KIMBERLEY METALS LIMITED ANNUAL FINANCIAL REPORT ABN

Transcription

1 ANNUAL FINANCIAL REPORT ABN YEAR ENDED 30 JUNE 2011

2 CORPORATE DIRECTORY Directors J A Wall (Executive Chairman) R E Besley (Non-Executive Director) S J Lonergan (ExecutiveDirector) R J McDonald (Non-Executive Director) J Richards (Non-Executive Director) Company Secretary S J Lonergan Registered Office and Principal Place of Business Level 3, 2 Elizabeth Plaza, North Sydney NSW 2060 Telephone: Facsimile: info@kimberleymetals.com.au Share Registry Boardroom Pty Ltd Level 7, 207 Kent Street Sydney, NSW 2000 Telephone: Facsimile: Auditors PKF (East Coast Practice) Level 10, 1 Margaret Street Sydney, NSW 2000 Web Page

3 KIMBERLEY METALS LTD DIRECTORS REPORT The Directors of Kimberley Metals Limited ( the Company or Kimberley ) hereby present the financial report of the Company. The Company is registered in Queensland. Directors The names of Directors of the Company who held office during the year and were in office at the date of this report unless otherwise stated are: James Wall Executive Chairman - appointed 29 February 2008, Age 66. Bachelor of Engineering from the University of Western Australia. Mr Wall was Managing Director of Nicron Resources Limited during the 1980s and in 1991 became Executive Director of Aztec Mining Company Limited. From late 1991 until mid-1997, he was Managing Director of Savage Resources Limited during which time its market capitalisation on ASX increased by 40 times to over $600 million. Under his management, Savage Resources was transformed from a loss making company into a profitable mining company with substantial operating assets in coal, copper/gold and zinc in Australia and zinc in the USA. He is a fellow of the Australasian Institute of Mining and Metallurgy and is the former Executive Chairman of CBH Resources Limited, retiring in March He was a non-executive director of Ferraus Limited up until 13 September 2011 due to the completion of a takeover, and has previously been a director of other listed companies including Emperor Mines Limited (Chairman) and BMA Gold Limited. Directorships of other listed companies in the last 3 years: Ferraus Limited from 8 November 2007 to 13 September 2011 and CBH Resources Limited from 18 September 2000 to 2 March Robert Besley Non-Executive Director - appointed 29 February 2008, Age 66. Bachelor of Science with Honours in Geology from the University of Adelaide. Mr Besley has over 30 years experience in the minerals industry in Asia, the Middle East, North and South America, Australia and the Pacific Rim. He spent 13 years with Unocal, seven of those as Manager of Minerals for Australia and the Pacific. Mr Besley was General Manager of Australmin Holdings Limited when that company developed a minerals sands project in eastern Australia and a gold mine in Western Australia. Mr Besley was Managing Director of CBH Resources Limited from 10 October 1989 to 11 November He is a fellow of the Australasian Institute of Mining and Metallurgy as well as the American Institute of Mining Engineers. Directorships of other listed companies in the last 3 years: CBH Resources Limited from 18 September 2000 to 2 March 2009 and Silver City Minerals Limited from 5 March 2011.

4 DIRECTORS REPORT Stephen Lonergan Executive Director - appointed 23 November 2011, Age 64. Honours graduate in law from the Australian National University and holds a Master s degree in Law from McGill University, Montreal, Canada. Mr Lonergan is a commercial lawyer based in Sydney with more than 30 years experience in the Australian and international mining industry having been General Counsel of Pancontinental Mining Group, a partner at Baker & McKenzie Sydney, and General Counsel and Company Secretary of Savage Resources Limited. Mr Lonergan was until 2010 General Counsel and Company Secretary of CBH Resources Limited. Directorships of other listed companies in the last 3 years: Paradigm Metals Limited from 15 November 2002 and Finders Resources Limited from 1 March Mr Lonergan was also a Director of the Company from 29 February 2008 to 30 October Rob McDonald Non-Executive Director - appointed 2 May 2008, Age 61. B Comm (UWA) and a MBA (Hons) (IMD). Mr McDonald is the principal of The Minera Group, a specialist mining advisory and investment group headquartered in Australia but active in most mining regions of the world. Minera assists a select number of mining companies and mining investment/ finance institutions in developing and executing business plans in the sector and participates in various investment syndicates. Mr McDonald has some 35 years experience in the mining sector firstly in various roles within the Rio Tinto Group and prior to launching Minera, in investment banking as Managing Director of N.M.Rothschild & Sons and as Director and Principal of Resource Finance Corporation. He is a member of the Australasian Institute of Mining and Metallurgy. Directorships of other listed companies in the last 3 years: Sedgman Limited John Richards Non-Executive Director - appointed 27 August 2008, Age 50. Bachelor of Economics (Honours) from the University of Queensland. Mr Richards has more than 25 years experience in the international minerals industry in a variety of executive and investment banking roles. He worked with the Normandy Mining group of companies in Australia and Europe for 11 years, ending as Group Executive of Strategy and Business Development. He was Head of Standard Bank s Mining & Metals Advisory business in the Asia-Pacific region from 2002 to 2004, when he was appointed Managing Director of Buka Minerals Limited, an ASX-listed resources investment company and then as an Executive Director of Scarborough Minerals plc. He now works as a consultant in mining corporate finance. Directorships of other listed companies in the last 3 years: Buka Gold Limited to August 2009 and Integrated Resources Group Ltd from 14 February Principal activities The Company operates in the mineral exploration, resource development and mining industry in Australia. Operating result The loss of the Company for the year, after providing for income tax, amounted to $3,213,290 (2010 loss of $360,592).

5 DIRECTORS REPORT Review of operations During the reporting period, the Company achieved major progress in both the advancement of its exploration and development assets and in the financing of its activities. The key events during the financial year were: The completion in September 2010 of a two-part agreement with Henan Yuguang Gold and Lead Co. Ltd, the largest silver and lead smelter group in China, ( Yuguang ) under which Yuguang subscribed $5.2 million for a placement of new shares in Kimberley at 25 cents per share and contributed a further $5 million to earn a 25% joint venture interest in the Sorby Hills silver-lead project. Yuguang s funding for the Sorby Hills Joint Venture enabled an 96 hole, 8,560 metre RC and diamond metre drilling program at Sorby Hills in the 2010 dry season producing a JORC Indicated Resource in September 2010 of 17 million tonnes at 4.6% lead, 56 g/t silver and 0.7% zinc. The raising of some $11.05 million from Australian and NZ shareholders by a Share Purchase Plan at 24 cents per share which gave the Company the necessary financial assurance to pursue a dual track development at Mineral Hill through the refurbishment of the Parkers Hill Mine and processing plant for the initial production of copper concentrates while permitting of the Pearse gold/ silver deposit is underway. The completion of an unmarketable parcels scheme whereby the unmarketable parcels of some 7,624 shareholders were sold at 24 cents per share (with the company paying the costs of sale) and the sales proceeds were remitted to participating shareholders rationalising the large shareholder distribution caused by the spin out from CBH Resources Limited. The completion of a farmin and joint venture arrangement with TNG Limited over the Manbarrum area, a mineralised belt appearing to be a continuation of the mineralisation at Sorby Hills in the Northern Territory. The Company has the right to earn a 51% interest in the Manbarrum tenements by spending $4.5 million over 3 years with an initial $0.5 million cash payment, $2 million of exploration expenditure and a final cash payment of $2 million. Thereafter the Company may increase its interest to 80% by sole funding exploration through to a Decision to Mine. The combination of the Sorby Hills and Manbarrum projects provides Kimberley with 140 kilometres of strike in the Bonaparte Basin, the majority of which remains untested. Completion of a successful diamond drilling program at the Parkers Hill underground mine at Mineral Hill generating: o metallurgical test work confirming the quality of the Parkers Hill ore body to produce copper concentrates o an initial high grade copper and a lead-zinc-low grade copper reserve o confirmation of immediate upside potential along strike to the northeast and southwest of the present Resource with additional expectation that high grade copper concentrate production may be extended by two to three years at Parkers Hill through in-mine Resource extension drilling below the lowest development level Completion of the upgrade and refurbishment of the Mineral Hill processing plant to 250,000 tonnes per annum and additional development of the Parkers Hill underground mine at Mineral Hill, enabling the start of commissioning in June The refurbishment and upgrade program commenced in August 2010 and was completed in July The building of management and operations team to bring the Mineral Hill operation into production, to improve the Company s exploration expertise and to provide a dedicated team

6 DIRECTORS REPORT to drive the development process of the Sorby Hills Project. Headcount at the end of the Financial Year was 67. Key appointments during the year included, following the earlier appointment of Stuart Mathews as Chief Operating Officer, included: Project Activities o Mick Hanlon, the previous resident manager at Straits Resources Tritton Mine, as General Manager, Mineral Hill. o Anthony (Trangie) Johnston, with more than 14 years international experience, as Chief Geologist. o Ed Newman, with 33 years mining and exploration experience, as Project Manager of Sorby Hills. A summary of activities at each of the Company s three development projects during the reporting (and subsequently) is as follows: 1. Mineral Hill Mine (New South Wales, Kimberley 100%) The Mineral Hill mine is located in central-western New South Wales, 50 km north of the town of Condobolin. Modern mining operations at Mineral Hill commenced in 1989 after intermittent mining over the previous century. The mine and plant was placed under care and maintenance by Triako Resources Limited in 2005 due to lower commodity prices and declining resources following a period of reduced exploration activity. A series of successful drilling programmes during the year resulted in the discovery and delineation of the high grade Pearse gold deposit, located less than 1 km from Kimberley s Mineral Hill processing plant and within the current mining leases. The first Proven & Probable Ore Reserve estimates for the Pearse Project open cut mine was completed in September 2010 and estimated at 235, g/t gold and 72 g/t silver (as Table 1) at depths of less than 100 metres from surface, providing additional impetus for the reactivation of the Mineral Hill plant. The environmental approval process for the Pearse open cut mine was commenced in February Open Cut Reserves Category Tonnes Silver g/t Gold g/t Contained Silver (oz) Contained Gold (oz) Probable Primary 28, ,417 6,212 Oxide 18, ,102 2,546 Sub Total 46, ,519 8,758 Proven Primary 152, ,709 35,674 Oxide 36, ,519 7,523 Sub Total 188, ,228 43,198 TOTAL 235, ,746 51,956 Table 1 Pearse Open Cut Mine Reserve During the year additional diamond drilling was undertaken at the Parkers Hill underground mine, which confirmed the amenability of the ore body to production of a copper concentrate, additional upside along strike and below the ore body and generated an initial reserve in June 2011 (refer table 2). Ore Reserves will be upgraded with mine development.

