Annual Financial Report

19 July 2016

Asa Resource Group plc

("Asa Resource", "the Group" or "the Company")

Full Year Financial Results for the Year to 31 March 2016

Asa Resource Group plc is pleased to announce its audited financial results for the year to 31 March 2016 (all references to $ are to US$).


Financial Highlights

· Group revenue decreased by a relatively contained 20.5% to $121.3m (2015: $152.3m) compared to the drop in market prices of 38% for the average nickel price and 8% for average gold price.

· In line with Group strategy of reducing expenditure during restructuring, exploration spend decreased by 42% to $3.7m (2015: $6.4m).

· Controllable, recurring Group EBITDA, excluding once off restructuring expenses and foreign exchange gains/losses, amounted to $7.4m profit (2015: $19.6m profit)

· Corporate overheads fell to below $5.0m (2015: $7.0m) in keeping with the strategy of cost cutting and streamlining efficiencies across the Group.

· Net profit/loss went from $7.0m profit in the 2015 fiscal year to $9.6m loss in the 2016 fiscal year.

Operational Highlights

Freda Rebecca Gold Mine (FRGM)

• Gold sales of 67,672 ounces (2015: 57,799 ounces) for the year.

• Cash costs (C1) $943/oz (2015: $1,067/oz), all-in sustainable costs (C3) $1,076/oz (2015: $1,259/oz) - these can be attributed to an increase in ounces produced as well as improvement in production efficiency and constant cost control implementation.

• Average realised price of gold price $1,149 /oz (2015: $1,247 /oz)

• Recovery increased to 84% (2015: 79%).

Bindura Nickel Corporation (BNC)

• Nickel in concentrate sales of 6,613t (2015: 7,352t) for the year.

• Cash costs for nickel in concentrate (C1) $5,978 /t (2015: $8,000/t), all-in sustainable costs (C3) $6,818 /t (2015: $8,558/t) due to tighter cost control measures.

• Average realised price of nickel in concentrate sold $6,737/t (2015: $10,855/t)

• Recovery marginally increased to 87% (2015: 84%).

Klipspringer Diamond Mine

• Diamond sales of $1.2m on 100,409 carats (2015: $1.4m on 95,062 carats) for the year.

• The average selling price of fine diamonds retreated from the slime tailings is $19.

• The costs of retreating the slime tailings are $8/ct (2015: $8/ct).

Mr Yat Hoi Ning, Executive Chairman, Asa Resource commented today:  

"The Company is emerging from one of its most challenging periods in better shape than one might expect. From this perspective, the financial performance the Company is reporting on today doesn't truly reflect the initiatives and progress being undertaken across the Group.

The controllable, recurring Group EBITDA amounted to $7.4m profit and with the re-structuring process more or less complete and with an improving outlook for commodity prices, the Group is well placed to benefit from these developments.

Since the business changed its leadership, it has undergone a root and branch reform. Management has been actively scrutinising expenses across the Group from corporate to exploration and mine level. This rigorous review has been essential in order to stabilise our financial position and, more importantly, to build a secure foundation for future growth. This strategy will allow the Group to take advantage of the improving commodity market, especially for gold and nickel.

The restructuring plan has been both organisational and financial. Shareholders will be pleased to note that our corporate overheads are now the leanest they've ever been and that the all-in-sustaining costs (AISC) at Trojan and Freda Rebecca are both at or close to, historical all-time lows.

I'm particularly pleased with the benefits that have been achieved from adopting a more integrated and inclusive management approach. Executives, engineers, mining consultants and key management at all levels within the Group are working more closely than ever before to make us a most efficiently run business.

The Group has always had an impressive and valuable portfolio of exploration and mining assets. The individual value in use of either of its two operating mines in Zimbabwe is more than the current value of the Group. The reason why the AIM market has persistently undervalued the combined value of the Group is partly due to the fact that we operate in Zimbabwe where indigenisation is always a concern. Management is fully engaged with the mining authorities in Zimbabwe, DRC and South Africa. As someone who takes an active role to interact with government officials at a high level, I do not share these same concerns and hope that in time the perception of Asa's true value shall be recognised and that the Group will be able to change market sentiment in due course.

To demonstrate the confidence the board has in the Group's future, the board of directors has agreed to implement a shareholding plan for all directors and senior management. Details will be announced after the scheduled board meeting in September."

Reflecting on the last year, the global economy remained in a subdued state with demand for commodities slowing. This depressed commodity cycle added greater pressure to the Group's operations. With such adverse business conditions, the management team took a number of measures to raise revenue and reduce expenditure as well as implementing a reorganisation plan. This involved more clearly segmenting our operations of gold, nickel, copper, diamonds, agriculture and property interests; broadening the source of income; accelerating the flows of operation and production and implementing a strict cost saving plan to lower operational costs at all levels. These measures lay solid foundations for the future and strengthen the Group's ability to deal with adverse markets should they persist over the medium term.

At Trojan, we implemented a new mine plan, blending one third from the higher-grade massives with two thirds from the lower-grade ore section. While the mine's output was lower compared to the previous year, the new plan is slowly driving down C3 costs to a historically low level with a target of $5,000/t - $6,000/t. The way the Group reports its all-in sustaining costs has also been changed to bring improved clarity to its results. In previous years, Bindura has applied a notional formula to the average nickel price within its off-take agreement. However, the Group believes a more accurate measure is to calculate Trojan's actual realised nickel-in-concentrate price. The improvement in C1/C3 costs is a combination of this new, more accurate method of reporting, the new higher-blend plan and lower general operating costs. It is not purely due to traditional 'high-grading'. Importantly, BNC has carefully calculated the nickel ore it has extracted from the higher-grade massives to protect Trojan's life of mine.

The reduction in output was also partly due to a planned halt in production for one month to upgrade shaft winders and electrical power supply systems - one of a number of effective measures taken to improve the operations.

The refurbishment of Bindura's smelter is progressing well. The Group has been engaging with a number of engineers who are highly trained in technical smelter technology and have helped streamline our re-start programme, resulting in reductions in capex, more efficient processes and technical improvements.

We are also focusing on Trojan's re-deepening project that has been ongoing for the last five years. This development and production drilling is to prepare the way for mining in the next financial year and gives access to the ore body where grades are consistent or higher than those at the previous mining levels. The re-deepening project is expected to be complete within the next year.

Freda Rebecca exceeded target with 67,673 ounces at an average C3 cost of $1,076/oz on the back of a higher recovery rate of 84% and a better-than-average grade of 2.05g/t. Grade results for Q4 temporarily slipped due to an incident in February 2016, damaging a loader used for mining and obscuring access to the higher grade section of the resource. A replacement loader is due on site by the second quarter of the 2017 financial year and will allow us to resume normal production and capitalise on the much-improved gold price. Our target for all-in-sustaining average cost of gold is $950-$1,000/oz over the next financial year.

The conversion of Freda's gold resource to a JORC compliant reserve status was one of the highlights of the period. This encouraging result is important as it supports the medium-term plan for the mine.

Milling capacity has always held back Freda Rebecca as it falls short of its mining capacity. There has been a positive development to rectify this long-standing issue. New milling equipment that would normally require significant investment has been sourced within the Group. The additional milling capacity has allowed Freda Rebecca to set a new target for gold production for the next financial year of over 70,000 ounces.

In Zani Kodo, where we hold significant gold resources and exploration licenses, the Group has continued to pay the DRC government the necessary land fees to ensure they protect their mining rights. The area around Zani Kodo is a promising resource for which we have imminent plans. A feasibility report is also being prepared in order to validate the mining permits.

In Katanga where we have a joint venture on copper with one of the largest copper manufacturers in the world, Zhejiang Hailiang Company Limited, there are also meeting obligations to pay up all the appropriate exploration licenses as they reserve the right to mine in the future. These two mines are expected to contribute to the Group's profitability.

As it is with most mining operations, procurement is a significant cost centre at our mining operations and management has been exploring ways of bringing individual functions into a more efficient structure. Rather than each mine procure separately, the Group will have two distinct functions, Asa Services in Harare, Zimbabwe and Asa Procurement in Guangzhou. The implementation of centralised procurement can bring major cost savings, where our buying power is greater and unnecessary intermediate costs are eliminated.

Historically the Group's overhead levels have been unsustainably high with offices, consultants and personnel in many countries. The Group has achieved dramatic reductions at all levels through the closure of their offices in London and Kinshasa (DRC). The remaining offices in Harare, Hong Kong, Guangzhou and Johannesburg are also rationalising functions, moderating remuneration and eliminating unnecessary staffing.

In order to widen our income streams during a time of lower commodity prices, the Group is utilising its vast land resources to diversify into agriculture. The acquisition of the KEPL abattoir in South Africa has been completed and will add another link to this value chain. The required operational permits and licenses have been applied for. This new business is expected to generate fresh income and cash flow for the Group in the coming fiscal year.

