POL.L Regulatory News (POL)

20 December 2016

Polo Resources Limited

("Polo" or the "Company")

RESULTS FOR THE YEAR ENDED 30 JUNE 2016

Polo Resources Limited (AIM: POL), the natural resources investment company with interests in oil and gas, gold, coal, copper, phosphate, iron and vanadium, today announces results for the year ended 30 June 2016.

Financial Summary:

· Combined total of cash, receivables, payables, listed and unlisted equity investments ofUSD56.97 million as of 9 December 2016 (30 June 2016: USD52.52 million).

· Net Asset Value per share as at 9 December 2016 was approximately 14.46 pence per share

(30 June 2016: 12.57 pence per share).

· Listed and unlisted investments at marked to market value, cost and valuation amounted to USD39.93 million (30 June 2016: USD34.93 million).

Investment Highlights:

· Hibiscus Petroleum Berhad (HIBI: MK) (Oil & Gas, UK and Australia)

o In December 2015, Polo subscribed 90 million shares in Hibiscus, a Main Market of Bursa Malaysia listed company for USD5 million. The holding represented a strategic 8.4 per cent stake in the enlarged fully paid capital of Hibiscus and was acquired at a price of MYR 0.235 per share.

o On 10 March 2016, Hibiscus jointly acquired a package of geographically focused producing fields and its associated infrastructure in the North Sea, UK, collectively known as the Anasuria Cluster. The Anasuria Cluster comes with stable positive cash flow from current production, in-field future development opportunities and exploration upside. The Anasuria Cluster maintains profitability despite prolonged low oil prices.

o Post reporting period, in July 2016, Polo's subsidiary, Polo Investments Limited ("PIL"), increased its interest in Hibiscus to 10.20 per cent (since diluted to 9.90 percent) via the subscription of 48.9 million new shares at an issue price of MYR0.18 per share following which, PIL emerged as the second largest shareholder of Hibiscus after the Hibiscus management team.

o In October 2016, Hibiscus announced that its indirect wholly-owned subsidiary, SEA Hibiscus Sdn Bhd ("SEA Hibiscus") has entered into a conditional sale and purchase agreement with Sabah Shell Petroleum Company Limited and Shell Sabah Selatan Sdn Bhd (collectively "Shell") to acquire Shell's entire 50 per cent participating interest in the 2011 North Sabah Enhanced Oil Recovery Production Sharing Contract ("PSC") for a purchase consideration of USD25 million (excluding post completion adjustments and reimbursements to Shell). Shell's interest also includes operatorship responsibilities which would be transferred to SEA Hibiscus through a transfer of operatorship program. This acquisition is expected to complete in 2017 and is subject primarily to obtaining regulatory approval of Petroliam Nasional Berhad ("PETRONAS") and consent of Petronas Carigali Sdn Bhd ("Petronas Carigali"), a fifty percent joint venture partner in the PSC.

· Blackham Resources (ASX:BLK) (Gold, Australia)

o Blackham's Matilda Gold Project (the "Project") is located in Australia's largest gold belt which stretches from Norseman through Kalgoorlie to Wiluna. In February 2016 the company announced that the Project's Definitive Feasibility Study had confirmed very strong economics and in June 2016 announced further improvements:

§ Mining Resource 5.1Mozs

§ Mining Inventory increased from 8.3Mt @ 2.9g/t for 767,000oz to 9.3Mt @ 2.9g/t for 873,000oz

§ Reserves increased from 6.1Mt @ 2.5g/t for 481,000oz to 7.0Mt @ 2.5g/t for 560,000ozs

§ Initial Life of Mine + 8 years

§ Average Annual production 101,000oz per year

§ Rapid low capital pathway to gold production within six months

o In July 2016 Blackham announced it was on target to bring Australia's newest gold mine into production. At this stage it had commenced open pit mining and underground mine development work, and was on track for commissioning of the Wiluna processing plant.

o During October 2016 Blackham announced that it had completed its first gold pour at the Matilda Gold Project. This was a key project development milestone for the company following the finance deal that it had signed with Orion Mine Finance back in May 2015 and restructured in June 2015 to ensure there would be adequate funding for project development.

