Sunrise Res Regulatory News (SRES)

SUNRISE RESOURCES PLC

("Sunrise" or "the Group" or "the Company")

11 December 2018

Audited Results for the year to 30 September 2018

The Board of Sunrise Resources plc, the AIM-traded company focusing on the development of its CS Pozzolan-Perlite Project in Nevada, USA, is pleased to announce audited results for the year ended 30 September 2018.

Operational Highlights for 2018

Focus continues on development of the CS Pozzolan Perlite Project:

Ø Drill programme completed in January 2018 for mine planning also delivered thick and open-ended intersections of natural pozzolan in extensions to Main Zone and in first hole in Northeast Zone.

Ø Mine permitting initiated with biological and cultural baseline surveys - no impediments to mining identified.

Ø Extensive laboratory testwork demonstrates the CS natural pozzolan to be high quality and defined perlite area suitable for a variety of horticultural and industrial uses.

Ø Memoranda of Understanding signed with two separate raw perlite buyers sufficient to underwrite initial planned production levels of perlite.

Ø Commercial scale trial successfully completed for production of:

· horticultural grade expanded perlite with MOU partner, and

· ground natural pozzolan with large cement company.

Ø Samples of perlite and pozzolan being tested by a range of additional potential customers.

Ø Initial 15-year Mine Plan design completed targeting production of up to 100,000 tonnes of perlite and 500,000 tonnes of natural pozzolan. Shallow open pits designed with very low waste strip ratios.

Ø Low Capex contract mining and processing development options being evaluated alongside investment in value adding processing plants.

Ø Mine permitting is continuing, targeting completion in the third quarter of 2019.

More perlite discovered at NewPerl

Ø Recent mapping identified new and large areas of perlite - claim holding expanded by 250%.

Ø Further perlite testwork in progress aims to confirm suitability for horticultural applications.

Drilling started at the Junction Copper-Silver Gold Project (Ongoing interests and royalty)

Ø VR Resources Ltd (VRR) drill testing Denio Summit target.

Ø Sunrise to be issued with 50,000 further shares in VRR.

Company to surrender Cue Diamond Project in Australia

Ø Escalating expenditure commitments not justified by strategy to focus expenditure on CS Project.

Commenting on today's results, Patrick Cheetham, Executive Chairman, said: "It has been a very busy year and our strategic plan is on track. We have seen a number of positive market developments this year, both for natural pozzolan and perlite. This has resulted in a high level of interest in our project from potential customers and the first commercial trials in customers' facilities have been very successful. We will continue working hard in 2019 to deliver the project and to see this reflected in the value of the Company. I look forward to reporting further progress and to meeting shareholders at our AGM in 2019."

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

Further information

Extracts from the Audited Results are set out below.

Chairman's Statement

I am pleased to present the Company's Annual Report and Financial Statements for the year ended 30 September 2018.

Following last year's decision to focus the Company's resources on development of the CS Pozzolan-Perlite Project I can report good progress this year towards this objective.

A drill programme in January 2018 delivered everything that was hoped for and impressive thick and open-ended intersections of natural pozzolan were made from bedrock surface in step out holes in the Main Zone and Northeast Zone. These results add substantially to the known pozzolan deposits and we are now very confident that the Main and Northeast Zones are part of one continuous zone with a very long-term production potential.

In early 2018 we also initiated the mine permitting process where environmental surveys and assessment are major components. Baseline biological and cultural surveys have been completed with favourable results and no impediments to mining were identified. We expect that this will facilitate a smooth permitting process which we are advised will be completed in the third quarter of 2019. We have also completed a 15-year mine plan, another large component of the permitting process, and a preliminary plant design for the processing of perlite. We are evaluating a low capital cost start-up for the project using contract mining and mineral processing as well as the construction of more sophisticated process plant to produce a larger range of higher-value products. Both perlite and pozzolan can be mined within the same broad open pit outlines as they occur in separate adjacent and overlapping zones.

The Company has made good progress in seeking sales contracts for both perlite and pozzolan, but shareholders should not expect immediate results as pozzolan and perlite are performance products with individual customer requirements requiring tailored testwork. Nevertheless, we have already signed two memoranda of understanding on perlite sales sufficient to underpin a production start-up.

Extensive laboratory testwork on drill and surface sampling has continued during the year and has delivered outstanding results for production of both perlite and pozzolan. This was followed up with a bulk sampling programme that has allowed us to deliver larger samples to several potential customers and successful commercial-scale trials have now been completed for both commodities. These customer trials are continuing and are expected to lead to firm sales contracts in due course.

The bulk sampling and commercial-scale trials have also allowed us to confirm the scale-up of our laboratory testwork and pave the way for commercial arrangements with the parties involved. Tests are also in progress with other potential customers.

It is a good time to be entering these markets. Cement companies and fly ash suppliers are already grappling with a shortage of fly ash which we are aiming to replace with our high quality natural pozzolan. This fly ash shortage will be intensified should the largest supplier to western markets, the coal-fired Navajo Power Station in Arizona, closes as expected in 2019. Meanwhile the perlite market in the western US continues to be strong as more US States, and now Canada, continue the legalisation of cannabis for which perlite provides an ideal growing medium.

The application of technology that led to the discovery of the CS Project has now been applied more widely by the Company and has resulted in the discovery of large areas of perlite deposits on our NewPerl Project. Earlier testing results from the initial discovery outcrops tested positive for expansion to horticultural grade perlite and the additional samples collected from large new areas during a recent mapping programme appear to be similar. These samples are now at a laboratory in Greece for testing. It is too early to say how the NewPerl Project will fit in with the development of our CS Project, but it adds value to and has synergy with the business we are developing.

We continue to explore possibilities to valorise our portfolio of mineral exploration projects and I am pleased with the progress that VR Resources ("VRR") has made in exploring the Junction Copper-Silver-Gold Project which we sold but where we have ongoing share and royalty interests. Drilling is now in progress which gives rise to a further VRR share issue to us and we look forward to seeing the results in due course.

In Australia we completed a modest programme of exploration during the year at our Bakers Gold Project to ready the project for drilling and to enhance its value and marketability as we continue to seek divestment of non-core assets. However, also in Australia, a difficult decision has now been made to surrender the Company's exploration licence over the Cue Diamond Project. We can no longer defer the escalating expenditure commitments for this project and need to concentrate our financial resources on the CS Project for the foreseeable future. As a result, we have impaired the carrying value of the Cue Project and consequently the inter-company loan from the Group parent company to our Australian subsidiary. This has the effect of increasing our overall loss for the financial year, but the loan impairments do not, of course, affect the Company's cash position.

During the year Block Energy, where we are a small shareholder, moved its main listing onto AIM from the NEX Exchange Growth Market and we continue to follow this investment.

Our Annual General Meeting for the year ended 30 September 2018 will be held in London on Thursday 21 February 2019.

Patrick Cheetham

Executive Chairman

11 December 2018

Strategic Plan on Track

KEY AIMS from our STRATEGY & BUSINESS PLAN for 2017 and 2018 are summarised here to show how our strategy has progressed in 2018. Our targets for 2019 are also set out below:

Strategic Report

The Directors of the Company and its subsidiary undertakings (which together comprise "the Group") present their Strategic Report for the year ended 30 September 2018.

A review of the AIMS and STRATEGY set out in our 2017 Annual Report highlights the advance and evolution of our strategic plan in 2018.

Our AIM is for the Company to be self-funding through the development of profitable mining projects.

Our Strategy is to develop the CS Pozzolan-Perlite Project through to production and to unlock the value inherent in our other mineral projects through sale, joint venture or other arrangements.

The Strategic Plan is on track. Our CS industrial mineral project, targeting the production of natural pozzolan and perlite, is now progressing through the mine permitting stage and customer trials and we are targeting to be mine ready in the third quarter of 2019.

Further details of our progress on the CS Project are given in the Operating Review.

The Company's Business Model is to acquire 100% ownership of mineral assets at minimal expense. This usually involves staking claims as was the case for the CS and NewPerl Projects or applying for exploration licences from the relevant authority, as was the case in Australia. In other cases, rights are negotiated with existing project owners for initially low periodic payments that rise over time as confidence in the project value increases and this was the case for the Bay State Silver Project.