In taking these measures, the Group is very aware of its obligations towards compliance and adhering to local rules and regulations. In order that it complies with these important requirements, including indigenisation laws in Zimbabwe, FRGM has already submitted its report to the respective ministry and is waiting on final approval. In the meantime, the Group has mandated a consultant to prepare the indigenisation plan for BNC. As a responsible multinational listed company, we respect the local culture and strictly comply with the local laws and regulations for the benefit of local communities.

We look to the future with optimism, managing our existing operations more efficiently and organising our many interests into distinct asset classes at Group level"

About Asa Resource's Strategic vision

Our strategic vision is to be a fully integrated pan-African commodity group, strengthening each commodity group through exploiting Asa Resource's wide portfolio of mining interests. We also continue to engage with trusted partners in many regions to help us exploit the true value of our assets.

The process of segmenting assets at Group level and integrating resources operationally is fundamental to both our short and long-term strategies. Over time we seek to shift our focus to having individual exposure in each of our key commodities including nickel, gold, copper and diamonds. Shareholders can have an interest in the whole Group or on a single-commodity basis. Our interests in agriculture and property will add valuable income during times of low commodity prices.

This strategy is already showing promise with significant efficiencies achieved through a transfer of skills at mine level and considerable efficiencies across our entire portfolio.

These developments would not be made possible without the commitment, versatility and expertise of management at all levels. This new vision has inspired us all within the Group to double our efforts to re-build Asa Resource as a strong and sustainable company.

Copies of the Group's Report & Accounts will be sent to shareholders shortly. For a copy of the full results please visit the company's website: http://www.asaukplc.com/

For further information contact [email protected]

London

Asa Resource Group plc.

One Fleet Place, London EC4M 7W

Yim Kwan, Finance Director

Tel: +44 (0) 203 696 5470

Hong Kong

Asa Resource Group plc.

Units 509-510, Level 5, Core E, Cyberport 3, 100 Cyberport Road, Hong Kong

Samuel Ng, Investment Manager

Tel: +852 25662638

Nominated Adviser and Joint Broker

SP Angel Corporate Finance LLP

Prince Frederick House, 35-39 Maddox Street, London W1S 2PP

John Mackay, Jeff Keating, Caroline Rowe

Tel: +44 (0) 20 3470 0470

Financial Adviser and Joint Broker

Cantor Fitzgerald Europe

1 Churchill Place, Canary Wharf, London E14 5RB

Stewart Dickson, Patrick Pittaway

Tel: +44 (0) 20 7894 7000

Gold

Freda Rebecca Gold Mine Limited in Zimbabwe

· JORC compliant indicated and inferred resource size - 1,707,000 ounces of contained gold at a grade of 2.42 g/t

· Ownership - Asa has an 85% stake

· Status - operational mine; restarted 2009

· FY2016 - produced 67,673 ounces (FY2015: 58,714 ounces), sold 67,672 ounces (FY2015: 57,799 ounces)

Zani Kodo gold project in DRC

· JORC compliant measured, indicated and inferred resource size - 2,972,502 ounces of contained gold at a grade of 2.43 g/t

· Ownership - joint venture in which Asa has an 80% stake.

· Status - exploration in progress

Maligreen Mining Company (PVT) Limited in Zimbabwe

· Resource size - internally estimated at 615,000 ounces of contained gold

· Ownership - Asa has a 50% stake

· Status - exploration prospect

Nickel

Bindura Nickel Corporation Limited (BNC) in Zimbabwe

· Ownership - Asa has a 74.7% stake

Entities 100% owned by BNC:

Trojan Mine Limited in Zimbabwe

· JORC compliant measured, indicated and inferred resource size - 1,050,555 tonnes of massive ores at a grade of 5.77% and 5,395,385 tonnes of disseminated ore at a grade of 0.83%

· Proved and probable reserves - 32,448 tonnes of contained nickel

· Status - operational mine; restarted in 2012 following a $23m restructuring and recapitalisation programme, after a four year care and maintenance period

· FY2016 production - 6,621 tonnes (FY2015: 7,306 tonnes) nickel in concentrate, sold 6,613 tonnes (FY2015: 7,352 tonnes) nickel in concentrate

· Smelter restart underway; will have capacity to treat BNC and third party concentrate

Shangani Project in Zimbabwe

· Measured, indicated and inferred resource size - 67,870 tonnes of contained nickel

· Status - mine on care and maintenance

Hunter's Road Project in Zimbabwe

· JORC compliant measured and indicated resource size - 200,404 tonnes of contained nickel

· Status - project on hold, funding options being considered

Diamonds

Klipspringer diamond mine in South Africa

· Measured, indicated and inferred resource size - Leopard Fissure - Gross 1,630,000 carats (1,150,000 carats attributable) of contained diamonds

· Resource information - Strike length 3,200m, depth 500m (drill indicated)

· Ownership - Asa has a 71.04% interest through 100% owned subsidiary, SouthernEra Diamonds Inc.

· Status - underground mine operations on care and maintenance whilst viability of restarting underground mining is being evaluated

· Diamond production from fine tailings (slimes) retreatment is taking place and coarse tailings retreatment to take place as planned

Société Minière de Bakwanga SARL (MIBA) diamond resource in DRC

· Resource size - still to be confirmed by exploration

· Ownership - joint venture in which Asa has a 20% stake

· Status - exploration prospect

Camafuca diamond project in Angola

· Inferred resource size - 23 million tonnes of contained diamonds

· Ownership - Asa has an 18% interest

· Status - exploration prospect

Copper

Société d'exploration Minière du Haut Katanga SARL (SEMHKAT) - Katanga copper concessions in DRC

· JORC compliant measured, indicated and inferred resource size - 210,058 tonnes of contained copper at a grade of 0.8%

· Status - exploration in progress

Muya SARL in DRC

· Established in terms of joint venture agreement with Zhejiang Hailiang Company Limited ("Hailiang"), the largest copper tube manufacturer in the world

· Ownership - Asa's stake in Muya is 38% following the fulfillment of contractual obligations by Hailiang under the JV agreement

· Holding 27 concessions under exploration

Agriculture

Bindura Estate Private Limited in Zimbabwe

· Total size of arable, irrigated land is 80 hectares

· The 5 different crops that are planted and have historically been a success in the area include potatoes, sweet peas, maize, beans, chilies and bananas. These also facilitate good crop rotation on the land

· Sweet peas are accredited to be exported to the EEC market

· Total area for livestock is 250 hectares

· The initial number of cattle is around 80

Asa Meat SA (Pty) in South Africa

· Acquired the abattoir business in April 2016

· Capacity to slaughter approximately 500 pigs and 50 cattle per day/per month

· Plan to integrate upstream with livestock farming and downstream with food processing for local and overseas market

CHAIRMAN'S LETTER & REPORT

On behalf of the Board of directors, I am pleased to present the results for Asa Resource Group plc. (the "Company" and together with its subsidiaries, "the Group", "us" or "we") in the 2016 annual report for the Group.

Overview

The Group has both mining and exploration interests in gold, nickel, copper and diamonds. It has added agriculture and property to its portfolio in the last year as part of diversifying its income stream. We continue to go through a process of streamlining all of our operations across our multi-commodity African business.

Strategic vision

We look to the future with a reasonable degree of optimism, managing our existing operations more efficiently and organizing our interests into distinct asset classes at Group level. Our strategic vision is to be a fully integrated pan-African commodity group, strengthening each commodity group through exploiting Asa Resource's wide portfolio of mining interests. We also continue to engage with trusted partners in many regions to help us exploit the true value of our assets.

The process of segmenting assets at Group level and integrating resources operationally is fundamental to both our short and long-term strategies. Over time we seek to shift our focus to having individual exposure in each of our key commodities including nickel, gold, copper and diamonds. Shareholders can have an interest in the whole Group or on a single-commodity basis. Our interests in agriculture and property will add valuable income during times of low commodity prices.

This strategy is already showing promise with significant efficiencies achieved through a transfer of skills at mine level and considerable efficiencies across our entire portfolio.

These developments would not be made possible without the commitment, versatility and expertise of management at all levels. This new vision has inspired us all within the Group to re-double our efforts to re-build Asa Resource as a strong and sustainable company.

Financial Highlights

· Group revenue decreased by a relatively contained 20.5% to $121.3m (2015: $152.3m) compared to the drop in market prices of 38% for average nickel price and 8% for average gold price.

· Exploration spend decreased by 42% to $3.7m (2015: $6.4m). This is in line with the group strategy to reduce spend during restructuring.

· Controllable, recurring Group EBITDA, excluding once off restructuring expenses and foreign exchange gains/losses, amounted to $7.4m profit (2015: $19.6m profit).

· Corporate expenses decrease to below $5.0m (2015: $7.0m) in keeping with the strategy of cost cutting and streamlining efficiencies across the Company.

· Net profit/loss went from $7.0m profit in 2015 fiscal year to $9.6m loss in 2016 fiscal year.

Operational Highlights

Freda Rebecca Gold Mine (FRGM)

· Gold sales of 67,672 ounces (2015: 57,799 ounces) for the year.