o Blackham continues to ramp up gold production to its planned 100,000oz/year and expects to meet the targeted 25,000oz/Qtr in the March 2017 Quarter. Meanwhile the company is progressing studies to expand production to 200-220,000oz/year.

o In June 2016, Polo's subsidiary, PIL, exercised its right to purchase a further 49 per cent of Perfectus Management Ltd for AUD3.0 million satisfied by the issue of 9,832,358 new ordinary shares in Polo at the price agreed in 2014 of 15 pence per share. Upon completion, Polo's undiluted interest in Blackham increased to approximately 8.11 per cent.

o Perfectus owns 5,888,495 ordinary shares (approximately 2.3 per cent) in Blackham's issued fully paid ordinary share capital. Polo directly holds a further 14,761,905 (approximately 5.83 per cent) Blackham ordinary shares.

· Nimini Holdings Limited (Gold, Sierra Leone)

o Nimini's Komahun Gold Project (the "Project") continues to be constrained through not having an acceptable Mine Development Agreement ("MDA") negotiated with the Government of Sierra Leone ("GoSL").

o With the end of the Ebola crisis the GoSL invited Nimini to further negotiations which began in August 2015. Although these negotiations were inconclusive, in early 2016 there were promising signs when His Excellency, President Koroma, issued a mandate to two senior persons to conclude a mutually acceptable MDA with Nimini. However, despite this high-level intervention, progress continues to be slow and consequently Nimini has pulled back on activity in country.

o Polo recognises that any return on its investment is dependent on Nimini being able to move the Project forward and this primarily is dependent on there being an acceptable MDA defining the fiscal and commercial terms for project development.

o In view of the significant delays in achieving the MDA and upon consideration of the overall risks in taking the Project forward, Polo has recorded an impairment on the carrying value of its investment of USD14.3 million.

o Polo holds a 90 per cent equity interest in Nimini.

· Weatherly International Plc (AIM: WTI) (Copper, Namibia)

o Weatherly's Tschudi open pit SX-EW project achieved first copper production in February 2015:

§ Resources: 49.7Mt @ 0.8% Cu

§ Open Pit Reserve: 22.7Mt @ 0.85% Cu

§ Mine life: 9 years

§ Stripping ratio: 6.3 to 1

§ Annual production: 17,000 tonnes per annum (achieved by December 2015)

o Weatherly's two underground mines, Otjihase and Matchless ceased production in September 2015 and moved to project development status. Plans are being prepared to support a future resumption of these operations at higher production rates and lower unit costs than previously achieved.

o Weatherly continues to pursue production cost reductions and is evaluating a plan to expand Tschudi production capacity to 20,000 tonnes per annum in an attempt to realise economies of scale benefits. Studies have shown the Solvent Extraction (SX) and Electro-Winning (EX) plants can already operate at the expanded production rate and that the capital requirement is much less than previously expected.

o Polo holds a 5.2 per cent equity interest in Weatherly.

· Ironstone Resources Limited (Iron Ore, Vanadium, Precious Metal, Canada)

o Ironstone is in advanced development of its Clear Hills Project located in the Peace Region of NW Alberta, Canada. Featuring a large compliant poly-metallic iron and vanadium resource, quality infrastructure, high value commodities, top tier partners and local and institutional support - the Clear Hills Project stands apart from traditional iron concentrate producers.

o During the period reported on, Ironstone raised CAD1.04 million towards reduction of debt and completing an SRK Consulting Preliminary Economic Assessment ("PEA"), on its Clear Hills iron/vanadium project. Polo participated and increased its interest in Ironstone to 18.8 per cent through an additional investment of CAD101,000 and the operation of a price protection mechanism for certain early stage investors.

o In April 2016, Ironstone completed its Strategic Plan designed to guide the company through its Clear Hills Project commercialization phase. Ironstone's partner, North American Coal, an industry leader in cost-effective open pit mining, has completed a Conceptual Mine Plan on the Clear Hills Project, featuring a relatively low-cost open pit mine design and environmentally-friendly electric drag-lines for overburden removal and surface miners to strip the ore body.

o Ironstone's PEA, originally planned for 2015, has been deferred due to the potential of re-aligning the production plan from export metallics to high-strength steel products for domestic consumption, depending on the outcome of a steel market study.