The Group currently operates with a low-cost base to maximise the funds that can be spent on value adding exploration and development activities. The Company's administration costs are reduced via a cost sharing Management Services Agreement with Tertiary Minerals plc. As at the date of this report Tertiary is a significant shareholder (as defined under the AIM Rules) of Sunrise Resources plc, holding 5.17% of the ordinary issued share capital.

The Company's activities are financed by periodic capital raisings, through private share placements. When projects become more advanced, or as acquisition opportunities advance, the Board will seek to secure additional funding from a range of various sources, for example debt funding, pre-financing through off-take agreements and other joint arrangements.

Over the past few years the Company has established a valuable portfolio of drill-ready precious metal, base metal and industrial mineral projects and our strategy with respect to those projects has evolved following a decision to focus on development of the CS Project. We are seeking to valorise those projects through sale or other arrangements seeking, wherever possible, free-carried exposure to increases in value and production from the projects. Our agreement to sell the Junction Project to VR Resources Ltd. is an early example of success in implementing this strategy.

Organisation Overview

The Group's business is directed by the Board and is managed by the Executive Chairman. The Company has a Management Services Agreement with Tertiary Minerals plc ("Tertiary") which is a significant shareholder in the Company (as defined under the AIM Rules). Under this cost sharing agreement Tertiary provides all of the Company's administration and technical services, including the technical and management services of the Executive Chairman, at cost. Day-to-day activities are managed from Tertiary's offices in Macclesfield in the United Kingdom, but the Group operates in two other countries and the corporate structure of the Group reflects the historical pattern of project acquisition by the Group and the need, where appropriate, for fiscal and other reasons, to have incorporated entities in particular territories.

The Group's exploration activity in Nevada, USA, is undertaken through two local subsidiaries, SR Minerals Inc. and Westgold Inc.

In Australia the Company operates through an Australian subsidiary, Sunrise Minerals Australia Pty Ltd.

The Board of Directors comprises two non-executive directors and the Executive Chairman. The Executive Chairman is also Chairman of Tertiary Minerals plc, but otherwise the Board is independent of Tertiary.

Financial & Performance Review

The Group is not yet producing minerals and so has no income other than a small amount of bank interest. Consequently, the Group is not expected to report profits until it disposes of or is able to profitably develop or otherwise turn to account its exploration and development projects.

The Group reports a loss of £786,672 for the year (2017: £311,046) after administration costs of £290,023 (2017: £276,568) and after crediting interest receivable of £105 (2017: £70). The loss includes expensed pre-licence and reconnaissance exploration costs of £10,473 (2017: £21,161), impairment of deferred exploration asset of £483,169 (2017: £3,077) and impairment of available for sale investment of £Nil (2017: £13,338). Administration costs include an amount of £1,741 (2017: £1,507) as non-cash costs for the value of certain share warrants held by employees of both Tertiary and Sunrise, as required by IFRS 2. Cash administration costs are therefore £288,282 (2017: £275,061).

The Financial Statements show that, at 30 September 2018, the Group had net current assets of £205,596 (2017: £183,422). This represents the cash position after allowing for receivables, trade and other payables. These amounts are shown in the Consolidated and Company Statements of Financial Position and are also components of the Net Assets of the Group. Net assets also include various "intangible" assets of the Company. As the name suggests, these intangible assets are not cash assets but include some of this year's and previous years' expenditure on mineral projects where that expenditure meets the criteria in Note 1(d) of the accounting policies. The intangible assets total £1,363,360 (2017: £1,302,404) and a breakdown by project is shown in Note 2 to the financial statements.

Details of intangible assets, property, plant and equipment and investments are also set out in Notes 8, 9 and 10 of the financial statements.

Impairment

Expenditures which do not meet the criteria in Note 1(d), such as pre-licence and reconnaissance costs, are expensed and add to the Company's loss. The loss reported in any year can also include expenditure for specific projects carried forward in previous reporting periods as an intangible asset but which the Board determines is "impaired" in this reporting period.

It is a consequence of the Company's business model that there will be regular impairments of unsuccessful exploration projects. The extent to which expenditure is carried forward as intangible assets is a measure of the extent to which the value of the Company's expenditure is preserved.

Biannual reviews are carried out by the Directors as to whether there are any indications of impairment of the Group's assets.

At the year-end an impairment review was undertaken by the Directors to ascertain whether the carrying value of its exploration and development projects and the associated intercompany loans should be impaired under IFRS 6 and IAS 36. It was judged that the full carrying value of the Cue Diamond Project in Australia, £463,574, and the Pozz Ash Project in Nevada, £19,595, should be impaired and charged to the Consolidated Income Statement, thereby increasing the loss for that period. As a consequence of the Cue Diamond Project impairment the directors have determined that the intercompany loan from Sunrise Resources plc to the Australian subsidiary, Sunrise Minerals Australia Pty Ltd should be written down to £180,275 (AU$325,000), the value assessed as the recoverable value based on the other main asset within the Australian subsidiary, namely the Baker's Gold project. 

The intangible asset value of a project should not be confused with the realisable or market value of a particular project which will, in the Directors' opinion, be at least equal in value and often considerably higher. Hence the Company's market capitalisation on the AIM Market is usually in excess of the net asset value of the Group.

The Company finances its activities through periodic capital raisings, via share placings and, in the past, through other innovative equity based financial instruments. As the Company's projects become more advanced there may be strategic opportunities to obtain funding for some projects from future customers, via production sharing, royalty and other marketing arrangements. The Company's agreement with VR Resources Ltd is such an example.

Key Performance Indicators

The financial statements of a mineral exploration and development company can provide a moment in time snapshot of the financial health of the Company but do not provide a reliable guide to the performance of the Company or its Board.

The usual financial key performance indicators ("KPIs") are neither applicable nor appropriate to measurement of the value creation of a company which is involved in mineral exploration and development which currently has no turnover. The Directors consider that the detailed information in the Operating Review is the best guide to the Group's progress and performance during the year.

The Directors highlight the following KPIs and expect that further KPIs will be reported as the Company progresses through development:

In exploring for valuable mineral deposits, we accept that not all our exploration will be successful but also that the rewards for success can be high. We therefore expect that our shareholders will be invested for the potential for capital growth taking a long-term view of management's track record in mineral discovery and development.

Fundraising

The Directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. Given the Group's cash position at year end (£235,722), these projections include the proceeds of future fundraising necessary within the next 12 months to meet the Group's overheads and planned discretionary project expenditures and to maintain the Company and its subsidiaries as going concerns.

Operating Review

The Company's focus during the year has been almost exclusively on advancing the CS Pozzolan-Perlite Project in Nevada, USA, towards production.

The CS Project is held in the Company's 100% owned subsidiary, SR Minerals Inc. The Company's other Nevada projects are held through SR Minerals Inc. and Westgold Inc. The Company's Australian projects are held through an Australian subsidiary, Sunrise Minerals Australia Pty Ltd.

SR MINERALS INC.

CS POZZOLAN-PERLITE PROJECT, NEVADA, USA

The CS Project is located near Tonopah, in Nevada, USA, and contains deposits of both natural pozzolan and perlite. Further details of the Company's opportunity in these two commodities are set out in the box above.

Drilling

In early 2018 the Company completed 25 reverse circulation percussion drill holes for a total of 838m of drilling to better define the zones of commercial interest and assist in the preparation of mine plans for permitting.

Eight of these holes were drilled in the Tuff Zone and sixteen holes were drilled in the Main Zone. This work confirmed extensive thick deposits of perlite and tephra-type natural pozzolan in the Main Zone and similarly extensive and thick zones of tuff-type natural pozzolan in the Tuff Zone.

The drill programme also included a first step-out hole into the Northeast Zone which hit a tephra-type pozzolan from bedrock surface (1.5m deep) to a depth of 40m and confirmed our belief that the main Zone and Northeast Zones are continuous and that large areas of natural pozzolan still remain to be explored.

Laboratory Testing

The drill programme provided samples for laboratory testwork aimed at demonstrating the quality of the Company's natural pozzolan and perlite and to provide data for mine planning.