7 DIRECTORS REPORT Table 2 Parkers Hill Underground Mine high grade copper reserve and lead-zinc-lower grade copper reserve The resource and reserve definition at Pearse and Parkers Hill justified the commencement of refurbishment of the nominal 200,000 tonnes per annum Mineral Hill plant in August During the refurbishment program, plant upgrades were identified and installed, raising the plant capacity to 250,000 tonnes per annum. Importantly, former key Mineral Hill employees enabled identified additional opportunities to further improve the plant based on their experience before the plant was shut down in The refurbishment and upgrade program was completed in June 2011, within the stated time period, and commissioning commenced in the September 2011 quarter. Concurrent with work on the plant, a decision was made to move ahead with the rehabilitation of the fully permitted Parkers Hill underground mine. Earlier plans had been based on a sequential development with Pearse gold-silver being ore treated first, over a period of approximately 18 months, followed by treatment of the high grade parts of the Parkers Hill deposit. However, a reassessment of the Parkers Hill resource, subsequent development of a mining plan for that deposit (for which underground access on three levels had previously been developed) and Pearse approval delays demonstrated that Parkers Hill ore could be available for treatment prior to Pearse ore. Mining contractor, Pybar, was mobilised to the site in December Rehabilitation of Parkers Hill included the reinstallation of ventilation, power and other services together with dewatering and ground support. By June 2011, underground development was on track for extraction of high grade copper ore from July During the year, priority targets were established to extend resources at Mineral Hill mine and to commence exploration at the nearby Iron Duke prospect to enable the production of copper concentrate and gold and silver doré production beyond Parkers Hill and Pearse.

8 DIRECTORS REPORT Figure 1 Resource Extensions and Mineralisation Targets at Mineral Hill Mine 2. Sorby Hills Silver-Lead-Zinc Project (Western Australia, Kimberley 75% Yuguang 25%) The Sorby Hills project is located in the north-eastern part of the Kimberley region of Western Australia, approximately 50 km from the regional centre of Kununurra and 120 km from the port at Wyndham. Figure 2 Geological Map of Bonaparte Basin showing Sorby Hills and other Kimberley tenements Sorby Hills is the largest undeveloped open cut depth silver-lead resource, in 17 mineralised pods over 8 km, in Australia and was discovered in 1971 by Elf Aquitaine. From 1972 to 1988, 889 holes were drilled at Sorby Hills and three feasibility studies were completed between 1974 and The project was shelved in the 2000s due to Ord River Scheme expansion uncertainty together with commodity price weakness. Following the acquisition of the project by Kimberley in 2008, the Western Australian government renewed mining leases for 21 years in February 2010 removing the Ord River Scheme uncertainty. In September 2010, a two part agreement was reached with the largest silver and lead smelter group in China, Henan Yuguang Gold and Lead Co ( Yuguang ). Under the agreement Yuguang subscribed for

9 DIRECTORS REPORT a $5.2 million placement of new shares in Kimberley and contributed $5.0 million to earn a 25% joint venture interest (with entitlement to an approximate 30% of off take from the Sorby Hills project) and provide funds for to fund the feasibility studies. Yuguang s funding enabled a 96 hole, 8,560 metre RC and diamond drilling program which also established in September 2010, an Inferred and Indicated Resource of 17 million tonnes at 4.6% lead, 56g/t silver and 0.7% zinc. During the year, experienced tropics mining development executive, Ed Newman was appointed to progress these studies with a view to bringing the project towards development in Initial plans are to develop the project in two stages; initially mining 450, ,000 tonnes of ore per annum rising to 1.2 million tonnes of ore per annum on successful project delivery for a projected mine life of at least 10 years. Project approvals are expected by late Manbarrum Project (Northern Territory, Kimberley earning 51% to 80%) During the March quarter, the Company completed a farmin and joint venture arrangement with TNG Limited over the Manbarrum area which lies to the east of the Sorby Hills tenements in the Northern Territory over a mineralised belt interpreted to be a continuation of the mineralisation at Sorby Hills along a syncline around the Bonaparte Basin. Fig3: Tenement map of Bonaparte Basin showing Sorby Hills and Manbarrum projects The Company has the right to earn a 51% interest in the Manbarrum tenements by spending $4.5 million over 3 years with an initial $0.5 million cash payment, $2 million of exploration expenditure and a final cash payment of $2 million. Thereafter the Company may increase its interest to 80% by sole funding exploration through to a decision to mine. The combination of the Sorby Hills and Manbarrum projects provides Kimberley with 140 km of strike along the same geological feature as Sorby Hills around the Bonaparte Basin, of which approximately 100 km remains untested. The Manbarrum project provides the potential for a material life extension for the Sorby Hills project.

10 DIRECTORS REPORT Project Category Mt Pb % Zn % Ag g/t Sorby Hills Inferred/Indicated Manbarrum Inferred/Indicated Table 3: Inferred and Indicated Resources for Sorby Hills and Manbarrum projects Project Category Mt Pb (t) Zn (t) Ag (oz) Sorby Hills Inferred/Indicated , ,900 30,261,290 Manbarrum Inferred/Indicated , ,480 9,615,484 Table 4: Contained Metal at Sorby Hills and Manbarrum projects 4. Constance Range Iron Ore Project (Queensland, Kimberley 30%) The Constance Range project is located in the north-western corner of Queensland. Constance Range was initially discovered by BHP in 1956, who undertook intensive exploration to 1963 producing an initial Inferred Resource of 296 million tonnes grading 53.1% Fe (and 10.3% silica). Subsequent exploration by Kimberley s predecessor resulted in the resource estimate set out below (Table 5). Table 5: Constance Range Resource Estimates* * Resource within Buffer Zone are those resources that occur within 1 km of the national park boundary. Kimberley Metals has a 30% stake in the Constance Range project and estimates that an exploration target of approximately 8 million tonnes of 56.5% Fe (non-jorc compliant) may be available for a direct shipping ore project using truck haulage to the coast and then barges to tranship ore in the Gulf of Carpentaria from Burketown to ore carriers. Development options and infrastructure needs are being reviewed in discussions with the relevant Queensland Government authorities. Competent Person s Statement The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Anthony Johnston, MSc (Hons), who is a Member of the Australasian Institute of Mining and Metallurgy and is a full-time employee of the Company as Chief Geologist. Anthony Johnston has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Johnston consents to the inclusion in this report of the matters based on his information in the form and context that the information appears. Dividends No dividends were paid or declared since the start of the financial period. Significant changes in the state of affairs In the opinion of the directors there were no significant changes in the state of affairs of the Company other than those noted in the review of operations.

11 DIRECTORS REPORT Events subsequent to reporting date There have been no material events subsequent to the reporting date other than commissioning of the Mineral Hills treatment plant. On 27 July 2011 the Company announced a placement (ASX KBLGA) of 10 million convertible notes and as at 28 September 2011 issued an additional 12.9m notes on a pro-rata 1 for 6, nonrenounceable rights issue basis at 38 cents per note. The convertible notes will pay interest at the rate of 10% p.a., have a 5 year term and holders will be able to convert them to ordinary shares on a one of one basis at quarterly points during the 5 year term. Meetings of directors The table below sets out the Board and committee meetings held during the financial year including the number of eligible meetings and the number attended by each Director. DIRECTOR Board Audit Remuneration Held Attended Held Attended Held Attended JA Wall RE Besley SL Lonergan RJ McDonald J Richards Remuneration Report In the following discussion these terms have the meanings indicated: Key Performance Indicator or KPI is a measure agreed between the Company and an employee, or Director as representing a key deliverable or result against which that employee s or Director s performance is to be measured in a given period. Long Term Incentive or LTI is the amount due to any employee or Director as a long term incentive. LTIs will typically be payable in the form of equity (shares, options or performance rights) and will typically relate to share price performance over a period greater than one year. Short Term Incentive or STI is the amount payable to an employee or Director in cash (or any other form) relating to performance against KPIs in a specific period. Total Fixed Remuneration or TFR is the sum of all salary and related benefits, including Company contributions to superannuation but excluding any STI and LTI payments. Total Remuneration refers to the sum of the TFR, STI and LTI for an employee or Director. Total Shareholder Return or TSR is the Company s share price accretion plus dividends which are assumed to have been reinvested. The Company aims that employees and Directors Total Remuneration (including STI and LTI where appropriate) will fall in the third (i.e. second highest) quartile of industry remuneration. However, it is recognised that in a competitive environment for talent where Kimberley cannot offer a career path or diversity of opportunity as offered by larger resources companies, a flexible approach needs to be maintained. The Company has a preference for a higher than normal percentage of Total Remuneration to be in the form of STI and LTI. This reflects Kimberley s size, the importance of minimising fixed costs and

12 DIRECTORS REPORT the desire for performance-oriented pay structures. This also recognises that Kimberley has more flexibility in offering equity based LTI s than its larger competitors and this will be used by Kimberley as a differentiator. In particular, it is the Board s view that Kimberley s Executive Chairman (and any future Chief Executive Officer) should receive Total Remuneration which is heavily weighted to performancerelated pay (STI and LTI) to ensure a dynamic focus. It is noted that the current Executive Chairman has Total Fixed Remuneration which is very low in comparison with his peers at similar companies somewhat offset by a relatively higher STI. The Board has adopted the policy that Total Remuneration should be subject to annual review. Except where particular anomalies are identified, salary review increments will be consistent with industry averages with the Board retaining flexibility to ensure a competitive remuneration plan. To identify prevailing industry averages the Company is guided by independent remuneration data received on a subscription basis. Short Term Incentives are paid in cash following year end and are based on performance against agreed Key Performance Indicators. Where an employee s Total Fixed Remuneration is in the top or second top quartile of industry remuneration, the maximum STI for that person will normally be 33% of TFR recognising that payments outside this parameter may nevertheless be required to address market circumstances. Where an employee s TFR is in a lower quartile, the employee s STI will be a maximum of 50% of TFR. For Kimberley s current group of executive Directors and senior executives, the following are currently considered to be appropriate maximum levels of STI: o Executive Chairman: for reasons noted above, 150% of a low TFR relative to peers; o Chief Operating Officer: 50% of TFR; o Executive Director, Commercial and Chief Financial Officer 50% of TFR; o General Managers 50% of TFR. With respect to contractual arrangements, all employment contracts with key management personnel are ongoing and have no set duration. Contracts do not provide for payment of termination benefits other than accrued entitlements. Employment contracts are terminable on between one and three months notice. The executive Directors (Messrs Wall and Lonergan) do not have formal employment contracts and their employment may be terminated on one month s notice without termination benefits. The Company s performance for the purposes of application of remuneration policy has not been driven by the Company s earnings performance as cash flow from the Mineral Hill mine has not yet commenced and the Company is otherwise engaged in exploration and development activities. However, the Company s performance, from the perspective of shareholder wealth creation has been assessed on the basis of the Company s Total Shareholder Return performance for measured against those resources companies included in the S&P/ASX 300 Metals and Mining Index as of 1 July Against this measure, the Company ranked 12th out of the 62 mining companies in the index. Director Remuneration The Non- Executive Directors (Messrs Besley, McDonald and Richards) were each paid Directors fees of $50,000 plus an amount equivalent to statutory superannuation during the year. In addition, Mr Besley provided consulting services to the Company for which he received an additional $64,500 and awarded an STI of $50,000. The Executive Chairman, Mr Wall, received a salary of $250,000 (plus statutory superannuation) during and an STI of $281,250 was awarded based on his having satisfied 2 of his 3 KPI measures for the year. Mr Wall s salary for will be $350,000.