· GCM Resources Plc (AIM: GCM) (Coal, Bangladesh)

o GCM is planning to develop a large scale mining project together with associated coal-fired power plants based on a world class deposit of 572Mt (JORC 2004 compliant) thermal and metallurgical coal in North-West Bangladesh.

o In the context that the Government of Bangladesh is moving to change the country's energy mix and increase coal fired power generation from the current 250MW to 19,000MW by 2030, GCM is well positioned to assist the Government to meet its targets.

o Bangladesh's Power Sector Master Plan recognises the importance of both domestic and imported coal in meeting the anticipated demand for high quality thermal coal of some 39 million tonnes per annum. Although there has been an initial focus on establishing power plants based on imported coal, at a recent media conference the highest level of Government promoted the benefits of open pit coal mining combined with mine mouth power plants.

o GCM has lifted its efforts to highlight that more than 4,000MW of power can be generated from Phulbari's coal and that it can provide the most competitive coal-based power tariffs.

o GCM is also pursuing potential partners who may assist in delivering Government approval and has recently agreed to a Memorandum of Understanding with China Gezhouba Group International Engineering Co. Ltd to investigate the feasibility of establishing up to 2,000MW of mine-mouth coal-fired power generation at the Phulbari Coal and Power Project site.

o Polo holds a 27.8 per cent equity interest in GCM.

· Universal Coal Resources Pte Ltd (Coal, Indonesia)

o In May 2016, Polo's subsidiary, PIL, entered into a secured S$5,000,000 nominal value 15 per cent redeemable convertible note (the "Note") with Universal Coal Resources Pte Ltd ("Universal"). Universal is a company incorporated in Singapore, which, in turn, has entered into a conditional agreement to acquire an indirect 75 per cent interest in PT Transcoal Minergy Coal Project ("TCM"), a company incorporated in Indonesia, from a Pan Asia Corporation Ltd. (ASX: PZC) subsidiary.

o TCM is the owner of a Production Operation Mining Business Licence (being an Indonesian business licence), in respect of a mining concession area in Mantewe District, Tanah Bumbu Regency, South Kalimantan Province, Indonesia. The TCM Coal Project comprises of 3,440 hectares and has a current JORC Resource of 129Mt (measured, indicated and inferred) in the major coal producing province in Indonesia.

o The TCM Coal Project is focussed on developing a two million tonne per annum underground mine delivering a high quality Bituminous Coal saleable product of some 6,200 kcal/kg specific energy (GAR - Gross as Received).

o Universal is targeting a Singapore Stock Exchange Catalist Board listing and the Note entitles Polo to convert the principal outstanding as well as any accrued interest into not less than 20 per cent of the share capital of Universal as enlarged by such a conversion.

o Universal has been coordinating with the relevant authority to procure a forestry permit for the TCM coal project. This is in the final stages and Universal hopes to complete the process and obtain the forestry license which is the single most important step in enabling work on site.

· Celamin Holdings NL ("ASX: CNL") (Phosphate, Tunisia)

o On 20 October 2016, Celamin issued an update regarding arbitration to resolve the dispute between its wholly owned subsidiary Celamin Limited and its joint venture partner Tunisian Mining Services ("TMS") and Chaketma Phosphates SA ("CPSA") in relation to the fraudulent transfer to TMS of Celamin's 51 per cent shareholding in CPSA.

o The sole arbitrator appointed by the International Court of Arbitration of the International Chamber of Commerce ("ICC") has considered the jurisdictional challenges raised by TMS and has issued an award confirming Celamin's position regarding jurisdiction of the arbitrator and the ICC. This is a significant outcome and allows the arbitration proceedings to recover Celamin's interest in CPSA to continue. Celamin is also pursuing other legal actions in Tunisia including criminal proceedings. This will also pave the way for Celamin to return to being quoted on ASX and progressing the world class Chaketma Phosphate Project.

o Polo holds a 33.23 per cent equity interest in Celamin.

