Wishbone Regulatory News (WSBN)

30 June 2017

Wishbone Gold Plc

Wishbone Gold Plc / Index: AIM / Epic: WSBN / Sector: Natural Resources

Wishbone Gold PLC ("Wishbone Gold" or the "Company")

Final Results

Wishbone Gold Plc, the precious metals trading and exploration company, announces its final results for the year ended 31 December 2016.

Financial Overview

At the end of the period under review, Wishbone Gold held cash balances totalling US$1,065,161 (2015: US$263,741). The Directors are all paid minimal salaries and, at the Company's option, these can be paid in ordinary shares. During the period under review and during the current year all Directors' salaries have been paid in shares in this way. Administrative costs, including interest during the year totalled US$944,285 (2015: US$622,659).

The Company undertook two equity placings during the year on 28 September and 27 October 2016 to raise a gross total of £1m, and also raised a debt facility in June 2016 with Sanderson Capital. The terms of this facility include an interest rate of 2% per annum and a trading override of 0.5% of the value of gold traded using the Sanderson facility.

General Highlights

• During 2016 Wishbone Gold plc continued the expansion of its trading subsidiary Black Sand, FZE ("Black Sand") which was acquired on 4 February 2016.

• Black Sand had revenue for the year of $4.2m. During the first quarter of 2017 revenue was $2.5m. We would anticipate improved gross margins as our trading operations mature.

• During the second quarter of 2017 the Company took cash out of trading to fund the initial investments in in a joint venture with Scotia International in Honduras. This is a 30-year agreement with Scotia International and the Honduran government.

• The Company formed a new subsidiary, Wishbone Gold Honduras, which is the signatory to the joint venture and the operating company, which will implement the project.

Outlook

• Precious metals resumed their upward climb during the first two months of 2017. During January and February, spot gold rose 8.34% (from $1,152.27 to $1,248.33) and spot silver increased 15.08% (from $15.92 to $18.32). However, both these are below the levels tested last year. The Board believes China, India and Russia continue to add to reserves at every opportunity.

• The diversification of the Company, and the continued development of ventures with Black Sand offer opportunities for growth.

• The Company intends that by supplying relatively small quantities of equipment ($300-$400,000 per mine) it can substantially increase the output of artisanal mines. These are mines, which have no JORC or NI43-101 resources but are simple alluvial projects or vein chasers. In the event a mine becomes exhausted the equipment will simply be moved to another site. In addition to the equipment the joint venture has operators and security in Honduras to ensure proper training in the use of the equipment and security of the supply of gold.

• With each mine that joins the Company's network it has a 10-year supply agreement at a beneficial price. The mine owners benefit as the new equipment should increase output by 3-5 times thus the quantum of money that they will make is increased.

• The Company's involvement ensures that the increased output is correctly reported and export taxes are paid. There is also the additional benefit that the Company ensures compliance with all environmental regulations.

Board of Directors

George Cardona will retire by rotation at the next annual general meeting ("AGM") and will not be offering himself for re-election. The AGM is expected to be held during the third quarter of 2017.

Comment - Chairman Richard Poulden

"Wishbone Gold plc's further entrenchment into precious metals trading with its subsidiary Black Sand has seen an increase in the profitable opportunities for the Company.

The Company's joint venture agreement in March 2017 through its subsidiary, Wishbone Gold Honduras Ltd with SION Honduras SA funds the development and exploitation of existing gold mine sites in Honduras, enabling then to increase production. In return, the mines will agree to supply Black Sand with all the output from the mines at preferential prices. It's proactive and sustainable model for the Company and its partners, and we look reporting further good news in coming months.

I am extremely grateful to George for all his help and advice as Wishbone has grown, and I wish him well in extending his retirement."

ENDS

For further information, please contact:

Wishbone Gold Plc

Richard Poulden, CEO Tel: +44 207 812 0645

Allenby Capital

James Thomas Tel: +44 20 3328 5656

Damson Communications

Abigail Stuart-Menteth Tel: +44 207 812 0645

Wishbone Gold PLC

FINANCIAL REPORT

AND

CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 31 December 2016

Wishbone Gold PLC

Consolidated Financial Statements

Contents

Wishbone Gold PLC

Company Information

DIRECTORS R O'D Poulden

JC Harrison

GS Cardona

Professor MR Mainelli

AD Gravett

SECRETARY Hawk Secretaries Limited

G1 Haven Court

5 Library Ramp

Gibraltar

REGISTERED OFFICE G1 Haven Court

5 Library Ramp

Gibraltar

INDEPENDENT AUDITORS RSM Audit (Gibraltar) Limited

(formerly Benady Cohen & Co Limited)

21 Engineer Lane

Gibraltar

BANKERS Banque J Safra (Monaco) Limited

La Belle Epoque

15 Bis / 17 Avenue D'Ostende

BP 347

MC-98006 Monaco Cedex

Monaco

NOMINATED ADVISOR Allenby Capital Ltd

3 St Helen's Place

London

EC3A 6AB

United Kingdom

BROKER Beaufort Securities Limited

63 St Mary Axe,

London

EC3A 8AA

United Kingdom

FINANCIAL PUBLIC RELATIONS Damson Communications

128 Wigmore Street

London W1U 3SA

United Kingdom

Wishbone Gold PLC

Company Information - continued

LAWYERS Pinsent Masons LLP

30 Crown Place

London

EC2A 4ES

United Kingdom

Hassans International Law Firm

57/63 Line Wall road

PO Box 119

Gibraltar

REGISTRARS Capita Registrars (Guernsey) Limited

Mont Crevelt House

Bulwer Avenue

St Sampson

Guernsey

GY2 4LH

Capita IRG

The Registry

34 Beckenham Road

Kent

BR3 4TU

United Kingdom

REGISTERED NUMBER 103190

Wishbone Gold Plc

Chairman's Report

Dear Shareholders,

During 2016 we continued the expansion of our trading subsidiary Black Sand, which we acquired on 4th February 2016. Black Sand had revenue for the year of $4.2m. During the first quarter of 2017 revenue was $2.5m.

