TABLE OF CONTENTS CORPORATE DIRECTORY...2 NOTICE OF ANNUAL GENERAL MEETING...3 CHAIRMAN S REVIEW AND REVIEW OF OPERATIONS...4 DIRECTORS REPORT...

Transcription

1 ANNUAL REPORT 2008

2 TABLE OF CONTENTS CORPORATE DIRECTORY...2 NOTICE OF ANNUAL GENERAL MEETING...3 CHAIRMAN S REVIEW AND REVIEW OF OPERATIONS...4 DIRECTORS REPORT...6 AUDITOR S REPORT...13 DIRECTORS DECLARATION...16 AUDITOR S INDEPENDENCE DECLARATION...17 INCOME STATEMENT...18 BALANCE SHEET...19 CASH FLOW STATEMENT...20 STATEMENT OF CHANGES OF EQUITY...21 NOTES TO THE FINANCIAL STATEMENTS...22 SHAREHOLDERS AND OPTIONHOLDERS DETAILS...37 PROXY FORM...39

3 CORPORATE DIRECTORY REGISTERED OFFICE Eagle Eye Metals Limited ABN Ventnor Avenue West Perth WA 6005 DIRECTORS Wayne Ryder FCA,FAICD,SME(U.S.) Executive Chairman Garry Plowright Non-Executive Warren Staude BSc, MSc, MAusIMM, ASIA Non-Executive SECRETARY AND CHIEF EXECUTIVE OFFICER Wayne Ryder FCA Tel (08) Fax (08) Mobile CONSULTING GEOLOGISTS BM Geological Services Pty Ltd Senior Geologist Darryl Mapleson 36 Hannan Street Kalgoorlie WA 6430 AUDITORS Grant Thornton (WA) Partnership Chartered Accountants Level 1, 10 Kings Park Road West Perth WA 6005 SOLICITORS Hardy Bowen Lawyers Level 1, 28 Ord Street, West Perth WA 6005 WEB SITE Page 2

4 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the 2008 Annual General Meeting of the Members of Eagle Eye Metals Limited will be held at the Registered Office, 45 Ventnor Avenue, West Perth WA 6005 on Friday 28 November 2008 at a.m. BUSINESS : 1. To receive, consider and, if thought fit, adopt the Balance Sheet at 30 June 2008 and the Income Statement for the Period then ended, together with the Reports of the Directors and Auditor s Report thereon. 2. To elect a Director : Mr Warren Staude retires by rotation in accordance with the Company s Constitution and, being eligible, offers himself for re-election. 3. To receive, consider and, if thought fit, adopt the Remuneration Report as contained in the Directors Report. 4. To transact any other business in accordance with the Company s Constitution. BY ORDER OF THE BOARD WAYNE RYDER SECRETARY DATED AT PERTH THIS 30TH DAY OF SEPTEMBER 2008 PROXIES Any Member entitled to attend and vote is entitled to appoint not more than two Proxies who must be natural persons over the age of 18 years. Where more than one Proxy is appointed each Proxy must be appointed to represent a specified proportion of the Member s voting rights. A Proxy need not be a Member of the Company. A Proxy Form is included at the back of this Report. If Proxies are appointed the Proxy Form must be lodged with the Company by delivery or post to the Registered Office, 45 Ventnor Avenue, West Perth WA 6005 or by fax to (08) , or by to info@eagleeyemetals.com not less than 48 hours before the Meeting. Page 3