Datuk Michael Tang, Executive Chairman of Polo, said: "As Polo enters 2017, we do so with renewed optimism, seeing signs of improvement in market sentiment across the natural resources sector. Improving prices for bulk commodities such as copper and coal bode well heading into the new financial reporting period for our investee companies, Weatherly and GCM. Whilst the global economy and in particular the Eurozone continue to face some uncertainty, investment exposure to gold through our stake in gold producer Blackham ensures Polo has some hedge against economic shocks that often serve to increase the value of gold.

Indeed, the new Sharia Gold Standard should add to the demand of gold moving forward, which is a very promising recent development. Also, the recent decision by the oil producers group OPEC to strike an agreement amongst members to curb production has helped to increase the price of oil, which is an important factor for Hibiscus, our oil and gas investee company.

Overall, Polo heads into 2017 in decent shape, we have an evolving portfolio that is moving down the risk curve and up the value curve, and we are now seeing these developments within our portfolio starting to reflect positively in our own share price."

For further information, please contact:

About the Company

Polo Resources Limited is a natural resources investment company focused on investing in undervalued companies and projects with strong fundamentals and attractive growth prospects. For complete details on Polo, refer to: www.poloresources.com.

CAUTIONARY STATEMENT

The AIM Market of the London Stock Exchange Plc does not accept responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. All statements, other than statements of historical fact, in this news release are forward-looking statements that involve various risks and uncertainties, including, without limitation, statements regarding the future plans and objectives of Polo. There can be no assurance that such statements will prove to be accurate, achievable or recognizable in the near term.

Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Polo assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

The Company's exploration and investment activities may also be affected by a number of risks, including legal, political, environmental, economic, financing, permitting, commodity, exploration and development and other market risks which are normal to the industry and referenced in greater detail in the Company's 2015 Annual Report for the period ending 30 June 2015, which may be found on the Company's website at profile on www.poloresources.com

Financial Review

The purpose of this review is to provide a further analysis of the Group's consolidated 2016 results and the main factors that affected this financial performance. The Financial Review should be read in conjunction with the financial statements and associated notes.

During the year, the Group made a loss on ordinary activities after taxation of USD31.2 million (2015: loss of USD61.2 million). This loss was significantly attributable to impairment of the Group's investments, with a total USD15.68 million written down against Regalis Petroleum Limited, Verolube Inc. and Equus Petroleum Plc, and a charge of USD14.3 million against the evaluation and exploration assets of its 90 per cent owned Nimini Gold project in Sierra Leone. It should be noted that this headline figure is not necessarily indicative of a weakening financial performance and as such variances are in the very nature of a natural resource investment company whose strategic focus extends beyond a single reporting year.

Basic loss per share for the year ended 30 June 2016 was USD10.64 cents (2015: basic loss per share of USD22.09 cents).

Focus sectors for our portfolio of investments in this reporting period centre largely on investments across the oil & gas, gold, and coal sectors. In the 2015/16 financial year, the Board has continued to support the on-going development of its key assets and acquired new investments.

In November 2015, Polo increased in its direct interest in Blackham Resources Limited ("Blackham") (ASX: BLK), an Australian gold exploration company listed on the Australian Stock Exchange. Polo acquired 10,000,000 ordinary shares of Blackham for AUD2.1 million (approximately £980,000) or AUD0.21 per share, a 10.6 per cent discount from Blackham's closing share price on 18 November 2015, from Perfectus Management Ltd ("Perfectus") by way of issuing and allotting 25,016,484 new Polo ordinary shares at an agreed price of 3.92 pence per share to Perfectus, a 36.11 per cent premium to Polo's closing share price of 2.88 pence on 18 November 2015. Perfectus was at that time a 49 per cent owned associate of Polo.

In December 2015, Polo accepted, through its wholly owned subsidiary Polo Investments Limited, a US$5 million cash subscription for 90 million new ordinary shares in Hibiscus Petroleum Berhad (HIBI: MK) ("Hibiscus"), a Main Market of Bursa Malaysia Securities Berhad listed company. The holding represented a strategic 8.4 per cent stake in the enlarged fully paid capital of Hibiscus and was acquired at a price MYR0.235 per share (settled in USD at an agreed rate of MYR/USD4.238), a 4.08 per cent discount to the Hibiscus closing price of MYR0.245 on 1 December 2015.