During the second quarter of 2017 we took cash out of trading to fund the initial investments in in our joint venture with Scotia International in Honduras. As previously announced this is a 30-year agreement with Scotia International and the Honduran government. In line with our normal operating structure we formed a new subsidiary, Wishbone Gold Honduras, which is the signatory to the joint venture and the operating company, which will implement the project.

The plan for Honduras is that by supplying relatively small quantities of equipment ($300-$400,000 per mine) we can substantially increase the output of artisanal mines. These are mines, which have no JORC or 43-101 resources but are simple alluvial projects or vein chasers. In the event that a mine becomes exhausted the equipment will simply be moved to another site. In addition to the equipment the joint venture has operators and security in Honduras to ensure proper training in the use of the equipment and security of the supply of gold.

With each mine that is pulled into our network we have a 10-year supply agreement at a beneficial price. From the mine owners point of view the new equipment should increase output by 3-5 times thus the quantum of money that they will make is increased. From the government's point of view having us involved ensures that the increased output is correctly reported and export taxes are paid. There is also the additional benefit that we ensure compliance with all environmental regulations.

We will roll this out steadily over the next few years to provide a solid and secure supply chain at good margins.

Financing

We did two equity placings during the year on 28th September and 27th October to raise a gross total of £1m. We also raised a debt facility in June 2016 with Sanderson Capital. The terms of this facility include an interest rate of 2% per annum and a trading override of 0.5% of the value of gold traded using the Sanderson facility.

Australia

We met our exploration commitments for the year in Australia and the core properties of White Mountains and Wishbone II will not come up for further review until 2019.

Directors

At the AGM George Cardona will retire by rotation and is not offering himself for re-election. I am extremely grateful to George for all his help and advice, as Wishbone has grown and wish him well in extending his retirement.

The Gold Market

Precious metals resumed their upward climb during the first two months of 2017. During January and February, spot gold rose 8.34% (from $1,152.27 to $1,248.33) and spot silver increased 15.08% (from $15.92 to $18.32). However both these are below the levels tested last year. Eric Sprott, one of the best known commentators on these markets attributes the fluctuations to uncertainty about the Federal Reserve's plans. I have a lot of respect for Eric but in this instance I think he is missing the overall trend where China, India and Russia continue to add to reserves at every opportunity.

Change of Advisers

On 11 March 2016, the Company appointed Allenby Capital Limited as its nominated adviser. This was in the light of Sanlam's decision to sell its London advisory business and the fact that their key employees moved to Allenby.

Financial Overview

At the end of the period under review, Wishbone Gold held cash balances totalling US$1,065,161 (2015: US$263,741). The Directors are all paid minimal salaries and, at the Company's option, these can be paid in ordinary shares. During the period under review and during the current year all directors' salaries have been paid in shares in this way. Administrative costs, including interest during the year totalled US$944,285 (2015: US$622,659).

In conclusion, I would like to thank the board, management team and all our advisers for their hard work during the year and to express all our thanks to you our shareholders for your continuing support. I am of the belief that this will be vindicated by performance in future.

___________________________

R O'D Poulden

Chairman

30 June 2017

Wishbone Gold Plc

Directors' Report

The directors submit their report and the audited consolidated financial statements for the year ended 31 December 2016.

Activities, review of business and future developments

The Group's principal activity is a diversified holding company with its principal interests in precious metals trading in Dubai, UAE and in mineral properties in Australia.

The directors' comments concerning the results and future developments are included in the Chairman's Statement.

The Group's business key performance indicators (KPIs) are cash, exploration costs, administrative costs revenue, sales margins and shareholder reserves, all of which are disclosed in these consolidated accounts.

Results for the year and dividends

The Group's loss after taxation and minority interests was US$958,120 (2015: US$1,120,111) after charging the following:

The Company's loss after taxation was US$909,004 (2015: US$1,105,438) after charging the following:

The directors do not recommend the payment of a dividend for the year ended 31 December 2016.

Directors

The directors listed on page 1 have served on the board throughout the year ended 31 December 2016 and the year ended 31 December 2015.

Financial risk management

Details of the Group's financial instruments and its policies with regard to financial risk management are given in note 18 to the consolidated financial statements.

Principal risks and uncertainties

The principal risks and uncertainties facing the Group is whether potential mineral reserves can be exploited economically and further demand for precious metals will continue. Further information on this can be found in the Chairman's statement.

Wishbone Gold PLC

Directors' Report

Going concern

As disclosed in note 2, the Group has incurred losses during the financial years ended 31 December 2016 and 31 December 2015. The Directors have reviewed the financial performance of the Group since 31 December 2016 and have considered the Group's cash projections and funding plan for the 12 months from the date of approval of these financial statements. Taking into account the debt facility of US$3m raised on 3rd June 2016 the Board of Directors is confident that the Group has access to sufficient funds to enable the Group to meet its liabilities as and when they fall due for at least the next twelve months.

Exploration and evaluation

Exploration and evaluation costs capitalised as intangible assets amounted to US$ 340,341 (2015: US$ 404,149) at the year end. The Directors recognise that the realisation of intangible assets depends on the successful discovery and development of mineral reserves. The Directors have reviewed the proposed work programme for exploration and evaluation assets and on the basis of the results from the exploration programme and the prospects for raising additional funds as required, consider it appropriate to prepare the financial statements on the going concern basis.

Creditor payment policy

The Group does not follow a code or standard on payment practice. Payment terms are normally agreed with individual suppliers at the time of order placement and are honoured, provided that goods and services are supplied in accordance with the contractual conditions.