5 CHAIRMAN S REVIEW AND REVIEW OF OPERATIONS Introduction The 2008 Financial Year saw major forward progress with the exploration and development of Eagle Eye s metals projects, and with the continuation of sound financial management in all areas of exploration and administration expenditure. Exploration Programme Waite Kauri nickel/cobalt project P37/6757,6634-6,6664-5, comprising 1,570 hectares located in the Leonora-Laverton region of the N-E Goldfields of Western Australia. Eagle Eye holds a 20% free carried interest in the project, with Poseidon Nickel Limited earning an 80% interest by way of undertaking future exploration and development works. Substantial drilling of the Waite Kauri nickel/cobalt project near Leonora, WA has enabled the defining of mostly near surface ore resources of 0.7% nickel and 0.05% cobalt, equating to over 17,000t of contained nickel and 1,520t of cobalt, using 0.5% nickel as a commercial cut off grade. The presence of highly priced cobalt in the ore facilitates the use of this 0.5% nickel cut off grade. Using a 0.7% nickel cut off grade the resource is 0.85% nickel and 0.06% cobalt. Based on this successful drilling programme we were approached by prominent nearby nickel miner Poseidon Nickel Limited and in June 2008 entered into an Agreement with them for development of the project by way of a farm in Agreement. Poseidon will earn an 80% interest by spending the next 500,000 on further metallurgical, ore process testing and drilling to increase the known ore resource. Subsequent to balance date this development work is proceeding well, assisted by the sound cooperative efforts of both parties. In addition to our 20% free carried interest, Eagle Eye is entitled to a 2% Net Smelter Royalty from Poseidon in respect of all metals produced from their 80% share. A great advantage of the Agreement is that all ore will be processed at Poseidon s production facility being established at nearby Windarra. Other Projects Several of the Company s seven other exploration projects as contained in our 2006 Prospectus and located in the Leonora/Laverton region have shown up as highly prospective for gold and base metals from initial exploration work, and these are being followed up progressively for more intense work, including drilling for resource. In particular our geologists are designing for implementation work programmes at the Apollo Hill gold project, and the Leonora East, Mertondale (subject to granting of title) and Randwick gold and base metals areas. These gold and base metals exploration projects are all located in the same Leonora-Laverton region and are all 100% owned by the Company. Their tenement details are as follows:- Apollo Hill M39/296 comprising 24 hectares. Leonora East P37/ ,532-5,6893,6674,6421, comprising 5,094 hectares. Mertondale P37/ comprising 400 hectares. Randwick M37/1163,1173, P37/5661-4,5883-4,6756,7525 comprising1,233 hectares. Erlistoun M38/561 comprising 550 hectares. Little Doris M38/916, P38/2878 comprising 18 hectares. Wandry Well P31/ comprising 1010 hectares. Page 4

6 New mining projects With a small capital base and good cash position in excess of 3million at balance date, Eagle Eye is attracting the attention of many other mining and associated broking and financial groups offering participation in new projects. Whilst we remain committed to the development of our existing exploration projects, several of which show the potential to become commercially viable, we consider the Company to have the management skills and financial capacity to beneficially participate in high quality new projects. We are presently looking at and analysing several mining projects on offer in Australia and overseas in a range of commodities. Financial Results For the year the Company incurred capitalised expenditure of 613,710 ( ,871) on exploration of it s mining tenements. Operating and administration expenses and the write down of financial assets totalled 442,455 ( ,202) and after deducting interest received of 251,100 ( ,389) this resulted in a net loss after taxation for the year of 191,355 ( ,813). Close Continuing on a dedicated path to becoming a strong participant in the mining industry, Eagle Eye has produced excellent results for the 2008 year, and this now finds the Company in a strong position to progress the Joint Venture with Poseidon, develop our other existing projects and to participate in new projects of high quality. We would like to see as many Shareholders as possible at the AGM, or you may contact any of the Directors with any queries or to discuss your views on our operations. Sincerely Wayne Ryder 30th September 2008 Page 5