Eighty composite drill samples of perlite and pozzolan were submitted to Magmatics Inc. in Idaho for 7-day and 28-day strength testing with selected samples being submitted to a third party for independent confirmation. Excellent results were also obtained confirming that large areas of the perlite and tephra in the Main Zone and tuff in the Tuff Zone have production potential for high quality natural pozzolan ("HQNP"). Samples from the only hole in the Northeast Exploration Area also qualified as HQNP.

Forty composite drill samples were submitted to In.Mat-Lab in Greece for perlite testing, including application specific testing for use in cryogenic, horticultural, plasters and mortars and ceiling tile applications.

Results demonstrate potential for different applications for different parts of the perlite deposits. Testing of the perlite that caps the tephra deposits earmarked for first mine production test favourably against commercial reference material for horticultural applications.

Mine & Environmental Permitting

As the CS Project is located on federally owned and administered land, the lead agency for permitting is the (Federal) Bureau of Land Management ("BLM"). A reclamation permit is required from the Nevada Division of Environmental Protection and several minor permits are required from other regulatory bodies.

The BLM has appointed an internal interdisciplinary project permitting team to address the permitting of the CS Project and the Company has appointed EM Strategies as its lead consultant.

Mine permitting in Nevada is a procedure involving many individual steps and processes. A key process is an environmental assessment by BLM as required under the National Environmental Policy Act (NEPA). A pre-requisite to the NEPA process is a requirement that the Company carry out various baseline surveys to establish the pre-mining biological and cultural values of the land that may be disturbed in future.

The Company has now completed the season sensitive and key baseline studies over the project area. These included botanical surveys, which had to be completed in the peak growing season (spring or early summer) and wildlife surveys. The wildlife surveys included bird surveys and golden eagle surveys which need to be completed in the nesting season by helicopter and included a 10km buffer zone around the Project Area.

Baseline cultural surveys have also been completed over the Project Area and included assessment of archaeological and architectural values and indirect visual effects. A small number of archaeological features of significance were identified in the broader Project Area but these are not within the proposed mine disturbance areas and can easily be avoided.

The Company's environmental consultants responsible for the biological and cultural surveys have concluded that the proposed mine development will not impact any significant biological or cultural sites, although the final assessment is made by the BLM.

The baseline survey reports have been accepted by the BLM and the Company is now working on submission of its formal Plan of Operations which sets out the detail of the proposed mining and mineral processing operation and, together with the baseline studies, forms the basis on which the environmental assessment is made under NEPA. This will eventually be made available for public comment although the Project Area is not close to any human habitation.

The Company's expectation is that the CS Project will not require an extensive Environmental Impact Statement ("EIS") but rather a simpler Environmental Assessment ("EA"). This decision is made by the BLM based on an assessment of the project's potential impact on the human and natural environment.

We are on track to be fully permitted and mine ready in the third quarter of 2019.

Mine Planning

The mine plan is a significant component of the Plan of Operations and has now been completed by SRK Consulting. A three-phase 15-year mine plan has been developed. The objective of a phased approach is to minimise the amount of the initial reclamation bond.

The Mine Plan does not include the extensive deposits of pozzolan in the northern part of the Main Zone or Northeast Zone which have potential to sustain the mine well beyond 15 years. However, all mine designs evolve over time and require modifications to their mine permits from time to time and therefore it would not be realistic to plan beyond fifteen years for permitting purposes.

Whilst the areas of perlite and pozzolan are spatially separate, they overlap in the Main Zone and can be developed within the same overall pit outline.

Perlite

Phase 1 perlite production (years 1-3) is scheduled to rise quickly from an initial rate of 20,000 tonnes per annum (tpa) of perlite to 100,000 tpa at the start of Phase 2 (years 4-8) and continue at that rate throughout all of Phases 2 and 3 (years 9-15).

Natural Pozzolan Mining

Pozzolan production is scheduled at an initial rate of 100,000 tpa rising to 300,000 tpa at the end of Phase 1, reaching a steady rate of 500,000 tpa during all of Phases 2 and 3.

Separate, alternative, mine plans have been developed for both the Main Zone and Tuff Zone pozzolan deposits. The pit design for the Main Zone pozzolan can supply pozzolan for the full 15-year mine plan on its own. The pit design for the Tuff Zone only takes in half of the Tuff Zone deposits but can still supply all of Phase 1 and 2 requirements and over half of Phase 3 requirements on its own.

At this stage the Company is leaving its options open to develop the Tuff Zone or Main Zone pozzolans separately or together.

The overall waste to ore ratios are very low - 0.25 tons waste per ton of perlite and pozzolan (combined) in the Main Zone and 0.16 ton waste per ton of pozzolan in the Tuff Zone with most of the waste not being mined until after Year 8 in each case.

Minerals Processing & Mineral Products

The Company has identified a number of options for processing and sale of natural pozzolan and perlite. In each case this includes a low capital cost option and an investment option where capital investment and time is required for plant construction.

The Company's current preference is to initiate production via the low capital costs option in each case and consider the investment options as markets become more firmly established.

Natural Pozzolan

For the sale of natural pozzolan the low capital costs option is the direct sale of 'as-mined' ore to cement companies who would then grind down the pozzolan in their facilities to the required fine size. This option, as tested with the recent bulk sample, would allow for production to start using contract mining immediately after permitting is completed and at minimal capital cost.

In due course the Company could consider production of a ground pozzolan. This second option would require construction of a grinding plant, most likely off-site and closer to the centres of demand but would open the market to ready-mix companies as well as cement companies and produce a higher value product.

Perlite

For the sale of perlite, the low capital costs option is the production of coarse horticultural grade perlite using mobile crushing and screening equipment. The required mobile plant is readily available to rent, or lease and production could start immediately after permitting is completed at minimal capital cost. The screened product may require drying prior to sale.

As raw perlite is also a good natural pozzolan, undersized perlite could be sold as pozzolan. It could also be stockpiled for later processing in a fixed plant to produce a range of finer-grained industrial raw perlite products.

The 'investment option' for perlite is the construction of the more sophisticated fixed plant to produce a range of raw perlite products in coarse, medium and fine grades for a range of industrial applications. This will achieve a better utilisation of the raw perlite. A preliminary plant design has been completed for permitting purposes.

It is intended that the permitting Plan of Operations will allow for all these possible processing options to give the Company maximum flexibility for initial production and future processing to additional and/or higher value products.

Marketing

During the year the Company has both received and actively solicited interest in the Company's pozzolan and perlite from potential customers.

This led to the signing of two Memoranda of Understanding with two separate perlite expanding companies targeting the horticultural market. These MOUs established that the parties will negotiate a definitive purchase and sales agreement ("Offtake Agreement") under which the parties will commit to sell/buy the minimum annual quantity of raw perlite specified in the MOU over a specified period, subject to satisfactory testing results and other commercial terms. They also establish that the Purchaser will provide valuable commercial and logistical support and advice to Sunrise during the development of the perlite deposits on its perlite projects.

The proposed offtake quantities governed by the two MOUs will, if converted to sales contracts, underwrite a production start-up for the perlite.

Marketing efforts are continuing but have already led to commercial-scale trials of both perlite and natural pozzolan.

Bulk Sampling & Customer Trials

Pozzolan

The Company recently excavated a 100-ton bulk sample of natural pozzolan. This bulk sample was collected from site by a cement company for trial grinding and subsequent testing in a mortar mix. The Company has been advised by the cement company that the trial was successful and that the bulk sample met all the tested requirements of ASTM C618, the standard for natural pozzolan for use in cement and concrete mixes. This is an extremely positive development and the cement company concerned has expressed a desire to continue cooperation with Sunrise, working towards a commercial arrangement.

Sunrise has retained approximately 30 tons of the original bulk sample and has made test samples of this available to a number of other cement companies with whom market discussions are continuing.

Perlite

A bulk sample of raw perlite has also been excavated and was sent to SGS Lakefield in Canada for crushing and screening to produce a horticultural grade raw perlite for expansion testing and to provide data for crushing characterisation. Approximately 2 tons of the resulting horticultural grade raw perlite was sent from SGS Lakefield to one of MOU signatories for expansion trials in a commercial-scale furnace.

This trial was very successful with the expander reporting "better-than-could-have-been-hoped-for results". An expanded perlite meeting the size requirements for horticultural perlite was produced with by-product fines meeting the commercial specification for water filtration grade material. The expander has confirmed a strong desire to work with the Company as a new supplier of perlite to its facility.