· Cash costs (C1) $943/oz (2015: $1,067/oz), all-in sustainable costs (C3) $1,076/oz

(2015: $1,259/oz) - these can be attributed to increase in ounces produced as well as improvement in production efficiency and constant cost control implementation.

· Recovery increased to 84% (2015: 79%).

Bindura Nickel Corporation (BNC)

· Nickel in concentrate sales of 6,613t (2015: 7,352t) for the year.

· Cash costs (C1) $5,978 /t (2015: $8,000/t), all-in sustainable costs (C3) $6,818 /t (2015: $8,558/t) due to tighter cost control measures.

· Recovery marginally increased to 88% (2015: 84%).

Klipspringer Diamond Mine

· Diamond sales of $1.2m on 100,409 carats (2015: $1.4m on 95,062 carats) for the year.

· The average selling price of fine diamonds retreated from the slime tailings is $19.

· The costs of retreating the slime tailings are $8/ct (2015: $8/ct).

Operational Review

Reflecting on the last year, the global economy remained in a subdued state with demand for commodities slowing. This depressed commodity cycle added greater pressure to the Group's operations. With such adverse business conditions, the management team took a number of measures to raise revenue and reduce expenditure as well as implementing a reorganization plan. This involved more clearly segmenting our operations of gold, nickel, copper, diamonds, agriculture and property interests; broadening the source of income; accelerating the flows of operation and production and implementing a strict cost saving plan to lower operational costs at all levels. These measures will lay solid foundations for the future and strengthen the Group's ability to deal with adverse markets should they persist over the medium term.

In order to broaden our income streams during a time of lower commodity prices, the Group is utilizing its vast land resources to diversify into agriculture. The acquisition of the KEPL abattoir in South Africa has been completed and will add another link to this value chain. The required operational permits and licenses have been applied for. This new business is expected to generate fresh income and cash flow for the Group in the coming fiscal year.

In Zani Kodo where we hold significant gold resources and exploration licenses, the Group has continued to pay the DRC government the necessary land fees to ensure they protect all their mining rights. The area around Zani Kodo is a promising resource for which we have imminent plans. A feasibility report is also being prepared in order to validate the mining permits. In Katanga where we have a joint venture on copper with Hailiang, they also are meeting obligations to pay up all the appropriate exploration licenses as they reserve the right to mine in the future. These two mines are expected to contribute to the Group's profitability.

As it is with most mining operations, procurement is a significant cost centre at our mining operations and management has been exploring ways of bringing individual functions into a more efficient structure. Rather than each mine procure separately, the Group will have two distinct functions, Asa Services in Harare and Asa Procurement in Guangzhou. The implementation of centralized procurement can bring major cost savings, where our buying power is greater and unnecessary intermediate costs are eliminated.

The refurbish of Bindura's smelter is progressing well. The Group has been engaging with a number of engineers who are highly trained in technical smelter technology and have helped streamline our re-start programme, resulting in reductions in capex, more efficient processes and technical improvements.

Historically the Group's overhead levels have been unsustainably high with offices, consultants and personnel in many countries. The Group has achieved dramatic reductions at all levels through the closure of their offices in London, Kinshasa and Likas. The remaining offices in Harare, Hong Kong, Guangzhou and Johannesburg are also rationalizing functions, moderating remuneration and eliminating unnecessary staffing.

In taking these measures, the Group is very aware of its obligations towards compliance and adhering to local rules and regulations. In order that it complies with these important requirements including indigenization laws in Zimbabwe, FRGM has already submitted its report to the respective minister and is waiting on final approval. In the meantime, the Group has mandated a consultant to prepare the indigenization plan for BNC. As a responsible multinational listed company, we respect the local culture and strictly comply with the local laws and regulations for the benefit of local communities.

Post Period Events

· 3 June 2016 - the Company appointed SP Angel Corporate Finance LLP ("SP Angel") as Asa's new nominated adviser and joint broker, with immediate effect. The Company appointed Niall Henry as a new independent non-executive director to the Board, with immediate effect.

· 12 May 2016 - at an extraordinary general meeting, held on 12th May 2016, the Company appointed the new auditors of the Company, Ernst & Young LLP and authorised the directors to fix the auditors remuneration. At the same meeting, the directors were granted authority to communicate with shareholders electronically for the purpose of Companies Act 2006 communications. 

· 14 April 2016 - Asa acquired the assets of Kanhym Estates Pty Ltd, the KEPL abattoir in South Africa, through an investment company in which Asa has 62% shares. The transaction for $411,000 was carried out as part of the Group's first steps towards investment diversification and in line with increasing the value chain together with our agricultural operations. The abattoir commenced trading as Asa Meat (SA) Pty Ltd on 1 July 2016.

· April 2016 - BNC successfully renewed its existing $7m working capital facility with a local financial institution. The facility, which was going to expire in May 2016, will now expire in May 2017. Another working capital facility of $3m was successfully negotiated as bridging finance for BNC. The facility has a tenure of 12 months and is secured by BNC's financial assets (note 9).

Outlook

In line with industry expectations, we see a gradual recovery in global economic conditions, albeit at a very slow pace. In the short term, we don't rule out the possibility of continued volatility in commodity markets before a full recovery can become sustainable. Following a slump in demand of commodities, the Group continues to seek out external opportunities to extend the business, optimize internal production efficiency and create value for shareholders.

In the absence of an immediate return to a more stable commodity environment, we will look to expand our business in associated sectors defined in our strategy and mitigate the risk of overdependence on one commodity, be it gold or nickel. This means the strategy of diversification in developing new opportunities will prevail. A good example of this strategy is at Zani Kodo where, in 2016, the Group will implement an affordable gravity-flotation operation where it has 2.9m ounces JORC resources. By using its vast land bank and acquiring a meat processing operation, the Group is making underutilized assets income producing. Both of these new operations should be revenue generating and contributing to profit in the next 12 months.

In an unpredictable environment, management needs to be constantly seeking ongoing efficiencies and reducing operational costs to mitigate the risks of low commodity prices. This includes enhancing cost and risk management expertise at Group and operational levels. Since BNC and FRGM are located in the same area, there has been improved dialogue and a pooling of resources to avoid duplication in certain administrative functions.

Bindura's smelter is scheduled to restart in the last quarter of FY2016 and will further reduce its all-in sustaining costs. Our Klipspringer Diamond mine in South Africa is targeted to break-even for the coming fiscal year.

This major re-structuring and focus on cost reduction means the Group will be ready to seize opportunities afforded by improvements in the world economy. It will also put us in a stronger position to deal with the various challenges that a diversified commodities company, such as Asa Resource, continuously faces. Competitive advantage and pursuing a truly integrated business model will bring more stable growth and greater long-term value to shareholders.

CORPORATE GOVERNANCE

Board of directors AS at 31 March 2016

Executive Directors:

YAT HOI NING* (60)

Executive Chairman

Yat Hoi Ning joined the Board in June 2012. He is the chairman of Hoi Mor Industrial (Group) Limited, China International Mining Group Corporation, Hong Kong Mining Exchange Company Limited and MBMI Resources Inc. Yat Hoi Ning also sat as the vice chairman of China Non-ferrous Metals Council. He has more than 21 years' experience in the trading, investing and managing of non-ferrous and precious metals businesses.

He is the founder of a number of mining companies including Congo International Mining Corporation SARL, African PGM Processing SARL and Fareast Nickel Mining Corporation.

Yat Hoi is instrumental in Asa's operational progress through his wealth of knowledge, experience and advice. These qualities, along with his deep understanding of the Company and the jurisdictions in which Asa operates will greatly assist in delivering maximum value from these assets during a particularly challenging time for the Company.

* Yat Hoi was appointed chairman on 8 June 2015, and confirmed by the Board as executive chairman on 9 June 2015. As of 9 June 2015 he is also now a member of the Nominations and Remuneration Committee.

YIM KWAN* (61)

Finance Director

Yim Kwan joined Asa Resource Group plc as finance director in October 2013. Prior to that, Yim held a number of directorships and corporate governance roles, including director and Audit Committee chair of Kam & Ronson Media Group as well as CFO and director of MBMI Resources Inc., both

TSX-V listed companies.

An accomplished and certified accounting, audit and tax specialist, Yim has over 15 years of experience gained in executive management positions in accounting firms, private companies and public corporations in Canada, Hong Kong, Africa and the United Kingdom, bringing a multi-cultural dimension to the Company. He has a breadth of professional qualifications including CA, CPA and a Bachelor in Business Administration earned in universities in Canada, Hong Kong and the United States.

Yim has played key roles in a number of major Mergers & Acquisition transactions, providing valuable corporate advisory services on international tax planning and compliance. With his extensive exposure in multi-national business environments, and in-depth knowledge in foreign exchange risk management and hedging strategy implementation, Yim plays a central role in developing the Company's plans for future growth.

* Yim is the chairman of the Corporate Social Responsibility and Safety, Health & Environment Committee.