7 DIRECTORS REPORT Your Directors present their Report on Eagle Eye Metals Limited for the year ended 30 June Currency All monetary amounts shown throughout the financial report are expressed in Australian Dollars. Directors and Company Secretary The following persons were Directors/Secretary of the Company during the year and at the date of this Report: Wayne Ryder FCA, FAICD, SME (Non-Independent Executive Chairman and Company Secretary) (Appointed 21 April 2005) Wayne is a substantial Shareholder and the largest holder in the Company. He has an extensive track record in the mining resources sector over many years, including having held Directorships with a number of successful explorers and producers including Forsayth Mineral Exploration, Condor Minerals & Energy (Mt Horner, Dongara WA oil field), Kitchener Mining (Bamboo Creek, WA gold mine), Great Eastern Mines (Aga Khan emerald mine at Cue, WA), Lightning Ridge Mining (opal mining at Lightning Ridge, NSW). He has spent significant time in the United States, working from his own Coral Resources exploration headquarters in Denver, Colorado and New York where he was a member of the prestigious New York Mining Club. As a consequence, he has developed excellent associations with US-based exploration groups, as well as key US capital market resource investors. Wayne has acted as the Secretary of a number of ASX listed public companies over the past 30 years, mostly mining and exploration companies based in Western Australia, but also manufacturing companies, including a commercial glass manufacturing company listed on ASX and with operations based in China. He is a Fellow of the Institute of Chartered Accountants in Australia, a Fellow of the Australian Institute of Company Directors and a Member of the Society of Mining Metallurgy and Exploration in the United States. Other Directorships held in the last three years were: Globe Securities Limited, appointed 11 February 1987 current. Number of fully paid Ordinary Shares held directly and indirectly: 4,120,000 Number of Options held directly and indirectly: 1,770,000 Garry Plowright (Non-Executive) (Appointed 21 April 2005) Garry s career includes over 15 years experience in commercial and technical development within the mining industry, working for some of Australia s leading resource companies. He has been mostly involved in gold, base metals and iron ore exploration and mining, predominantly in Western Australia. He brings to the Board considerable experience and knowledge associated with the supply and logistics of services to the mining industry, tenement management and issues relating to land access, native title, and community consultation. Garry has held management positions in the private sector of the mining industry, including mapping and GIS management for various small, medium and large capped companies. He has an extensive background in mining law and administration and has provided services to the industry in tenement management and administration, property acquisitions, project generation Page 6

8 and joint venture negotiations. He is responsible for the important tenement management role with Eagle Eye. Number of fully paid Ordinary Shares held directly and indirectly: 1,060,000 Number of Options held directly and indirectly: 1,060,000 Warren John Staude BSc MSc MAusIMM ASIA (Non-Executive) (Appointed 31 March 2006) Sydney based, Warren has long term professional experience in mining and mineral exploration, resource investment and portfolio investment management. Over the past 20 years he has been engaged mostly in institutional investment management and research, working in AMP and GIO. Following AMP s takeover of GIO he assumed a leading role in establishing a specialist international resource equity investment fund and in assisting corporations in fund raising and with corporate advice. Previously he has worked as a Consulting Geologist in both Government and industry, and on the academic staff at Macquarie University. Warren is a Director of minerals explorers Malachite Resources NL, Central West Gold NL, Frontier Resources Limited and Stonehenge Metals Limited. He is a Graduate of the University of Sydney (BSc, Geology), Macquarie University (MSc, Mineral Economics), and holds a Graduate Diploma from the Securities Institute of Australia, and sits on the Joint Ore Reserves Committee (JORC) and the VALMIN Committee. Other Directorships held in the past three years were: Central West Gold NL, appointed 24 February 2202 current. Malachite Resources NL, appointed 9 July 2202 current. Frontier Resources Limited, appointed 31 December 2002 current. Jupiter Mines Limited, appointed 15 April 2204, resigned 2 November Stonehenge Metals Limited, appointed 7 September 2006 current. Number of fully paid Ordinary Shares held directly and indirectly: 600,000 Number of Options held directly and indirectly: 600,000 Tim Colclough (Non-Executive) (Appointed 21 April 2005, Resigned 30 November 2007) Number of fully paid Ordinary Shares held directly and indirectly: 3,125,000 Number of Options held directly and indirectly: 625,000 Results The Net Loss After Taxation of the Company for the year ended 30 June 2008 was 191,355 ( ,813). Principal Activities and Use of Funds During the year the principal activity of the Company was the exploration of it s mining tenements for nickel, gold and other base metals. The Company utilised it s cash funds in a way consistent with it s business objectives as stated in it s 2006 Prospectus. No other substantial activities were undertaken during the year. Page 7