In May 2016, Polo entered into a secured S$5,000,000 nominal value 15 per cent redeemable convertible note (the "Note") with Universal Coal Resources Pte Ltd ("Universal"). Universal is a company incorporated in Singapore, which, in turn, had entered into a conditional agreement to acquire an indirect 75 per cent interest in PT Transcoal Minergy Coal Project ("TCM"), a company incorporated in Indonesia, from a Pan Asia Corporation Ltd. (ASX: PZC) subsidiary. The Note entitles Polo to convert the principal outstanding plus any accrued interest into not less than 20 per cent of the share capital of Universal as enlarged by such conversion at any time up to 18 months from drawdown, or earlier upon the receipt of approval in principle to list. The Note is repayable 18 months from draw-down unless previously converted. The Note is secured by TCM and underwritten by a personal guarantee and undertaking by Mr. Boelio Muliadi, an Indonesian national and major shareholder of Universal, guaranteeing the repayment by Universal of the principal amount and any accrued interest and undertaking to meet all the funding requirements of Universal and the TCM Coal Project for the proposed listing on or before 31 December 2017.

In June 2016, Polo gave notice to exercise its right to purchase a further 49 per cent of Perfectus, taking its interest therein to 98 per cent, for AUD3.0 million satisfied by the issue of 9,832,358 new ordinary shares in Polo ("Consideration Shares") at the price agreed in 2014 of 15 pence per share. At 7 June 2016 closing price of 4.00 pence, the Consideration Shares have a value of approximately £393,000 or AUD800,000. Perfectus owns 5,888,495 ordinary shares (approximately 2.3 per cent.) in Blackham's issued fully paid ordinary share capital. Polo directly holds a further 14,761,905 (approximately 5.83 per cent) Blackham ordinary shares.

The Board of Polo is still sensitive to the impact of current market sentiment towards junior exploration-stage resource companies and of the correction in the prices of many commodities, such as gold, copper and oil during the reporting period under review. Whilst these factors have combined to create a difficult operating environment across the board for junior resource companies, Polo's strategy of developing a broad-based portfolio of projects and investments capable of delivering positive shareholder returns has enabled the Company to retain the financial flexibility to optimise asset value over the medium and longer-terms.

Financial Position

The Directors have reviewed the Group's budgets for 2017, as well as longer-term financial cash flow projections and have considered a range of different scenarios together with their associated risks and uncertainties, and the impact of these scenarios on the Group's cash balances. Additionally, the Directors have assessed the likelihood of future funding requirements. Based on these activities, the Directors are satisfied that the Group maintains a healthy financial position from the date of the signing of these financial statements, enabling Polo to take a flexible approach to the acquisition and disposal of investments.

As at 9 December 2016, the Group had a net position of cash, receivables and short term investments of USD20.29 million (30 June 2016: USD20.83 million). Listed and unlisted investments at marked to market value, cost and valuation amounted to USD39.93 million (30 June 2016: USD34.93 million). The combined total of cash, receivables, payables, listed and unlisted investments was USD56.97 million as of 9 December 2016 (30 June 2016: USD52.52 million) which is equivalent to a Net Asset value of approximately 14.46 pence per Polo share (30 June 2016: 12.57 pence per share).

Outlook

Polo continues to investigate potential investments and will allocate financial resources to investments on the basis of anticipated future returns.

Although all natural resource investments remain vulnerable to near-term market instabilities, I remain positive about the longer-term fundamentals of the resource sector and am particularly focused on achieving near-term returns which in turn will strengthen our financial position. The Company will continue to keep shareholders advised as and when developments are confirmed.

This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No 596/2014 and has been announced in accordance with the Company's obligations under Article 17 of that Regulation.

Group Statement of Comprehensive Incomefor the year ended 30 June 2016

Group Statement of Financial Positionas at 30 June 2016

Group Statement of Cash Flowsfor the year ended 30 June 2016

Group Statement of Changes in Equityfor the year ended 30 June 2016