ALTECH BATTERIES LTD — Annual Report 2010

Sep 23, 2010

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ABN 45 125 301 206

Financial Statements for the year ended 30 June 2010

3 Bay Road, Claremont WA 6009 Telephone: (08) 9389 5557 Facsimile: (08) 9389 5510 Email: info@ammg.com.au Website: ammg.com.au

AUSTRALIA MINERALS & MINING GROUP LIMITED ABN 45 125 301 206

CORPORATE DIRECTORY

DIRECTORS	Luke Fredrick Atkins
	Executive Chairman
	David John Brook
	Non-Executive Director
	Christopher John Forrester
	Non-Executive Director
	Daniel Lewis Tenardi
	Non-Executive Director
COMPANY SECRETARY	Sam Middlemas
PRINCIPAL REGISTERED
OFFICE	3 Bay Road
	Claremont
	Western Australia 6009
	Telephone: (08) 9389 5557
	Facsimile: (08) 9389 5510
	Email: info@ammg.com.au
	Internet: www.ammg.com.au
AUDITOR	Moore Stephens
	Level 3, 12 St Georges Terrace
	Perth
	Western Australia 6000
SHARE REGISTRY	Security Transfer Registrars Pty Limited
	770 Canning Highway
	Applecross
	Western Australia, 6153
	Telephone: (08) 9315 2333
	Facsimile: (08) 9315 2233
	Email: registrar@securitytransfer.com.au
STOCK EXCHANGE	The Company’s shares are quoted
LISTING	on the Australian Stock Exchange.
	The Home Exchange is Perth.
ASX CODE	AKA - ordinary shares
	AKAO - listed options

AUSTRALIA MINERALS & MINING GROUP LIMITED

DIRECTORS’ REPORT

The Directors present their report on Australia Minerals & Mining Group Limited at the end of, or during the year ended 30 June 2010.

DIRECTORS

The names and details of the Directors of Australian Minerals & Mining Group Limited during the financial year and until the date of this report are:

Luke Frederick Atkins – LLB Executive Chairman Appointed 8 May 2007

Luke Atkins is currently a non-executive director of the ASX-listed mining and exploration company, Bauxite Resources Ltd, a role which he has held since co-founding the company in 2007. He has had experience in the resource sector from project generation, exploration, project management, project finance, commercial and legal structuring, and corporate development.

Mr Atkins has extensive experience in capital raisings and has held a number of executive and non executive directorships of private and publicly listed companies, including a number of mining and exploration companies.

Mr Atkins is a lawyer by profession and was previously the principal of Atkins and Co Lawyers, a Perth-based legal firm, which he owned and managed for seven years. Mr Atkins brings to the board extensive experience in the areas of minerals exploration, legal matters, and corporate governance.

During the three year period to the end of the financial year, Mr Atkins continues to hold a directorship in Bauxite Resources Ltd (17 February 1995 to present). He previously held directorships in Reclaim Industries Ltd.

David John Brook – BA (Hons, First Class) Non Executive Director Appointed 17 September 2009

David Brook is currently an investor relations account manager at Professional Public Relations firm. He is an experienced mining industry executive and consultant, specialising in the fields of investor relations, financial and corporate communications, government and community relations and sustainability. He has almost 20 years experience in the global resources sector and government in Australia, New Zealand and Asia, including experience with resource industry leaders Rio Tinto and Alcoa.

Mr Brook previously operated his own investor relations and financial corporate communications consultancy. Prior to this he was Head of Investor Relations and Corporate Affairs for Consolidated Minerals Limited, an ASX 200 and AIM listed diversified mining company. He managed investor relations and corporate communications strategy during one of the most highly competitive corporate actions in recent years – a $1.2 billion, 15 month transaction, involving multiple global bidders and diverse market and government stakeholders. Mr Brook has extensive networks in the Australian, UK and US financial and investment markets.

Mr Brook brings to the Board extensive corporate experience in the mining and government sectors. As a government relations and issues management adviser for Alcoa Australia, Mr Brook managed Alcoa’s state and federal government relations strategies for major growth projects in Australia. Previously Mr Brook worked in corporate communication management roles with Western Australian minerals sands miner, Iluka Resources Limited, and Rio Tinto subsidiary, Robe River Iron Associates.