At 31 December 2016, the Group had creditor days of 34 days (2015: 123 days) based on the financial data for the year.

Corporate governance

The Directors intend, in so far as practicable given the Group's size and the constitution of the board, to comply with the main provisions of the Combined Code: Principles of Corporate Governance and Code of Best Practice which is consistent with the recommendations on Corporate Governance Guidelines of the Quoted Companies Alliance for AIM companies.

The Directors have adopted terms of reference for an audit committee and remuneration committee. The Directors do not fully comply with the Corporate Governance Code to the extent that there is no nomination committee as the Board does not consider it appropriate to establish at this stage of the Group's development.

The Directors comply with Rule 21 of the AIM Rules relating to the Directors' dealings as applicable to AIM companies and will also take all reasonable steps to ensure compliance with Rule 21 by the Group's relevant employees.

Events after the reporting year

The following events took place after the year end:

· Wishbone Gold Plc has signed a joint venture agreement in March 2017 through its subsidiary, Wishbone Gold Honduras Ltd ("Wishbone"), with SION Honduras SA ("SION"), to fund the development and exploitation of existing gold mine sites in Honduras. SION is an associated company of Scotia International of Nevada Inc; a privately-owned mining equipment supply company based in the United States of America. SION has an agreement with the Honduran government to modernise and expand the Honduran mining industry.

The agreement provides that Wishbone and SION will provide equipment and expertise to existing small mines in Honduras to enable then to increase production. In return, the mines will agree to supply Wishbone's trading subsidiary Black Sand FZE with all the output from the mines at preferential prices.

Wishbone Gold PLC

Directors' Report

Statement regarding disclosure of information to the auditors

Each director of the Company has confirmed that, in fulfilling their duties as a director, they are aware of no relevant audit information of which the Group's auditors are not aware and that they have taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the Group's auditors are aware of that information.

This information is given and should be interpreted in accordance with the provisions of Gibraltar Companies Act 2014.

Independent auditors

RSM Audit (Gibraltar) Limited (formerly Benady Cohen & co Limited) were appointed as auditors for the year.

A resolution for the appointment of RSM Audit (Gibraltar) Limited will be proposed at the Annual General Meeting.

The financial statements on pages 12 to 39 were approved by the Board of Directors on 30 June 2017 and signed on its behalf by:

___________________________

Name:

Date: 30 June 2017

Company's registered number: 103190

Wishbone Gold PLC

Statement of Directors' Responsibilities

The Directors are responsible for preparing 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 which give a true and fair view of the state of affairs of the Company and the Group as at the financial year end and of the profit or loss of the Group for that year. In preparing those financial statements, the directors are required to:

a. select suitable accounting policies and then apply them consistently;

b. make judgements and estimates that are reasonable and prudent;

c. state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

d. prepare the financial statements on the going concern basis unless it is inappropriate to resume that the group will continue in business.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and to enable them to ensure that the financial statements comply with the requirements of the Companies Act 2014. Specifically, pursuant to section 248 of the Gibraltar Companies Act 2014, the directors have elected to follow International Financial Reporting Standards as adopted by the European Union. The directors are also responsible for safeguarding the assets of the Company and Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate financial statements included on the Company's website. Legislation in Gibraltar governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.

___________________________

R O'D Poulden

Chairman

30 June 2017

To the shareholders of Wishbone Gold Plc

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements ("the financial statements") of Wishbone Gold Plc (the "Company") and its subsidiaries ("the Group"), which comprise the company and consolidated statement of financial position as at 31 December 2016, and the consolidated income statement, the consolidated statement of comprehensive income, consolidated statement of changes in equity and company and consolidated statement of cash flows for the year then ended, and notes to the company and consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements:

· give a true and fair view of the state of the Group's and Company's affairs as at 31 December 2016 and of the Group's loss and cash flows for the year then ended;

· have been properly prepared in accordance with IFRSs as adopted for use in the European Union; and,

· have been properly prepared in accordance with the Companies Act 2014.

Emphasis of matter - valuation of goodwill

In forming our opinion on the consolidated financial statements, which are not modified in this respect, we have considered the adequacy of the disclosures contained within note 10 to the consolidated financial statements concerning the valuation of the net assets acquired of $50,510, the contingent consideration of 240 million ordinary shares and the resulting goodwill of $748,617.

This note highlights the inherent uncertainties on the valuation of the resulting goodwill which may differ materially from that that might have been achieved had there been more certainty with the consideration and the fair value of the net assets acquired.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of the directors for the financial statements

The directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with applicable law in Gibraltar and International Financial Reporting Standards, as adopted for use in the European Union, and for such internal control as the directors determine is necessary to enable the presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company, or to cease operations, or have no realistic alternative but to do so.

Report on the Audit of the Consolidated Financial Statements (continued)

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on Other Legal and Regulatory Requirements

Opinion on other matter prescribed by the Companies Act 2014

In our opinion, based on the work undertaken in the course of the audit:

· the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the consolidated financial statements; and

· the Directors' Report has been prepared in accordance with the requirements of the Companies Act 2014.

In the light of the knowledge and understanding of the Group, and its environment obtained in the course of the audit, we have not identified any material misstatements in the Directors' Report.

Matters on which we are required to report by exception

We have nothing to report in respect of the matter where the Companies Act 2014 requires us to report to you if, in our opinion, we have not received all the information and explanations we require for our audit.

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 257 of the Companies Act 2014 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

SVM Cohen

Statutory auditor

For and behalf of

RSM Audit (Gibraltar) Limited

(formerly Benady Cohen & Co Limited)

21 Engineer Lane

Gibraltar

30 June 2017

Wishbone Gold PLC

Consolidated Income Statement

for the year ended 31 December 2016

There are no recognised gains or losses other than disclosed above and there have been no discontinued activities during the year. Precious Metals International Ltd was acquired during the year.