13 DIRECTORS REPORT The Executive Director Commercial, Mr Lonergan was appointed a Director on 24 November 2010 and prior to his appointment was remunerated on the basis of an hourly fee for time worked as Company Secretary and General Counsel. During Mr Lonergan was paid aggregate fees of $258,750. It is intended that in Mr Lonergan remuneration will be switched to an annual salary basis. Mr Lonergan was awarded a STI of $50,000 for the year. Long Term Incentives The Company s policy on Long Term Incentives is that they should be available only to personnel who have an ability to impact the value of the Company whether individually or as part of a group. 1. Directors With respect to Directors, the Company believes that any equity based plan should be aligned with shareholder interests and therefore only reward Directors by reference to the Company s TSR bettering its peers. In 2009, the following LTI plan (as amended by the Company s 1 for 2 share consolidation in December 2009) was adopted for the then Directors. The Company on 30 June 2010 issued to each current Director the number of Performance Rights specified in the Table below for nil consideration obliging the Company to issue one ordinary fully paid share in the Company at the request of the Director if: the Company TSR is in the Second Quartile of the Ranking Table, each Director shall be entitled 50% of the number of Performance Rights specified in relation to him in the Table below; and the Company TSR is in the First Quartile of the Ranking Table, each Director shall be entitled to 100% of the number of Performance Rights specified in relation to him in the Table below Value on grant date Expensed during the period Not expensed at 30 June 2011 No. $ $ $ JA Wall 1,500, ,933 74,967 49,293 RE Besley 750,000 74,966 37,483 24,647 SL Lonergan 750,000 74,967 37,483 24,647 RJ McDonald 750,000 74,966 37,483 24,648 J Richards 750,000 74,967 37,483 24,648 Total 4,500,000* 449, , ,883 * All The performance rights were in issue on 1 July The Company has given an undertaking to the ASX that no shares will be issued pursuant to the Performance Rights held by Directors within 24 months after the Company listing date being 25 February The fair value of the Performance Rights on grant date was assessed as $449,799 ($0.20 per Performance Right) and 4,500,000 Performance Rights, with a value of $224,899, were expensed during the period and therefore form part of the share based payment expense for the year. The following assumptions were used in determining the fair value of Performance Rights on 25 February 2010: Fair value at grant date $0.20 Share price at grant date $0.20 Exercise price nil

14 DIRECTORS REPORT Expected volatility 110% Risk-free interest rate based on government bonds 5.7% Expected life of Performance Rights 2 years (Note: The Company has given an undertaking to ASX that no securities will be issued pursuant to this plan before 25 February 2012) For the purposes of the LTI for Directors the following definitions apply: Company TSR the Company s total shareholder return (as determined in accordance with generally accepted investment analysis principles) based on a start date of 1 July 2009 and a start share price of 10 cents per share and ending on 31 December First Quartile means the first quartile of the Ranking Table below the top of the Ranking Table. Peer Group Company means each Company listed in the S&P/ASX 300 Metals and Mining Index as of 1 July Ranking Table means a table ranking, from highest to lowest, the total shareholder returns for the Company and each of the Peer Group Companies for the period commencing 1 July 2009 and ending 31 December Second Quartile means the quartile immediately below the First Quartile in the Ranking Table. The Directors current LTI plan expires on 31 December 2011 and any further plan will require shareholder approval. One Director, Mr Richards also holds 500,000 options exercisable at 42 cents and expiring on 27 August These options do not have performance conditions other than that inherent in an exercise price of 42 cents. 2. Non Directors With respect to LTI s for employees other than Directors, the Company has on issue an aggregate of 1,900,000 options exercisable at 20 cents of which all but 250,000 cannot be exercised before the commencement of commercial production at Mineral Hill. The Board has determined that this performance hurdle has not yet been achieved. Prior to year end, the Board adopted a new LTI for senior employees and this is structured on the basis of shares being issued to participants at market price at the date of issue. The subscription price for these shares is lent to the participant by the Company on a limited recourse basis. The shares become saleable by the employee in three tranches over the 3 years following the date of issue. Upon sale of some or all of the shares, the employee is obliged to repay the loan in respect of those shares and is entitled to retain the surplus. If an employee leaves the Company then his entitlement to sell shares ceases and his shares are to be either sold to repay the Company s loan or cancelled. To date, 2,400,000 shares each at 30 cents and 300,000 shares each at 29 cents have been issued to a total of 13 employees under this LTI. The Directors believe that this LTI provides a real incentive to participants to work to improve the Company s share price and is therefore consistent with the interests of shareholders. The board also believes there should be some equity incentive for selected employees who are not the beneficiary of an LTI reflecting the principle that all long term employees should have some equity interest in the Company. Hence during some 23 employees not participating in the LTI plan described above were issued with a $1,000 each worth of the Company s shares at no cost under an exempt share plan. No Director or executive of the Company has received a benefit other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors and executives shown below.

15 DIRECTORS REPORT Remuneration paid to the Non- Executive Directors during the year was as follows: Name Title Year Non - Executive Director Fees Cash Bonus Superannuation Compensation: Equity Shares/ Rights / Options R E Besley a Non-Executive Director ,257-9,743 37, , ,667 40,000 7,425 12, ,929 R J Non-Executive Director ,000-4,500 37,483 91,983 McDonald a ,500-7,425 12,837 74,762 J Richards a Non-Executive Director Chairman Audit Committee Total ,000-4,500 53, , ,500-4,275 26, ,337 Totals ,257-18, , , ,667 40,000 19,125 52, ,028 Remuneration paid to the key management personnel during the year was as follows: Primary Benefits Equity Compensation Total Name Title Year Salaries and Fees Cash Bonus Non- Monetary Super- annuation Shares / Rights / Options J A Wall a,b Executive Chairman , ,500-22,500 74, ,967 SJ Lonergan a S Mathews a Executive Director Company Secretary Chief Operating Officer , ,000-14,850 25, , , , , ,325 20,000-7,425 12, , , , , , , ,875-22,768 Totals , ,500-45, ,054 1,264, , ,000-24,150 38, ,378 a) Remuneration of $352,822 for the Shares, Rights and Options for 2011 were due to the amortization of the fair value that was determined by Black-Scholes option pricing model. b) Mr Wall potential maximum bonus was $375,000, being 150% of his salary, based on the achievement of certain KPI. Mr Wall achieved 75% of the maximum bonus, of which 50% was achieved in the year ended 30 June 2011 and the remaining 25% was approved by the remuneration committee after the completion of the financial year. Mr Wall forfeited 25% of his maximum bonus. The bonus was paid on 28 September As such directors remuneration and key management personnel remuneration totalling $1,621,093 has been recognised in the year ended 30 June 2011 (2010 $931,406).

16 DIRECTORS REPORT Equity compensation comprised the following: $ $ Performance Rights 224,899 77,019 Share Options 127,923 13, ,822 90,746 Ordinary shares For part of the period prior to the Company s listing on ASX, Directors deferred receipt of cash salaries and, on listing, elected to receive shares at the IPO issue price in lieu of the deferred cash salaries. The value of shares on grant date was 20c and the the fair value was determined by Black-Scholes option pricing model as $255,643. Shares issued 2011 Shares 2010 issued No.* $ No.* $ JA Wall - - 1,650,000 83,693 RE Besley ,000 41,846 IR Plimer ,600 22,319 SL Lonergan ,000 41,846 RJ McDonald ,000 41,846 J Richards ,000 24, ,079, ,643 * These shares were issued pre-consolidation and were effectively halved on the share consolidation. Share Options Directors and Executive On 27 August 2008, 1,000,000 options were granted to Mr J Richards with an exercise price 21 cents and expiry date of 27 August These shares were issued pre-consolidation and were effectively halved on the share consolidation. This resulted in the number of options reducing to 500,000 and the exercise price increasing to 42c. The option entitle the holder to one ordinary fully paid up equity share per option held. The fair value at grant date was assessed at $65,319 with an amount of $30,044 treated as vested at year end, including $16,319 which relates to the current year and were treated as part of share based payments. Fair value at grant date $0.14 Share price at grant date $0.20 Exercise price $0.42 Expected volatility 110% Risk-free interest rate based on government bonds 5.7% Expected life of option 5 years

17 DIRECTORS REPORT On 20 July 2010, 1,650,000 options were granted to employees of the Company of which included 1,000,000 options granted to Chief Operating Officer, Mr Stuart Mathews with an exercise price 20 cents and expiry date of 20 July 2015, entitling the holder to one fully paid ordinary share per option held and is exercisable on commencement of commercial production at Mineral Hill. The fair value of the grant date was assessed at $282,150 with a value of $185,812 in the current period and were treated as part of share based payments. Fair value at grant date $0.17 Share price at grant date $0.21 Exercise price $0.20 Expected volatility 110% Risk-free interest rate based on government bonds 5.7% Expected life of option 5 years Summary of Options Directors and Executive Value on grant Expensed during the year Not expensed at 30 June 2011 No. $ $ $ J Richards 500,000 * 65,319 16,319 35,275 S Matthews 1,000,000 ** 171, ,604 59,522 Total 1,500, , ,923 94,797 * On issue at 1 July 2010 ** Issued on 20 July 2010 No options were exercised during the year.