Between 1990 and 2000, Mr Brook served as a diplomat, posted in Wellington, Canberra and Thailand. He has an excellent knowledge of Asian trade and investment practices and government regulatory regimes, as well as significant experience, and networks, in international trade, economics and government relations.

Christopher John Forrester Non Executive Director Appointed 30 June 2009

Chris Forrester brings to the board extensive strategic development, operational and marketing skills, with over 30 years business and management experience.

Mr Forrester was responsible for the establishment and development of Entyre Rubber Systems Pty Ltd and after selling the company, played a key role in the growth transformation of the company into an ASX listed enterprise, trading as

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AUSTRALIA MINERALS & MINING GROUP LIMITED

DIRECTORS’ REPORT

Reclaim Ltd. Reclaim went on to become the Australian industry leader in its sector, undergoing significant expansion nationally and internationally, securing markets in Asia, the Middle East, the US and the UK.

As Executive Director of Reclaim Ltd, Mr Forrester was responsible for overseeing the day to day operational management of the company, the ongoing review of process improvement and the identification and implementation of expansion strategies. Mr Forrester has had extensive business dealings in China and the Middle East.

Prior to his work with Reclaim Ltd, Mr Forrester worked in the agricultural industry, the mining industry, as a sub contract miner, and as the Assistant Manager of the blast hole division of Thomson Drilling.

Daniel Lewis Tenardi Non Executive Director Appointed 17 September 2009

Dan Tenardi is currently principal adviser to the Chairman of CITIC Pacific Mining. He is a highly experienced mining executive with some 40 years in the industry, including experience with a number of global resource industry leaders across a range of commodities, including iron ore, gold, bauxite, and copper. His wealth of knowledge and depth of experience in developing and managing bulk ore operations is ideally suited to the Company’s ongoing business plan.

Mr Tenardi was formerly Managing Director of Bauxite Resources Ltd, where he supervised the rapid growth of the company from its initial exploration phase to its trial shipments and negotiating a joint venture, binding heads of agreement for the development of an alumina refinery. Mr Tenardi previously spent 13 years with Alcoa World Alumina Australia, at its bauxite mines in Western Australia, and a further two years at Alcoa’s Kwinana refinery. He has substantial gold mining experience, including experience with Roche Mining at the Kalgoorlie Superpit and at Anglo Gold Ashanti’s Sunrise Dam. Mr Tenardi has worked at an executive level for Rio Tinto’s Robe River Iron Associates and their East Pilbara Division, and was appointed as a Director of Robe River Iron Associates in the latter years of his employment with Rio Tinto.

Prior to his role at Bauxite Resources Ltd, Mr Tenardi held the positions of General Manager of Operations and Chief Operating Manager at CITIC Pacific Mining. At CITIC Pacific, Mr Tenardi helped develop the largest magnetite iron ore mine in Australia and was responsible for the strategic development of the Company’s Australian and global mining operations.

Annette Atkins was appointed a director on 30 June 2009, and resigned from the board on 17 September 2010.

COMPANY SECRETARY

Sam Middlemas – B.Com. CA. Grad. Dip. Acc. Company Secretary Appointed 4 February 2010

Mr Middlemas is a chartered accountant with more than 15 years experience in various financial roles with a number of listed public companies operating in the resources sector. He is the principal of a corporate advisory company which provides financial and company secretarial services specialising in capital raisings and initial public offerings. Previously Mr Middlemas worked for an international accountancy firm. His fields of expertise include corporate secretarial practice, financial and management reporting in the mining industry, treasury and cash flow management and corporate governance. Mr Middlemas was appointed Company Secretary and Chief Financial Officer on 4 February 2010.

PRINCIPAL ACTIVITIES

The principal activities of the Company during the financial year consisted of mineral exploration and development principally in Australia.

There have been no significant changes in these activities during the financial year.

RESULTS OF OPERATIONS

The net loss after income tax for the financial year was $613,894 (2009: $424).

DIVIDENDS

No dividend has been paid since the end of the previous financial year and no dividend is recommended for the current year.