Customer trials are also being arranged with other potential raw perlite customers.

Only coarse grades of raw perlite from certain sources can be expanded to produce the coarse expanded perlite used as a growing medium for cannabis. Raw perlites from other sources shatter too much on expansion and are not suitable. It is therefore significant that the Company's recent commercial trials confirmed that the coarse grades produced from the processed bulk sample produced the expanded product that is of interest to the cannabis industry as well as other more traditional horticultural buyers.

NEWPERL PERLITE PROJECT, NEVADA

The NewPerl Project, which is located approximately 85km from its CS Project in Nevada, USA, was a new discovery this time last year. As a result of exploration mapping during the year new and large areas of outcropping perlite have been discovered and an additional 40 claims have been staked.

Earlier testing results from the initial discovery outcrops tested positive for expansion to horticultural and other grades of perlite and the additional samples collected from these new areas during the latest mapping programme appear to be similar. These samples are now at the lab in Greece for testing.

JUNCTION COPPER-SILVER-GOLD PROJECT, NEVADA, USA

The Junction Gold (-Copper) Project is located in Humboldt County in northern Nevada and is now owned by VR Resources Ltd ("VRR"), a Canadian TSX listed company, following the sale of the project in late 2016.

As a result of the sale the Company holds 50,000 shares in VRR and expects to be issued with a further 50,000 shares in VRR as a result of the start of drilling. It is also entitled to the issue of a further 250,000 shares should VRR complete and file a 43-101 compliant report containing a resource estimate for the project. Sunrise has also retained a royalty equal to 3% of the Net Smelter Return, subject to VR's right to buy up to half of the royalty entitlement (1.5%) for US$500,000 per half-percent.

VRR has carried out systematic exploration throughout the year and drilling is now in progress at the Denio Summit target to test large geochemical and geophysical anomalies that are coincident with a 1.5km trend of surface showings of copper-silver-gold bearing quartz veins and pegmatites.

OTHER SR MINERALS PROJECTS

The Company's Pozz Ash Project was not renewed this year as the quality of its natural pozzolan there is inferior to that at the CS Project.

No work was carried out during the year on the Bay State Silver Project, the County Line Diatomite Project, Ridge Limestone Project or Garfield Gold-Silver-Copper Project in Nevada, USA. although the Company's claim position is being maintained whilst a buyer or joint venture partner is sought for these projects or until such time as further exploration can be funded by the Company.

WESTGOLD INC.

The Company's Westgold subsidiary holds three projects in Nevada - Stonewall, Clayton and Newark - that were acquired with the specific objective to hold at minimal costs and offered as available for joint venture. No work has been carried out on these projects to date, but all have drill-ready targets for epithermal gold, silver and Carlin style deposits respectively.

SUNRISE MINERALS AUSTRALIA PTY LTD

The Cue Diamond Project is held under a mature exploration licence which now carries significant expenditure commitments. We have been able to avoid these commitments through the grant of exemptions in the past few years but this is not the case going forward and, in view of the Company's firm focus on the CS Project in Nevada, a decision has been made to surrender the licence in the near future.

The Company intends to maintain its interest in the Baker's Gold Project where a small programme of exploration during the year has enhanced the prospectivity and value of the project. Mapping and chip sampling of gold bearing quartz-stockwork veins in the Dicky Lee open pit, which was developed in the 1980s for production of specimen gold-quartz nuggets, has returned gold values to 32.1 grammes/tonne gold ("g/t Au"), averaging 1.7 g/t Au, and infill soil sampling at DRL4 target has confirmed a 500m long gold-in-soil anomaly, increasing its tenor and enhancing its definition as a drill target.

Risks & Uncertainties

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible.

The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed below together with risk mitigation strategies employed by the Board.

Forward-Looking Statements

This Annual Report may contain certain statements and expressions of belief, expectation or opinion which are forward-looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements.

This Strategic Report was approved by the Board of Directors on 11 December 2018 and signed on its behalf.

Patrick Cheetham

Executive Chairman

Directors' Responsibilities

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and applicable law. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. The directors are also required to prepare financial statements in accordance with the AIM Rules of the London Stock Exchange for companies trading securities on the AIM Market.

In preparing these financial statements, the directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other information included in the Annual Report and Financial Statements is prepared in accordance with applicable law in the United Kingdom.

Website Publication

The maintenance and integrity of the Sunrise Resources plc website is the responsibility of the directors; the work carried out by the auditors does not involve the consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions.

Information from the Directors' Report

The directors are pleased to submit their Annual Report and audited accounts for the year ended 30 September 2018.

The Strategic Report contains details of the principal activities of the Company and includes the Operating Review which provides detailed information on the development of the Group's business during the year and indications of likely future developments and events that have occurred after the Balance Sheet date.

Going Concern

In common with many exploration companies, the Company raises finance for its exploration and appraisal activities in discrete tranches. Further funding is raised as and when required. When any of the Group's projects move to the development stage, specific project financing will be required.

The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. Given the Group's cash position at year end (£235,722), these projections include the proceeds of future fundraising necessary within the next 12 months to meet the Group's overheads and planned discretionary project expenditures and to maintain the Company and its subsidiaries as going concerns. Although the Company has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. This represents a material uncertainty related to events or conditions which may cast significant doubt on the Group and Company's ability to continue as going concerns and, therefore, that they may be unable to realise their assets and discharge their liabilities in the normal course of business. However, the directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.

Dividend

The directors are currently unable to recommend the payment of any ordinary dividend.

Financial Instruments and Other Risks

The business of mineral exploration and evaluation has inherent risks. Details of the Group's financial instruments and risk management objectives and of the Group's exposure to risk associated with its financial instruments are given in Note 18 to the financial statements.

Details of risks and uncertainties that affect the Group's business are given in the Strategic Report.

Directors

The directors holding office in the period were:

Mr P L Cheetham - Chairman of the Board and Chairman of Nomination Committee.

Mr D J Swan - Chair of Audit Committee and member of Nomination and Remuneration Committees.

Mr R D Murphy - Chair of Remuneration Committee and member of Nomination and Remuneration Committees.

Attendance at Board and Committee Meetings

The Board retains control of the Group with day-to-day operational control delegated to the Executive Chairman. The full Board meets four times a year and on any other occasions it considers necessary.

The directors' shareholdings are shown in Note 16 to the financial statements.

Post Balance Sheet Events

There were no post balance sheet events which affect the financial position of the Company at balance date.

Shareholders

As at the date of this report the following interests of 3% or more in the issued share capital of the Company appeared in the share register.

Disclosure of Audit Information

Each of the directors has confirmed that so far as he is aware, there is no relevant audit information of which the Company's Auditor is unaware, and that he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

Auditor

A resolution to reappoint Crowe U.K. LLP as Auditor of the Company will be proposed at the forthcoming Annual General Meeting.

Charitable and Political Donations

During the year, the Group made no charitable or political donations.

Annual General Meeting

The Annual General Meeting will be held on Thursday 21 February 2019 at 10.30 a.m

Conflicts of Interest

The Companies Act 2006 permits directors of public companies to authorise directors' conflicts and potential conflicts, where appropriate, where the Articles of Association contain a provision to this effect. The Company's Articles contain such a provision. Procedures are in place in order to avoid any conflict of interest between the Company and Tertiary Minerals plc, which held 5.19% of the Company's issued share capital at 30 September 2018. Tertiary Minerals provides corporate and project management services to Sunrise Resources plc.

Approved by the Board of Directors on 11 December 2018 and signed on its behalf.