18 DIRECTORS REPORT DIRECTORS SHAREHOLDINGS The following tables set out each Director s relevant direct or indirect interest in the securities of Kimberley Metals Limited as at 30 June 2011: Fully Paid Ordinary Shares Balance as at 1 July 2010 Held on Appointment Sold Issues Balance as at 30 June 2011 Directors No s No s No s No s No s JA Wall 3,111, ,358 3,647,392 RE Besley 1,011,456 - (5,000) 125,001 1,131,457 RJ McDonald 1,517, ,334 1,601,221 J Richards 475, , ,667 SJ Lonergan - 501, ,478 Total 6,115, ,478 (5,000) *786,360 7,398,215 * Issues were made due to the Directors participation in the Share Purchase Plan on December Directors and officers indemnities and insurance During the financial year, the Company has paid an insurance premium in respect of a contract insuring each of the Directors and Officers of the company, against all liabilities and expenses arising as a result of work performed in their respective capacities, to the extent permitted by law. Disclosure of the total amount of the premium and the nature of the liabilities in respect of such insurance is prohibited by the policy. Proceedings on behalf of the Company No person has applied to the court under s237 of the Corporation Act 2001 for leave to bring proceedings on behalf of the Company or intervened 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. Environmental regulations The Company participates in mineral exploration activities covered by mineral exploration/ mining licences governed by the relevant States. These licences specify the environmental regulations applicable to the exploration of minerals. There have been no known breaches of the environmental obligations of the Company s contracts or licences. Likely developments Disclosure of information regarding likely developments in the operations of the Company in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Company. Accordingly, this information has not been disclosed in this report.

19 DIRECTORS REPORT Non-audit services Non-audit services are approved by the Board of Directors. No non-audit services were provided by the auditors during the year. Auditor s independence declaration In accordance with the Audit Independence requirements of the Corporations Act 2001, the Directors have received and are satisfied with the Audit Independence Declaration provided by the Company s external auditors PKF. The Audit Independence Declaration has been attached as part of this Directors Report on the following page. Signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations Act For and on behalf of the Directors James A Wall Director Dated: 28 September 2011

20 Lead auditor s independence declaration under Section 307C of the Corporations Act 2001 To the Directors of Kimberley Metals Limited I declare to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2011 there have been: no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit, and no contraventions of any applicable code of professional conduct in relation to the audit. PKF Tim Sydenham Sydney Partner 28 September 2011 Tel: Fax: PKF ABN Level 10, 1 Margaret Street Sydney New South Wales 2000 Australia The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. Liability limited by a scheme approved under Professional Standards Legislation.

21 STATEMENT OF COMPREHENSIVE INCOME Note 30-Jun Jun-10 $ $ Continuing operations Interest revenue 791, ,081 Management fees Sorby Hills Joint Venture 292,293 - Other income - 4,052 Employee benefits 6 (2,169,037) (1,500,238) Depreciation (11,992) (105,959) General and administration expenses (1,662,190) (746,284) Finance costs 7 (264,796) (147,569) Fair value (loss)/gain on financial liabilities 18 (290,470) 1,983,538 Share of joint venture profits ,197 - Loss before income tax (3,213,290) (304,379) Income tax expense 8 - (56,213) Loss for the year (3,213,290) (360,592) Other comprehensive income for the year - - Total comprehensive income for the year (3,213,290) (360,592) Loss per share attributable to the ordinary equity holders of the Company Cents Cents Basic loss per share 27 (2.0) (0.3) Diluted loss per share 27 (2.0) (0.3)

22 STATEMENT OF FINANCIAL POSITION as at 30 June 2011 Note 30-Jun Jun-10 $ $ CURRENT ASSETS Cash and cash equivalents 9 8,359,829 7,797,542 Trade and other receivables 10 1,314, ,680 Inventories , ,794 Total current assets 9,791,169 8,108,016 NON-CURRENT ASSETS Other financial assets 12 1,029, ,000 Plant and equipment 13 10,349, ,011 Mining property 14 20,355,650 - Investment in joint venture 15 9,474,446 - Exploration and evaluation 16 1,948,437 24,431,942 Total non-current assets 43,156,884 26,258,953 TOTAL ASSETS 52,948,053 34,366,969 CURRENT LIABILITIES Trade and other payables 17 6,292, ,294 Provisions ,808 27,359 Financial liabilities 18 1,818,800 - Total current liabilities 8,220, ,653 NON-CURRENT LIABILITIES Financial Liabilities 18 1,198,774 3,262,610 Provisions , ,447 Total non-current liabilities 1,663,859 3,895,057 TOTAL LIABILITIES 9,884,508 4,552,710 NET ASSETS 43,063,545 29,814,259 EQUITY Issued capital 20 46,754,093 30,742,750 Reserves , ,782 Accumulated losses (4,249,563) (1,036,273) TOTAL EQUITY 43,063,545 29,814,259

23 STATEMENT OF CHANGES IN EQUITY Issued capital Share based payment reserve Accumulated losses Total $ $ $ $ Year ended 30 June 2011 As at 1 July ,742, ,782 (1,036,273) 29,814,259 Total comprehensive income for the year - - (3,213,290) (3,213,290) 30,742, ,782 (4,249,563) 26,600,969 Transactions with owners in their capacity as owners Ordinary shares issued 16,404, ,404,588 Transaction costs (393,245) - - (393,245) Equity settled transactions - 451, ,233 Total 16,011, ,233-16,462,576 As at 30 June ,754, ,015 (4,249,563) 43,063,545 Year ended 30 June 2010 As at 1 July ,594, ,679 (675,681) 19,191,120 Total comprehensive income for the year - - (360,592) (360,592) 19,594, ,679 (1,036,273) 18,830,528 Transactions with owners in their capacity as owners Ordinary shares issued 11,773, ,773,651 Transaction costs (880,666) - - (880,666) Transfer from share based payment reserve 255,643 (255,643) - - Equity settled transactions - 90,746-90,746 Total 11,148,628 (164,897) - 10,983,731 As at 30 June ,742, ,782 (1,036,273) 29,814,259

24 STATEMENT OF CASH FLOWS $ $ Cash flows from operating activities Note Cash receipts during the course of operations 271,547 65,720 Payments to suppliers and employees (2,675,560) (1,581,872) Interest received 759, ,605 Interest paid (14,368) (35) Net cash generated from /(used in) operating activities 28 (1,658,570) (1,336,582) Cash flows from investing activities Payments for development (5,162,927) - Payments for plant and equipment (6,761,564) (109,009) Payments for exploration and evaluation (541,420) (1,200,099) Employee loan (194,793) 15,125 Other financial assets (109,000) - Net cash used in investing activities (12,769,704) (1,293,983) Cash flows from financing activities Proceeds from issue of equity securities 16,404,588 11,325,609 Repayments of borrowings (1,020,782) (1,000,000) Payment of share issue costs (393,245) (744,479) Net cash provided by financing activities 14,990,561 9,581,130 Net increase in cash held 562,287 6,950,565 Cash at the beginning of the financial year 7,797, ,977 Cash at the end of the financial year 9 8,359,829 7,797,542

25 1. Corporate information Kimberley Metals Limited (the Company) is a publicly listed company domiciled in Australia. The address of the Company s registered office is Level 3, 2 Elizabeth Plaza, North Sydney, NSW The financial statements of the Company are. The Company is primarily involved in mineral exploration, resource development and mining industry in Australia. 2. Basis of preparation (a) Statement of compliance The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards, including Australian Interpretations, adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act The financial report of the Company complies with International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board (IASB). The financial statements were approved by the Board of Directors on 28 September (b) Basis of measurement The financial report has been prepared on the historical cost basis, except where applicable the revaluation of financial liabilities through profit or loss. (c) Functional and presentation currency The financial report is presented in Australian dollars which is the functional currency for the Company. (d) Use of estimates and judgements The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements is in respect of the provision for restoration (refer Note 19), testing for impairment of mining properties (note 14) and the amount due to Triako Resources Pty Ltd (note 18). 3. Significant accounting policies (a) Financial instruments (i) Non-derivative financial instruments Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and other payables. A financial instrument is recognised if the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Company s contractual rights to the cash flows from the financial assets expire or if the Company transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, the date that the Company commits to purchase or sell the asset. Financial liabilities are derecognised if the Company s obligations specified in the contract expire, are discharged or cancelled. Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Company s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Accounting for finance income and expense in relation to financial instruments is discussed in note 3(i). Non-derivative financial instruments are classified, recognised and measured as follows:

26 3. Significant accounting policies continued Financial assets and liabilities at fair value through profit or loss An instrument is classified as at fair value through profit or loss if it is held for trading or is designated as such on initial recognition. Upon initial recognition, attributable transaction costs are recognised in profit or loss as incurred. Financial instruments at fair value through profit or loss are measured at fair value and subsequent changes in fair value are recognised in profit or loss. Loans and receivables Loans and receivables are non-derivative financial assets with fixed and determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process. Available-for-sale financial assets The Company s investments in equity securities are classified as available-for-sale financial assets. Subsequent to initial recognition available-for-sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or determined to be impaired, at which time the accumulative gain or loss previously reported in equity is recognised in profit or loss. Financial liabilities at amortised cost Financial liabilities recognised at amortised are initially recognised at their fair value, net of transaction costs. These are subsequently measured at amortised cost using the effective interest method. Issued capital Ordinary shares are classified as equity. The incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any related income tax benefit. (b) Property, plant and equipment (i) Initial recognition Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of selfconstructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition. (ii) Subsequent costs The cost of replacing part of an item of property, plant or equipment is recognised in the carrying amount of the item if it is probable that the replacement will result in an increase in future economic benefit accruing to the Company. The cost of the replacement can only be recognised if it can be measured reliably. (iii) Depreciation Depreciation is provided on all property, plant and equipment so as to write off assets progressively over their useful economic lives. Depreciation methods, useful lives and residual values are reassessed at the reporting date and mine buildings, plant and equipment are depreciated over life of mine. Depreciation rates used are as follows Office equipment Mine buildings Mobile equipment Treatment plant 3 years 10 years 5 years 10 years

27 3. Significant accounting policies continued (iv) Disposal and derecognition An item of property, plant or equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss for the period. (c) Exploration and evaluation expenditure Exploration and evaluation expenditure is charged to the statement of comprehensive income account as incurred except in the following circumstances, in which case the expenditure is capitalised: the exploration and evaluation activity is within an area of interest for which it is expected that the expenditure will be recouped through successful development and exploitation or sale; or at the statement of financial position date, exploration and evaluation activity has not reached a stage which permits a reasonable assessment of the existence of commercially viable reserves; or the exploration and evaluation activity is within an area of interest which was acquired in a business combination and measured at fair value on acquisition. Capitalised exploration and evaluation expenditure is recorded at cost less impairment losses. As the asset is not available for use it is not depreciated. All capitalised exploration and evaluation expenditure is monitored for indications of impairment for each area of interest and where a potential impairment is indicated an assessment is performed. (d) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition.net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and costs necessary to make the sale. (e) Impairment (i) Financial assets A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of the asset. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value. If evidence of impairment exists, individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in Companies that share similar credit risk characteristics. All impairment losses are recognised in profit or loss. Any cumulative loss in respect of an available- for-sale financial asset previously recognised in equity is transferred to profit or loss. If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has occurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows discounted at the financial assets original effective interest rate and recognised in profit or loss. An impairment loss can be reversed if the reversal can be related objectively to an event occurring after the impairment was recognised. For financial assets measured at amortised cost the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised in equity.