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AUSTRALIA MINERALS & MINING GROUP LIMITED

DIRECTORS’ REPORT

REVIEW OF OPERATIONS AND ACTIVITIES

Australia Minerals & Mining Group was incorporated on 8 May 2007 for the purpose of securing by application, exploration licenses over land that has been subject to historical exploration and where significant geological data was available and/or the land was considered sufficiently prospective due to proximity to existing resources and infrastructure.

To date the Company has identified eight separate project areas, located in Western Australia and Queensland, which the Directors believe may, following necessary advancement and development, have the potential for the realisation of economic resources including - iron ore, gypsum, mineral sands, kaolin, and salt.

The Company currently has four granted tenements and 40 applications for tenements covering approximately 6,460 km[2] over the eight project areas. These include tenements subject to joint venture where the Company has the right, following grant, to acquire 100% ownership.

Strategy

AMMG continues to evaluate the pre-existing exploration data available for its tenements and review the historical data of potential joint venture partners on ground in close proximity to the Company’s project areas with a view to pursuing potential joint venture opportunities.

The Company is also working to identify potential strategic investors and potential end users of mineral commodities which the Company is targeting with a view to growing the Company to the mutual benefit of the parties concerned.

AMMG is focused on pursuing investment opportunities that leverage off the Company’s management, expertise and local knowledge and which is in a form that is acceptable to all stakeholders.

With the granting of a number of Exploration Licenses, the Company is moving forward with its exploration program to collect samples, investigate potential beneficiation and processing techniques and pursue potential marketing opportunities.

Projects

The projects the Company is focused on include the following targeting:

• Iron Ore - Constance Range, Northern Queensland

• Gypsum - Lake MacLeod, North West, Western Australia

• Iron Ore - Pilbara, Western Australia

• Iron Ore –South West, Western Australia (Yilgarn)

• Mineral Sands - Scott River, South West, Western Australia

• Kaolin - South West, Western Australia

• Salt - South West, Western Australia (Yilgarn)

The Company’s projects have been carefully evaluated and selected based primarily on access to existing historical geological exploration activity and reporting. Other considerations included proximity to existing infrastructure, ease of extraction, and leverage to growth markets.

In a number of project areas, the Company has commenced preliminary discussions with potential joint venture partners, is in the process of gathering and evaluating historical data to assess potential resources and has undertaken field trips to Constance Range for iron ore sampling and analysis and the South West for kaolin sampling and analysis.

Initial exploration priorities lie in the Lake Macleod gypsum project where drilling has now commenced post 30 June 2010, and the Constance Range iron ore project in Northern Queensland. Further consideration is also being given to the recently applied for Meckering WA Kaolin project which has had significant geological work carried out in the past.

Corporate and Financial Position

As at 30 June 2010 the Company had cash reserves of $7.9 million.

Business Strategies and Prospects

The Company currently has the following business strategies and prospects over the medium to long term:

• (i) Seek to increase the value of the Company’s mineral assets located in Australia through exploration success;

• (ii) Undertake exploration activities on its existing Projects; and

• (iii) Continue to examine new mineral opportunities, with particular focus on advanced projects with the potential to deliver early cash flow opportunities.

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AUSTRALIA MINERALS & MINING GROUP LIMITED

DIRECTORS’ REPORT

Risk Management

The Board is responsible for the oversight of the Company’s risk management and control framework. Responsibility for control and risk management is delegated to the appropriate level of management with the Executive Chairman having ultimate responsibility to the Board for the risk management and control framework.

Areas of significant business risk to the Company are highlighted in the Business Plan presented to the Board by the Executive Chairman Director each year.

Arrangements put in place by the Board to monitor risk management include monthly reporting to the Board in respect of operations and the financial position of the Company.

EMPLOYEES

The Company has 2 employees as at 30 June 2010 (2009: Nil).

EARNINGS/LOSS PER SHARE	2010		2009
	Cents	Cents
Basic loss per share	(0.01)	n/a(1)
Diluted loss per share	(0.01)	n/a(1)
(1) Loss per share for 2009 was $237/share as there were only 2	shares on issue and it is not reported here

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

During the year ended 30 June 2010 there were significant changes undertaken by the Company as it converted from a Private Company to a Public Company on 13 July 2009 and changed its name from Archeoptryx Resources Pty Ltd to Australia Minerals & Mining Group Limited, and proceeded to an Initial Public Offering to raise $7.5 million and a listing on the Australian Securities Exchange on 27 January 2010.