The notes on pages 19 to 39 form part of these financial statements.

Wishbone Gold PLC

Consolidated Statement of Comprehensive Income for the year ended 31 December 2016

The notes on pages 19 to 39 form part of these financial statements.

Wishbone Gold PLC

Consolidated Statement of Financial Position

as at 31 December 2016

The financial statements on pages 12 to 39 were approved by the board and authorised for issue on 30 June 2017 and signed on its behalf by:

______________________ ______________________

JC Harrison R O'D Poulden

Director Director

The notes on pages 19 to 39 form part of these financial statements.

Wishbone Gold PLC

Company Statement of Financial Position

as at 31 December 2016

The financial statements on pages 12 to 39 were approved by the board and authorised for issue on 30 June 2017 and signed on its behalf by:

______________________ ______________________

JC Harrison R O'D Poulden

Director Director

The notes on pages 19 to 39 form part of these financial statements.

Wishbone Gold PLC

Consolidated Statement of Changes in Equity

for the year ended 31 December 2016

The notes on pages 19 to 39 form part of these financial statements.

Wishbone Gold PLC

Consolidated Statement of Cash Flows for the year ended 31 December 2016

The notes on pages 19 to 39 form part of these financial statements.

Wishbone Gold PLC

Company Statement of Cash Flows for the year ended 31 December 2016

The notes on pages 19 to 39 form part of these financial statements.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

1 General information

The consolidated financial statements of Wishbone Gold Plc (the "Company") and its subsidiaries (the "Group) for the year ended 31 December 2016 were authorised for issue in accordance with a resolution of the Company's directors on 30 June 2017.

The Company was incorporated in Gibraltar under the name of Wishbone Gold Plc as a public company under the Gibraltar Companies Act 2014. The authorised share capital of the Company is £3,000,000 divided into 3,000,000,000 shares of £0.001 each. The registered office is located at G1 Haven Court, 5 Library Ramp, Gibraltar. The principal activity of the Company is that of holding company of a group which is engaged in mineral exploration.

On 2 July 2013, the Company approved the conversion of £207,222 of expenses and debts into 11,841,307 ordinary shares to the Directors at a price of 1.75p to satisfy debts and expenses incurred on behalf of the Company.

On 18 December 2013 the Company approved the conversion of £7,500 of expenses into 272,727 shares at the price of 2.75p.

On 7 March 2014 the Company issued 45,772,693 ordinary shares in exchange for 1,031,360 ordinary shares in Global Resources Investment Trust, net of issue costs of US$34,450.

The Company undertook a conditional Placing and Open Offer on 4 April 2014. A total of new issues, including commission shares, of 33,677,181 new ordinary shares were admitted to trading AIM on 28 April 2014 which raised US$780,792 net of expenses of US$32,682.

On 17 July 2014, the Company approved the conversion of £7,500 of expenses into 500,000 new ordinary shares at the price of 1.5p.

On 1 September 2015, the Company approved the issue of 100,000,000 shares at a price of 0.25p per share to raise £250,000 gross.

On 11 September 2015, the Company settled £992,123 of debts including outstanding directors' fees and expenses and repaid loans from the Black Swan group through the issue of 396,849,129 shares at a price of 0.25p per share.

On 5th February 2016 Wishbone acquired Precious Metals International Ltd ("PMI") and its wholly owned subsidiary, Black Sand FZE in an all share transaction.

The terms of the acquisition are an initial payment of 240,000,000 ordinary shares of 0.1p each in the Company with a further payment of an additional 240,000,000 ordinary shares once the annual profit after tax of the PMI Group exceeds $1m. This values the initial consideration for the PMI Group at £648,000 ($779,127), based on the Company's closing mid-market. The net assets acquired were $50,510 leading to goodwill of $748,617.

On 3rd June 2016 Wishbone agreed a two-year loan facility of $3m from Sanderson Capital Partners Limited. A 10% commitment fee is payable in ordinary shares of Wishbone. The 38,657,037 shares of 0.1p each, will be issued at a price of 0.54p per ordinary share, being the closing mid-market price of the company's shares on 3rd June 2016.

On 28th September 2016 Wishbone raised £600,000 (before expenses) through a placing via its broker, Beaufort Securities Limited of 80,000,000 new ordinary shares of 0.001p each at a price of 0.0075p per ordinary share. The Company has also issued 5,000,000 warrants with an exercise price of 1.2p with a life of two years to Beaufort Securities Limited.

On 27th October 2016 Wishbone raised £400,000 (before expenses) through a placing via its broker, Beaufort Securities Limited, of 50,000,000 new ordinary shares of 0.1p each at a price of 0.8p per ordinary share. The Company has also issued 3,076,923 warrants with an exercise price of 1.3p with a life of two years to Beaufort Securities Limited.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

2 Accounting policies

Basis of preparation

The financial statements of the Group have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") applied in accordance with the provisions of the Gibraltar Companies Act 2014.

In accordance with the Gibraltar Companies Act 2014, the individual statement of financial position of the Company has been presented as part of these financial statements. The individual statement of comprehensive income has not been presented as part of these financial statements as permitted by Section 288 of the Act. The individual statement of comprehensive income of the Company shows a loss for the year of US$909,004 (2015 loss: US$1,105,438).

IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC") and there is an on-going process of review and endorsement by the European Commission. The accounts have been prepared on the basis of the recognition and measurement principles of IFRS that are applicable for the year commencing 1 January 2016.