28 3. Significant accounting policies continued (ii) Non-financial assets The carrying amounts of the Company s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset s recoverable amount is estimated. The recoverable amount in respect of goodwill and development is estimated at each reporting date. An impairment loss is recognised if the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. A cash generating unit is the smallest identifiable asset within the Company that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted using a pre-tax discount rate that reflects the time value of money and the risks specific to the asset. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (f) Employee benefits (i) Short term benefits Liabilities for employees entitlements to wages and salaries, annual leave and other employee entitlements expected to be settled within 12 months of the reporting date are recognised in current provisions in respect of employees services up to reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable. (ii) Long-term benefits The Company s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods plus related on-costs discounted to determine its present value. (iii) Termination benefits Termination benefits are recognised as an expense when the Company is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Company has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. (iv) Share-based payment transactions The grant date fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to exercise the options. Where awards are forfeited because non-market based vesting conditions are not satisfied, the expense previously recognised is proportionately reversed. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

29 3. Significant accounting policies continued (g) Provisions Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. (h) Provision for restoration and rehabilitation A provision for material restoration obligations is recognised in relation to exploration licences, development projects and mining operations. The amount recognised includes reclamation and site rehabilitation after taking into account restoration works that are carried out during exploration, development and production. Costs are determined from estimates of future costs and are then discounted at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. (i) Finance income and expense Finance income comprises interest income on funds invested, dividend income, gains on the disposal of available-for-sale financial assets, changes in the value of financial assets at fair value through profit or loss, foreign currency gains, and gains on hedging instruments that are recognised in profit or loss. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the Company s right to receive payment is established. Finance expenses comprise interest expense on borrowings, unwinding of discount on provisions, foreign currency losses, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets, and losses on hedging instruments that are recognised in profit or loss. All borrowing costs are recognised in profit or loss using the effective interest method. (j) Income Tax Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the statement of financial position method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is recognised for all deductible temporary timing differences except for those arising: on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit; and in relation to differences associated with investments in subsidiaries and jointly controlled entities to the extent that they will probably not reverse in the foreseeable future.

30 3. Significant accounting policies continued Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that the related tax benefit will be realised. Deferred tax assets and liabilities are offset only if a legally enforceable right exists to offset current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same taxation authority, the Australian Taxation Office. (iii) Other taxes Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax ( GST ) except: where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. Cash flows are included in the Statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as part of operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. (k) Segment reporting A business segment is a distinguishable component of the entity that is engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is a distinguishable component of the entity that is engaged in providing products or services within a particular economic environment and is subject to risks and returns that are different than those of segments operating in other economic environments. (l) Foreign currency translation Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the statement of financial position date. (m) Earnings per share Basic earnings per share Basic earnings per share is determined by dividing net profit after income tax attributable to members of the Company, excluding any costs of servicing equity, other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary shares issued during the period. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

31 3. Significant accounting policies continued (n) Mining Properties Mining Properties are initially recognised at cost. Mining Properties are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of Mining Properties is measured as the difference between net disposal proceeds and the carrying amount of the asset. The method and useful lives of the asset is reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period. Costs are capitalised when it is probable that the project will be a success considering its commercial and technical feasibility; the entity is able to use or sell the asset; the entity has sufficient resources; and intent to complete the development and its costs can be measured reliably. Mining Property has a finite useful life and will be depreciated over the life of mine. (o) Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependant on the use of a specific asset or assets and the arrangement conveys a right to use the asset. A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits. Finance leases are capitalised. A lease asset and liability are established at the present value of minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability. Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset s useful life and the lease term if there is no reasonable certainty that the entity will obtain ownership at the end of the lease term. Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line basis over the term of the lease. (p) Going Concern The financial statements have been prepared on a going concern basis. (q) New standards and interpretations not yet adopted The following standards, amendments to standards and interpretations have been identified as those which may impact the entity in the period of initial application. They are available for early adoption at 30 June 2011 but have not been applied in preparing this financial report: The following standards and interpretations not yet adopted have been reviewed by the Company. It is the opinion of management that these standards and interpretations will not have an impact to the Company s financial statements.

32 3. Significant accounting policies continued AASB No. Title Issue Date Operative Date (Annual reporting periods beginning on or after) 9 Financial Instruments Dec Jan Consolidation Jun Jan Joint Arrangements Jun Jan Disclosure of Interests in Other Entities Jun Jan Fair Value Measurement Jun Jan Application of Tiers of Australian Accounting Standards Jun Jul Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13] Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] Amendments to Australian Accounting Standards Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7] Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] Amendments to Australian Accounting Standards Deferred Tax: Recovery of Underlying Assets [AASB 112] Amendments to Australian Accounting Standards Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters [AASB 1] Amendments to Australian Accounting Standards Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters [AASB 1] Dec Jan 2011 Jun Jul 2013 Jun Jan 2011 Oct Jan 2011 Nov Jul 2011 Dec Jan 2013 Dec Jan 2012 Dec Jul 2011 Dec Jul 2011

33 3. Significant accounting policies continued Amendments to Australian Accounting Standards Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters [AASB 1] Further Amendments to Australian Accounting Standards Removal of Fixed Dates for First-time Adopters [AASB & AASB ] Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project [AASB 1, AASB 5, AASB 101, AASB 107, AASB 108, AASB 121, AASB 128, AASB 132 & AASB 134 and Interpretations 2, 112 & 113] Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project Reduced Disclosure Requirements [AASB 101 & AASB 1054] Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements [AASB 124] Dec Jul 2011 Dec Jan 2013 May Jul 2011 May Jul 2013 Jul Jul 2013 Main features of newly issued or amended Australian Accounting Standards The following standards should be adopted by an entity during the first annual reporting period commencing after the effective date of each pronouncement. In certain circumstances earlier adoption may be permitted, refer to the full pronouncements for further detail. AASB 9 Financial Instruments The revised AASB 9 incorporates the IASB s completed work on Phase 1 of its project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement) on the classification and measurement of financial assets and financial liabilities. In addition, the IASB completed its project on derecognition of financial instruments. The Standard includes requirements for the classification and measurement of financial instruments, as well as recognition and derecognition requirements for financial instruments. AASB 9 (issued in 2009) only included requirements for the classification and measurement of financial assets resulting from the first part of Phase 1 of the IASB s project to replace IAS 39 (AASB 139). The main changes in this Standard compared with AASB 139 are described below. (a) Financial assets are classified based on: (i) the objective of the entity s business model for managing the financial assets; and (ii) the characteristics of the contractual cash flows. This replaces the categories of financial assets in AASB 139, each of which had its own classification criteria. Application guidance has been included in AASB 9 on the conditions necessary for a financial asset to be measured at amortised cost. (b) AASB 9 allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment are recognised in profit or loss and there is no impairment or recycling on disposal of the instrument.

34 3. Significant accounting policies continued (c) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases. (d) Hybrid contracts with financial asset hosts are classified and measured in their entirety in accordance with the classification criteria. (The treatment of embedded derivatives in respect of financial liability hosts has not changed.) (e) Investments in unquoted equity instruments (and contracts on those investments that must be settled by delivery of the unquoted equity instrument) must be measured at fair value. However, in limited circumstances, cost may be an appropriate estimate of fair value. (f) Investments in contractually linked instruments that create concentrations of credit risk (tranches) are classified and measured using a look through approach. Such an approach looks to the underlying assets generating cash flows and assesses the cash flows against the classification criteria (discussed in (a) above) to determine whether the investment is measured at fair value or amortised cost. (g) Financial assets are reclassified only in the rare circumstances when there is a relevant change in the entity s business model. (h) The portion of a change of fair value relating to the entity s own credit risk for financial liabilities measured at fair value utilising the fair value option is presented in other comprehensive income, except when that would create an accounting mismatch. If such a mismatch would be created or enlarged, the entity is required to present all changes in fair value (including the effects of changes in the credit risk of the liability) in profit or loss. AASB 10 Consolidation AASB 10 replaces AASB 127 and 3 key elements of control. According to AASB 10 an investor controls an investee if and only if the investor has all the following: (a) power over the investee; (b) exposure, or rights, to variable returns from its involvement with the investee; and (c) the ability to use its power over the investee to affect the amount of the investor s returns. Additional guidance is provided in how to evaluate each of the three limbs above. While this is not a wholesale change from the current definition of control within AASB 127 (and for many entities no change in practice will result) some entities may be impacted by the change. The limbs above are more principle based rather than hard and fast rules. For instance, an example provided in AASB 10 is: An investor acquires 48 per cent of the voting rights of an investee. The remaining voting rights are held by thousands of shareholders, none individually holding more than 1 per cent of the voting rights. None of the shareholders have any arrangements to consult any of the others or make collective decisions. When assessing the proportion of voting rights to acquire, on the basis of the relative size of the other shareholdings, the investor determined that a 48 per cent interest would be sufficient to give it control. In this case, on the basis of the absolute size of its holding and the relative size of the other shareholdings, the investor concludes that it has a sufficiently dominant voting interest to meet the power criterion without the need to consider any other evidence of power. Potential voting rights are also discussed within AASB 10 and the following example provided: Investor A holds 70 per cent of the voting rights of an investee. Investor B has 30 per cent of the voting rights of the investee as well as an option to acquire half of investor A s voting rights. The option is exercisable for the next two years at a fixed price that is deeply out of the money (and is expected to remain so for that twoyear period). Investor A has been exercising its votes and is actively directing the relevant activities of the investee. In such a case, investor A is likely to meet the power criterion because it appears to have the current ability to direct the relevant activities.