Patrick Cheetham

Executive Chairman

Board of Directors

The Directors and Officers of the Company during the financial year were:

Patrick Cheetham

Executive Chairman

Key Strengths:

· Founding director

· Mining geologist with 37 years' experience in mineral exploration

· 32 years in public company management

Appointed: March 2005

Committee Memberships: Chairman of Nomination Committee

External Commitments: Executive Chairman of Tertiary Minerals plc

David Swan

Senior Non-Executive Director

Key Strengths:

· Chartered Accountant with career focus in natural resources industry

· Past executive director of several public listed mining companies including Oriel Resources plc

Appointed: May 2012

Committee Memberships: Chairman of the Audit Committee, Member of the Remuneration and Nomination Committees

External Commitments: Non-Executive Director of Central Asia Metals plc and CFO (part-time) of Scotgold Resources Limited

Roger Murphy

Non-Executive Director

Key Strengths:

· Career focus in capital raising for mining and oil & gas companies

· Former MD, Investment Banking, of Dundee Securities Europe Ltd

· Geologist

Appointed: May 2016

Committee Memberships: Chairman of the Remuneration Committee and Member of Audit and Nomination Committees

External Commitments: CEO of African Battery Metals Plc

Colin Fitch LLM, FCIS

Company Secretary

Key Strengths:

· Barrister-at-Law

· Previously Corporate Finance Director of Kleinwort Benson

· Previously held a number of non-executive directorships of public and private companies, including Merrydown Plc, African Lakes plc and Manders plc

Appointed: October 2006

External Commitments: Company Secretary for Tertiary Minerals plc

Corporate Governance

Chairman's Overview

There is no prescribed corporate governance code for AIM companies and the London Stock Exchange prefers to give companies the flexibility to choose from a range of codes which suit their specific stage of development, sector and size.

The Board considers the corporate governance code published by the Quoted Companies Alliance Corporate Governance Code 2018 ("the QCA Code") is the most suitable code for the Company and has adopted the principles set out in the QCA Code and applies these principles wherever possible, and where appropriate to its size and available resources. The Company's Corporate Governance Statement was adopted by the Board on 7 September 2018. The Company has set out on its website and in its Corporate Governance Statement, the 10 principles of the QCA Code and details of the Company's compliance.

Patrick Cheetham, in his capacity as Chairman, has overall responsibility for the corporate governance of the Company and the Board is responsible for delivering on our well-defined business strategy having due regard for the associated risks and opportunities.

The corporate governance arrangements now in place are designed to deliver a corporate culture that understands and meets shareholder and stakeholder needs and expectations whilst delivering long-term value for shareholders.

The Board recognises that its principal activity, mineral exploration and development, has potential to impact on the local environment and consequently has adopted an Environmental Policy to ensure that the Group's activities have minimal environmental impact. Where appropriate the Group's contracts with suppliers and contractors legally bind those suppliers and contractors to do the same. The Group's activities, carried out in accordance with the Environmental Policy, have had only minimal environmental impact at present and this policy is regularly reviewed. Where appropriate, all work is carried out after advance consultation with affected parties.

In response to the Data Protection Act 2018 and the implementation of the General Data Protection Regulation introduced during the year the Company has carried out extensive due diligence to ensure compliance and has adopted a Privacy and Cookies Policy.

The Board recognises the benefits that social media engagement can have in helping the Company reach out to shareholders and other stakeholders, but it also recognises that misuse or abuse of social media can bring the Company into disrepute. To facilitate the responsible use of social media the Company has adopted a Social Media Policy applicable to all officers and employees of the Company.

The Board has also adopted a Share Dealing Code of Conduct for dealings in shares of the Company by directors and employees and an Anti-corruption Policy and Code of Conduct applicable to employees, suppliers and contractors.

The Group recognises that the goodwill of its contractors, consultants and suppliers is important to its business success and seeks to build and maintain this goodwill through fair dealings. The Group has a prompt payment policy and seeks to settle all agreed liabilities within the terms agreed with suppliers. The amount shown in the Consolidated and Company Statement of Financial Position in respect of trade payables at the end of the financial year represents 13 days of average daily purchases (2017: 12 days). This amount is calculated by dividing the creditor balance at year end by the average daily Group spend in the year.

The Board recognises it has a responsibility to provide strategic leadership and direction in the development of the Group's health and safety strategy in order to protect all of its employees and other stakeholders. The Company has developed a Health and Safety Policy to clearly define roles and responsibilities and in order to identify and manage risk.

Your Board currently comprises three directors of which two are non-executive and considered independent of management. We believe that this balance provides an appropriate level of independent oversight. The Board has the ability to seek independent advice although none was deemed necessary in the year under review. The Board is aware of the need to refresh its membership from time to time and to match its skill set to those required for the development of its mineral interests and will consider appointing additional independent non-executive directors in the future.

Patrick Cheetham

Executive Chairman

Corporate Governance Statement 

The QCA Code sets out ten principles which should be applied. The principles are listed below with an explanation of how the Company applies each principle, and the reasons for any aspect of non-compliance.

Principle One: Establish a strategy and business model which promote long-term value for shareholders.

The Company has a clearly defined strategy and business model that has been adopted by the Board and is set out in the Strategic Report.

Principle Two: Seek to understand and meet shareholder needs and expectations.

All shareholders are encouraged to attend the Company's Annual General Meetings where they can meet and directly communicate with the Board. After the close of business at the Annual General Meeting, the Chairman makes an up to date corporate presentation and opens the floor to questions from shareholders.

Shareholders are also welcome to contact the Company via email at info@sunriseresourcesplc.com with any specific queries.

The Company also provides regulatory, financial and business news updates through the Regulatory News Service (RNS) and various media channels such as Twitter. Shareholders also have access to information through the Company's website, www.sunriseresourcesplc.com, which is updated on a regular basis and which includes the latest corporate presentation on the Group. Contact details are also provided on the website.

Principle Three: Take into account wider stakeholder and social responsibilities and their implications for long-term success.

The Board takes regular account of the significance of social, environmental and ethical matters affecting the business of the Group. At this stage in the Group's development, the Board has not adopted a specific written policy on Corporate Social Responsibility as it has a limited pool of stakeholders other than its shareholders. Rather, the Board seeks to protect the interests of the Group's stakeholders through individual policies and through ethical and transparent actions. The Company engages positively with local communities, regulatory authorities and stakeholders in its project locations and encourages feedback through this engagement. Through this process the Company identifies the key resources and fosters the relationships on which the business relies.

Principle Four: Embed effective risk management, considering both opportunities and threats, throughout the organisation.

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible whilst recognising that its business opportunities carry an inherently high level of risk. The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed in the Strategic Report, together with risk mitigation strategies employed by the Board.

Principle Five: Maintain the board as a well-functioning, balanced team led by the chair.

The Board's role is to agree the Group's long-term direction and strategy and monitor achievement of its business objectives. The Board meets formally four times a year for these purposes and holds additional meetings when necessary to transact other business. The Board receives reports for consideration on all significant strategic, operational and financial matters.

The Board met nine times during the year to consider these matters. Further details are provided in the Directors' Report. The Board is supported by the Audit, Remuneration and Nomination Committees.

The Board currently consists of the Executive Chairman (Patrick Cheetham), a senior non-executive director (David Swan) and one further non-executive director (Roger Murphy). The current Board's preference is that independent non-executive directors comprise the majority of Board members. Mr Patrick Cheetham is currently the Chairman and Chief Executive. Mr Cheetham has a service contract as Chairman of the Company and his services as Chief Executive are provided to the Company at cost through a Management Services Agreement with Tertiary Minerals plc, in which he is a shareholder and where he is employed as Chairman. Currently Mr. Cheetham dedicates over 90% of his working time to the Company. The combined role of Chairman and Chief Executive results in cost savings and is considered acceptable whilst there is a majority of independent directors on the Board and having regard to the fact that the Company is not yet revenue generating.

The non-executive directors have committed the time necessary to fulfil their roles during the year. The attendance record of the directors at Board and Board Committee meetings are detailed in the Directors Report .

The current non-executive directors are considered independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement.

Principle Six: Ensure that between them the directors have the necessary up to date experience, skills and capabilities.

The Board considers the current balance of sector, financial and public market skills and experience which it embodies is appropriate for the current size and stage of development of the Company and that the Board has the skills and experience necessary to execute the Company's strategy and business plan and discharge its duties effectively.

The directors maintain their skills through membership of various professional bodies, attendance at mining conferences and through their various external appointments.

All Directors have access to the Company Secretary who is responsible for ensuring that Board procedures and applicable rules and regulations are observed.

Principle Seven: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.

The ultimate measure of the effectiveness of the Board is the Company's progress against the long-term strategy and aims of the business. This progress is reviewed in Board meetings held at least four times a year. The Executive Chairman's performance is reviewed once a year by the rest of the Board.