The significant changes were as follows:

13 July 2009 - Change of Company Name and conversion from a private to a public Company

17 September 2009 – Consolidation of Company Capital from 47,000,002 shares to 30,000,002 on issue

17 September 2009 – Issue of 17,000,000 A Class Performance Shares each convertible into one fully paid share in the Company upon the achievement of a JORC compliant inferred resource in excess of 25 million tonnes of Gypsum being discovered from the Company’s Lake McLeod tenements within 5 years from the date of listing

17 September 2009 – Issue of 16,475,000 Fully Paid Ordinary Shares to seed investors at 8 cents per share

21 January 2010 – Issue of 37,500,000 Fully Paid Ordinary Shares from the IPO Prospectus at 20 cents per share

27 January 2010 – Company Listed on the Australian Securities Exchange

28 April 2010 – Issue of 41,987,501 Listed Options each convertible into one Ordinary Fully Paid share with an exercise price of 20 cents each any time on or before 4 February 2015 issued as a 1 for 2 entitlement to all shareholders at a price of 1 cent each

In the opinion of the Directors there were no other significant changes in the state of affairs of the Company that occurred during the financial year under review.

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AUSTRALIA MINERALS & MINING GROUP LIMITED

DIRECTORS’ REPORT

OPTIONS OVER UNISSUED CAPITAL

Unlisted Options

During the financial year the Company granted the following unlisted options over unissued ordinary shares to the following Directors and Key Management Personal. All employee options were issued for Nil consideration:

Issued To	Number of Options Granted	Exercise Price	Value per Option at Grant Date	Value of Options Granted	Expiry Date
Luke Atkins David Brook William Witham William Witham William Witham Sam Middlemas Sam Middlemas Sam Middlemas	6,000,000 2,000,000 1,000,000 500,000 500,000 333,333 333,333 333,333	20 cents each 20 cents each 20 cents each 25 cents each 30 cents each 30 cents each 30 cents each 30 cents each	4.44 cents 4.44 cents 9.68 cents 9.01 cents 8.44 cents 8.39 cents 8.39 cents 8.39 cents	$246,000 $88,000 $96,800 $45,050 $42,200 $27,967 $27,967 $27,967	31 August 2015 31 August 2015 8 February 2015 8 February 2015 8 February 2015 4 February 2015 4 February 2015 4 February 2015

Since 30 June 2010 and up until the date of this report there have been no further options issued.

As at the date of this report unissued ordinary shares of the Company under option are:

Number of Options on Issue	Exercise Price	Expiry Date
8,000,000 1,000,000 500,000 500,000 1,000,000	20 cents each 20 cents each 25 cents each 30 cents each 30 cents each	31 August 2015 8 February 2015 8 February 2015 8 February 2015 4 February 2015

The above options represent unissued ordinary shares of the Company under option as at the date of this report. These unlisted options do not entitle the holder to participate in any share issue of the Company.

The holders of unlisted options are not entitled to any voting rights until the options are exercised into ordinary shares.

The names of all persons who currently hold options granted are entered in a register kept by the Company pursuant to Section 168(1) of the Corporations Act 2001 and the register may be inspected free of charge.

No person entitled to exercise any option has or had, by virtue of the option, a right to participate in any share issue of any other body corporate.

CORPORATE STRUCTURE

Australian Minerals & Mining Group Limited (ACN 125 301 206) is a company limited by shares that was incorporated on 8 May 2007 and is domiciled in Australia.

EVENTS SUBSEQUENT TO BALANCE DATE

There has not arisen since the end of the financial year any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial years.