9 Dividends The Directors recommend that no dividend be declared in respect of the financial year covered by this Report. Significant Changes in the State of Affairs No significant changes took place during the year in the state of affairs of the Company. Matters Subsequent to the End of the Financial Year At the date of this Report there is no matter or circumstance which has arisen since the end of the financial year that has significantly affected or may significantly affect: the Company s operations in future financial years; or the results of those operations in future financial years; or the Company s state of affairs in future financial years. Likely Development and Expected Results of Operations There are no likely developments contemplated at the date of this Report that may have a significant affect upon the expected results of operations of the Company. Environmental Regulations Operating in the minerals exploration and development industry, Eagle Eye is subject to Environmental Regulations and controls as set down by the Statutory Authorities, including the Department of Industry & Resources. The Company has complied and will continue to comply with those Regulations, and have adopted such compliance as an important point in our Corporate Governance practices. Meetings of Directors and Committees Directors during the year and Directors' Meetings attended were: Name Meetings Held Meetings Attended Wayne Ryder 6 6 Tim Colclough 3 1 (resigned 30 November 2007) Garry Plowright 6 4 Warren Staude 6 6 The Audit Committee Meeting was formed during the year for the purpose of reviewing and discussing with the Auditors the Company s activities and financial statements for the year. The first meeting was held after balance date and was attended by both members of the Committee, Directors Warren Staude and Garry Plowright. The Company does not have a separate Remuneration Committee. Remuneration is considered and determined by the Board of the Directors of the Company, with any relevant affected Director not participating in the vote on his Remuneration. Remuneration Report (Audited) The Board of the Company determines the remuneration policies and practices generally, and makes specific decisions on remuneration packages and other terms of employment for Executive Directors, other senior executives and Non-Executive Directors. Page 8

10 The Company has no Employee Option Plan and does not offer any other incentives to Directors or Key Management Personnel as part of their remuneration. No Key Management Personnel remuneration is linked to the company s performance. During the year the following Directors fees, salaries, management and consulting fees were paid or accrued to Directors: Salary, Fees Superannuation Total Wayne Ryder 106,761 73, ,000 Tim Colclough 12,500-12,500 (resigned 30 November 2007) Garry Plowright 60,000-60,000 Warren Staude 30,000-30, ,261 73, ,500 Executive Chairman Wayne Ryder is the only Director or Key Management Personnel employed by the Company under Contract. His current Contract for Employment is due to expire on 6 December 2008 if not renewed by then. The Company may terminate the Contract by written notice of at least 2 months, with the balance of remuneration to the expiry date of the Contract thereupon becoming due and payable. The Company may also terminate the Contact without any termination payment for unrectified within 14 days notice of breaches of his required duties and responsibilities. Corporate Governance Statement The Directors are responsible for the Corporate Governance practices of the Company. These practices are being progressively developed, having regard to the most suitable and effective procedures applicable to the Company. The main Corporate Governance practices in operation by the Company are:- The Board of Directors The Board's charter is that it should: be comprised of at least 3 Directors; be made up of a majority of Independent Non-Executive Directors; be comprised of Directors with a broad range of skills, qualifications and experience appropriate to the Company's operations; meet on a regular basis; and maintain constant on-going communication of activities between Directors so that all Directors are fully informed of the Company s business and so as to be possessed of all the necessary information required to make decisions by Resolutions of the Board. Duties and Responsibilities of Directors On the date on which this Report of the Directors is made out, the Board consisted of 3 Directors, the Chairman of which is an Executive Director and the other 2 are Independent Non-Executives. Details of the Directors are set out at the commencement of this Directors Report. The primary responsibilities of the Board include: the approval of the annual Financial Statements; Page 9

11 establishment of long term goals of the Company and strategic plans to achieve those goals; the review and adoption of annual budgets for the financial performance of the Company, monitoring the results on a regular basis; ensuring that the Company abides by ASX listing rule disclosure requirements; ensuring that all management, employees and consultants abide by a high standard code of conduct befitting a listed corporation; ensuring that the Company abides strictly by Environmental Regulations affecting its operations in the minerals exploration and development industry; and ensuring that the Company has implemented adequate systems of internal controls together with appropriate monitoring of compliance activities. Unless disclosed below, all the best practice recommendations of the ASX Corporate Governance Council have been applied for the entire financial year ended 30 June Board Composition The skills, experience and expertise relevant to the position of each Director who is in office at the date of the Annual Report and their term of office are detailed in the Directors Report. The names of independent Directors of the Company are: Warren Staude Garry Plowright When determining whether a Non-Executive Director is independent the Director must not fail any of the following materiality thresholds: less than 10% of Company s Shares are held by the Director and any entity or individual directly or indirectly associated with the Director; none of the Directors income or the income of an individual or entity directly or indirectly associated with the Director is derived from a contract with any member of the Company other than income derived as a Director of the Company. Independent Directors have the right to seek independent professional advice in the furtherance of their duties as Directors at the Company s expense. Written approval must be obtained from the Chairman prior to incurring any expense on behalf of the Company. Securities Trading Policy The Company s policy regarding Directors and employees trading in its securities is set by the Board. The policy restricts Directors and employees from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the Company s securities prices. Communication with Shareholders The Company s policy is to keep Shareholders well informed of operational activities and financial matters via ASX announcements, media releases, direct letter and advices and it s web site. The Company also actively encourages communication from Shareholders. To assist Key Management Personnel with communications, the Company retains investor relations and media consultants. Page 10