The Nomination Committee, currently consisting of the Executive Chairman and the two non-executive directors, meets once a year to lead the formal process of rigorous and transparent procedures for Board appointments. During this meeting the Nomination Committee reviews the structure, size and composition of the Board; succession planning; leadership; key strategic and commercial issues; conflicts of interest; time required from non-executive directors to execute their duties effectively; overall effectiveness of the Board and its own terms of reference.

No new Board appointments were considered necessary during the year.

Principle Eight: Promote a corporate culture that is based on ethical values and behaviours.

The Board recognises and strives to promote a corporate culture based on strong ethical and moral values. The Group encourages its employees to understand all aspects of the Group's business and seeks to remunerate its employees fairly, being flexible where practicable. The Group gives full and fair consideration to applications for employment received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Board takes account of employees' interests when making decisions, and suggestions from employees aimed at improving the Group's performance are welcomed.

The corporate culture of the Company is promoted to its employees, suppliers and contractors and is underpinned by the implementation and regular review, enforcement and documentation of various policies: Health and Safety Policy; Environmental Policy; Share Dealing Policy; Anti-Corruption Policy & Code of Conduct; Privacy and Cookies Policy and Social Media Policy. These procedures enable the Board to determine that ethical values are recognised and respected.

The Board recognises that its principal activity, mineral exploration, has potential to impact on the local environment and consequently has adopted an Environmental Policy to ensure that the Group's activities have minimal environmental impact. Where appropriate the Group's contracts with suppliers and contractors legally bind those suppliers and contractors to do the same. The Group's activities carried out in accordance with the Environmental Policy have had only minimal environmental impact and this policy is regularly reviewed. Where appropriate, all work is carried out after advance consultation with affected parties.

Principle Nine: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board.

The Board has overall responsibility for all aspects of the business. The Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board's decision-making, and that the non-executive directors are properly briefed on all operational and financial matters. The Chairman has overall responsibility for corporate governance matters in the Group and chairs the Nomination Committee. The Chairman has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group. The Company Secretary is responsible for ensuring that Board procedures are followed, and applicable rules and regulations are complied with. Key operational and financial decisions are reserved for the Board through quarterly project reviews, annual budgets, and quarterly budget and cash-flow forecasts and on an ad hoc basis where required.

The two non-executive directors are responsible for bringing independent and objective judgment to Board decisions. The Board has established Audit and Remuneration Committees with formally delegated duties and responsibilities. David Swan currently chairs the Audit Committee; Roger Murphy chairs the Remuneration Committee.

This Corporate Governance statement will be reviewed at least annually to ensure that the Company's corporate governance framework evolves in line with the Company's strategy and business plan.

Principle Ten: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.

The Company regularly communicates with, and encourages feedback from, its shareholders who are its key stakeholder group. The Company's website is regularly updated and users, including all stakeholders, can register to be alerted via email when material announcements are made. The Company's contact details are on the website should stakeholders wish to make enquiries of management.

The Group's financial reports can be found here: https://www.sunriseresourcesplc.com/financial-reports.

Notices of General Meetings are posted to shareholders and copies for at least the past five years are contained within the Annual Reports, copies of which are available in the Company Documents section of the AIM Rule 26 page of the website.

The results of voting on all resolutions in future general meetings will be posted to the Company's website, including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of independent votes.

Audit Committee Report

The Audit Committee is a sub-committee of the Board, composed entirely of non-executive directors and assists the Board in meeting responsibilities in respect of external financial reporting and internal controls. The Audit Committee also keeps under review the scope and results of the audit. It also considers the cost-effectiveness, independence and objectivity of the auditors taking account of any non-audit services provided by them. Mr Swan is Chairman of the Audit Committee.

The specific objectives of the Committee are to:

a) maintain adequate quality and effective scope of the external audit of the Group including its branches where applicable and review the independence and objectivity of the auditors.

b) ensure that the Board of Directors has adequate knowledge of issues discussed with external auditors.

c) ensure the financial information and reports issued by the Company to AIM, shareholders and other recipients are accurate and contain proper disclosure at all times.

d) maintain the integrity of the Group's administrative operating and accounting controls and internal control principles.

e) ensure proper accounting policies are adhered to by the Group.

The Committee has unlimited access to the external auditors, to senior management of the Group and to any external party

deemed necessary for the proper discharge of its duties. The Committee may consult independent experts where it considers necessary to perform it duties.

The Audit Committee reviews the financial controls of the Company on a regular basis and is satisfied that the Group's financial controls and reporting procedures are robust and sufficient to prevent fraud and ensure that senior management, the Committee and the Board are fully aware of the Company's financial position at all times.

The Audit Committee met twice in the last financial year. Significant reporting issues considered during the year included the following:

1. Impairments

The Committee has reviewed the carrying values of the Group projects and the Group inter-company loans and carried out impairment reviews. The project carrying values are assessed against IFRS 6 and with reference to IAS 36 and in particular the criteria set out in Note 1(j).

As a result of the year-end review it was judged that the Cue Diamond Project should be fully impaired and that, consequently, the value of the inter-company loan from Sunrise Resources plc to its wholly owned subsidiary Sunrise Minerals Australia Pty Ltd, the company holding the Cue Diamond Project, should be impaired and reduced to a level that might reasonably be recovered from the Baker's Gold Project in future based on evidence available to the Committee.

2. Going Concern

The Committee also considered the Going Concern basis on which the accounts have been prepared and can refer shareholders to the Company's accounting policy set out in Note 1(b). The directors are satisfied that the going concern basis is appropriate for the preparation of the financial statements.

David Swan

Chairman - Audit Committee

Remuneration Committee Report

The Remuneration Committee is a sub-committee of the Board and comprises the non-executive directors. Mr Murphy is Chairman of the Remuneration Committee.

The primary objective of the Committee is to review the performance of executive directors and review the basis of their service agreements and make recommendations to the Board regarding the scale and structure of their remuneration.

However, the Company does not currently remunerate any of the directors other than in their capacity as directors. Whilst the Chairman of the Board, Patrick Cheetham, does have an executive role, his technical and managerial services are provided under a general service agreement with Tertiary Minerals plc and his remuneration is fixed by Tertiary Minerals plc.

The Remuneration Committee has not met during the period under review, but held a meeting on 6 November 2018 to consider if any changes were required to the Committee's terms of reference. There were no new recommendations made to the Board.

Roger Murphy

Chairman - Remuneration Committee

Nomination Committee Report

The Nomination Committee comprises the Chairman and the non-executive directors. Mr Cheetham is Chairman of the Nomination Committee.

The Nomination Committee meets at least once per year to lead the formal process of rigorous and transparent procedures for Board appointments and to make recommendations to the Board in accordance with best practice and other applicable rules and regulations, insofar as they are appropriate to the Group at this stage in its development.

The Committee is required to:

(a) Review the structure, size and composition of the Board and make recommendations to the Board with regard to any changes.

(b) Give full consideration to succession planning for directors and other senior executives in the course of its work, taking into account the challenges and opportunities facing the Company, and the skills and expertise needed on the Board in the future.

(c) Keep under review the leadership needs of the organisation to compete effectively in the marketplace.

(d) Review annually the time required from non-executive directors.

(e) Arrange periodic reviews of its own performance and, at least annually, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.

The Committee carries out its duties for the Parent Company, major subsidiary undertakings and the Group as a whole and met once during the period under review, on 21 August 2018.

The Committee is satisfied that the current Board has a depth of experience and level and range of skills appropriate to the Company at this stage in its development. It is however recognised that the Company is likely to need additional expertise as it moves forward into commercial production and so the composition of the Board will be kept under careful review to ensure that the Board can deliver long term growth in shareholder value.

Patrick Cheetham

Chairman - Nomination Committee

Publication of Statutory Accounts

The financial information set out in this announcement does not constitute the Company's Annual Accounts for the period ended 30 September 2018 or 2017. The financial information for 2017 is derived from the Statutory Accounts for 2017. Full audited accounts in respect of that financial period have been delivered to the Registrar of Companies. The Statutory Accounts for 2018 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The Auditors have reported on the 2018 and 2017 accounts. Neither set of accounts contain a statement under section 498(2) of (3) the Companies Act 2006 and both received an unqualified audit opinion. However, there was an emphasis of matter in relation to a requirement that the company raise funds in the future to continue as a going concern.