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AUSTRALIA MINERALS & MINING GROUP LIMITED

DIRECTORS’ REPORT

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Likely developments in the operations of the Company are included elsewhere in this Annual Report. Disclosure of any further information has not been included in this report because, in the reasonable opinion of the Directors, to do so would be likely to prejudice the business activities of the Company.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Company holds various exploration licences to regulate its exploration activities in Australia. These licences include conditions and regulations with respect to the rehabilitation of areas disturbed during the course of its exploration activities. So far as the Directors are aware there has been no known breach of the Company’s licence conditions and all exploration activities comply with relevant environmental regulations.

INFORMATION ON DIRECTORS

As at the date of this report the Directors’ interests in shares and unlisted options of the Company are as follows:

Director	Title	Directors’ Interest in Ordinary Shares	Directors’ Interest in A Class Performance Shares	Directors’ Interest in Listed Options	Directors’ Interest in Unlisted Options
Luke Atkins	Executive Chairman	4,393,617	1,356,353	-	6,000,000
David Brook	Non-Executive Director	-	-	-	2,000,000
Christopher Forrester	Non-Executive Director	2,232,447	542,553	1,119,223	-
Daniel Tenardi	Non-Executive Director	5,968,085	2,531,915	-	-

DIRECTORS’ MEETINGS

The number of meetings of the Company’s Directors held in the period each Director held office during the financial year and the numbers of meetings attended by each Director were:

Director	Board of Directors’ Meetings Meetings Attended Meetings held while a director	Board of Directors’ Meetings Meetings Attended Meetings held while a director
Luke Atkins David Brook Christopher Forrester Daniel Tenardi Annette Atkins	6 5 6 3 -	6 5 6 5 1

REMUNERATION REPORT

Recommendation 8.1 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (2[nd] edition) states that the Board should establish a Remuneration Committee. The Board has formed the view that given the number of Directors on the Board, this function could be performed just as effectively with full Board participation. Accordingly it was resolved that there would be no separate Board sub-committee for remuneration purposes.

This report details the amount and nature of remuneration of each Director of the Company and executive officers of the Company during the year.

Overview of Remuneration Policy

The Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors and the executive team. The broad remuneration policy is to ensure that remuneration properly reflects the relevant person’s duties and responsibilities, and that the remuneration is competitive in attracting, retaining and motivating people of the highest quality. The Board believes that the best way to achieve this objective is to provide the Executive Chairman and the executive team with a remuneration package consisting of a fixed and variable component that together reflects the person’s responsibilities, duties and personal performance. An equity based remuneration arrangement for the Board and

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AUSTRALIA MINERALS & MINING GROUP LIMITED

DIRECTORS’ REPORT

REMUNERATION REPORT (Continued)

the executive team is in place. The remuneration policy is to provide a fixed remuneration component and a specific equity related component, with no performance conditions. The Board believes that this remuneration policy is appropriate given the stage of development of the Company and the activities which it undertakes and is appropriate in aligning Director and executive objectives with shareholder and business objectives.

The remuneration policy in regard to setting the terms and conditions for the Executive Chairman has been developed by the Board taking into account market conditions and comparable salary levels for companies of a similar size and operating in similar sectors.

Directors receive a superannuation guarantee contribution required by the government, which is currently 9% per annum and do not receive any other retirement benefit. Some individuals, however, have chosen to sacrifice part or all of their salary to increase payments towards superannuation.

All remuneration paid to Directors is valued at cost to the Company and expensed. Options are valued using the BlackScholes methodology. In accordance with current accounting policy the value of these options is expensed over the relevant vesting period.

Non-Executive Directors

The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at a General Meeting, and has been initially set not to exceed $200,000 per annum. Actual remuneration paid to the Company’s Non-Executive Directors is disclosed below. Remuneration fees for Non-Executive Directors are not linked to the performance of the Company. However, to align Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company

Executive Chairman and Senior Management

The remuneration of the Executive Chairman is dictated by an executive service agreement.

The Company aims to reward executives with a level of remuneration commensurate with their position and responsibilities within the Company so as to:

• Reward executives for Company and individual performance against targets set by reference to appropriate benchmarks;

• Reward executives in line with the strategic goals and performance of the Company; and

• Ensure that total remuneration is competitive by market standards.

Structure

Remuneration consists of the following key elements:

• Fixed remuneration; and

• ● Issuance of unlisted options

Fixed Remuneration

Fixed remuneration consists of base remuneration (which is calculated on a total cost basis including any employee benefits e.g. motor vehicles) as well as employer contributions to superannuation funds.