12 Audit Committee The names and qualifications of those appointed to the Audit Committee and their attendance at meetings of the Committee are included in the Directors Report. Risk Management The Board and Risk Management Committee are responsible for the Company's system of internal controls to effectively manage material business risks and any oversights. The Board and Committee constantly monitors the operational and financial aspects of the Company's activities and considers the recommendations and advice of the Auditors and other external advisers on the operational and financial risks that face the Company. The Board and Committee ensures that recommendations made by the Auditors and other external advisers are investigated and, where considered necessary, appropriate action is taken to ensure that the Company has an appropriate internal control environment in place to manage the risks identified. The Board is satisfied from the advice of the Chief Executive Officer and Chief Financial Officer, who has signed off in that regard, that all material business risks and financial reporting risks for the financial year have been managed effectively. Code of Conduct As part of the Board's commitment to the highest standards of conduct, the Company has adopted a Code of Conduct to guide executives, management and employees in carrying out their duties and responsibilities. The Code of Conduct covers such matters as: responsibilities to Shareholders; relations with customers and suppliers; compliance with environmental regulations; employment practices; and responsibilities to the community. Performance Evaluation An annual performance evaluation of the Board and all Board members was conducted by the Board for the financial year ended 30 June The Chairman also speaks to each Director individually regarding their role as a Director. The evaluation was considered by the Board and formed the basis for recommendations to set and improve performance criteria and goals for the next year. Remuneration Policies The remuneration policy, which sets the terms and conditions for the key management personnel, was developed by the Board after seeking professional advice from independent consultants. Executives receive a base salary, and may also receive superannuation and fringe benefits. The Board reviews executive packages annually by reference to the Company s performance, executive performance, comparable information from industry sectors and other listed companies and independent advice. The object is to reward executives adequately so as to attract highly capable personnel who will develop the Company s activities to the maximum benefit of Shareholders. Remuneration Committee and Nomination Committee The Company does not have either a Remuneration Committee or Nomination Committee as recommended by the ASX Corporate Governance Council. Given that the Company has only three Directors, it is considered that there are no efficiencies to be gained by having these separate Committees, so these roles are undertaken by the Board. Page 11

13 Other Information Further information relating to the Company s corporate governance practices and policies has been made publicly available on the Company s web site at Proceedings on Behalf of Company No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. Non-audit Services The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for Auditors imposed by the Corporations Act The Directors are satisfied that the services disclosed below did not compromise the external Auditor s independence for the following reasons: all non-audit services are reviewed and approved by the Board prior to commencement to ensure they do not adversely affect the integrity and objectivity of the Auditor; and the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. The Auditors were paid 6,020 (2007: 3,300) for non-audit taxation advisory services during the year. Auditor s Independence Declaration The Auditor s Independence Declaration for the year ended 30 June 2008 can be found on Page 17. This Directors Report is made in accordance with a Resolution of the Board of Directors. Wayne Ryder DIRECTOR Dated at Perth this 30th Day of September 2008 Page 12

14 Grant Thornton (WA) Partnership ABN: Level 1 10 Kings Park Road West Perth WA 6005 PO BOX 570 West Perth WA 6872 T F E admin@gtwa.com.au W INDEPENDENT AUDITOR S REPORT To the members of Eagle Eye Metals Limited Report on the Financial Report We have audited the accompanying financial report of Eagle Eye Metals Limited, which comprises the balance sheet as at 30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors declaration. Directors Responsibility for the Financial Report The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards. Auditor s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. Liability limited by a scheme approved under Professional Standards Legislation. Grant Thornton (WA) Partnership is an independent business entitled to trade under the international name Grant Thornton. Grant Thornton is a trademark owned by Grant Thornton International and used under licence by independent firms and entities throughout the world.