Availability of Financial Statements

The Annual Report containing the full financial statements for the year to 30 September 2018 will be posted to shareholders on or around 21 December 2018, a soft copy of which will then be available to download from the Company's website:

https://www.sunriseresourcesplc.com

Consolidated Income Statement

for the year ended 30 September 2018

All amounts relate to continuing activities.

Consolidated Statement of Comprehensive Income

for the year ended 30 September 2018

Consolidated and Company Statements of Financial Position

at 30 September 2018

Company Registration Number: 05363956

The Company reported a loss for the year ended 30 September 2018 of £797,908 (2017: 271,115).

These financial statements were approved and authorised for issue by the Board of Directors on 11 December 2018 and were signed on its behalf.

P L Cheetham D J Swan

Executive Chairman Director

Consolidated Statement of Changes in Equity

Company Statement of Changes in Equity

Consolidated and Company Statements of Cash Flows

for the year ended 30 September 2018

Notes to the Financial Statements

for the year ended 30 September 2018

Background

Sunrise Resources plc is a public company incorporated and domiciled in England. It is traded on the AIM Market of the London Stock Exchange - EPIC: SRES.

The Company is a holding company (together, "the Group") for one company incorporated in Australia, and two companies incorporated in Nevada, in the United States of America. The Group's financial statements are presented in Pounds Sterling (£) which is also the functional currency of the Company.

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements.

1. Accounting policies

(a) Basis of preparation

The financial statements have been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS), as adopted by the European Union. They have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

(b) Going concern

In common with many exploration companies, the Company raises finance for its exploration and appraisal activities in discrete tranches. Further funding is raised as and when required. When any of the Group's projects move to the development stage, specific project financing will be required.

The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. Given the Group's cash position at year end (£235,722), these projections include the proceeds of future fundraising necessary within the next 12 months to meet the Group's overheads and planned discretionary project expenditures and to maintain the Company and its subsidiaries as going concerns. Although the Company has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. This represents a material uncertainty related to events or conditions which may cast significant doubt on the Group's and Company's ability to continue as going concerns and, therefore, that they may be unable to realise their assets and discharge their liabilities in the normal course of business. However, the directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.

(c) Basis of consolidation

Investments, including long-term loans, in the subsidiaries are valued at the lower of cost or recoverable amount, with a biannual review for impairment.

The Group's financial statements consolidate the financial statements of Sunrise Resources plc and its subsidiary undertakings eliminating intercompany balances and transactions.

In accordance with section 408 of the Companies Act 2006, Sunrise Resources plc is exempt from the requirement to present its own statement of comprehensive income. The amount of the loss for the financial year recorded within the financial statements of Sunrise Resources plc is £797,908 (2017: £271,115). The loss for 2018 includes provision for impairment of its investment in subsidiary undertakings in the amount of £546,541 (Note 8).

(d) Intangible assets

Exploration and evaluation

Accumulated exploration and evaluation costs incurred in relation to separate areas of interest (which may comprise more than one exploration licence or exploration licence applications) are capitalised and carried forward where:

(1) such costs are expected to be recouped through successful exploration and development of the area, or alternatively by its sale; or

(2) exploration and/or evaluation activities in the area have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to the areas are continuing.

A biannual review is carried out by the directors to consider whether there are any indications of impairment in capitalised exploration and development costs. The biannual impairment reviews were conducted in April 2018 and November 2018.

Where an indication of impairment is identified, the relevant value is written off to the income statement in the period for which the impairment was identified. An impairment of exploration and development costs may be subsequently reversed in later periods should conditions allow.

Accumulated costs, where the Group does not yet have an exclusive exploration licence and in respect of areas of interest which have been abandoned, are written off to the income statement in the year in which the pre-licence expense was incurred or in which the area was abandoned. 

Development

Exploration, evaluation and development costs are carried at the lower of cost and expected net recoverable amount. On reaching a mining development decision, exploration and evaluation costs are reclassified as development costs and all development costs on a specific area of interest will be amortised over the useful economic life of the projects, once they become income generating and the costs can be recouped.

(e) Trade and other receivables and payables

Trade and other receivables and payables are measured at initial recognition at fair value and subsequently measured at amortised cost.

(f) Cash and cash equivalents

Cash and cash equivalents consist of cash at bank and in hand and short-term bank deposits with a maturity of three months or less.

(g) Deferred taxation

Deferred taxation, if applicable, is provided in full in respect of taxation deferred by temporary differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax assets are recognised to the extent that they are regarded as recoverable.

(h) Foreign currencies

The Group's consolidated financial statements are presented in Pounds Sterling (£), being the functional currency of the Company, and the currency of the primary economic environment in which the Company operates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date.

For consolidation purposes, the net investment in foreign operations and the assets and liabilities of overseas subsidiaries, associated undertakings and joint arrangements, that have a functional currency different from the Group's presentation currency, are translated at the closing exchange rates. Income statements of overseas subsidiaries, that have a functional currency different from the Group's presentation currency, are translated at exchange rates at the date of transaction. Exchange differences arising on opening reserves are taken to the foreign currency reserve in equity.

(i) Share warrants and share-based payments

The Company issues warrants to employees (including directors) and third parties. The fair value of the warrants is recognised as a charge measured at fair value on the date of grant and determined in accordance with IFRS 2 or IAS 39, adopting the Black-Scholes-Merton model. The fair value is recognised on a straight-line basis over the vesting period, with a corresponding adjustment to equity, based on the management's estimate of shares that will eventually vest. The expected life of the warrants is adjusted, based on management's best estimates, for the effects of non-transferability, exercise restrictions and behavioural considerations. The details are shown in Note 15.

The Company also issues shares in order to settle certain liabilities, including settlement of outstanding directors fees. The fair value of shares issued is based on the closing mid-market price of the shares on the AIM Market on the day prior to the date of settlement and it is expensed on the date of settlement with a corresponding increase in equity.

(j) Judgements and estimations in applying accounting policies

In the process of applying the Group's accounting policies above, management has identified the judgemental areas that have the most significant effect on the amounts recognised in the financial statements:

Intangible assets - exploration and evaluation

Capitalisation of exploration and evaluation costs requires that costs be assessed against the likelihood that such costs will be recoverable against future exploitation or sale or alternatively, where activities have not reached a stage which permits a reasonable estimate of the existence of mineral reserves, a judgement that future exploration or evaluation should continue. This requires management to make estimates and judgements and to make certain assumptions, often of a geological nature, and most particularly in relation to whether or not an economically viable mining operation can be established in future. Such estimates, judgements and assumptions are likely to change as new information becomes available. When it becomes apparent that recovery of expenditure is unlikely the relevant capitalised amount is written off to the Income Statement.

Impairment

Impairment reviews for deferred exploration and evaluation costs are carried out on a project by project basis, with each project representing a potential single cash generating unit. The Group will look to evidence produced by its exploration activities to indicate whether the carrying value is impaired. Assessment of the impairment of assets is a judgement based on analysis of the future likely cash flows from the relevant project, including consideration of:

a) The period for which the entity has the right to explore in the specific area and whether this right will expire in the near future, and whether the right is expected to be renewed.

b) Whether substantive expenditure on further exploration for and evaluation of mineral resources for the specific project is either budgeted or planned.

c) Whether exploration for and evaluation of mineral resources on the specific project has led to the discovery of commercially viable quantities of mineral resources and whether the entity has decided to discontinue such activities on the project.

d) Whether sufficient data exist to indicate that, although a development on the specific project is likely to proceed, the carrying amount of the exploration and evaluation asset is likely to be recovered in full from successful development of a mine or by the sale of the project.

Impairment reviews for investments are carried out on an individual basis. The Group will look to performance indicators of the investment, such as market share price, to indicate whether the carrying value is impaired. The results of the impairment review conducted during the year are detailed within Note 9.

Going concern

The preparation of financial statements requires an assessment of the validity of the going concern assumption. The validity of the going concern assumption is dependent on finance being available for the continuing working capital requirements of the Group. Based on the assumption that such finance will become available, the directors believe that the going concern basis is appropriate for these accounts.