The consolidated financial statements have been prepared under the historical cost convention. The principal accounting policies set out below have been consistently applied to all years presented other than changes from the new and amended standards and interpretations effective from 1 January 2016.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Report and Directors' Report. The financial position of the Group at the year end and its cash flows and liquidity position are included in the consolidated statement of financial position on page 14 and the consolidated statement of cash flows on page 17. As at 31 December 2016 the Group cash balances amounted to US$1,065,161 and current liabilities, excluding directors and other fees (amounting to US$143,554), were US$4,108,110. The Group closely monitors and manages its capital position and liquidity risk regularly throughout the year to ensure that it has sufficient funds to meet forecast cash requirements and satisfy the working capital requirements and proposed acquisition and exploration activity. Taking into account the debt facility of US$3m raised on 3rd June 2016 the Board of Directors is confident that the Group has access to sufficient funds to enable the Group to meet its liabilities as and when they fail due for at least the next twelve months.

Basis of consolidation

The Group's consolidated financial statements incorporate the financial statements of the Company and its subsidiaries prepared to 31 December each year. Control is achieved where the company has power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

All intra-group transactions and balances and any unrealised gains and losses arising from intra-group transactions are eliminated in preparing the consolidated accounts.

In the parent company financial statements the investment in the subsidiaries is accounted for at cost.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

2 Accounting policies (continued)

Business combinations and goodwill

On acquisition, the assets and liabilities and contingent liabilities of subsidiaries are measured at their fair values at the date of acquisition. Any excess of cost of acquisition over the fair value of identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of identifiable net assets acquired (i.e. discount on acquisition) is credited to the income statement in the period of acquisition. Goodwill arising on consolidation is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

Exploration and evaluation assets

Costs arising from exploration and evaluation activities are accumulated separately for each area of interest and only capitalised where such costs are expected to be recovered through successful development, or through sale, or where exploration and evaluation activities have not, at the reporting date, reached a stage to allow a reasonable assessment regarding the existence of economically recoverable reserves.

Expenditure capitalised comprises direct costs that have a specific connection with a particular area of interest. Capitalised expenditure in respect of areas of interest is written off in the income statement when the above criteria do not apply or when the directors assess that the carrying value may exceed the recoverable amount.

Capitalised costs in respect of an area of interest that is abandoned are written off in the period in which the decision to abandon is made.

Once production commences, capitalised expenditure in respect of an area of interest will be amortised on a unit of production basis by reference to the reserves of that area of interest.

Investments

Investments in group undertakings

Investments in group undertakings are measured at cost less any impairments arising should the fair value after disposal costs be lower than cost.

Investments held for resale

Investments held for resale are designated at fair value through profit or loss at inception. Purchases and sales of investments are recognised on the trade date, which is the date that the Group commits to purchase or sell the asset. Investments are de-recognised when the rights to receive cash flows from the investments have expired or the Group has transferred substantially all risks and rewards of ownership. Investments held for resale are initially recognised at cost. Subsequent to initial recognition, these investments held for resale are measured at fair value in the statement of financial position. Gains and losses arising from changes in the fair value of these assets are presented in profit or loss in the period in which they arise. During the year the Group and Company recognised impairments of US$370 (2015: US$272,450).

Impairment

At each year end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

2 Accounting policies (continued)

Impairment (continued)

Recoverable amount is the higher of fair value less cost to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset, for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash generating unit) in prior periods. A reversal of impairment loss is recognised in the income statement immediately.

Foreign currencies

The consolidated financial statements are presented in United States Dollars ("US$"), the presentation and functional currency of the Company. All values are rounded to the nearest US$. Transactions denominated in a foreign currency are translated into US$ at the rate of exchange at the date of the transaction or using the average rate for the financial year. At the year-end date, monetary assets and liabilities denominated in foreign currency are translated at the rate ruling at that date. All exchange differences are dealt with in the income statement.

On consolidation, the assets and liabilities of foreign operations which have a functional currency other than US$ are translated into US$ at foreign exchange rates ruling at the year-end date. The revenues and expenses of these subsidiary undertakings are translated at average rates applicable in the period. All resulting exchange differences are recognised as a separate component of equity. Foreign exchange gains or losses arising from a monetary item receivable from or payable to a foreign operation are recognised in the consolidated statement of comprehensive income and disclosed as a separate component of equity, such foreign exchange gains or losses are reclassified from equity to the income statement on disposal of the net foreign operation. The same foreign exchange gains or losses are recognised in the stand-alone income statements of either the parent or the foreign operation.

In the statement of cash flows, cash flows denominated in foreign currencies are translated into the presentation currency of the Group at the average exchange rate for the year or the prevailing rate at the time of the transaction where more appropriate.

The closing exchange rate applied at the year-end date was AUD 1.3885 per US$1 (2015: AUD 1.3735). The average exchange rate applied at the year-end date was AUD 1.346 per US$1 (2015: AUD 1.3319).

The closing exchange rate applied at the year-end date was AED 3.67 per US$1. The average exchange rate applied at the year-end date was AED 3.67 per US$1.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker as required by IFRS 8 "Operating Segments". The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors.

The accounting policies of the reportable segments are consistent with the accounting policies of the Group as a whole. Segment loss represents the loss incurred by each segment without allocation of foreign exchange gains or losses, investment income, interest payable and tax. This is the measure of loss that is reported to the Board of Directors for the purpose of the resource allocation and the assessment of the segment performance.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

2 Accounting policies (continued)

Segment reporting (continued)

When assessing segment performance and considering the allocation of resources, the Board of Directors review information about segment assets and liabilities. For this purpose, all assets and liabilities are allocated to reportable segments (note 4).

Revenue recognition

Revenue is recognised only when the following have occurred:

• The product has been despatched to the purchaser and is no longer under the physical control of the producer;

• The products is in a form that can be delivered to a purchaser, requiring no additional processing by or on behalf of the producer;

• The quantity and quality of the product can be determined with reasonable accuracy; and

• The selling price can be determined with reasonable accuracy.

Other receivables

Other receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for impairment. Provision for impairment is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. The amount of the impairment is the difference between the asset's carrying amount and the present value of the estimated future cash flows, discounted at effective interest rate.