15 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Electronic Presentation of Audited Financial Report This auditor s report relates to the financial report of Eagle Eye Metals Limited (the company) for the year ended 30 June 2008 included on the company s web site. The company s directors are responsible for the integrity of the company s web site. We have not been engaged to report on the integrity of the company s web site. The auditor s report refers only to the statements named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this web site Independence In conducting our audit, we complied with applicable independence requirements of the Corporations Act Auditor s Opinion In our opinion: (a) the financial report of Eagle Eye Metals Limited is in accordance with the Corporations Act 2001, including: i. giving a true and fair view of the company s and consolidated entity s financial position as at 30 June 2008 and of their performance for the year ended on that date; and ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1 Liability limited by a scheme approved under Professional Standards Legislation. Grant Thornton (WA) Partnership is an independent business entitled to trade under the international name Grant Thornton. Grant Thornton is a trademark owned by Grant Thornton International and used under licence by independent firms and entities throughout the world.

16 Report on the Remuneration Report We have audited the Remuneration Report included in pages 8 to 9 of the directors report for the year ended 30 June The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Auditor s Opinion In our opinion the Remuneration Report of Eagle Eye Metals Limited for the year ended 30 June 2008, complies with section 300A of the Corporations Act GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants M. J. Hillgrove Partner Perth, 30 September Liability limited by a scheme approved under Professional Standards Legislation. Grant Thornton (WA) Partnership is an independent business entitled to trade under the international name Grant Thornton. Grant Thornton is a trademark owned by Grant Thornton International and used under licence by independent firms and entities throughout the world.

17 DIRECTORS DECLARATION In accordance with a Resolution of the Directors of Eagle eye Metals Limited, I state that: 1. In the opinion of the Directors: a. The financial statements, notes and the additional disclosures included in the Directors Report designated as audited, of the Company are in accordance with the Corporations Act 2001, including: i. giving a true and fair view of the Company s financial position as at 30 June 2008, and its performance for the year ended on that date; and ii. complying with Accounting Standards and Corporations Regulations 2001; and b. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 2. This Declaration has been made after receiving the Declarations required to be made to the Directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June Page 16

18 Grant Thornton (WA) Partnership ABN: Level 1 10 Kings Park Road West Perth WA 6005 PO BOX 570 West Perth WA 6872 T F E admin@gtwa.com.au W AUDITOR S INDEPENDENCE DECLARATION To the Directors of Eagle Eye Metals Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Eagle Eye Metals Limited for the year ended 30 June 2008, I declare that, to the best of my knowledge and belief, there have been: a b No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and No contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants M. J. Hillgrove Partner Perth, 30 September Liability limited by a scheme approved under Professional Standards Legislation. Grant Thornton (WA) Partnership is an independent business entitled to trade under the international name Grant Thornton. Grant Thornton is a trademark owned by Grant Thornton International and used under licence by independent firms and entities throughout the world.

19 INCOME STATEMENT For the year ended 30 June 2008 Notes Revenue 2 251, ,389 Finance costs (496) (817) Other expenses 3 (426,959) (504,385) Impairment of financial assets 8 (15,000) - Profit/(loss) before income tax (191,355) (353,813) Income tax Profit/(loss) after income tax (191,355) (353,813) Basic and Diluted earnings/(loss) per share 15 (0.004) (0.008) The accompanying notes form part of the Financial Statements Page 18