35 3. Significant accounting policies continued Although investor B has currently exercisable options to purchase additional voting rights (that, if exercised, would give it a majority of the voting rights in the investee), the terms and conditions associated with those options are such that the options are not considered substantive (i.e. remote possibility of being exercised). Entities are advised to re-consider control of related entities in light of AASB 10 on adoption. IFRS 11 Joint Arrangements AASB 11 replaces the AASB 131 Interests in Joint Ventures. The previous standard had 3 types of Joint ventures whereas AASB 11 only has two. These are: Joint Operations; and Joint Ventures. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Those parties are called joint operators. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Those parties are called joint venturers. Joint ventures must now be accounted for using the equity method of accounting. The option to proportionately consolidate a joint venture entity has been removed. This will have significant implications for entities that currently use proportionate consolidation. Some entities only have interests in joint ventures and only use proportionate consolidation. Adopting AASB 11 will cause them to use equity accounting and will result in a different presentation in the Statement of Comprehensive Income, Statement of Financial Position and Statement of Cash Flows. The IASB are aware that this change is likely to cause concern for many entities. They note: the evidence suggests that in accounting for interests in jointly controlled entities, approximately half of the entities applying IFRSs use proportionate consolidation and half use the equity method; the variation in practice, which is facilitated by the option in AASB 131, is a prime motivation for developing AASB 11; that variation will, inevitably, be a source of disagreement; and that the approach in the standard is consistent with its view of what constitutes the economic substance of an entity s interests in joint arrangements, a view that it concedes may differ from that of certain entities preparing financial statements. Accounting for interests in Joint Operations will be different to that of Joint Ventures. A joint operator shall recognise in relation to its interest in a joint operation: (a) its assets, including its share of any assets held jointly; (b) its liabilities, including its share of any liabilities incurred jointly; (c) its revenue from the sale of its share of the output arising from the joint operation; (d) its share of the revenue from the sale of the output by the joint operation; and (e) its expenses, including its share of any expenses incurred jointly. The accounting for Joint Operations more closely resembles the old proportionate consolidation regime therefore is it important for entities to consider how best to structure joint arrangements so as to present their interests in those arrangements in a relevant and reliable manner. In considering the above it is important to understand how AASB 11 distinguishes between the two types of joint arrangements. The classification of a joint arrangement as a joint operation or a joint venture depends upon the rights and obligations of the parties to the arrangement.

36 3. Significant accounting policies continued AASB 12 Disclosure of Interests in Other Entities AASB 12 provides the disclosure requirements for entities that have an interest in a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. As such, it pulls together and replaces disclosure requirements from many existing standards. The IASB noted: The global financial crisis that started in 2007 also highlighted a lack of transparency about the risks to which a reporting entity was exposed from its involvement with structured entities, including those that it had sponsored. AASB 12 is an attempt to improve the level of disclosure around these types of arrangements and to enhance existing disclosures with regard to interests in a subsidiary, a joint arrangement and an associate. The AASB requires an entity to disclose information that enables users of financial statements to evaluate: (a) the nature of, and risks associated with, its interests in other entities; and (b) the effects of those interests on its financial position, financial performance and cash flows. Entities are advised to review AASB 12 in more detail in the lead up to adoption as the disclosures are generally more detailed and enhanced compared to current requirements. AASB 13 Fair Value Measurement AASB 13: (a) defines fair value; (b) sets out in a single IFRS a framework for measuring fair value; and (c) requires disclosures about fair value measurements. Fair value is defined as: the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price) The standard does not require fair value measurements in addition to those already required or permitted by other IFRSs. The IASB note: That definition of fair value emphasises that fair value is a market-based measurement, not an entityspecific measurement. When measuring fair value, an entity uses the assumptions that market participants would use when pricing the asset or liability under current market conditions, including assumptions about risk. As a result, an entity s intention to hold an asset or to settle or otherwise fulfil a liability is not relevant when measuring fair value. Entities are advised to review their current policies with regards to measuring fair value in light of the guidance in AASB 13 and the principles highlighted above. 4. Determination of fair values A number of the Company's accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. Financial liability amount due to Triako Resources Pty Ltd The fair value of the financial liability due to Triako Resources Pty Ltd was arrived at using discounted cash flow methodology requiring application of a number of subjective assumptions as detailed in note 18 of the financial statements.

37 5. Financial risk management Overview The Company has exposure to the following risks from their use of financial instruments: credit risk; liquidity risk; and interest rate risk. This note presents information about the Company s exposure to each of the risks identified above, the policies and processes for measuring and managing risk and the management of capital. Further quantitative disclosures are provided throughout this financial report. Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company s investment of surplus cash. The Company has a policy in place to ensure that surplus cash is invested with financial institutions of appropriate creditworthiness and limits the amount of credit exposure to anyone counterparty. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions. The Board has put in place strict processes for the prior approval of expenditure. Interest rate risk Interest rate risk is the risk that the fair value of financial instruments of the Company will fluctuate as a result of changes in market interest rates. The Company's exposure to interest rate risk is not deemed to be significant as the interest income generated from cash on hand is not considered an integral part of the Company's operations.

38 6. Employee benefits expense $ $ Wages and salaries 1,440,011 1,338,193 Contributions to employee superannuation plans 42,347 16,862 Share based payments 451,233 90,746 Other employee benefits 152,997 35,879 Provision for employee entitlements 82,449 18, Finance costs 2,169,037 1,500,238 Interest costs 14, Unwinding of discount on restoration provision 45,852 20,785 Unwinding of discount on amount due to Triako Resources Pty Ltd 204, , , , Income tax recognised in profit/loss Current tax - - Deferred tax - 56,213 Reconciliation between pre-tax net loss and income tax (benefit) / expense - 56,213 Loss before tax (3,213,290) (304,379) Income tax (benefit)/expense at the statutory rate of 30% ( %) (963,987) (91,314) Tax effect of non-temporary differences (74,454) - Tax effect of equity raising costs debited to equity (79,808) - Share based payments - 103,916 Current year losses for which no tax benefit has been recognised 1,118,249 43,611 Income tax (benefit) / expense - 56,213 Income tax recognised directly in equity Transaction costs on equity issue - (56,213) - (56,213)

39 8. Income tax recognised in profit/loss (continued) Unused tax losses for which a deferred tax benefit has not been recognised total $26,449,527 (2010: $18,724,179). The potential future income tax benefit will be obtained if: The relevant Company derives future assessable income of a nature and an amount sufficient to enable the benefit to be realised in accordance with Division 170 of the Income Tax Assessment Act 1997; The relevant Company continues to comply with the conditions for deductibility imposed by the law; and No changes in tax legislation adversely affect the Company in realising the benefit. 9. Cash and cash equivalents Cash at bank and in hand 8,359,829 7,797,542 Balance as per statement of cash flows 8,359,829 7,797, Trade and other receivables CURRENT $ $ GST receivable 984, ,092 Amount due from Sorby Hills Joint Venture 20,745 - Loan to employee* 213,566 - Other prepayments and accrued income 95,869 49,588 1,314, ,680 *Details of the related party receivable are disclosed in note 22 no receivables are past due or impaired. 11. Inventories CURRENT Mining and maintenance stocks 110, ,794 Bulk Fuel 6, Other financial assets NON-CURRENT 116, ,794 Security deposit 939, ,000 Rental guarantee deposit 90,000-1,029, ,000 The security deposit is presently not available for use by the Company as it is presently in use to secure a bank guarantee in favour of The Minister of Mineral Resources for the State of New South Wales.

40 13. Plant and equipment NON-CURRENT Property at cost 383,260 - Plant and equipment at cost 9,667,450 1,114,546 Accumulated depreciation (224,667) (223,067) 9,442, ,479 Mine buildings at cost 137,960 - Mobile plant at cost 286,500 - Office equipment at cost 112,446 18,738 Accumulated depreciation (13,598) (3,206) 98,848 15,532 Total Property Plant & Equipment 10,349, ,011 Property Balance at beginning of year - - Additions 383,260 Carrying amount at end of year 383,260 - Plant & Equipment Balance at beginning of year 891, ,961 Additions 8,552,904 90,271 Depreciation (1,600) (102,753) Carrying amount at end of year 9,442, ,479 Mine Buildings Balance at beginning of year - - Additions 137,960 - Carrying amount at end of year 137,960 - Mobile Plant Balance at beginning of year - - Additions 286,500 - Carrying amount at end of year 286,500 - Office Equipment Balance at beginning of year 15,532 - Additions 93,708 18,738 Depreciation (10,392) (3,206) Carrying amount at end of year 98,848 15,532 Plant and equipment with a carrying value of $286,500 are encumbered by the finance lease as disclosed in note 18 and 25.

41 14. Mining Property $ $ Cost 20,355,650 - Accumulated amortization - - Carrying amount at end of year 20,355,650 - NON-CURRENT Balance at the beginning of year - - Additions 6,917,188 - Transfer from exploration and evaluation 13,651,676 - Fair value adjustment on restoration provision (213,214) - Carrying amount at the end of year 20,355,650 - The recoverable amount of the mining property has been determined by a value-in-use calculation using a discounted cash flow model, based on an 1 year projection, approved by Management and extrapolated for a further 7 years (being the estimated life of the mine) using a steady rate. Key assumptions are those to which the recoverable amount of the cash generating unit is most sensitive. The mining property relates to a single cash generating unit, the Company's activities at Mineral Hill. The following key assumptions were used in the discounted cash flow model of the mining property: A discount rate of 15% pre-tax; Inflation rate of 3% per annum; An exchange rate of US$1.05:AU$1; and Price of commodities: - Copper: US$9,000/tonne - Gold: US$1,500/ounce - Silver: US$35/ounce The discount rate of 15% pre-tax reflects management's estimate of the time value of money and the Company's weighted average cost of capital. Based on the above no impairment of the mining property was required to be recognised. Sensitivity As disclosed in note 2(d), management have made judgements in respect of testing the mining property for impairment. The recoverable amount of the mining property would be affected if revenue decreased* by more than 33% before the mining property were impaired. * A decrease in revenue could occur either due a 50% increase in the USD: AUD exchange rate to $1.58 or a 33% decline in US$-denominated commodity prices. Management believe that other reasonable changes in the key assumptions on which the recoverable amount of the mining property is based would not cause the cash generating unit's carrying amount to exceed its recoverable amount.