Cash and cash equivalents

Cash and cash equivalents comprise on demand deposits held with banks, with original maturity of three months or less.

Derivative financial instruments

Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to the income statement.

Trade and other payables

Trade payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest rate method.

Taxation

Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the year end date.

Deferred taxation is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, if the deferred tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting, nor taxable profit or loss, it is not accounted for. Deferred tax is determined using tax rates and laws that have been enacted (or substantively enacted) by the year end date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

2 Accounting policies (continued)

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its liabilities. Equity instruments issued by a group entity are recorded at the proceeds received, net of any direct issue costs.

Share based payments

The Company has historically issued warrants and share options in consideration for services. The Company issued warrants as disclosed in note 16 in 2016. The fair value of the warrants have been treated as part of the cost of the service received and is charged to share premium with a corresponding increase in the share based payment reserve. As of 31st December 2016, the warrants remain outstanding.

Standards, amendments and interpretations to existing standards that are effective in 2016:

The following new standards, amendments and interpretations to existing standards have been adopted by the Group during the year but have had no significant impact on the financial statements of the Group:

· IAS 1 (amendment), 'Presentation of financial statements'. The amended standard is effective for annual periods beginning on or after 1 January 2016, and clarifies existing IAS 1 requirements. The amendments clarify the materiality requirements in IAS 1 which includes the following: that specific line items in the statement(s) of profit or loss and other comprehensive income ("OCI") and the statement of financial position may be disaggregated; that entities have flexibility as to the order in which they present the notes to financial statements; and the requirements that apply when additional subtotals are presented in the statement of financial position and the statement(s) of profit or loss and OCI. The adoption of this amended standard is not expected to have a significant impact on the Group's financial position or results.

· IAS 16 (amendment), 'Property, plant and equipment'. The amended standard is based on the principle that the basis of depreciation is the expected pattern of consumption of the future economic benefits of an asset. The amended standard is effective for annual periods beginning on or after 1 January 2016. The amendments prohibit entities from using a revenue-based depreciation method for items of property, plant and equipment since revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. The adoption of this amended standard is not expected to have a significant impact on the Group's financial position or results.

· IAS 27 (amendment), 'Equity Method in Separate Financial Statements'. The amendments reinstate the equity method as an accounting option for investments in subsidiaries, joint ventures and associates in an entity's separate financial statements. The adoption of this amended standard is not expected to have a significant impact on the Group's financial position or results.

· IAS 38 (amendment), 'Intangible Assets'. The requirements of IAS 38 are amended to introduce a rebuttable presumption that a revenue-based amortisation method for intangible assets is inappropriate for the same reasons as in IAS 16. However, the IASB states that there are limited circumstances when the presumption can be overcome:

o The intangible asset is expressed as a measure of revenue (the predominant limiting factor inherent in an intangible asset is the achievement of a revenue threshold);

o And it can be demonstrated that revenue and the consumption of economic benefits of the intangible asset are highly correlated (the consumption of the intangible asset is directly linked to the revenue generated from using the asset).

The adoption of this amended standard is not expected to have a significant impact on the Group's financial position or results.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

2 Accounting policies (continued)

Standards, amendments and interpretations to existing standards that are effective in 2016 (continued):

· IFRS 7 (amendment), 'Financial Instruments: Disclosures'. The amendment adds additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset for the purpose of determining the disclosures required. The adoption of this amended standard is not expected to have a significant impact on the Group's financial position or results.

· IFRS 11 (amendment), 'Joint arrangements: Accounting for Acquisitions of Interests in Joint Operations'. The amendments clarify the accounting for acquisitions of an interest in a joint operation when the operation constitutes a business. The adoption of this amended standard is not expected to have a significant impact on the Group's financial position or results.

· IFRS 14 'Regulatory Deferral Accounts'. This standard permits an entity which is a first-time adopter of International Financial Reporting Standards to continue to account, with some limited changes, for 'regulatory deferral account balances' in accordance with its previous GAAP, both on initial adoption of IFRS and in subsequent financial statements. The objective of IFRS 14 is to specify the financial reporting requirements for 'regulatory deferral account balances' that arise when an entity provides goods or services to customers at a price or rate that is subject to rate regulation. FRS 14 is designed as a limited scope Standard to provide an interim, short-term solution for rate-regulated companies that have not yet adopted IFRS. The adoption of this standard will not have any impact on the Group's financial position or results.

New standards, amendments and interpretations to existing standards that are not yet effective or have not been early adopted by the Company:

At the date of authorisation of these consolidated financial statements, the following standards and interpretations were in issue but not yet mandatorily effective and have not been applied in the financial statements:

· IFRS 1 (amendment), 'First-time Adoption of International Financial Reporting Standards'. The amendment is to delete the short-term exemptions in paragraphs E3-E7 of IFRS 1, because they have now served their intended purpose. The amendments are effective for annual periods beginning on or after 1 January 2018. The adoption of this new standard is not expected to have a significant impact on the Group's financial position and results.

· IFRS 2 (amendment), 'Share-based Payment'. The amendments clarify the classification and measurement of share-based payment transactions. Guidance has been added that introduces accounting requirements for cash-settled share-based payments that follows the same approach as used for equity-settled share-based payments. The amendments are effective for annual periods beginning on or after 1 January 2018. Earlier application is permitted. The amendments are to be applied prospectively. The adoption of this new standard is not expected to have a significant impact on the Group's financial position or results.

