analysis is not presented, as all borrowing costs have been capitalised as at 30 June 2016; therefore profit or loss and equity would have not been affected by changes in the interest rate.

27. Parent Company Information (Golden Saint Resources Ltd)

A copy of the unaudited results for the six months ended 30 June 2016 is available on the Company's website www.goldensaintresources.com.