The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position and is competitive in the market.

Remuneration packages for the staff who report directly to the Executive Chairman are based on the recommendation of the Executive Chairman, subject to the approval of the Board in the annual budget setting process.

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AUSTRALIA MINERALS & MINING GROUP LIMITED

DIRECTORS’ REPORT

REMUNERATION REPORT (Continued)

Service Agreement

The Executive Chairman, Mr Luke Atkins is employed under a contract for services with his private company Executive Resources Personnel Pty Ltd (“ERP”). The Agreement commenced on the date of listing on 27 January 2010.

Under the terms of the present contract:

• The Agreement is for a period of three years and can be terminated by the Company giving 12 months written notice, or ERP by providing three months written notice.

• ERP will provide consulting services for which it will be remunerated $4,400/week, plus a vehicle allowance of $1,450 per month.

Details of the nature and amount of each element of the emoluments of each Director and Executive Officer of Australian Minerals & Mining Group Limited paid/accrued during the year are as follows:

	Primary		Post Employment	Equity Compensation
2009/2010	Base Salary/Fees $	Motor Vehicle $	Superannuation Contributions $	Options $	Total $
Directors
Luke Atkins–Executive Chairman (i)	117,600	7,250	-	264,000	388,850
D Brook–Non Executive (ii)	58,619	-	-	88,000	146,619
C Forrester–Non Executive (iii)	19,066	-	-	-	19,066
D Tenardi–Non Executive (iv)	16,666	-	-	-	16,666
Executives
S Middlemas-Company Secretary (v)	30,300	-	-	21,301	51,601
W Witham-Exploration Manager (vi)	49,250	-	-	54,631	103,881

(i) Chairman’s fees commenced from the date of listing on 27 January 2010, with all fees paid to Executive Resource Personnel Pty Ltd.

(ii) Directors’ fees commenced from the date of listing on 27 January 2010, with all fees paid to Brook Consulting.

(iii) Directors’ fees commenced from the date of listing on 27 January 2010, with all fees paid to Calcat Resources Pty Ltd.

(iv) Directors’ fees commenced from the date of listing on 27 January 2010.

(v) Mr Middlemas was appointed a Company Secretary on 4 February 2010 – all fees were paid to Sparkling Investments Pty Ltd. Mr Witham commenced as exploration manager on 8 February 2010 – all fees were paid to Australian Renewable Energy Pty Ltd.

There were no payments made to Executives during 2008/2009. Other than the Directors and executive officers disclosed above there were no other executive officers who received emoluments during the financial year ended 30 June 2010.

Share-based compensation

The terms and conditions of each grant of options affecting remuneration in this or future reporting periods are as follows:

	Granted	Terms & Conditions for each Grant	Terms & Conditions for each Grant	Terms & Conditions for each Grant
	Number	Date of Grant	Date of Vesting	Option Value ($)	Exercise Price ($)	Expiry Date
Luke Atkins	6,000,000	31 Aug 2009	31 Aug 2009	0.044	0.20	31 Aug 2015
David Brook	2,000,000	31 Aug 2009	31 Aug 2009	0.044	0.20	31 Aug 2015
Sam Middlemas	333,333 333,333 333,333	30 Mar 2010 30 Mar 2010 30 Mar 2010	4 Feb 2011 4 Feb 2012 4 Feb 2013	0.0839 0.0839 0.0839	0.30 0.30 0.30	4 Feb 2015 4 Feb 2015 4 Feb 2015
William Witham	1,000,000 500,000 500,000	8 Feb 2010 8 Feb 2010 8 Feb 2010	8 Feb 2011 8 Feb 2012 8 Feb 2012	0.0968 0.0901 0.0844	0.20 0.25 0.30	8 Feb 2015 8 Feb 2015 8 Feb 2015

There were no other options that have been issued by the Company. When exercisable, each option is convertible into one ordinary share of Australia Minerals & Mining Group Resources Limited.