42 15. Investment in joint venture Investment in Sorby Hills $ $ NON-CURRENT Balance at the beginning of year - - Joint venture contribution 9,373,249 - Share of joint venture profits 101,197 - Carrying amount at the end of year 9,474,446 - During the year the Company held a 75% interest in the Sorby Hills Joint Venture, an entity domiciled in Australia, and accounted for this interest using the equity method. The Sorby Hills project is a feasibility-stage exploration asset with mineral resources containing 31Moz Ag, 125kt Zn and 800Kt Pb. The 25% joint venture partner, Yuguang, has provided cash of $5,000,000 to fund further drilling, aimed at upgrading resources, hydrogeological and environmental studies, and other works leading to completion of a bankable feasibility study. The assets and liabilities of the joint venture are as follows. Current Assets Cash and cash equivalents 2,822,021 - Other 72,886 - Non Current Assets 2,894,907 - Property Plant & Equipment 38,381 - Deferred exploration 11,970,932-12,009,313 - Total Assets 14,904,220 - Current Liabilities Trade creditors 363,495 - Other accruals 32, ,041 - Total Liabilities 396,041 - Net Assets 14,508,179 - Contribution Contributions by joint venture parties 14,373,249 - Retained earnings 134,930-14,508,179 -

43 15. Investment in joint venture (continued) $ $ Earnings by the joint venture were Interest 141,610 - Expenses (6,680) - Net profit 134, Exploration and evaluation NON-CURRENT Movement in carrying amounts: Balance at beginning of year 24,431,942 23,231,843 Transfer to Mining Property (13,651,676) - Transfer to Investment Sorby Hill Joint venture (9,373,249) - Additions 541,420 1,200,099 Carrying amount at end of year 1,948,437 24,431,942 Recoverability of the carrying amount of exploration and evaluation assets is dependent on successful development and commercial exploration or sale of the respective areas of interest. 17. Trade and other payables CURRENT Unsecured liabilities: Trade payables 5,837, ,444 Sundry payables and accrued expenses 454, ,850 6,292, ,294 Refer to note 24 for detailed information on financial instruments. 18. Financial liabilities CURRENT Amount due to Triako Resources Pty Ltd 1,771,041 - Amount due to St George HP Facility 47,759 - Balance at end of the year 1,818,800 -

44 18. Financial liabilities (continued) $ $ Amount due to Triako Resources Pty Ltd 986,615 3,262,610 Amount due to St George HP Facility 212,159 - Balance at end of the year 1,198,774 3,262,610 Reconciliation Balance at the beginning of the year 3,262,610 6,119,399 Transfer to current financial liability due to Triako Resources Pty Ltd (1,771,041) - Transfer to current financial liability due to St George HP Facility (47,759) - St George HP Facility 259,918 - Fair value adjustment on Triako Resources Pty Ltd Loan 290,470 (1,983,538) Amount paid to Triako Resources Pty Ltd on capital raising (1,000,000) (1,000,000) Unwinding of discount on Triako Resources Pty Ltd Loan 204, ,749 Balance at end of the year 1,198,774 3,262,610 The liability to Triako Resources Pty Ltd (a wholly owned subsidiary of CBH Resources Limited) arose from the purchase by the Company of certain Mineral Hill Assets and is payable on the following terms: a) If more than $5 million is raised in any equity capital raising, 10% of the amount raised is repaid rounded down to the nearest $100,000 and capped at $1.8 million per capital raising, b) $0.75m within 7 days after the Commencement of Commercial Production, and c) royalties at a rate of 3% of revenue generated from the sale of any minerals or concentrates. Until the aggregate payments of royalties and payments pursuant to a), b) and c) above total $5m. At the end of the period the loan owing to Triako Resources Pty Ltd was $2,757,656. The loan to Triako Resources Pty Ltd has been designated as a financial liability at fair value through the statement of comprehensive income on initial recognition of the loan. The fair value of the loan is not determined based on observable market data and has been classified as Level 3. The fair value of the loan was calculated using the following assumptions: Royalty based on 3% net smelter return; A discount rate of 12% representing the company's effective cost of debt; An exchange rate of US$1.05:AU$1; and Price of commodities: - Copper: US$9,000/tonne - Gold: US$1,500/ounce - Silver: US$35/ounce

45 19. Provisions CURRENT $ $ Employee provisions 109,808 27,359 NON CURRENT Restoration provision 465, ,447 Current: employee provisions Balance at the beginning of the year 27,359 8,801 Charged to the statement of comprehensive income 82,449 18,558 Balance at end of the year 109,808 27,359 The entire amount of the provision is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations. Non-Current: restoration provision Balance at the beginning of the year 632, ,662 Unwinding of discount 45,852 20,785 Fair value adjustment (213,214) - Balance at end of the year 465, ,447 The restoration provision relates to the estimated costs of dismantling and restoring mining sites and exploration tenements to their original condition at the end of the life of the mine or exploration drilling program. The provision at year end represents the present value of the Directors' best estimate of the future sacrifice of economic benefits that will be required for meeting environmental obligations for existing tenements after activities have been completed. The provision is reviewed annually by the Directors. The present value of the restoration provision was determined based on the following assumptions: Undiscounted rehabilitation costs: $920,000; Life of Mine: 8 years; Annual growth rate: 3%; and Discount rate of 15% pre-tax. 20. Issued capital ordinary shares No. $ Balance at the beginning of the year 117,943,880 30,742,750 Shares issued during the year 67,485,503 16,404,588 Shares issued in terms of employee incentive plans 2,476,659 - Transaction costs (net of tax) - (393,245) Balance at end of the year 187,906,042 46,754,093

46 20. Issued capital ordinary shares (continued) No. $ Balance at the beginning of the year 115,622,043 19,594,122 Consolidation (60,347,815) - Issued during the year 62,669,652 12,029,294 Transaction costs (net of tax) - (880,666) Balance at end of the year 117,943,880 30,742,750 At reporting date the Company had 187,906,042 (2010: 117,943,880) shares of no par value. Ordinary Shares entitle the holder to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary Shares entitle the holder to one vote, either in person or by proxy, at a meeting of the Company. Movements during the year: On 20 July 2010 the Company issued 1,650,000 share options pursuant to employee share plans as disclosed in note ,813,626 shares were issued at 25 cents per share to Yuguang (Australia) Pty Ltd in September 2010 pursuant to an agreement under which Yuguang Australia Pty Ltd acquired a 25% interest in the Sorby Hills Joint Venture. 46,052,230 shares were issued at 24 cents per share to applicants under a Share Purchase Plan in December ,647 shares were issued by placement at 24 cents per share in February On 30 June 2011 the Company issued the following shares to employees pursuant to employee share plans as disclosed in note 30: 76,659 Exempt employee share plan at zero consideration; and 2,400,000 shares at 30 cents per share funded by a limited recourse loan. Capital risk management The company's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

47 21. Reserves $ $ Share based payment reserve Balance at the beginning of the year 107, ,679 Transfer to share capital - (255,643) Share options issued to employees and directors 202,131 13,727 Amounts recognised in relation to performance rights 224,899 77,019 Amounts recognised in relation to exempt employee share plan 22,998 - Amounts recognised in relation to non-exempt employee share plan 1,205 - Balance at the end of the year 559, ,782 Employee share options No. No. Balance at the beginning of the year 750, ,000 Issued to directors - 500,000 Issued to employees and key management personnel 1,650,000 - Balance at the end of the year 2,400, ,000 Performance rights Balance at the end of the year 4,500,000 - Issued to directors - 4,500,000 Balance at the end of the year 4,500,000 4,500,000 Exempt employee share plan Balance at the end of the year - - Issued to employees 76,659 - Balance at the end of the year 76,659 - Non-exempt employee share plan Balance at the end of the year - - Issued to employees 2,400,000 - Balance at the end of the year 2,400,000 - The share based payment reserve is used to recognise: the grant date fair value of options issued to employees but not exercised; the grant date fair value of shares issued to employees which have restrictions on their transferability

48 21. Reserves (continued) Fair value of options granted Fair values at grant date are independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at the grant date, the expected volatility of the underlying share, the expected dividend yield and risk free interest rate for the term of the option. The model inputs for options granted during the year ended 30 June 2011 included: Non-exempt employee share plan 30/06/2011: Shares were granted on 30/6/2011 and are subject to a limited recourse loan included in the employee share purchase plan; Exercise price of $0.30; Grant date of 30 June 2011; Expiry date of 30 June 2015; Vesting period of 3 years; Share price at grant date of $0.30; Expected volatility of the share price of 88.18%; Expected dividend yield rate of 0.0%; and Risk free rate of 5.5% Expected volatility is based on the historic volatility of the market price of the Company's share price, based on two year's historic volatility data. The valuation per option has been determined at $0.20. The dividend rate is based on past Company practice and the risk free rate is determined with reference to medium term government bonds. Employee share option plan 20/07/2010: Options are granted for no consideration; Exercise price of $0.20; Grant date of 20 July 2010; Expiry date of 20 July 2015; Vesting is upon commencement of commercial production at Mineral Hill; Share price at grant date of $0.21; Expected volatility of the share price of %; Expected dividend yield rate of 0.0%; and Risk free rate of 5.7% Expected volatility is based on the historic volatility of the market price of the Company's share price, based on two year's historic volatility data. The valuation per option has been determined at $0.17. The dividend rate is based on past Company practice and the risk free rate is determined with reference to medium term government bonds. Assumptions used in valuing performance rights are detailed in the remuneration report included in the directors report.

49 22. Related party transactions (a) Key management personnel are set out in note 23. (b) Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. (c) The following related party transactions, other than those with key management personnel as disclosed in note 23, occurred during the year Related Party: Sorby Hills Joint Venture Transactions: Expenses recovered from Related Party during the year $583,367 Balances: Balance owing by related party $20,745 The balance owning by related party is interest free and unsecured and repayable on demand. 23. Key management personnel disclosures (a) Details of key management personnel The following were key management personnel of the Company at any time during the reporting period. Unless otherwise indicated, individuals were employed for the entire period. Directors JA Wall RE Besley RJ McDonald J Richards SL Lonergan S Mathews Director Director Director Director Director, Company Secretary Chief Operating Officer 2011 No No. Aggregate numbers of shares of Kimberley Metals Limited held directly, indirectly, or beneficially by Directors and key management personnel of the Company at reporting date: Ordinary shares 7,398,215 6,115,377 Performance Rights over ordinary shares 4,500,000 4,500,000 Share options rights over ordinary shares 1,500, ,000