Non-Executive Directors:

DR SCOTT MORRISON* (59)

Senior Independent Non-executive Director

Dr Scott Morrison has a BSc (Geology) and a PhD (Metallurgical Engineering) and over 35 years' experience in the mining, extractive metallurgy, and manufacturing sectors. Much of his career has involved leadership positions with staff complements of between 50 to 5,000 people. He was a board member and retained advisor to the management of Metalor Technologies International SA, a world leader in the refining of precious metals and the manufacture of a variety of value-added products. He served as chairman of the Board between 2013 and 2015 and as CEO from 2004 to 2013. Scott resigned as a board member of Metalor in Dec 2015 and was a retained advisor until end of April 2016. He spent 20 years with SGS SA, a world leader in inspection testing and verification, and has had country and mineral/metals sectorial leadership assignments in the USA, Canada, Peru, Bolivia and Ghana.

Scott brings great value to the Company with his in-depth experience in leading multi-cultural international organisations.

* Scott was appointed as an independent non-executive director at an extraordinary general meeting held on 9 June 2015 and was later confirmed by the Board as senior independent non-executive director. He is also a member of the Audit Committee and Nominations and Remuneration Committee.

YUAN CHING HU (42)

Non-executive Director

Yuan Ching Hu joined the Board in July 2012. He was born in 1974 in Taipei, Taiwan. He studied Architecture and Environment Design, graduating from Taiwan Shu Te University in 2000. He also has a Fiduciary Broker License, a Marketing Immovable Property License and is a qualified professional financial supervisor.

Between 2001 and 2006 he was general manager of Taiwan A-Life Company, where he was made an executive director in 2005 and in 2006 he established Taiyou Investment Company Limited in Hong Kong.

OLIVIER BARBEAU* (42)

Non-executive Director

Olivier Barbeau is registered as a chartered accountant in South Africa and Mauritius and has extensive advisory and corporate finance experience. He is the managing director of Moore Stephens in Johannesburg, and a member of the National Executive Committee. Previous executive positions include chief operating officer of BDO South Africa as well as managing partner of the Moore Stephens South African office. Olivier is a member of the Institute of Directors as well as a fellow of the Mauritius Institute of Directors.

Olivier's extensive experience in the mining sector has seen him initiate, develop and implement merger and acquisition transactions for both listed and unlisted companies across the African continent. His Mauritian interests have equipped him to advise several multinational businesses on their offshore structures and strategies.

* Olivier was appointed as a non-executive director at an extraordinary general meeting on 9 June 2015. He is the chairman of the Audit Committee.

BRIAN CHING FUNG HUNG* (32)

Non-executive Director

Brian Ching Fung Hung is an executive director of Jimei International Entertainment Group Limited and China Bio Cassava Holdings Limited; both companies are listed on the Hong Kong Stock Exchange. Brian also worked as the financial controller of the Jimei Group and worked previously as an auditor for Deloitte Touche Tohmatsu and Grant Thornton. Brian obtained a Bachelor Degree in Commerce from Macquarie University in Australia in 2007 and he is a full member of CPA Australia.

Brian's financial management experience enables him to make a significant contribution to the Board by monitoring and providing oversight to the business activities of the Company.

* Brian was appointed as a non-executive director on 29 September 2015 at the annual general meeting. He is the chairman of the Nominations and Remuneration Committee and a member of the Audit Committee.

AMILHA YOUNG* (53)

General Counsel and Company Secretary

* Amilha was appointed on 1 June 2015.

DIRECTORS' REPORT

The directors present their report and financial statements for the year ended 31 March 2016.

Principal Activities

The Group's main activities are exploration, development and production of gold, nickel, copper and diamonds. Further information concerning the activities of the Group and its future prospects are contained in the Chairman's Letter and Report and the Business Sector.

Business Review

The Group loss before tax was $4.5m (2015: $14.9m profit). The loss for the year attributable to shareholders of the parent Company was $8.8m (2015: $3.6m profit). The directors do not recommend the payment of a dividend on ordinary shares, as was the case in the previous financial year too. As required by the Companies Act 2006, the Company must provide a fair review of the development and performance of the Group during the year ended 31 March 2016, its financial position at the end of the year and likely future developments in the Group's business. The information, which satisfies these requirements, is to be found in the Chairman's Letter and Report, the Business Sector and the Financial Review.

Key Performance Indicators

Management monitors the Group's liquidity requirement on a weekly basis. Financial and operational performance is measured regularly and operational updates are published quarterly.

Key performance indicators are specific to each area of the business:

Freda Rebecca Gold Mine

Key performance indicators include tonnes mined and processed, grade of material delivered to plant, gold recovery, operating costs per ounce produced, ounces of gold produced, financial performance (including revenue, profit and cost targets) and management of assets, health, safety and environmental incidents including lost-time events due to injury. Refer to the Business Sector.

Bindura Nickel Corporation

Key performance indicators in respect of the Trojan Mine include tonnes mined and processed, grade of nickel delivered to the plant, nickel recovery, operating costs per tonnes, tonnes of nickel in concentrate within specifications, both in % MgO and moisture content. Other measures considered are financial performance (including revenue, profit and cost targets) and management of assets, health, safety and environmental incidents including lost time events due to injury. The remainder of the BNC operations remain on care and maintenance, and the key performance areas include maintenance and the operating integrity of all the assets and the financial performance against the care and maintenance budget. Refer to the Business Sector.

Exploration projects

Key performance indicators include the addition of resource ounces in the case of Zani Kodo and the identification of drill targets at Semhkat. Refer to the Business Sector.

Changes in Share Capital

Details of changes in the share capital during the year are set out in note 27 to the financial statements.

Creditor Payment Policy

Each operating company in the Group is responsible for agreeing the terms of transactions, including payment terms, with suppliers and, provided that suppliers perform in accordance with the agreed terms, it is the Group's policy that payment is made accordingly. Trade creditors of the Group at 31 March 2016 represented 58 days (2015: 61 days) of annual purchases, including capital expenditure.

Subsequent Events

The post fiscal year events are described in note 36 to the financial statements.

Directors

The directors of the Company as at 31 March 2016 were as follows:

Stuart Morris and Johan Botha resigned as non-executive directors of the Company on 5 June 2015.

Yat Hoi Ning was appointed chairman on 8 June 2015, and confirmed by the Board as Executive chairman on 9 June 2015. As of 9 June 2015 he is a member of the Nominations and Remuneration Committee.

Mark Wellesley-Wood, Dr Scott Morrison, Anne-Marie Chidzero and Olivier Barbeau were appointed as non-executive directors of the Company at an extraordinary general meeting on 9 June 2015.

Dr Scott Morrison was later confirmed as senior independent non-executive director. Mark Wellesley-Wood retired from the Board on 29 September 2015 and Anne-Marie Chidzero resigned on 1 October 2015 to pursue personal interests.

Yuan Ching Hu was retired by rotation and being eligible, offered himself for re-election as a non-executive director at the annual general meeting of the Company held on 29 September 2015. He was re-elected as a non-executive director.

Ngoni Kudenga and Herbert Mashanyare were appointed as non-executive directors after the last annual general meeting and were removed as directors of the Company by shareholder vote at an extraordinary general meeting held on 9 June 2015.

Following changes in the Board, Kalaa Mpinga was removed from his position as Chief Executive Officer, and he departed from the Company on 9 June 2015 when he resigned as a director.

Brian Ching Fung Hung was appointed as a non-executive director at the annual general meeting held on 29 September 2015.

The interests of the non-executive and executive directors and their remuneration are described in the Directors' Remuneration Report.

Holdings

The share register records that the following shareholders held 3% or more of the issued share capital of the Company at 31 March 2016:

* Held through the following holders: Hong Kong Hongan International Investment Company Limited, Feng Luming, Zhu Aihua, Rich Pro Investments Limited, HSBC Client Holdings Nominee (UK) Limited (see below)

** Excludes 22,383,497 shares held on behalf of Zhejiang Hailiang Company Limited

International Financial Reporting Standards

The Group has prepared its consolidated accounts for the year ended 31 March 2016 in accordance with International Financial Reporting Standards (IFRS) as endorsed by the European Union.

Directors' and Officers' Liability Insurance

The Company has purchased directors' and officers' liability insurance which remains in place at the date of this report.

Political Contributions and Charitable Donations

Total contributions of $316,745 (2015: $128,483) were made during the year, $192,881 (2015: $nil) as political contributions and $123,864 (2015: $128,483) as charitable donations.

Disclosure of Information to Auditors

The directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditors are unaware and each director has 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 Company's auditors are aware of that information.

Auditors

In accordance with Section 418 of the Companies Act 2006, a resolution to appoint Ernst & Young LLP as the Company's auditors was passed at a general meeting held on 12 May 2016.

By order of the Board

Amilha Young

Group Company Secretary

18 July 2016

DIRECTORS' REMUNERATION REPORT

Nominations and Remuneration Committee

The Nominations and Remuneration Committee reviews the performance of the executive directors and sets and reviews the scale, structure and basis of their remuneration and the terms of their service agreements, paying due regard to the interests of shareholders as a whole and the performance of the Company.

In determining the remuneration of executive directors, the Nominations and Remuneration Committee seeks to enable the Company to attract and retain executives of the highest calibre. The Committee also makes recommendations to the Board concerning the allocation of share options to employees. No director is permitted to participate in discussions or decisions concerning his own remuneration.

During the current year the Committee comprised non-executive directors Johan Botha (chairman) and Stuart Morris. Following the changes in the Board, the Remuneration Committee changed, now comprising of Dr Scott Morrison as a member and Brian Ching Fung Hung as chairman. Executive chairman, Yat Hoi Ning, also serves on the Nominations and Remuneration Committee.

Remuneration Policy

The policy on directors' remuneration is that the overall remuneration package should be sufficiently competitive to attract and retain individuals of a quality capable of achieving the Group's objectives.

The remuneration policy is designed such that individuals are remunerated on a basis that is appropriate to their position, experience and value to the Company.

The Nominations and Remuneration Committee determines the contract terms, basic salary and other remuneration for each of the executive directors, including performance related share options, bonuses, pension rights and any compensation payments.

Executive Remuneration Package

The details of individual components of the remuneration package and service and employment contracts are discussed below.

Basic salary and benefits

The policy is to review salary and benefits annually against competitive market data and analysis, and adjust accordingly.

Bonus scheme

There is no formal bonus scheme in place. Bonus awards in respect of the year ended 31 March 2016 are set out in this report.

Share Options

The Company has options outstanding under a replacement scheme, which was approved by shareholders at the Company's annual general meeting on 31 July 2007 (2007 Scheme). Details of option awards made under these schemes are detailed in note 33.

2007 Scheme

The 2007 Scheme allows for awards of both tax approved options (approved options) to be made to employees resident in the United Kingdom and unapproved options (unapproved options), to be made to both resident and non-resident employees. The Company's policy on the granting of share options is to make such awards that are necessary to recruit and retain executives. Details of option awards made under this scheme are detailed in note 33.

The Company has operated this scheme since December 2007 where options may be granted to full-time employees and directors of the Company or any subsidiary of the Company. The overall limit for options granted under this scheme and any other employees' share scheme adopted by the Company is, in any rolling 10-year period, 10% of the issued ordinary share capital (including treasury shares) of the Company for the time being plus 8,100,000 ordinary shares. There is an individual limit of a maximum of ordinary shares to the value of £30,000 in respect of approved options.

Options may be granted, when the Nominations and Remuneration Committee determines, within 42 days of the announcement by the Company of its full or interim results. Options may be granted outside the 42-day period if the Remuneration Committee considers there to be exceptional circumstances. Options must be granted subject to performance conditions being satisfied. The performance conditions must be objective and, save where the Remuneration Committee determines there to be exceptional circumstances, the performance conditions must relate to the overall financial performance of the Company or the market value of ordinary shares over a period of at least three years. The performance conditions can be waived or amended by the Remuneration Committee if it determines that a change of circumstances means that the performance conditions cannot reasonably be met. No consideration is payable on the grant of an option and no option may be granted after 31 July 2017.

The Remuneration Committee determines the exercise price before the options are granted which cannot be less than the market value of the shares on the date of grant.

The options can be exercised only on or after the third anniversary of the date of grant provided the performance conditions have been satisfied or waived by the Remuneration Committee. The options lapse if not exercised by the 10th anniversary of the grant.

These options lapse when the option holder ceases to be an eligible employee. In the case of death, a participant's personal representatives may exercise his/her options within 12 months after the date of death. Where an option holder ceases to be an employee by reason of injury, disability, redundancy, the Company that employs the option holder ceasing to be a subsidiary of the Company, retirement, pregnancy or in any other circumstances determined by the Remuneration Committee, the options may be exercised within six months of the termination of employment or such longer period as may be determined by the Remuneration Committee.

Share incentives

The Share Incentive Scheme was approved by shareholders at the Company's annual general meeting on 31 July 2007. The Share Incentive Scheme is designed to complement the Share Option Scheme to facilitate awards to selected executives and managers. The Share Incentive Scheme permits the award of any one or a combination of the following incentives:

• the sale of ordinary shares on deferred payment terms;

• share awards as part of a bonus scheme by way of nil cost options in consideration of cash bonuses forgone on terms that would be determined by the Remuneration Committee of the Company; and

• the issue of share appreciation rights either by the Company or EBT (as defined below).

The Company has also adopted an Employees' Benefit Trust (EBT) which operates in conjunction with the Share Option Scheme and Share Incentive Scheme. The EBT has not yet been utilised for this purpose and there have been no awards under the Share Incentive Scheme since it was approved by shareholders.

Pensions

The Company does not operate a pension scheme for executive directors but does, according to the director's preference, contribute to the personal pension plan of each executive director, or pays cash in lieu of such contributions up to a specified maximum of 12.5% of salary. No pension contributions are made in respect of non-executive directors.

Fees

The fees for non-executive directors are determined by the Board, having taken independent expert advice on appropriate levels, and are reviewed on an annual basis.

Service contracts

The service and employment contracts of the executive directors are not of a fixed duration and therefore have no unexpired terms, but continuation in office as a director is subject to re-election by shareholders as required under the Company's Articles of Association. The Company's policy is for executive directors to have service and employment contracts with provision for termination of no longer than 12 months' notice.

The non-executive directors do not have employment contracts. Letters of appointment provide for termination of the appointment with up to three months' notice by either party.

Details of the contracts or appointment dates of the directors who held office in the course of the current year are as follows:

Directors' Remuneration

Details of the remuneration of the directors who were in office during the current and/or prior years are as follows:

1 No bonuses were awarded to any directors in respect of the year ended 31 March 2016

2 Benefits in kind relate to medical insurance and pension contributions for Yim Kwan, and Kalaa Mpinga, pension contributions for Yat Hoi Ning

3 Yat Hoi Ning was appointed chairman on 9 June 2015 with an increase in fees

4 Dr Scott Morrison and Olivier Barbeau were both appointed as non-executive directors and

committee members on 9 June 2015

5 Yuan Ching Hu fees changed from 1 October 2015

6 Brian Ching Fung Hung was appointed as non-executive director and committee member on 30

September 2015

7 Mark Wellesley-Wood and Anne-Marie Chidzero were appointed as non-executive directors and committee members on 9 June 2105. Mark Wellesley-Wood retired from the Board on 29 September 2015. Anne-Marie Chidzero resigned from the Board on 1 October 2015.

 8 Kalaa Mpinga departed from the Company on 9 June 2015

9 Herbert Mashanyare and Ngoni Kudenga were not elected to the Board on 9 June 2015

10 Stuart Morris and Johan Botha resigned from the Board on 5 June 2015

11 Donald McAlister did not serve as a director during the current financial year. He is a former director

Contributions in lieu of directors' pensions were as follows:

Directors' share interests

Details of the share interests or beneficial interests of the directors who were in office during the current year or prior year are as follows:

1 Includes 275,338,243 shares held by China International Mining Group Corporation, a company in

which Yat Hoi Ning has an interest

² Related to Kalaa Mpinga

3 Kalaa Mpinga controls the voting rights in Palanka Trust

4 Held through non-disclosing bank or private client broker

5 In addition to the shares in Asa Resource Group plc., Kalaa Mpinga also holds 666,667 shares in BNC. This equates to 0.05% in BNC

Directors' share options

Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the Company granted to or held by the directors. Details of the interests in shares held under option of the directors in office during the current and/or prior years are shown below:

1 Exercise price is the weighted average of all share options held based on the price at the grant date

2 Granted on the date of appointment as a director

No share options were exercised during the current or prior year.

The intrinsic values of all options which have vested during the year were nil (2015: Nil).

No options have been awarded to directors between the year-end and the signing of these accounts.

The market price of the Company's shares on 31 March 2016 was 0.675 pence (2015: 1.8 pence) per ordinary share and the highest and lowest share prices during the year were 1.790 pence (2015: 4.09 pence) and 0.350 pence (2015: 1.15 pence) respectively.

The agreements covering directors' options are available for inspection at the Company's registered office: One Fleet Place, London, EC4M 7WS, United Kingdom. The Company's register of directors' interests (which is also open to inspection) contains full details of the directors' shareholdings and options to subscribe.

Signed on behalf of the Board:

YIM KWAN

Finance Director

18 July 2016

BUSINESS SECTOR

Gold Strategy

Asa Group is always looking ahead - to better ensure its future success, it is embarking on a comprehensive gold strategy. One of the primary aims of the strategy is to consolidate all gold-mining and exploration assets under one subsidiary company within the Group. This is part of a wider, long-term goal to segment its assets by commodity in a more formal way.

This step will lead to the horizontal and vertical integration of its operations, which will help it to be more efficient and reduce operating costs. To this end, management has been working hard at streamlining mining operations by allowing operational staff to work more closely with the group executive.

The Group has impressive gold-mining and exploration assets in both Zimbabwe and the DRC. These assets would dwarf the current combined value of the Group if they were valued independently and on a pure book-value basis. In order to unlock the true value of these assets, Asa Group is exploring the possibility of listing a separate gold subsidiary, Asa Gold. This plan is part of the Group's constant drive to increase shareholder value. It is also based on the fact that some investors discount multi-commodity miners, since they do not offer exposure to one metal.

Under Asa gold, revenue generated by operating mines, such as Freda Rebecca in Zimbabwe, will be used to fund gold resource development and mining activities within the Group. Management, technical and operating skills within the new gold company will be shared and used across the subsidiary's operations.

Freda Rebecca gold mine is the single largest gold-producing mine in Zimbabwe and the mine has plans to increase it's output significantly. The mine is now generating strong cash flow, as a result of the close working relationship between Asa's group executive and mine management, as well as the comparatively stable gold price. Freda Rebecca's solid performance represents a turnaround for the operation, which previously delivered inconsistent grades and output due to underinvestment. With the mine's investment programme being prioritised, its performance is expected to improve further in the medium term.

The Company has also been actively exploring new gold-mining relationships within Zimbabwe. The near-term strategy is to aggressively pursue joint venture opportunities with neighbouring mines in order to fully utilize the processing-plant capacity at Freda Rebecca.

The current processing capacity is approximately 1.2mt per year, while mining capacity is around 1.8mt per year. Processing capacity can be increased significantly by using some of the idle assets within the Group. The additional milling capacity will support Freda Rebecca's new plans to grow the output and process feed from neighbouring mines. This will all drive down C3 costs and increase efficiencies and income.

In terms of new gold exploration ventures, the Group will renew its focus on the promising Zani Kodo project in the next financial year, with a view to commence trial mining and a pilot gravity plant for gold production within the year. The release of the first exploration results marked a promising new phase for the Company's future and further exploration drilling plans were given only a slightly lower priority while management stabilised operations and commodity prices were low. The Group's cost base has been substantially reduced, which enables it to bring the project to fruition.

Performance overview

Freda Rebecca will continue its upward path in this financial year as the Group has overcome most of the challenges at the mine. There is good reason to believe that C1/C3 costs will gradually decline as gold production increases steadily.

Management at all levels continues to focus on increasing mill throughput, investing in the plant, improving plant efficiencies and managing costs to ensure the operation remains competitive, even if the gold price weakens.

Operational performance

Freda Rebecca exceeded target production by delivering 67,673 ounces in this financial year. This marked improvement on the previous year's production of 57,799 ounces was due to a higher recovery rate of 84% and a better-than-average grade of 2.05g/t. The mine achieved its full milling capacity of 1.2mt throughput of ore.

The improved operational performance was made possible by the installation of a secondary crushing unit at a cost of $1m. The secondary crusher helped increase the tonnes of ore throughput from 80t to 88t per hour.

The Freda Rebecca team recognises the need for mining grades to be consistent. It excelled by achieving an improved grade of 2g/t or higher throughout the year. To ensure that this performance is maintained, evaluation drilling was carried out, which confirmed that the ore body can support feed grades of about 2g/t in the near term and a life of mine grade of about 1.8g/t.

Grade results for Q4 temporarily slipped below 2g/t due to an ore rush incident in February 2016. The event damaged one of the four loaders used for mining and obscured access to the higher-grade section of the resource. Lower than plan grade ore from the stockpile was blended to supplement Plant feed. However, access was restored, also a replacement loader will be on mine site by the beginning of the second quarter of the 2017 financial year.

Other important developments include the improvement of leach-tank availability at Freda Rebecca, which was done by rebuilding and changing its drive mechanism. To improve classification, the milling circuit has also been modified to include a thickener, smaller diameter and efficient cyclones. These improvements will help sustain gold recoveries for the life of the mine.

Power outages often occur in an unscheduled manner in Zimbabwe. Since this affected throughput at the operation, the mine procured a transformer for the main power utility substation. This extended the main power utility transformer bank capacity and provided dedicated power supply with minimal interruption to the mine.

Production highlights include a 15% decline in average C1 cash costs to $943/oz. All-in sustaining costs declined by $183/oz to $1,076/oz, as a result of lower labour costs. Freda Rebecca did not retrench staff during the operating period, but negotiated a 25% decrease in employees' salaries. Despite this reduction, employees remain motivated as a new bonus scheme has been introduced to encourage them to achieve the performance targets set by management.

Finally, the conversion of the Group's gold resource to a JORC compliant reserve status was one of the great highlights of the period. This encouraging result is important as it supports the medium-term plan for the mine.

Outlook

In the next financial year, milling capacity will be increased significantly at Freda Rebecca through the additional mills from within the Group.

The procurement of milling equipment would normally require significant investment, but sourcing the mills internally has brought about a major capital saving and will allow the Group to bring the new milling capacity online without delay.

The additional milling capacity has allowed the Company to set target for gold production for the next financial year to better than 70,000 ounces.

Zani Kodo exploration project

The Zani Kodo joint venture project did not undertake further resource development during the past financial year as the Group concentrated on restructuring and improving the efficiency of operations.

Only a small portion of the Zani Kodo joint venture project has been drilled, but the established JORC-compliant measured resource of 2.975m ounces is promising. The project is located in the DRC's Orientale Province, known for its rich mineralised zone.

The immediate objective at Zani Kodo is to start trial mining and install a pilot gravity plant to mine the near-surface gold resource. The plant is expected to be installed and commissioned by the second half of this financial year and the first year's production target is 10,000 ounces. The trial mining and pilot gravity plant will provide the Group with information on cost and technical matters that will inform the upscaling of production in future. This is subject to exploration results.

The Group's joint venture partner is the state-owned mining company SOKIMO. SOKIMO holds a 20% stake in MIZAKO SARL, the joint venture operating company for Zani Kodo, and Asa Resource Group plc. holds the remaining 80% stake, as well as the mining licenses. Prior to the MIZAKO joint venture, Zani Kodo was owned by Mwana Africa Congo Gold SARL. 

Gold Resources

The effective date for the JORC compliant Freda Rebecca resources estimate is 31 March 2016

The effective date for the Zani Kodo resources statement is September 2013

Nickel Strategy

The Group is in the final stages of radically overhauling BNC's operations and Trojan's cost base.

Trojan has moved from a high volume/low grade mining strategy to a low volume/high grade strategy in the past financial year and this change, along with a host of cost-saving initiatives, has been transformative for the mine. The cost-saving initiatives that have been implemented include more efficient equipment usage, the optimising of shift cycles to reduce labour costs, and outsourcing the Company's drilling to more competitive contractors.

All of these measures have resulted in achieving higher production volumes, improved head grades and a rapid reduction of all-in sustaining costs. Importantly, the Company has carefully calculated the nickel ore it has extracted from the higher-grade massives to protect Trojan's life of mine.

The Group initially implemented this strategy to ensure that the mine remains competitive when the nickel price is weak, but many of the improvements that we have made will have a long-term positive effect on the operation's performance.

It's important that shareholders appreciate Trojan's unique ability to swiftly adapt the mining ratio of the operation's higher-grade and lower-grade ore bodies to respond to changes in the nickel price. As the mine has both higher-grade massives and lower-grade disseminated ore, management can change the blending ratios of mining grades from quarter to quarter to ensure that the operation remains profitable when the nickel price weakens. The Company will also adapt this strategy for maximum benefit when the nickel price strengthens again.

The way the Group reports its all-in sustaining C3 costs has also been changed to bring improved clarity to its results. In previous years, Bindura has applied a notional formula to the average nickel price within its off-take agreement. However, the Group believes a more accurate measure is to calculate Trojan's actual realised nickel-in-concentrate price. The dramatic improvement in C1/C3 costs is a combination of this new more accurate method of reporting, the new higher-blend plan and lower general operating costs. It is not purely due to traditional 'high-grading'.

It has been a long-standing ambition of our Group to re-start BNC's smelter. The intention is to complete the ongoing refurbishment of the smelter in the next six months and to have it fully operational in the beginning of the following financial year (commencing April 2017), nickel price dependent.

The budget for the refurbishment of the smelter is expected to come in below its estimate of $26m and this was financed in part by the $20m bond that BNC raised in the previous financial year.

In order for BNC to achieve significant benefits from the smelter re-start, nickel prices would need to improve from their current range of $8,500-$9,000 and the Company would have to secure third-party concentrate from neighbouring mines.

The Trojan mine will supply about 55% of the smelter's capacity of 150,000t of nickel concentrate per annum. The Group is in discussions with several third-party tolling customers regarding opportunities to acquire additional concentrate and is reasonably confident about negotiations to date.

BNC's smelter will produce leach alloy, a purer form of nickel, which will significantly increase the current level of payability. BNC currently transports its concentrate from Bindura, Zimbabwe, to Durban, South Africa, for export, but once the smelter is in full production the savings on transport will be significant.

Longer-term, Bindura Smelter Refinery's (BSR) strategy is to fully integrate the Trojan mine, Bindura smelter and refinery once again. When the nickel complex is fully operational, BSR can produce nickel sulphate and nickel cathode that achieves a higher payability on nickel price and maintain lower transport costs. The global market for nickel sulphate as a product is far greater than it is for nickel concentrate, with Chinese demand particularly strong. When operating at optimum capacity, the BSR complex is a world-class asset capable of generating strong cash flows.

Traditionally, the primary industrial uses of nickel sulphate include electroplating, electrolysis plating and battery cathodes. However, another major development is demand from the auto industry, which is set to rise as much as threefold in five years as output of electric and hybrid cars gathers pace.

Meanwhile, the new strategy uniquely positions the Group to manage its overheads and protect Trojan's life of mine while meeting its target grades and remaining profitable.

Operational performance

In FY2016 production decreased to 6,621t from 7,306t in the previous financial year. This reduction was due to a halt in production for one month to upgrade shaft winders and electrical power supply systems - one of a number of effective measures taken to improve the operations.

In the second half of the year, a new mining plan was implemented and cost-saving initiatives introduced to dramatically drive down C1/C3 costs and maintain mining grades.

The new mining plan was carefully reworked, blending one third from the higher-grade massives (4-6%) and two thirds from the lower-grade ore section. As a result, an overall head grade of 1.71% was achieved for the financial year. Trojan is one of the few nickel mine operations that has a combination of higher-grade and lower-grade ore, which enables the mine to remain viable when nickel prices are low.

All-in sustaining C3 costs of nickel concentrate were reduced from $6,300/t in December 2015 to $5,126/t in March 2016. This was achieved by outsourcing drilling and hauling activities, which improved overall efficiencies, as well as a 25% cut in the salaries of employees. About 300 staff members in total were retrenched during the year, reducing the size of the total workforce to 800 employees. Over the next year, the new target for all-in sustaining C3 costs is below $5,000/t.

In the last quarter of the year, the Trojan team was focused on the re-deepening project that has been ongoing for five years. This development and production drilling is to prepare the way for mining in the next financial year and gives access to the ore body where grades are consistent or higher than those at the previous mining levels. The re-deepening project is set to be completed within the next year.

Finally, cost control measures resulted in C1 and C3 costs being further reduced by nearly $700/t and $1,800/t respectively, from the end of the third quarter. This resulted in the nickel sale price exceeding the all-in sustaining cost for the first time in several quarters. The nickel head grade increased by 29% over the past quarter, mainly due to higher grade ores.

Outlook

The production outlook for next year is to increase nickel production by 2,000t to 8,500t per year. As stated, our intention is to complete the refurbishment of the smelter before end of financial year.

JORC Compliant Nickel Resources

The effective date for the Trojan resource statement is 31 March 2016.

The effective date for the Hunter's Road resource estimate is May 2006.

The JORC compliant Hunter's Road resource of 36,437kt is found in the West orebody of Hunter's Road and includes 2,377kt of resource, which forms part of a 30m cap of oxide ore mineralisation. In addition, in 1993, an Anglo American MinRED estimate showed 11,000kt grading 0.43% Ni approximately 600m east of the West orebody of Hunter's Road which is not included in the resource shown above.

Diamond Strategy

Asa Resource Group plc. is actively pursuing the restart of its Klipspringer diamond mine, situated near Mokopane in the Limpopo province of South Africa, while we are getting the tailings retreatment plant into full production. The kimberlite fissure mine has been on temporary care and maintenance since 2011 due to a number of severe weather events that flooded the mine.

Management is reviewing the viability of underground mining with the help of a desktop review of the feasibility study, exploration reports, mining figures and historical data.

It shows that a proven and probable reserve of respectively 211,000 tonnes and 433,000 tonnes has been defined at the Klipspringer fissure mine, implying that mining at a rate of 50,000t to 60,000t per year from proven reserves can continue for approximately four years and mining from probable reserves can continue for a further seven to nine years. The mineral resource currently extends to a depth of about 650m below surface.

It also verifies that a total of 619,378 tonnes of material was mined and processed from the Klipspringer fissure mine, and 274,483 carats of diamonds were recovered at an average grade of 44.3cpht.

The last parcel of diamonds sold in 2011, which belonged to jewelry grade, achieved an average price of $125/carat for 22,700 carats, which is representative of the diamonds from this mine. A conservative escalation of 4% is applied for the period 2012-2014 with no escalation for 2015-2016 to compensate for softer market conditions, which indicates an expected diamond sales value of at least $145/carat, according to the review.

Further exploration drilling is expected at Klipspringer. The exploration work will seek to confirm the findings of the desktop study and to upgrade and increase the resource status.

The Group also interest in very promising diamond assets in DRC and Angola. Asa's ownership in these assets, namely Miba (DRC) and Camafuca (Angola), is 20% and 18% respectively. Camafuca boasts an inferred resource of 23 million tonnes of contained diamonds. However the Group did not undertake any exploration work during the past two years.

Operational performance

While the Klipspringer underground mine was on care and maintenance, the Group continued to operate the fine tailings dams in the mining complex during FY2016. The income derived from the tailings retreatment is important, as it funds a significant of the underground mine's monthly care and maintenance costs.

The care and maintenance work in the underground mine mainly involves ongoing dewatering from the bottom of the shaft, the maintenance of surface and underground infrastructure and fire prevention during the dry winter months.

The fine tailings operation produced 112,060 carats of diamonds from 202,623t of grade of 55.3cpht. Operated by contractors under a revenue-share agreement, it generated total income of $1.2.m.

The life of the slime tailing retreatment is expected to come to an end in the next two to three months (second quarter of financial year 2017), but its production will be replaced by that of the coarse tailings dam in the complex, set to start producing in the same quarter. Asa Resource Group plc. started up the fine tailings dam in 2013.

The Group has completed a desktop review of the coarse tailings dam, which established that the dam contains an estimated 1,3mt to 1,4mt of tailings. Currently a bulk resource sampling programme is being carried out, the results of which are expected in the second quarter of this financial year.

Outlook

The Group's tailings treatment partner, will continue sampling the coarse tailings to confirm the viability of the planned remining operation during the next financial year.

If the sampling results are satisfactory, the coarse tailings operation is expected to come online in the second or third quarter of financial year 2017. It will be operational for two to three years.

At this point, the coarse tailings operation is expected to produce 30 000t of ore per month and 2 100 carats of diamonds per month, attaining a price of $150 per carat.

Diamond Resources

* Carats per hundred tonnes

The effective date for the Leopard fissure resource statement is 31 March 2015.

Copper Strategy

Exploration work continues on the 27 concessions, previously transferred to the development company Muya SARL. This entity was established under the joint venture agreement with Hailiang, the largest copper tube manufacturer in the world.

Hailiang agreed to spend $25m on exploration in these concessions over a minimum of four years. On fulfillment of spending $6,5m in the first year, Hailiang is entitled to 62% of the joint venture and Asa holds a 38% interest that is non-dilutable.

The joint venture naturally allows Asa Resource Group plc. to accelerate its copper exploration and development programmes in Africa's highest-grade copper belt; it looks forward to announcing the viability of developing a mine in the joint venture concession area.

Importantly, Hailing has increased its shares ownership in the Group, to 9%, which indicates the Company has a vested interest in its success.

In the meantime, the Group is working towards unlocking the value of five of the remaining most promising concessions of Kibolwe, Lutobwe, Lombe, Kapande and Mifumbi, under our wholly owned subsidiary SEMKHAT, where drilling was completed in November 2014. JORC compliant measured, indicated and inferred resource size of 210,058 tonnes of contained copper at a grade of 0.8% was discovered here over these different sites in the world-class copper mineralisation zone of the Katanga Province in the DRC.

Agricultural Strategy

Zimbabwe is renowned for its fertile agricultural land in the north and for the cattle carrying capacity of its midlands grassland. Asa Resource Group plc. is fortunate to own the land on which the Bindura Nickel Corporation Limited and Freda Rebecca Gold Mine (Pty) Ltd operations take place, hence have access to both arable land in the Bindura area and cattle grazing in the midlands at its Shangani Mine.

With the national emphasis in Zimbabwe being on land utilizations, the Bindura Estate Pvt. Ltd farm operations commenced in the 2013 financial year with the development of a modest 30 hectares of potatoes, a crop that was repeated in the subsequent year.

With the high cost of land development and the acquisition of farming implements it was decided in 2015 to extend the area under crops to 80 hectares, in order to benefit from marginally better economies of scale and to enable a wider range of cash generating crops, whilst also facilitating the recommended crop rotation cycles.

During 2015 successful potato and pea crops were achieved, with exceptionally high local demand in Zimbabwe for the potatoes while the peas were of an export quality, earning the business an export accreditation for peas.

With effect from January 2016 a detailed crop cycle plan was prepared introducing a variety of cash crops, including seed maize, potatoes, peas and chilies. In addition approximately 10 hectares of arable land have been identified to plant bananas. Even though the gross margin on all of these crops is promising the capital repayment period after the allocation of overheads is in excess of 4 years depicting the long-term nature of investment in crop farming.

During the financial year to March 2016 an investment was made in purchasing approximately 80 cattle. This has been regarded as a small experimental herd in lieu of proposing the establishment of a medium sized beef breeding operation that can make use of the grazing available at the Shangani Mine premises.

In continuation of the livestock business plan and to benefit from the entire value chain profitability an abattoir was acquired in April 2016, to trade as Asa Meats SA (Pty) Ltd. This abattoir has the capacity to handle the slaughter requirements of the Company's planned herd as well as slaughtering both pigs and cattle on a toll basis. Additional plans are being formulated to establish a meat processing capability at the abattoir to cater for the local or export markets.

FINANCIALS

FINANCIAL REVIEW

summary of group Income Statement

summary of group cash flow statement

summary of group FINANCIAL POSITION

FINANCIAL REVIEW COMMENTARY

PRESENTATION NOTE:

All figures in the above tables are presented before consolidation entries in order to improve comparability with the underlying financial statements of subsidiaries. Through the addition of the column entitled "Consolidation entries", these figures may then be tied back to the Group's financial statements.

INCOME STATEMENT:

The Group reported revenue for the year of $121.3m (2015: $152.3m) and a controllable, recurring Group EBITDA, excluding once off restructuring expenses and foreign exchange gains/(losses), amounted to $7.4m profit (2015: $19.6m profit). The net loss for the year is $9.6m (2015: $7.0m profit).

FREDA REBECCA

During the year, Freda Rebecca sold 67,672 ounces of gold (2015: 57,799 ounces) at an average gold price of $1,149 per ounce (2015: $1,247 per ounce), as well as by-products, generating total revenue of $77.8m (2015: $72.1m). All-in sustainable costs during the period totalled $66.7m (2015: $66.6m) for the year, resulting in an EBITDA of $10.5m (2015: $5.4m). Net profit for the year was $1.4m (2015: $2.0m loss).

BINDURA NICKEL CORPORATION

Revenue of $42.3m (2015: $78.9m) was generated through the sale of 6,613 tonnes (2015: 7,352 tonnes) of nickel in concentrate at an average payable nickel price of $6,737 per tonne (2015: $10,855 per tonne), as well as by-products. All-in sustainable costs were $43.1m (2015: $60.2m). BNC reported EBITDA of $0.4m (2015: $18.0m) and net profit for the year was $0.6m (2015: $11.0m).

During the previous financial year, $5.1m of the impairment (as shown under the "Consolidation entries" column) relating to the smelter was reversed due to BNC's plans to restart the smelter (as evidenced by the successful closing of a $20m bond prior to year end, of which $16.4m was banked in FY2015, and the balance was receiving during the current financial year. Expenditure on the refurbishment of the smelter during the current financial year was $7.2m (2015: $2.4m).

OTHER ASA GROUP

The Group, excluding BNC and Freda Rebecca, generated revenue of $1.2m (2015: $1.4m) and incurred operating costs of $3.3m (2015: $6.1m), including corporate expenses of $2.0m (2015: $4.6m), once off restructuring costs of $1.6m (2015: $nil) and cost of sales of $0.8m (2015: $1.3m). Foreign exchange losses of $4.8m (2015: $0.1m gain) were incurred, resulting in a net loss of $12.8m (2015: $0.9m).

CASH FLOW:

FREDA REBECCA

Positive cash flow of $9.3m (2015: $10.0m) was generated by operations during the year. The company invested $8.6m (2015: $5.6m) in capital expenditure, and utilised $0.6m (2015: $5.7m) in financing activities, including repayment of Asa group loans of $2.4m (2015:$4.8m) (excluding interest).

BINDURA NICKEL CORPORATION

Cash flow of $2.5m (2015: $6.6m generated) was utilised in operations and $6.5m (2015: $10.4m) was raised in cash flows from financing activities. $3.6m (2015: $16.4m) was raised in respect of the BNC smelter bond, and a further $8m was raised in loan financing (2015: $nil), offset by repayment of Asa group loans of $5.3m (2015: $6.0m). BNC utilised $12.5m (2015: $9.3m) in investing activities of which $4.5m (2015: $6.9m) related to ongoing sustainable capital expenditure and $7.2m (2015:$2.4m) in relation to the smelter re-start.

OTHER ASA GROUP

Other Asa Group (excluding BNC and Freda) saw operating cash outflow of $6.2m (2015: $5.1m). During the year, other Asa Group invested $3.8m (2015: $7.2m) of which $3.7m (2015: $6.4m) was spent on its portfolio of exploration prospects, being $0.6m (2015: $1.9m) in SEMHKAT and $3.1m (2015: $4.5m) in Zani Kodo (MIZAKO). Asa Group received $7.7m (2015:$10.8m) in cash generated from financing activities, all of which related to receipts from repayments of Group loans by subsidiaries.

At year end, the Group had cash balances of $7.4m (2015: $14.0m), comprising $3.4m (2015: $11.9m) held by BNC, $0.9m (2015: $0.7m) held by Freda Rebecca, and $3.1m (2015: $1.3m) by Other Asa Group entities.

FINANCIAL POSITION:

FREDA REBECCA

Non-current assets of $50.6m (2015: $46.4m) decreased from the prior year, mainly due a movement in property, plant and equipment. Property, plant and equipment included additions of $8.6m (2015: $5.6m) and depreciation of $4.6m (2015: $5.7m). Current assets excluding cash decreased from $17.6m to $15.1m, which comprised mainly of a decrease in inventory from $8.5m to $6.9m. Refer to the above analysis regarding movement in the cash balance.

Non-current liabilities decreased from $29.4m to $28.3m after taking into account the repayment of Asa group loans of $2.4m (2015:$4.8m).

BINDURA NICKEL CORPORATION

Non-current assets increased to $71.3m from $58.6m mainly attributable to investment in property, plant and equipment (offset by proceeds on disposal of assets) of $12.5m (2015: $9.3m).

Current assets excluding cash increased to $26.6m from $21.8m, mainly attributable to treasury bills received during the year of $3.4m (2015: $nil) and an increase in inventories of $2.1m (2015: $1.8m). Refer to the above analysis regarding movement in the cash balance.

OTHER ASA GROUP

The value of non-current assets including investments decreased to $287.7m (2015: $292.2m), related to additional exploration expenditure of $3.7m (2015: $6.4m) capitalised during the year in accordance with the Group's policy. Refer to the above analysis regarding movement in the cash balance.

The book value of shareholders' equity attributable to the owners of the Parent for the Group at the year-end was $123.6m (2015: $124.0m), whereas for the Company it was $171.1m (2015: $171.6m). The reason for the Company equity being more than Group equity is because of equity deficits included in the consolidated figure.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ASA RESOURCE GROUP plc

We have audited the financial statements of Asa Resource Group plc for the year-ended 31 March 2016 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Financial Position, the Consolidated and Parent Company Statements of Cash Flows, the Consolidated and Parent Company Statements of Changes in Equity and the related notes 1 to 39. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group's and the parent company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Financial Statements for the year-ended 31 March 2016 to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

In our opinion:

· the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 March 2016 and of the group's loss for the year then ended;

· the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

· the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

· the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Emphasis of matter

In forming our opinion, which is not modified we have considered the adequacy of the disclosure in note 2(D) to the financial statements concerning the recoverable amount of the Group's Zimbabwean mining assets and its ability to continue as a going concern. The conditions outlined in note 2(D) concerning the Group's compliance with Indigenisation legislation in Zimbabwe indicate the existence of a material uncertainty that may impact the recoverable amount of the Group's Zimbabwean mining assets and that may also cast significant doubt about the Group's ability to continue as a going concern.

The financial statements do not contain the adjustments that would result if the Group was unable to recover the carrying value of its Zimbabwean mining assets or to continue as a going concern.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

· Adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

· The parent company financial statements are not in agreement with the accounting records and returns; or

· Certain disclosures of directors' remuneration specified by law are not made; or

· We have not received all the information and explanations we require for our audit.

STEVEN DOBSON (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

London

19 July 2016

Notes:

1. The maintenance and integrity of the Asa Resource Group plc web site is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the web site.

2. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Annual Financial Statements for the year-ended 31 March 2016

CONSOLIDATED INCOME STATEMENT

for the year-ended 31 March 2016

The notes are an integral part of these consolidated financial statements.

 (1) Earnings before interest, impairments, tax, depreciation and amortisation

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year-ended 31 March 2016

These financial statements were approved by the Board of directors on 18 July 2016 and were signed on its behalf by:

YAT HOI NING Yim Kwan

Executive Chairman Finance Director

CONSOLIDATED STATEMENT of financial position

AS AT 31 March 2016

The notes are an integral part of these financial statements.

These financial statements were approved by the Board of directors on 18 July 2016 and were signed on its behalf by:

YAT HOI NING Yim Kwan

Executive Chairman Finance Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR-ENDED 31 March 2016