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AUSTRALIA MINERALS & MINING GROUP LIMITED

DIRECTORS’ REPORT

INDEMNIFYING OFFICERS AND AUDITOR

During the year, the Company paid an insurance premium to insure certain officers of the Company. The officers of the Company covered by the insurance policy include the Directors named in this report.

The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers in their capacity as officers of the Company. The insurance policy does not contain details of the premium paid in respect of individual officers of the Company. The premium paid during the year for the insurance policy was $27,034.

The Company has not provided any insurance for an auditor of the Company.

AUDITORS’ INDEPENDENCE DECLARATION

Section 370C of the Corporations Act 2001 requires the Company’s auditors Moore Stephens, to provide the Directors of the Company with an Independence Declaration in relation to the audit of the financial report. This Independence Declaration is attached and forms part of this Directors’ Report.

NON-AUDIT SERVICES

The external auditors Moore Stephens undertook an Investigation Accountants report for the IPO prospectus. The Directors consider these non-audit services are compatible with, and did not compromise the auditor independence requirements of the Corporations Act 2001.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not party to any such proceedings during the year.

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the Company support and have adhered to the principles of corporate governance for a Company of the current size. The Company’s corporate governance statement is contained in the Annual Report.

DATED at Perth this 24[th] day of September 2010. Signed in accordance with a resolution of the Directors.

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L Atkins Executive Chairman

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AUSTRALIA MINERALS & MINING GROUP LIMITED

AUDITOR’S INDEPENDENCE DECLARATION

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AUSTRALIA MINERALS & MINING GROUP LIMITED

STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2010

Other income Accounting and audit fees ASX and Share Registry fees Chairman’s fees Company Secretarial fees Directors’ fees Depreciation Employee Benefit expense Insurance expense Rent expense Expense of share-based payments Exploration Written off Other expenses Loss before income tax Income tax Net loss attributable to members of the Company Other Comprehensive Loss net of tax Total Comprehensive Loss Basic earnings/(loss) per share (cents per share) Diluted earnings/(loss) per share (cents per share)	NOTES 2 3 3 3 5 13 19 19	THE COMPANY 2010 $ 205,212	2009 $ -
		10,000 13,190 106,100 30,300 88,473 10,506 21,463 21,310 50,398 427,932 - 39,434	- - - - - - - - - - - 424
		613,894 -	424 -
		613,894	424
		-	-
		613,894	424
		(0.01) cents (0.01) cents	N/a N/a

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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AUSTRALIA MINERALS & MINING GROUP LIMITED

STATEMENT OF FINANCIAL POSITION

As at 30 June 2010

ASSETS CURRENT ASSETS Cash and cash equivalents Other receivables Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment and motor vehicles Capitalised mineral exploration expenditure TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Borrowings TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Share Option Reserve Accumulated losses TOTAL EQUITY	NOTES 20(a) 6 7 8 9 10 11 12(a) 14 13	2010 $ 7,925,895 27,543 6,000	2009 $ 4,669 - -
		7,959,438	4,669
		77,733 698,442	- 105,737
		776,175	105,737
		8,735,613	110,406
		117,418 -	- 110,358
		117,418	110,358
		117,418	110,358
		8,618,195	48
		8,804,581 427,932 (614,318)	472 - (424)
		8,618,195	48

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

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AUSTRALIA MINERALS & MINING GROUP LIMITED

STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2010

Notes BALANCE AT 1 JULY 2008 Total comprehensive loss for the year 13 TOTAL COMPREHENSIVE INCOME TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS Shares issued during the year Directors’ and Employees options BALANCE AT 30 JUNE 2009 Total comprehensive loss for the year 13 TOTAL COMPREHENSIVE INCOME TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS Shares issued during the year 12(b) Directors’ and Employees options BALANCE AT 30 JUNE 2010	Contributed Equity Share Based Payment Reserve Losses Total 2 - - 2 - - (424) (424)
	- - (424) (424)
	- - - - 470 - - 470 - - - -
	472 - (424) 48
	(613,894) (613,894)
	(613,894) (613,894)
	8,804,109 - - 8,804,109 - 427,932 - 427,932
	8,804,581 427,932 (614,318) 8,618,195

The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.