20 BALANCE SHEET as at 30 June 2008 Note Current Assets Cash and cash equivalents 6 3,034,678 3,860,832 Other current assets 10,700 6,000 Total Current Assets 3,045,378 3,866,832 Non - Current Assets Financial assets 8 242, ,000 Property, plant & equipment 9 8,345 9,696 Exploration and evaluation costs 10 1,491, ,431 Total Non Current Assets 1,741,986 1,087,127 Total Assets 4,787,364 4,953,959 Current Liabilities Trade and other payables 83,293 58,533 Total Current Liabilities 83,293 58,533 Total Liabilities 83,293 58,533 Net Assets 4,704,071 4,895,426 Equity Issued capital 11 5,499,754 5,499,754 Accumulated losses (795,683) (604,328) Total Equity 4,704,071 4,895,426 The accompanying notes form part of the Financial Statements Page 19

21 CASH FLOW STATEMENT For The Year Ended 30 June 2008 Note Cash flows from operating activities Payments to suppliers (402,903) (496,885) Interest received 251, ,389 Cash flows (used in) operating activities 13 (151,803) (345,496) Cash flows from Investing Activities Purchase of financial assets (57,500) (200,000) Exploration and evaluation costs (613,710) (286,870) Purchase of property, plant and equipment (3,141) (9,696) Cash flows (used in) investing Activities (674,351) (496,566) Cash flows from financing activities Proceeds from issue of shares - 5,260,900 Proceeds from borrowings - - Equity fund raising costs - (438,494) Repayment of borrowings - (152,000) Cash flows provided by financing activities - 4,670,406 Net increase/(decrease) in cash held (826,154) 3,828,344 Cash at beginning of the financial year 3,860,832 32,488 Cash at end of the financial year 6 3,034,678 3,860,832 The accompanying notes form part of the Financial Statements Page 20

22 STATEMENT OF CHANGES OF EQUITY For the year ended 30 June 2008 Ordinary Share Capital Accumulated Losses Note 2007 Balance at beginning of the financial year 677,347 (250,515) 426,832 Shares issued during the year 5,260,900-5,260,900 Capital raising costs (438,493) - (438,493) Current year profit/(loss) - (353,813) (353,813) Balance at end of the financial year 5,499,754 (604,328) 4,895,426 Total 2008 Balance at beginning of financial year 5,499,754 (604,328) 4,895,426 Current year profit/(loss) - (191,355) (191,355) Balance at end of the financial year 11 5,499,754 (795,683) 4,704,071 The accompanying notes form part of the Financial Statements Page 21

23 NOTES TO THE FINANCIAL STATEMENTS for the Year Ended 30 June 2008 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES This financial report includes the financial statements and notes of Eagle Eye Metals Limited ( the Company ). Basis of Preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated. The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. (a) Income Tax The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Page 22

24 Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. (b) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Plant and Equipment Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset s useful life to the Company commencing from the time the asset is held ready for use. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset s carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. (c) Exploration and Evaluation Expenditure Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. Page 23

25 A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. (d) Leases Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred. (e) Financial Instruments Recognition and Initial Measurement Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention. Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below. Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the Company no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. Classification and Subsequent Measurement i Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that are not classified in any of the other categories. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. ii Financial Liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method. Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm s length transactions, reference to similar instruments and option pricing models. Page 24

26 Impairment At each reporting date, the group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement. (f) Provisions Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. (g) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other shortterm highly liquid investments with original maturities of three months or less. (h) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (i) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (j) Critical Accounting Estimates and Judgments The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company. Key Estimates Impairment The Company assesses impairment at each reporting date by evaluating conditions specific to the Company that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. Page 25

27 Note 2: Revenue Interest received 251, ,389 Total Revenue 251, ,389 Note 3: Other Expenses Consulting expenses 20, ,268 Administration expenses 406, ,117 Total Expenses 426, ,385 Note 4: Income Tax Expense Prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows: (57,406) (106,144) Add: Tax effect of: other non-allowable items 6,893 - tax losses not brought to account 271, , Less: Tax effect of: share issue expenses (37,274) (37,274) exploration and evaluation expenditure (184,113) (86,061) Recoupment of prior year tax losses not previously brought to account - - Income tax attributable to Company - - Unrecognised Deferred Tax Balances: Unrecognised deferred tax asset losses 765, ,482 Unrecognised deferred tax asset equity 99, ,031 Unrecognised deferred tax liabilities (exploration and evaluation temporary (447,342) (263,229) differences) Net unrecognised deferred tax assets 417, ,284 Page 26