26 August 2015 ASX Release

Unity Mining Limited

ABN 61 005 674 073

Corporate Details:

ASX Code: UML

Issued capital:

1140M ord. shares

9.58M unlisted Perf. Rights

Substantial Shareholders: Diversified Minerals Pty Ltd

136.5M (11.97%)

Directors:

Non-Executive Chairman: Clive Jones

Managing Director: Andrew McIlwain

Non-Executive Directors: Ronnie Beevor

Gary Davison

Frank Terranova

Contact Details:

Unity Mining Limited

Level 10

350 Collins St Melbourne Victoria 3000

Australia

Tel: +61 (0)3 8622 2300

Fax: +61 (0)3 8622 2399

Email:

[email protected]

Website:

www.unitymining.com.au

FY15 Results Commentary

Overview

 At 30 June 2015-$31.4 million available cash, including $2.9

million in gold in transit;

 $21.6 million cash generated from operating activities;

 Gold production of 50,450 oz; and

 Cost reduction and efficiency initiatives across all areas of the business continue to have a positive impact.

Review of 2015 Results

For the financial year ended 30 June 2015, the Company generated a gross profit from mining operations of $23.4 million, which after interest, exploration, corporate and other non-cash expenses resulted in a small net loss of $0.6 million.
Sales revenue for the year was $77.6 million (2014: $54.9 million). Revenue increased substantially as a result of an increase in production from the Henty Gold Mine.
The average gold price received during the year was A$1,471/oz (2014: A$1,419/oz).
Gold production was 50,450 ounces (2014: 38,067 ounces), a direct result of an increase in ore production to 264,041 tonnes (2014: 247,230 tonnes), and an increase in mined ore grade to 6.27/t Au (2014: 5.3g/t Au).
The main contributors to the $0.6 million net loss included:

 Expensing of exploration costs of $1.8 million. Of this, $0.6 million relates to exploration expenditure which was incurred during FY 2015 with the balance of $1.2 million relating to prior period costs which were written off during the year;

 Non-cash impairment charge relating to the Dargues Gold Mine Project totalling $2.5 million which has resulted primarily from the delay in commencement of the development of the project, and consequent additional holding costs during that time;

 Non-cash write-downs of $0.9 million in relation to the Company's

investment in GoldStone Resources which was derecognised as an associate during the year;

 Taking up of redundancy costs of $6.8 million associated with the

planned closure of the Henty Gold Mine in November 2015; and

 Corporate and administration costs

Throughout FY2015, as a result of prevailing gold prices and market sentiment at the time, Unity undertook a number of previously announced initiatives to reduce corporate costs and recalibrate the business in line with the pending changes to the Henty production profile. With a

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reduction in headcount and cash remuneration and an unwavering focus on project and operating costs, over the year approximately $4.0 million was removed from the operating cost structure of the business, which, with the return of a more positive market for gold and stronger production performance, has delivered Unity's strong positive cash position as at 30 June 2015.
In addition, Mr Andrew McIlwain, Unity Managing Director & CEO, agreed to a further 10% reduction in his cash salary (in addition to a 15% previous reduction) which has been offset with a higher "at risk" component in the form of unlisted share options (subject to shareholder approval at a General Meeting of Shareholders to be held on 31 August 2015).
Further cost reductions continue to be pursued in the form of reduced office space and rental costs, as well as ensuring Henty's operating costs are further reduced where possible as production reduces.
During the financial year, Unity executed a landmark Farm-In Agreement with the PYBAR Group that will see up to $5 million spent on Henty mine exploration over the next 18 months.
Under the Agreement, Diversified Minerals Pty Ltd (a 100% owned subsidiary of the PYBAR Group) will fund a comprehensive 3 stage drilling program focused on resource delineation with a view to recommencing sustainable production at Henty. Anticipated to include approximately 40,000 -
50,000 metres of underground drilling, the Agreement allows Diversified Minerals to earn up to
50% Joint Venture ownership in the Henty Mine. The drilling program is being undertaken by a
PYBAR Group company focused on using locally based employees.
Drilling activities under this Agreement commenced on 4 June 2015 and are continuing.
Progressive results from this program have already been released to the market.

2016 Full Year Forecast

As previously announced, the Henty Gold Mine is scheduled to transition to care and maintenance by the end of November 2015. The focus until this time will be on cash maximisation from extraction of the remaining ore reserves.
Henty's production performance has remained strong so far in Q1 of 2015/16. Sustainable cost reduction measures have been undertaken across the organisation and the results of these initiatives are continuing to have a positive impact on cashflow.
Unity's Managing Director and CEO Andrew McIlwain noted that "Coupled with the substantial improvements in the cost profile at Henty that have been achieved over the last six months, we are confident that the current mine plan will continue to generate positive cash-flow from operations over the remaining mine life".
"We will continue to aggressively pursue mine financial performance and evaluate other opportunities in-mine, particularly the exciting results from the Darwin South Offset target that is currently being drill tested".
"Our current plans and budget also include continuing to explore our highly prospective regional tenement package adjacent to and along strike from Henty. Any significant discoveries within the region will undoubtedly lead to a re-evaluation of the Henty mine's future" said Mr McIlwain.