· IFRS 9 'Financial Instruments'. This standard introduces new requirements for the classification and measurement of financial assets and liabilities, including some hybrid contracts. The standard is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted. Upon adoption of IFRS 9, modified prior period disclosures may be required. IFRS 9 represents the completion of the first part of a three-part project to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 uses business model and contractual cash flow characteristics to determine whether a financial asset is measured at amortised cost or fair value, replacing the four category classification in IAS 39. The approach is also based on how an entity manages its financial instruments (its business model) and the contractual cash flow characteristics of the financial assets. The adoption of this new standard is expected to have a significant impact on the Group's financial position or results.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

2 Accounting policies (continued)

New standards, amendments and interpretations to existing standards that are not yet effective or have not been early adopted by the Company (continued):

· IFRS 12 (amendment), 'Disclosure of Interests in Other Entities'. The amendment clarified the scope of the standard by specifying that the disclosure requirements in the standard, except for those in paragraphs B10-B16, apply to an entity's interests listed in paragraph 5 that are classified as held for sale, as held for distribution or as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. The amendment to IFRS 12 are effective for annual periods beginning on or after 1 January 2017. The adoption of this new standard is not expected to have a significant impact on the Group's financial position and results.

· IFRS 15 'Revenue from Contracts with Customers'. This standard is based on the principle that revenue is recognised to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. The standard's requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity's ordinary activities (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue; information about performance obligations; changes in contract asset and liability account balances between periods and key judgements and estimates. The adoption of this new standard is not expected to have a significant impact on the Group's financial position or results.

· IFRS 15 (amendment) 'Revenue from Contracts with Customers'. The amended standard are clarifications seeking to address certain implementation issues of IFRS 15. The amended standard is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted. The amendments address three areas which are identifying performance obligations, principal versus agent considerations, and licensing and provide some transition relief for modified contracts and completed contracts. The adoption of this new standard is not expected to have a significant impact on the Group's financial position or results.

· IFRS 16 'Leases'. The new standard eliminates the current dual accounting model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. The standard is effective for annual periods beginning on or after 1 January 2019, with early adoption permitted. The standard requires lessees to recognise assets and liabilities for most leases. Lessees applying IFRS 16 will have a single accounting model where all leases will be recorded on the statement of financial position as liabilities, at the present value of the future lease payments, along with an asset reflecting the right to use the asset over the lease term. Rent expense will be replaced with depreciation and interest expenses. Two possible exemptions are available for leases with a maximum term of twelve months or less and leases of low value assets (something in the region of circa £3,000 or less, irrespective of how many such leases there are). Lessors applying IFRS 16 will classify leases using the same principle as in IAS 17 and lessor accounting is substantially unchanged. The adoption of this new standard is not expected to have a significant impact on the Group's financial position and results.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

2 Accounting policies (continued)

New standards, amendments and interpretations to existing standards that are not yet effective or have not been early adopted by the Company (continued):

· IAS 7 (amendment), 'Statement of Cash Flows' - Disclosure Initiative. The amended standard is effective for annual periods beginning on or after 1 January 2017 and clarifies existing IAS 7 requirements. The amendments carry the objective for entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities. The following changes in liabilities arising from financing activities are required to be disclosed (to the extent necessary): (i) changes from financing cash flows; (ii) changes arising from obtaining or losing control of subsidiaries or other businesses; (iii) the effect of changes in foreign exchange rates; (iv) changes in fair values; and (v) other changes. The amendments also state that changes in liabilities arising from financing activities must be disclosed separately from changes in other assets and liabilities. The adoption of this amended standard is not expected to have a significant impact on the Group's financial position or results.

· IAS 17 'Leases' will be superseded by IFRS 16 Leases as of 1 January 2019. The adoption of this new standard is not expected to have a significant impact on the Group's financial position and results.

· IAS 18 'Revenue' will be superseded by IFRS 15 Revenue from Contracts with Customers as of 1 January 2018. The adoption of this new standard is not expected to have a significant impact on the Group's financial position and results.

· IAS 28 (amendment) 'Investments in Associates and Joint Ventures'. The amendment clarified that the election to measure at fair value through profit or loss an investment in an associate or a joint venture that is held by an entity that is a venture capital organisation, or other qualifying entity, is available for each investment in an associate or joint venture on an investment-by-investment basis, upon initial recognition. The amendments are effective for annual periods beginning on or after 1 January 2018. The adoption of this new standard is not expected to have a significant impact on the Group's financial position and results.

· IAS 39 'Financial Instruments: Recognition and Measurement' will be largely replaced by IFRS 9 Financial Instruments for annual periods beginning on or after 1 January 2018. The adoption of this new standard is not expected to have a significant impact on the Group's financial position and results.

· IFRIC 22 'Foreign Currency Transactions and Advance Consideration'. The new standard is to clarify the accounting for transactions that include the receipt or payment of advance consideration in a foreign currency. It is effective for annual reporting periods beginning on or after 1 January 2018. Earlier application is permitted. The adoption of this new standard is expected to have a significant impact on the Group's financial position and results.

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

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

3 Critical accounting estimates and judgements

The critical accounting estimates and judgements made by the Group regarding the future or other key sources of estimation, uncertainty and judgement that may have a significant risk of giving rise to a material adjustment to the carrying values of assets and liabilities within the next financial year are:

Critical judgements in applying the group's accounting policies

Going concern

The preparation of the financial statements is based on the going concern assumption as disclosed in note 2. The Board of Directors, after taking into consideration the additional funding received, believe the going concern assumption is appropriate.

Impairment of exploration and evaluation assets

The Board of Directors continue to budget for the exploration and evaluation commitments noted in note 19 and continue to invest in these. The Board of Directors do not consider that the exploration and evaluation assets are impaired. The carrying value of these assets is dependent on the judgements reached in relation to going concern in order to fund and develop these assets.

Determination of functional currency

The Directors considers the US$ to be the currency that most faithfully represents the economic effect of the underlying transactions, cash flows, events and conditions of the Company. The US$ is the currency in which the Company measures its performance and reports its results, as well as the currency in which it assesses the viability of projects.