50 23. Key management personnel disclosures (continued) The aggregate compensation made to key management personnel of the Company and consolidated entity are set out below: - Short Term Employee Benefits - Directors 946, ,892 Short Term Employee Benefits - Other Key management personnel 321,521 22,768 Share based payments - Directors Share based payment - Other Key management personnel 2011 $ 241, , $ 90,746 Total 1,621, ,406 Balances owing by related parties S Mathews 213,566 - The balance owing by key management personnel bears interest at the bench mark interest rate prevailing from time to time, being 6.65% at the time of entering into the agreement, payable monthly in arrears. The balance outstanding is secured by a second mortgage of property owned by the debtor in favour of the company. The highest amount of indebtedness during the year amounted to $296,000. The Company has utilized the relief provided by ASIC Class Order 06/50 and has transferred the detailed remuneration disclosures to the Directors report. 24. Financial instruments Credit risk Exposure to credit risk The carrying amount of the Company s financial assets represents the maximum credit exposure. The Company s maximum exposure to credit risk at the reporting date was: $ $ Cash 8,359,829 7,797,542 Receivables 323, ,680 Security and rental guarantee deposits 1,029, ,000 9,712,489 8,917,222 - Financial assets exposed to credit risk are neither past due or impaired at year end and relates predominantly to cash and security deposits invested with financial institutions of appropriate creditworthiness limiting the amount of credit exposure to any one counterparty. Liquidity risk The following are the contractual maturities of financial liabilities, including interest payments:

51 24. Financial instruments (continued) 2011 Carrying amount Contractual cash flows 6 mths or less 6-12 mths 1-2 years 2-5 years $ $ $ $ $ $ Trade and other payables 6,292,041 6,292,041 6,292, Financial liabilities 3,017,574 3,319,745 1,325, ,165 1,239, ,221 9,309,615 9,611,786 7,617, ,165 1,239, , Carrying amount Contractual cash flows 6 mths or less 6-12 mths 1-2 years 2-5 years $ $ $ $ $ $ Trade and other payables 630, , , Financial liabilities 3,262,610 4,000, ,150,000 1,850,000 3,892,904 4,630, ,294-2,150,000 1,850,000 Interest rate risk The Company s exposure to interest rate risk, which is the risk that a financial instrument s fair value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows: Non interest bearing 1 year or less 1 to 5 years More than 5 years Floating interest rate Total Weighted average interest rate 2011 Financial assets $ $ $ $ $ $ % Cash ,359,829 8,359,829 6 Receivables 323, ,660 - Security and rental guarantee deposits Financial liabilities ,029,000 1,029, , ,388,829 9,712,489 Trade and other payables 6,292, ,292,041 - Financial liabilities 2,757,656 47, , ,017, ,049,697 47, , ,309,615

52 24. Financial instruments (continued) 2010 Non interest bearing 1 year or less 1 to 5 years More than 5 years Floating interest rate Total Weighted average interest rate Financial assets Cash ,797,542 7,797,542 6 Receivables 199, ,680 - Security deposit , ,000 5 Financial liabilities 199, ,717,542 8,917,222 Trade and other payables 630, ,294 Financial liabilities and trade payables 3,262, ,262,610-3,892, ,892,904 Fair values The fair values of financial assets and liabilities at year end approximate their carrying amounts and amount to $9,712,489 and $9,309,615 (2010 $8,917,222 and $3,892,904) respectively. 25. Commitments and contingencies (a) Exploration expenditure commitments In order to maintain rights of tenure on mining and exploration tenements, the Company is required to outlay certain annual expenditures. The expenditure commitment is estimated to be $733,000 per annum to be incurred in the next 12 months. The Company has satisfied expenditure commitments for its mining and exploration tenements. (b) Operating lease commitments The Company has entered into a lease for office accommodation. The lease has a remaining term of 2 years to 30 June 2013 and an option to renew for a further 3 years. During the current year the following minimum lease payments were incurred: $ Minimum lease payments 139,249 28,800 Future minimum lease payments under the non-cancellable lease at 30 June 2011 are as follows: Within one year 102, ,731 After one year but not more than five years 108, ,456 More than five years - -

53 25. Commitments and contingencies (continued) (c) Finance lease commitments Future minimum lease payments under the non-cancellable lease at 30 June 2011 are as follows: $ $ Within one year 69,768 - After one year but not more than five years 250, ,770 - Future finance charges (59,852) Recognised as a liability 259,918 The present value of the minimum lease payments at 30 June 2011 are as follows: Within one year 47,759 - After one year but not more than five years 212, ,918 - d) Contingencies There were no contingent liabilities as at 30 June Segment information The Company operates in the mining exploration industry in Australia. Management has determined the operating segments based on reports reviewed by the Chief Operating Officer COO. The COO considers the business from both an operations and geographic perspective and has identified three reportable segments, Mineral Hill, Sorby Hills and other exploration assets. The COO monitors the performance in these segments separately. Discreet financial information in relation to items included in the Statement of Comprehensive Income is not available, for the current period, to be able to allocate these costs to each of the segments identified. Sorby Hills Other Exploration Unallocated Mineral Hill Total 2011 Segment assets 31,259,876 9,474,446 1,948,437 10,265,294 52,948,053 Segment liabilities ,884,508 9,884, Segment assets 14,655,893 9,407,255 1,399,589 8,904,232 34,366,969 Segment liabilities ,552,710 4,552,710

54 27. Earnings per share $ $ (a) Reconciliation of earnings per share Net loss after tax (3,213,290) (360,592) Loss used in the calculation of basic EPS and dilutive EPS (3,213,290) (360,592) (b) Weighted average number of ordinary shares outstanding during the period used in the calculation of basic EPS 162,621, ,641,497 Weighted average number of options outstanding 250,000 - Weighted average number of ordinary shares outstanding during the period used in the calculation of dilutive EPS 162,871, ,641,497 At 30 June 2011 the following instruments are on issue which could potentially dilute earnings per share in the future but were not included in the calculation of dilutive earnings per share for the period as they are anti-dilutive for the periods presented: 2,400,000 shares issued in terms of the Non-exempt employee share plan exercisable at 30c per share if vesting conditions as disclosed in note 30 has been met, 76,659 shares issued at nil consideration in terms of the Exempt employee share plan as disclosed in note 30 and 4,500,000 performance rights issued to Directors at nil consideration exercisable upon meeting the vesting conditions as disclosed in the directors report. 500,000 ordinary shares options at 42c were granted to a Director at nil consideration upon meeting the vesting condition as disclosed in the directors report. 1,650,000 ordinary shares options at 20c were granted to employees at nil consideration upon meeting the vesting conditions as disclosed in note 30.

55 28. Reconciliation of loss from continuing activities to net cash inflow/(outflow) from operating activities $ $ Operating loss from ordinary activities after income tax (3,213,290) (360,592) Non cash flows in loss from ordinary activities Share based payments 451, ,388 Depreciation and capital expenses written of 20, ,959 Finance costs 250, ,749 Share of joint venture profit (101,197) - Fair value gain on financial liabilities 290,470 (1,983,538) Income tax expense / (benefit) - 56,213 Increase in working capital for property plant and equipment (2,412,885) Increase in working capital for development (1,763,262) Changes in operating assets and liabilities (Increase) / decrease in trade and other receivables (919,066) (130,889) (Increase) / decrease in inventories (6,189) - Increase /(decrease) in trade and other payables 5,661, ,785 Increase /(decrease) in provisions 82,449 39,343 Net cash generated from / (used in) operating activities (1,658,570) (1,336,582) 29. Auditors remuneration Amounts received or due and receivable by the auditor of the Company for: Auditor review of the financial report of the Company 46,500 20, Share based payments Total expense arising from equity settled share based payment transactions during the year 46,500 20,000 Shares issued in terms of non-exempt employee share plan (a) 1,205 - Shares issued in terms of an exempt employee share plan (b) 22,998 - Performance rights issued to directors 224,899 77,019 Share options issued to directors 16,319 13,727 Share options issued to employees (c) 185, ,233 90,746

56 30. Share based payments (continued) (a) Non-exempt employee share plan 2,400,000 ordinary shares were issued at 30c each, funded by a limited recourse loan pursuant to the employee share plan. The shares vest on an annual basis as follows: 30 June , June , June ,000 The limited recourse loan is repayable on the earlier of: the 4th anniversary of the date of allotment of the Placement of the Shares; and the date on which the facility is terminated or cancelled by the lender. The amount to be repaid is equal to 30c per share. The effect of the employee share plan is akin to an option. The fair value of shares granted during the year ended 30 June 2011 is assessed at 20c per share. The fair value is determined using the Black-Scholes option pricing model. (b) Exempt employee share plan 76,659 ordinary shares were issued to employees at nil consideration The Shares vest immediately and the participant may sell the shares at the earlier of Termination of employment; or 3 Years of employment. The fair value of shares granted during the year ended 30 June 2011 are assessed at 30c per share which was based on the market value of the company s shares at grant date. (c) Share option scheme 1,650,000 ordinary shares options at 20c were granted to employees at nil consideration on 20 July The options vest upon the commencement of commercial production at Mineral Hill and expire on 20 July The fair value of shares granted during the year ended 30 June 2011 are assessed at 17c per share. The fair value is determined using the Black-Scholes option pricing model. 31. Subsequent events Commissioning of the Mineral Hill project began in July On 27 July 2011 the Company announced a placement (ASX KBLGA) of 10 million convertible notes and as at 28 September 2011 issued an additional 12.9m notes on a pro-rata 1 for 6, non-renounceable rights issue basis at 38 cents per note. The convertible notes will pay interest at the rate of 10% p.a., have a 5 year term and holders will be able to convert them to ordinary shares on a one of one basis at quarterly points during the 5 year term. There have been no other material events subsequent to the reporting date.

57 DIRECTORS DECLARATION The Directors of the Company declare that: 1. the attached financial statements and notes thereto comply with International Financial Reporting Standards; 2. the attached financial statements and notes thereto give a true and fair view of the financial position and performance of the Company; 3. in the Directors opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001; 4. in the Directors opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; 5. the Directors have been given the declarations required by section 295A of the Corporations Act 2001; and 6. the remuneration disclosures contained in the remuneration report comply with s300a of the Corporations Act. This Directors Declaration is made in accordance with a resolution of the Board of Directors made pursuant to section 295(5) of the Corporations Act On behalf of the Directors James A Wall Dated: 28 September 2011 Sydney

58 INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF KIMBERLEY METALS LIMITED Report on the Financial Report We have audited the accompanying financial report of Kimberley Metals Limited, which comprises the statement of financial position as at 30 June 2011, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors declaration. Directors Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply 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. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. 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 of the financial report that gives a true and fair view 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 opinion. Tel: Fax: PKF ABN Level 10, 1 Margaret Street Sydney New South Wales 2000 Australia The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

59 Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act Opinion In our opinion: (a) the financial report of Kimberley Metals Limited is 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 2011 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2. Report on the Remuneration Report We have audited the Remuneration Report included in the directors report. 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. Opinion In our opinion, the Remuneration Report of Kimberley Metals Ltd complies with section 300A of the Corporations Act PKF Tim Sydenham Sydney Partner 28 September 2011