Rand Mining : 2016 Half Year Report

Rand Mining Limited ABN 41 004 669 658 Interim Report - 31 December 2016 Contents 31 December 2016

Directors' report 2

Auditor's independence declaration 4

Statement of profit or loss and other comprehensive income 5

Statement of financial position 6

Statement of changes in equity 7

Statement of cash flows 8

Notes to the financial statements 9

Directors' declaration 12

Independent auditor's review report to the members of Rand Mining Limited 13

The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of Rand Mining Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2016.

Directors

The following persons were directors of Rand Mining Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

Otakar Demis - Chairman Anthony Billis

Gordon Sklenka

Principal activities

The principal activities of the Group during the financial half-year were exploration, development and production activities at the Group's East Kundana Joint Venture tenements.

Review of operations

The profit for the Group after providing for income tax amounted to $7,579,775 (31 December 2015: $6,149,605).

East Kundana Joint Venture (Rand's Interest 12.25%)

Raleigh - Rand's entitlement is 12.50%

Production at the Raleigh Underground Mine continues.

Capital development ceased in the September Quarter 2011. The depth of the decline is approximately 727 m below the surface.

Operating development in waste and ore recommenced in late 2014 with the development of the Skinners structure. Development associated with the extraction of the Crown Pillar started in October 2015. Operating development for the half-year totalled 1,659 m; 131 m in waste, 1,289 m in ore and 239 m through paste fill.

Mine production during the half-year totalled 89,943 t grading 9.33 g/t containing 26,989 oz of gold, based on grade control estimates (31 December 2015: 71,323 t grading 9.6 g/t containing 22,024 oz of gold were estimated to be mined).

Rubicon - Rand's entitlement is 12.25%

Production at the Rubicon Underground Mine that commenced in August 2011 continues.

Rubicon and Hornet Ore Bodies

Capital development for the half-year totalled 1,815 m; 403 m for decline development and 1,411 m for secondary development. At the close of the half-year period, the bottom of the Rubicon Decline is 464 m below the surface, the bottom of the Hornet Decline is 599 m below the surface and the bottom of the Hornet Exploration Decline is 637 m below the surface.

Operating development for the half-year totalled 2,234 m; 2,114 m in ore and 120 m through paste fill.

Mine production during the half-year totalled 224,773 t grading 5.55 g/t containing 40,103 oz of gold, based on grade control estimates (31 December 2015: 229,715 t grading 6.7 g/t containing 49,592 oz of gold were estimated to be mined).

Pegasus Ore Body

The Access Decline to the Pegasus ore body from the Rubicon Decline commenced in April 2014 and was completed in early November 2014 when the Pegasus Incline and Decline commenced. In February 2015, the first stope at Pegasus was fired.

Capital development for the half-year totalled 1,786 m; 388 m for decline development and 1,398 m for secondary development. At the close of the half-year period, the top of the Pegasus Incline is 98 m below the surface and the bottom of the Pegasus Decline is 446 m below the surface.

Operating development for the half-year totalled 1,234 m; 1,099 m in ore and 135 m through paste fill.

Mine production during the half-year totalled 192,867 t grading 9.26 g/t containing 57,391 oz of gold, based on grade control estimates (31 December 2015: 107,749 t grading 6.6 g/t containing 22,736 oz of gold were estimated to be mined).

Processing

Treatment campaigns at the Kanowna Belle Plant processed 473,482 t of EKJV ore from the Raleigh and Rubicon mines during the half-year. A total of 51,062 oz of gold and 10,196 oz of silver were credited to the Rand and Tribune Bullion Accounts. Rand's share of gold bullion was 12,765 oz.

Exploration

Currently, the main drilling programmes are underground resource and exploration drilling at the Rubicon-Hornet-Pegasus complex. A new drilling programme at Raleigh will target potential up-dip extensions of the Raleigh South structure. Details of all EKJV exploration activities are contained in the September and December Quarterly Reports released to the market on 31 October 2016 and 31 January 2017.

The 30 June 2016 EKJV Summary Resource and Reserve Report was released to the ASX on 3 August 2016. Resource and Reserve upgrades for Raleigh, Rubicon, Hornet and Pegasus are in progress and will be released to ASX when received.

Other projects

Seven Mile Hill (Rand's Interest 50%)

A Programme of Work for a 10,000 m RAB drilling campaign was recently approved by the Department of Mines and Petroleum. Drilling commenced in early February.

Tapeta Iron Ore Project, Liberia, West Africa

The site is currently on care and maintenance. Rand Mining Ltd announced on 2 September 2016, that it has extended the term of the option to 23 September 2017, in exchange for paying a non-refundable option fee of USD $5,000.

Corporate

Share buy-back

On 7 December 2016, the Company announced it was extending the share buy-back for an additional 12 months to 11 December 2017.

No shares were purchased or cancelled during the half-year ended 31 December 2016.

Significant changes in the state of affairs

There were no significant changes in the state of affairs of the Group during the financial half-year.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

On behalf of the directors

_ _ Anthony Billis

Director

12 March 2017 Perth