Parent company statement of financial position - impairment of the investment in and loan to the subsidiary

At the reporting date, the Australian subsidiary had net liabilities of US$266,254 (AUD 213,883) (2015: US$127,801 (AUD 175,535)). As noted above, the Board of Directors do not consider that the exploration and evaluation assets are impaired and therefore there is no indication of impairment of the investment in and loan to the Australian subsidiary of US$340,341 (2015: US$164,135) and US$518,302 (2015: US$495,588) respectively.

At the reporting date, the UAE subsidiary had net liabilities of US$23,354 (AED 85,709). There is no indication of impairment of the loan to the UAE subsidiary of US$500,692.

Key accounting estimates

Valuation of warrants and options

As described in note 17, the fair value of the warrants and options granted was calculated using the Black & Scholes model which requires the input of highly subjective assumptions, including volatility of the share price. Changes in subjective input assumptions may materially affect the fair value estimate.

4 Segmental analysis

Management has determined the operating segments by considering the business from both a geographic and product perspective. For management purposes, the Group is currently organised into three operating divisions: resource evaluation (Australia), gold trading (UAE) and gold production (Honduras). The division is the business segment for which the Group reports its segment information internally to the Board of Directors.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

5 Operating loss

Abortive acquisition costs relate to costs incurred in exploring and evaluating potential acquisition targets which were later aborted by the directors.

Remuneration paid to the directors of the Group has historically been settled via the issue of equity in the Company, as disclosed in note 20.

6 Staff costs

The Group has used the services of Mr. Barrett Kosh. Staff costs for the year ended 31 December 2016 were US$52,338 (2015: US$nil).

7 Taxation

The Company is subject to corporation tax in Gibraltar on any profits which are accrued in or derived from Gibraltar or any passive income which is taxable. The corporation tax rate in Gibraltar for the year ended 31 December 2016 is 10% (2015: 10%).

The Company has taxable losses to carry forward, consequently no provision for corporate tax has been made in these financial statements.

The Group's subsidiary is subject to corporate income tax in Australia. The corporate income tax rate in Australia for the year ended 31 December 2016 is 30% (2015: 30%).

This subsidiary has taxable losses to carry forward, consequently no provision for corporate tax has been made in these financial statements.

Note that there are no group taxation provisions under the tax laws of Gibraltar.

The Ajman Free Zone where the UAE based subsidiary operates currently is a tax-free zone and has no corporate income taxes levied on companies operating within the Zone.

As at 31 December 2016 and as at 31 December 2015 the Company has no deferred tax assets and no deferred tax liabilities.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

Due to the Company and the Group being loss making, the share options and warrants (note 17) are anti-dilutive.

The amount owed by subsidiary undertaking relates to an interest free loan to Wishbone Gold Pty. and Black Sand FZE, repayable on demand.

The loan to supplier relates to an interest-free loan to Ecogreen del Peru SAC to support the Company's gold trading business and repayable on demand.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

The Group holds Exploration Permits for Mining ("EPMs") to four tenements which have initial expiration dates ranging from 2019 and beyond. The renewal of the EPMs is for a maximum further period of 5 years. Permits are not automatically renewed but require an application to the Queensland Department of Natural Resources and Mines.

Acquisition of PMI Group

During the year, Wishbone acquired 100% of the share capital of Precious Metals International Ltd together with its wholly owned subsidiary Black Sand FZE ("the PMI Group").

The fair value of the net assets acquired was $50,510 and the initial consideration of USD 799,127 was paid in shares.

The terms of acquisition of the PMI Group involved the aforementioned initial consideration and a further contingent payment of an additional 240,000,000 ordinary shares if annual profit after tax of the PMI Group exceeds $1m. At the end of the reporting year, the value of this contingent consideration cannot be ascertained.

The Company carried out its own valuation of the net assets acquired. There are inherent limitations in any fair value estimation and material differences could arise that could have an impact on the fair value of the net assets acquired and on the resulting goodwill.

In the directors' opinion, there is no difference between the fair value and book values of the assets acquired.

The resulting goodwill of USD 748,617 reflects uncertainty on the fair value of the net assets acquired and on the value of the consideration reflected in these financial statements.

The goodwill currently has an unlimited useful economic life as its subsidiary Black Sand FZE is more valuable than when purchased due to new agreements, in particular Honduras.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

11 Investments (continued)

Wishbone Gold Pty Ltd is an exploration company and Wishbone Gold Tasmania Pty Limited has remained dormant. Both companies are incorporated in Australia and the registered office address is PKF, RSL Centre Level 5, 9 Beach Road, Surfer's Paradise QLD 4217, Australia.

Precious Metals International Ltd. is a holding company that controls Black Sand FZE in the UAE. Precious Metals International Ltd. is incorporated in the British Virgin Islands and the registered office address is Nerine Chambers, P.O. Box 905, Road Town, Tortola, British Virgin Islands.

Investments held for resale

Investments held for resale of both the Group and the Company relate to Global Resources Investment Trust which was acquired as a result of a share-for-share exchange as disclosed in note 15. The investments held for resale are valued based on the market price of the shares. During the year, this investment has been sold and the value of investment held for resale is US$nil (2015: US$91,152), however prior to the sale, the directors recognised an impairment loss of US$370 (2015: US$272,450) through the consolidated income statement.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016

12 Impairment of investments

As stated in note 11, the directors have recognised impairment on the investment held in Global Resources Investment Trust to reflect the fair value of the investment. The impairments recognised in both the Group and the Company accounts are as follows:

In addition to the directors' fees payable as disclosed in note 20, directors' expenses amounting to US$73,839 (2015: US$51,371) have been accrued and are expected to be settled via the issue of equity.

The loan from Canon Street Investments Ltd. relates to a loan note issued by the Company to Canon Street Investments Ltd, repayable at the option of the noteholder or upon default. The note bears 4% interest payable monthly.

Wishbone Gold PLC

Notes to the Consolidated Financial Statements for the year ended 31 December 2016