Share warrants and share-based payments

The estimates of costs recognised in connection with the fair value of share warrants requires that management selects an appropriate valuation model and make decisions on various inputs into the model including the volatility of its own share price, the probable life of the warrants before exercise, and behavioural consideration of warrant holders.

(k) Available for sale investments

Available for sale financial assets include non-derivative financial assets that are either designated as such or do not qualify for inclusion in any of the other categories of financial assets. Available for sale investments are initially measured at cost and subsequently at fair value, being the equivalent of market value, with changes in value recognised in equity. Gains and losses arising from available for sale investments are recognised in the income statement when they are sold or impaired.

(l) Standards, amendments and interpretations not yet effective

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and in some cases have not yet been adopted by the EU.

The directors do not expect that the adoption of these standards will have a material impact on the financial statements of the Group in future periods. Specifically, the adoption of IFRS 9 will have minimal impact for both the classification and measurement of existing financial instruments. As the Group does not have any turnover, IFRS 15 will not have any significant impact on revenue recognition and related disclosures. Finally, the adoption of IFRS 16 will not have any impact on the financial statements of the Group as all lease contracts are for periods of less than one year.

2. Segmental analysis

The Chief Operating Decision Maker is the Board of Directors. The Board considers the business has one reportable segment, the management of exploration projects, which is supported by a Head Office function. For the purpose of measuring segmental profits and losses the exploration segment bears only those direct costs incurred by or on behalf of those projects, no Head Office cost allocations are made to this segment. The Head Office function recognises all other costs.

3. Loss before income tax

4. Directors' emoluments

In the year ended 30 September 2018 the cost of Employer's National Insurance Contributions for directors was £Nil (2017: £Nil)

In the year ended 30 September 2018 the value of non-cash share based payments in respect of share warrants issued to the directors was £Nil (2017: £Nil).

Patrick Cheetham is also a director of Tertiary Minerals plc and under the terms of the Management Services Agreement (see Note 5) a total of £110,790, including Employers National Insurance Contributions, was charged to the Company for his services during the year (2017: £104,324). These services are provided at cost.

The directors are also the key management personnel. If all benefits are taken into account, the total key management personnel compensation would be £36,000 (2017: £36,000).

5. Staff costs

The average monthly number of employees employed by the Group and Company during the year was as follows:

The Company does not employ any staff directly apart from the directors and a company secretary. The services of technical and administrative staff are provided by Tertiary Minerals plc as part of the Management Services Agreement between the two companies (see Note 16). The Company issues share warrants to Tertiary Minerals plc staff from time to time and these non-cash share-based payments resulted in a charge within the financial statements of £1,291 (2017: £1,117).

6. Loss per share

Loss per share has been calculated using the loss for the year attributable to equity holders of the Parent and the weighted average number of shares in issue during the year.

The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for the basic earnings per ordinary share. This is because the exercise of share warrants would have the effect of reducing the loss per ordinary share and is therefore anti-dilutive.

7. Income tax

No liability to corporation tax arises for the year due to the Group recording a taxable loss (2017: £Nil).

The tax credit for the period is lower than the credit resulting from the loss before tax at the standard rate of corporation tax in the UK - 19% (2017: 19%). The differences are explained below.

Factors that may affect future tax charges

The Group has total losses carried forward of £3,376,297 (2017: £3,493,492). This amount would be charged to tax, thereby reducing tax liability, if sufficient profits were made in the future. The deferred tax asset has not been recognised as the future recovery is uncertain given the exploration status of the Group. The carried tax loss is adjusted each year for amounts that

can no longer be carried forward.

8. Investments

Subsidiary undertakings

The registered office of Sunrise Minerals Australia Pty Ltd is Level 4, 35-37 Havelock Street West, Perth, WA 6005.

The registered office of SR Minerals Inc. and Westgold Inc. is 241 Ridge Street, Suite 210, Reno, NV 89501.

In relation to indication of impairment of exploration assets under IFRS 6, the value of investment in and due from the subsidiaries was considered. The directors therefore undertook an impairment review of the carrying values of the investments under IAS 36. The result of this review, together with the fact that there had been an impairment of the underlying assets held by Sunrise Minerals Australia Pty Ltd, indicated that impairment was required under IAS 36.12(f) in the carrying value of the investment in Sunrise Minerals Australia Pty Ltd. The investment has been impaired down to the value of the underlying exploration and development asset, i.e. an impairment of £546,541.

Available for sale investments

The fair value of each available for sale investment is equal to the market value of its shares at 30 September 2018, based on the closing mid-market price of shares on its equity exchange market.

These are level one inputs for the purpose of the IFRS 13 fair value hierarchy.

9. Intangible assets

The directors carried out an impairment review, with reference to IFRS 6.20(a) and IAS 36.12 (f) which resulted in an impairment charge relating to the Cue Diamond Project being recognised in the Consolidated Income Statement as part of operating expenses following a decision by the Board to surrender the exploration licence over the Cue Diamond Project. Refer to accounting policy 1(d) and 1(j) for a description of the considerations used in the impairment review.

10. Property, plant and equipment

The Group has the use of tangible assets held by Tertiary Minerals plc as part of the Management Services Agreement between the two companies.

11. Receivables

12. Cash and cash equivalents

13. Trade and other payables

14. Issued capital and reserves

During the year to 30 September 2018 the following share issues took place:

An issue of 6,802,353 0.1p ordinary shares at 0.17p per share to three directors, for a total consideration of £11,564, in satisfaction of outstanding directors' fees (31 October 2017).

An issue of 333,333,333 0.1p ordinary shares at 0.15p per share, by way of placing, for a total consideration of £462,500 net of expenses (6 December 2017).

An issue of 285,714,285 0.1p ordinary shares at 0.14p per share, by way of placing, for a total consideration of £372,000 net of expenses (24 July 2018).

An issue of 7,044,426 0.1p ordinary shares at 0.15p per share to three directors, for a total consideration of £10,567, in satisfaction of outstanding directors' fees (21 August 2018).

During the year to 30 September 2017 a total of 684,105,288 0.1p ordinary shares were issued, at an average price of 0.103p per share, for a total consideration of £657,897 net of expenses.

Nature and purpose of reserves

Foreign currency reserve

Exchange differences relating to the translation of the net assets of the Group's foreign operations, which relate to subsidiaries only, from their functional currency into the Parent's functional currency, being Sterling, are recognised directly in the foreign currency reserve.

Share warrant reserve

The share warrant reserve is used to recognise the value of equity-settled share warrants provided to employees, including key management personnel, as part of their remuneration, and to third parties in connection with fundraising. Refer to Note 15 for further details.

15. Share warrants granted

Warrants not exercised at 30 September 2018

Share warrants are issued for nil consideration and are exercisable as disclosed above. They are exchangeable on a one for one basis for each ordinary share of 0.1p at the exercise price on the date of conversion.

Share warrant transactions

The Company issues share warrants on varying terms and conditions.

Details of the share warrants outstanding during the year are as follows:

The share warrants outstanding at 30 September 2018 had a weighted average exercise price of 0.245p (2017: 0.26p), a weighted average fair value of 0.025p (2017: 0.033p) and a weighted average remaining contractual life of 0.35 years.

In the year ended 30 September 2018 warrants were granted on 31 January 2018 to an officer of the Company and employees of Tertiary Minerals plc with an aggregate estimated fair value of £1,941. Note 5 explains the value recognised in the reporting period in respect of Tertiary Minerals plc.

In the year ended 30 September 2017 warrants were granted on 1 February 2017 to an officer of the Company and employees of Tertiary Minerals plc with an aggregate estimated fair value of £1,348.

In the year to 30 September 2018 the Company recognised expenses of £1,741 (2017: £1,507) related to issuing of share warrants in connection with equity-settled share-based payment transactions. The fair value is charged to administrative expenses on a straight-line basis over the vesting period, together with a corresponding increase in equity, based on the management's estimate of shares that will eventually vest.

In the year ended 30 September 2018 no share warrants were exercised. 

Expected volatility was determined by calculating the historical volatility of the Company's share price over the previous 3 years. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

16. Related party transactions

Key management personnel

The directors holding office at the year end and their warrants held in the share capital of the Company are: