OROYA MINING LIMITED

OROYA Mining Limited

ABN 16 009 146 794

Suite 502, 140 Bourke Street, Melbourne, VIC 3000 Telephone: (03) 9077 7987 Facsimile: (03) 9078 0888

Web: www.oroya.com.au

FINANCIAL REPORT

For the Half-Year Ended 31 December 2012

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http://www.oroya.com.au/

OROYA Mining Limited ABN 16 009 146 794

2

CONTENTS PAGE

Directors’ Report 3

Consolidated Statement of Comprehensive Income 5

Consolidated Statement of Financial Position 6

Consolidated Statement of Cash Flows 7

Consolidated Statement of Changes in Equity 8

Notes to the Half-Year Financial Statements 9

Directors’ Declaration 13

Auditor’s Independence Declaration 14

Report on the Half-Year Financial Report 15

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DIRECTORS’ REPORT

Your Directors submit their report for the half-year ended 31 December 2012.

DIRECTORS

The names of the Company’s Directors in office during the half-year and until the date of this report are as below:

Dr Kevin Moriarty (Chairman) – Appointed 6 July 2012 Mr Joshua Wellisch (Executive Director) – Resigned as alternate for Mr K Lim 23 November 2012 Mr Wade Guo (Non-executive Director) Mr Ping Zhao (Executive Director) – Appointed 24 January 2013 Mr Kenneth Meng Kang Lim (Chairman until 6 July 2012 and thereafter Non-executive Director) –

Deceased 22 November 2012 Mr Andrew Peter Armitage (Director) – Resigned 6 July 2012 Mr Michael Safrata (Director) – Resigned 6 July 2012

The Directors were in office for the entire period unless otherwise stated. Company Secretary is Mr Mathew Whyte.

REVIEW OF AND RESULTS OF OPERATIONS

The net loss after income tax for the half-year was $883,220 (31 December 2011: $2,199,269). Oroya is an Australian-based mineral explorer, focused on the exploration and discovery of large copper and base metal projects. The activities of the Company and its joint venture partners over the last year has progressed several of the projects. On 20 February 2013, drilling commenced at the Company’s 100% owned Orbost porphyry copper targets. In December 2012 the Company signed a binding Heads of Agreement for the establishment of two joint ventures which requires Mining Projects Group Ltd to spend $800,000 on exploration of the Company's Western Australian Talc Lake Nickel Project within 12 months. At the date of this report, Oroya held interests in the following projects:

Major projects (ORO: 100%) Orbost Copper Project – Sunday Creek, Victoria (Oroya:100%) A diamond rig commenced drilling at the Granite Creek porphyry copper target on 20 February 2013 and the company expects to complete the planned holes within 3 months. The Granite Creek target is a strong near circular EM anomaly detected in Oroya’s 2012 HeliTEM survey. It lies on a large fault and this combination of structure with conductive, circular shape is a strong indicator for a porphyry intrusion. It lies between two old copper-gold workings. This target has not been tested in previous exploration, unlike the Sunday Creek target where historic drilling intersected porphyry copper mineralisation. Oroya has been advised that all 14 sites, including those at Sunday Creek, have been cleared for drilling. Commencement of clearing of the access to the Sunday and Sardine Creek is conditional upon the signing of a heads of agreement to secure offset arrangements for habitat and vegetation. Two sites to test the Sardine Creek anomaly are included in the second work plan, so all three targets can be tested in the current mobilisation. Other projects Talc Lake Nickel Project – Roe Hills, WA (Oroya:100%)

Mt Barrett Gold and Base Metal Project (Oroya 100%) On 21 December 2012, the company announced it had executed a binding Heads of Agreement to establish 2 joint ventures with Mining Projects Group Limited (MPJ) over Oroya’s Western Australia nickel and gold exploration assets, the Roe Hills/Talc Lake Project and the Mr Barrett Project. Key terms of the agreement include:

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- MPJ will hold the right to earn a 75% participating interest in the Talc Lake Project by expending a minimum of $800,000 during the initial 12 month period from signing and then continue to solely fund Talc Lake until completion of a Bankable Feasibility or decision to mine.

- MPJ will hold the right to earn an 80% participating interest in Mt Barrett by completing all required expenditure until completion of a Bankable Feasibility Study.

- MPJ will issue Oroya 50,000,000 fully paid ordinary shares in MPJ and 30,000,000 options with an exercise price of 1 cent and an expiry date at 30 June 2016 subject to shareholder approval to reimburse expenditure undertaken at Talc Lake and Mt Barrett thus far.

NSW, Sofala Gold-Copper Project, Wiagdon Thrust Joint Venture (Oroya 30% free-carried, Neo Resources 70%) Neo Resources Limited (Neo) has earned a 70% interest in the Sofala Wiagdon Thrust Joint Venture by completing the Earn-In Expenditure of a minimum of $1.5 million within the deemed Earn-In Period. Oroya is now free carried until the mining commencement date, with a 30% Joint Venture Interest. Oroya’s key objective is advancing its porphyry copper exploration project to define resources. In recent months the company has reduced non-core projects through relinquishment of some licences and sale or farm out where advantageous. Further rationalisation is planned to ensure that the Company’s funds are focused on the best prospects for major metal discoveries. New tenements under application: - Victoria, Mount Buck, Copper Project (ELA 5444, Oroya 100%) - Victoria, Bonang, Copper-gold Project (ELA 5445, Oroya 100%)

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

On 22 October 2012, the Company placed 600,000,000 $0.003 options at a price of $0.0001 per option raising $600,000 before costs. EVENTS AFTER THE BALANCE SHEET DATE

There are no events subsequent to reporting date other than stated below.

- The appointment of Mr Ping Zhao as Executive Director commencing 24 January 2013. Mr Zhao is involved in Australian mine exploration through his role as Managing Director of Soaraway Development Pty Ltd and owns the China based Yucai Group of companies.

- As announced on 12 February 2013, Soaraway Development Pty Ltd, a major shareholder of Oroya and mining subsidiary of China based Yucai Group, subscribed for $800,000 in convertible notes. The amount received will be used to fund the Company’s immediate exploration objectives. The Company intends to convene an EGM to seek shareholder approval to convert the notes at the earliest opportunity.

- A diamond rig commenced drilling at the Granite Creek porphyry copper target on 20 February 2013. The company expects to complete the planned holes within 3 months.

AUDITOR’S INDEPENDENCE DECLARATION

The Auditor’s Independence Declaration is set out on page 14 and forms part of the Directors’ Report for the half year ended 31 December 2012.

Signed in accordance with a resolution of the Directors.

Kevin Moriarty Chairman

14 March 2013

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Kevin Moriarty

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

HALF-YEAR ENDED 31 DECEMBER 2012

Note 31 December 2012

$

31 December 2011

$

Revenue 9,507

37,555

Employee benefits expenses Share-based payments Depreciation expense Impairment of exploration and evaluation expenditure Allowance for impairment of receivables Occupancy expense Legal and audit expense Other expenses

7

6

(241,301) (334,950)

(5,005) (6,452) (2,000)

(31,115) (80,183) (191,721)

(118,509) -

(3,364) (1,875,769)

(93,764) (13,715) (24,865) (106,838)

Loss before income tax benefit Income tax benefit

(883,220)

-

(2,199,269)

-

Loss for the period

(883,220)

(2,199,269)

Other comprehensive income Items that may be reclassified subsequently to profit or loss: Net fair value gain on available-for-sale financial assets Income tax on items of other comprehensive income

30,000 -

- -

Other comprehensive income for the period, net of tax

30,000

-

Total comprehensive loss for the period

(853,220)

(2,199,269)

Loss per share (cents per share)

¢ ¢

Basic loss per share for the period Diluted loss per share for the period

(0.038) (0.038)

(0.11) (0.11)

The accompanying notes form part of these financial statements.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

Note

AS AT 31 December 2012

$

AS AT 30 June 2012

$ ASSETS Current Assets Cash and cash equivalents Trade and other receivables Other current assets Available-for-sale financial assets

5(a)

296,963 90,836 18,837

356,667

545,904 48,508

- 326,667

Total Current Assets

763,303

921,079

Non-current Assets Other receivables Available-for-sale financial assets Other financial assets Plant and equipment Deferred exploration and evaluation expenditure

5(b)

6

-

6,000 130,000

17,092 2,462,507

26,904 6,000

160,000 22,097

2,223,795

Total Non-current Assets

2,615,599

2,438,796

TOTAL ASSETS

3,378,902

3,359,875

LIABILITIES Current Liabilities Trade and other payables Provisions

44,477 91,303

43,249 56,437

Total Current Liabilities

135,780

99,686

Non-current Liabilities Other payables Provisions

- -

10,000 6,396

Total Non-current Liabilities

-

16,396

TOTAL LIABILITIES

135,780

116,082

NET ASSETS

3,243,122

3,243,793

EQUITY Contributed equity Share based payment reserve Available for sale reserve Accumulated losses

4

34,550,941 537,538

30,000 (31,875,357)

34,094,242 141,688

- (30,992,137)

TOTAL EQUITY 3,243,122 3,243,793


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CONSOLIDATED STATEMENT OF CASH FLOWS

HALF-YEAR ENDED 31 DECEMBER 2012

Note AS AT

31 December 2012 $

AS AT 31 December 2011

$ Cash flows from operating activities Payments to suppliers and employees Interest received

(535,530) 12,320

(300,423) 39,087

Net cash flows used in operating activities

(523,210)

(261,336)

Cash flows from investing activities Funds deposited for performance bonds Performance bond funds refunded Exploration and evaluation expenditure

(10,000) 40,000

(273,330)

- -

(234,401)

Net cash flows used in investing activities

(243,330)

(234,401)

Cash flows from financing activities Consideration received from share based payments Proceeds from issue of capital Expenses related to share issue

900 600,000 (83,301)

- 610,084

-

Net cash flows from financing activities

517,599

610,084

Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period

(248,941)

545,904

114,347

1,453,175

Cash and cash equivalents at end of period

296,963

1,567,522


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

Contributed equity

Share based payment

reserve

Available for sale reserve

Accumulated losses Total

$ $ $ $ $

At 1 July 2012 34,094,242 141,688 - (30,992,137) 3,243,793

Loss for the period - - - (883,220) (883,220)

Other comprehensive income - - 30,000 - 30,000


-

-

30,000

(883,220)

(853,220)

Transactions with owners in their capacity as owners

Issue of options 600,000 - - - 600,000

Transaction costs of option issue (143,301) - - - (143,301)

Share based payments - 395,850 - - 395,850

At 31 December 2012 34,550,941 537,538 30,000 (31,875,357) 3,243,122

Contributed equity

Share based payment

reserve

Available for sale reserve

Accumulated losses Total

$ $ $ $ $

At 1 July 2011 33,514,353 124,488 - (28,638,809) 5,000,032

Loss for the period - - - (2,199,269) (2,199,269)

Other comprehensive income - - - - -


-

-

-‐

(2,199,269)

(2,199,269)

Transactions with owners in their capacity as owners

Issue of share capital 610,084 - - - 610,084

Transaction costs of share issue (30,195) - - - (30,195)

Share based payments - 17,200 - - 17,200

At 31 December 2011 34,094,242 141,688 - (30,838,078) 3,397,852


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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

1. CORPORATE INFORMATION The financial report of Oroya Mining Limited (“the Company”) and its controlled entities (“the Group” or “consolidated entity”) for the half-year ended 31 December 2012 was authorised for issue in accordance with a resolution of the directors on [14] March 2012.

The Company is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Stock Exchange.

The address of the registered office is Suite 502, 140 Bourke Street, Melbourne Victoria 3000.

2. BASIS OF PREPARATION

(a) Basis of preparation This interim financial report for the half-year ended 31 December 2012 has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001.

The half year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The half year financial report should be read in conjunction with the most recent annual financial report for the period ended 30 June 2012.

It is also recommended that the half year financial report be considered together with any public announcements made by Oroya Mining Limited during the half year ended 31 December 2012 in accordance with the continuous disclosure obligations arising under the ASX Listing Rules.

The accounting policies and methods of computation are the same as those adopted in the most recent annual financial report.

From 1 July 2012 the consolidated entity has adopted all Australian Accounting Standards and Interpretations effective for annual periods beginning on or before 1 July 2012. The adoption of new and amended standards and interpretations had no impact on the financial position or performance of the consolidated entity.

The consolidated entity has not elected to early adopt any new standards or amendments that are issued but not yet effective.

(b) Going concern

The consolidated entity has incurred an operating loss of $883,220 (2011: $2,199,269) and negative operating cash flows of $523,210 (2011: $261,336) excluding exploration expenditure of $273,330 (2011: $234,401) for the half year ended 31 December 2012. The consolidated entity's net current asset position at 31 December 2012 was $627,523. The financial statements have been prepared on a going concern basis which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The Directors consider this to be appropriate for the following reasons: (i) the ability to vary the consolidated entity’s cost structure and in turn the levels of cash outflow dependent

on the timing of its exploration activities; and (ii) the demonstrated ability to obtain funding through equity issues as required. As announced on 12

February 2013, the Company received additional funding by issuing $800,000 of convertible notes to Soaraway Development, a major shareholder of Oroya. The amount received will be used to fund the Company’s immediate exploration objectives.

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The Company is currently conducting a drilling program at its Orbost Copper Project using existing funds from previous equity capital raisings. The Directors recognise that the Company will need to raise additional finance at the appropriate time to fund planned discretionary exploration activities, most notably the ongoing drilling program at Orbost. The Directors are currently assessing a range of options to meet this funding requirement. The Directors recognise the above factors create uncertainty as to the Company’s ability to continue as a going concern and whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. However, by taking into account the points noted above, the Directors are confident the Company has adequate resources to continue in operational existence for the foreseeable future. Should the Company not achieve the matters set out above, there is uncertainty whether the Company would continue as a going concern and therefore whether it would realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not include adjustments relating to the recoverability or classification of the recorded assets amounts nor to the amounts or classification of liabilities that might be necessary should the Company not be able to continue as a going concern.

3. SEGMENT INFORMATION

For management purposes, the Company is organised into one main operating segment, which involves exploration for mineral deposits throughout Australia. All of the Company’s activities are interrelated, and discrete financial information is reported to the Board (Chief Operating Decision Makers) as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the Company as a whole.

4. CONTRIBUTED EQUITY

CONSOLIDATED 31 December 2012 30 June 2012 $ $

(a) Issued and paid up capital: Contributed Equity 34,550,941 34,094,242

(b) Movements in contributed equity during the past six months were as follows:

Number $ Issued and paid up capital: 31 December 2012

2,309,345,013

34,094,242

Ordinary shares Opening balance at 1 July 2012 Add: Shares issued during the period Less: Transaction costs on share issue

2,309,345,013

- -

34,094,242

- -

Total shares on issue at 31 December 2012

2,309,345,013

34,094,242

Listed Options Opening balance at 1 July 2012 Add listed options issued during the period: Options exercisable at $0.003 expiring 30 June 2015 Options exercisable at $0.003 expiring 30 June 2015 Less: Transaction costs on options issued

-

600,000,000 60,000,000

-

-

600,000 -

(143,301)

Total listed options on issue at 31 December 2012

660,000,000

456,699

Total contributed equity at 31 December 2012

34,550,941

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5. AVAILABLE-FOR-SALE FINANCIAL ASSETS

CONSOLIDATED 31 December 2012

$ 30 June 2012

$

Available-for-sale financial assets at fair value

(a) Current At fair value Shares - listed

356,667

326,667

(b) Non-current At cost Shares - unlisted

6,000

6,000

6. EXPLORATION AND EVALUATION EXPENDITURE

31 December 2012 $ 30 June 2012

$

Exploration and evaluation costs

2,462,507

2,223,795

Reconciliation of carrying amount Opening balance Expenditure incurred during the year Impairment

2,223,795 245,164 (6,452)

3,236,650 913,599

(1,926,454) Closing balance

2,462,507

2,223,795

The Directors have reviewed all exploration projects for indicators of impairment in light of approved budgets. Where substantive expenditure on further exploration is neither budgeted nor planned, or the period for which the Company has the right to explore will expire in the near future and is not expected to be renewed, the area of interest has been written down to nil pending the outcome of any future farm out arrangement. The Company will continue to look to attract farm-‐in partners and/or recommence exploration should circumstances change.

7. SHARE BASED PAYMENTS

During the period the following options were granted to directors: Grant date Expiry date Grant date fair

value $

Exercise price $

Number issued Vesting date

8-Oct-12

30-Nov-15

0.00379

0.005

65,000,000

Immediate

8-Oct-12

30-Nov-15

0.00358

0.007

25,000,000

Immediate

The assessed fair value of the options was determined using a Black Scholes model, taking into account the exercise price, term of option, the share price at grant date and expected price volatility of the underlying share, expected dividend yield and the risk-free interest rate for the term of the option. The following assumptions were used in the estimation: - Risk free interest rate of 2.57% - Company share price of 0.5 cents - Dividend Yield of 0% - Expected volatility of 130% - Option exercise price of 0.5 cents for 65 million options and 0.7 cents for 25 million options. - Option duration of 37.74 months

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Total consideration received for the director options issued was $900. In addition, 60 million options exercisable at 0.3 cents and expiring 30 June 2015 were issued to Melbourne Capital on 26 October 2012 and vest immediately. The issue was part of a lead manager’s fee per the prospectus dated 9 October 2012. The valuation of the options has been determined at $0.001 per option, by reference to the fair value of services provided.

8. EVENTS AFTER THE BALANCE SHEET DATE

There are no events subsequent to reporting date other than stated below.

- The appointment of Mr Ping Zhao as Executive Director commencing 24 January 2013. Mr Zhao is involved in Australian mine exploration through his role as Managing Director of Soaraway Development Pty Ltd and owns the China based Yucai Group of companies.

- As announced on 12 February 2013, Soaraway Development Pty Ltd, a major shareholder of Oroya

and mining subsidiary of China based Yucai Group, subscribed for $800,000 in convertible notes. The amount received will be used to fund the Company’s immediate exploration objectives. The Company intends to convene an EGM to seek shareholder approval to convert the notes at the earliest opportunity.

- A diamond rig commenced drilling at the Granite Creek porphyry copper target on 20 February 2013.

The company expects to complete the planned holes within 3 months.

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Liability limited by a scheme approved under Professional Standards Legislation

Auditor's Independence Declaration to the Directors of Oroya Mining Limited

In relation to our review of the financial report of Oroya Mining Limited for the half-year ended 31 December 2012, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Ernst & Young

D S Lewsen Partner Perth 14 March 2013

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Independent review report to members of Oroya Mining Limited

Report on the Interim Financial Report

We have reviewed the accompanying half-year financial report of Oroya Mining Limited, which comprises the statement of financial position as at 31 December 2012, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Directors’ Responsibility for the Interim Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the company’s financial position as at 31 December 2012 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Oroya Mining Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the Directors’ Report.

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Oroya Mining Limited is not in accordance with the Corporations Act 2001, including:

i giving a true and fair view of the company’s financial position as at 31 December 2012 and of its performance for the half-year ended on that date; and

ii complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Material Uncertainty Regarding Continuation as a Going Concern

Without qualifying our conclusion, we draw attention to Note 2(b) of the half-year financial report. As a result of the matters described in Note 2(b), there is a significant uncertainty whether the company will be able to continue as a going concern and therefore whether it will be able to realise its assets and extinguish its liabilities in the normal course of business at the amounts stated in this half-year financial report. The half-year financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the company not continue as a going concern.

Ernst & Young D S Lewsen Partner Perth 14 March 2013

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OROYA MINING LIMITED

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