15

AUSTRALIA MINERALS & MINING GROUP LIMITED

STATEMENT OF CASHFLOWS

For the year ended 30 June 2010

Cash flows from operating activities Interest received Payments to suppliers and employees (inclusive of goods and services tax) Net cash used in operating activities Cash flows from investing activities Payments for exploration and evaluation Payments for plant and equipment and motor vehicles Net cash used in investing activities Cash flows from financing activities Proceeds from the issue of shares Costs of shares issued Proceeds of Loans Repayment of Loans Net cash provided by financing activities Net (decrease)/increase in cash held Cash at the beginning of the financial year Cash at the end of the financial year	NOTES 20(b) 20(a)		2010 $ 205,212 (305,445)	2009 $ - (424)
			(100,233)	(424)
			(244,053) (88,239)	(54,635) -
			(332,292)	(54,635)
			9,237,705 (773,596) 9,202 (119,560)	472 - 59,254 -
			8,353,751	59,726
			7,921,226 4,669	4,667 2
			7,925,895	4,669

The above statement of cash flows should be read in conjunction with the accompanying notes.

16

AUSTRALIA MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in preparing the financial report of the Company, Australian Minerals & Mining Group Limited (“AMMG” or “Company”), are stated to assist in a general understanding of the financial report. These policies have been consistently applied to all the years presented, unless otherwise indicated.

Australian Minerals & Mining Group Limited is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the official list of the Australian Stock Exchange. The financial statements are presented in Australian dollars which is the Company’s functional currency.

(a) Basis of Preparation

This general purpose financial report has been prepared in accordance with Australian Accounting Standards (including Australian Interpretations) adopted by the Australian Accounting Standards Board and the Corporations Act 2001. Compliance with Australian Accounting Standards ensures that the financial statements also comply with International Financial Reporting Standards.

The financial report has been prepared on the basis of historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets.

The financial report was authorised for issue by the Directors on 24[th] September 2010.

(b) 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 reported amounts of assets and 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. None of the balances reported have been derived from estimates.

(c) Income Tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred asset or liability is recognised in relation to those temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Current and future tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

(d) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Interest income

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

17

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(e) Cash and Cash Equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of three months or less.

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, which are readily convertible to cash on hand and which are used in the cash management function on a day-to-day basis.

(f) Plant and equipment and motor vehicles

Each class of plant and equipment and motor vehicles is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment and motor vehicles

Plant and equipment and motor vehicles are stated at cost less accumulated depreciation and any impairment in value.

The carrying values of plant and equipment and motor vehicles are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

If any such indication exists where the carrying values exceed the estimated recoverable amount, the assets or cash generating units are written down to their recoverable amount.

Depreciation

Depreciable non-current assets are depreciated over their expected economic life using either the straight line or the diminishing value method. Profits and losses on disposal of non-current assets are taken into account in determining the operating loss for the year. The depreciation rate used for each class of assets is as follows:

• Plant & equipment 20 - 33% • Motor vehicles 22.5%

(g) Employee Entitlements

Liabilities for wages and salaries, annual leave and other current employee entitlements expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the 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.

Contributions to employee superannuation plans are charged as an expense as the contributions are paid or become payable.

18

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(h) Exploration and Evaluation Expenditure

Mineral exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest and is subject to impairment testing. These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which:

• such costs are expected to be recouped through the successful development and exploitation of the area of interest, or alternatively by its sale; or

• Exploration and/or evaluation activities in the area have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active or significant operations in, or in relation to, the area of interest are continuing.

In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of reduced value, accumulated costs carried forward are written off in the year in which that assessment is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Where a mineral resource has been identified and where it is expected that future expenditures will be recovered by future exploitation or sale, the impairment of the exploration and evaluation is written back and transferred to development costs. Once production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

Costs of site restoration and rehabilitation are recognised when the Company has a present obligation, the future sacrifice of economic benefits is probable and the amount of the provision can be reliably estimated.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

Exploration and evaluation assets are assessed for impairment if:

(i) sufficient data exists to determine technical feasibility and commercial viability, and

(ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

For the purpose of impairment testing, exploration and evaluation assets are allocated to cashgenerating units to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then re-classified from intangible assets to mining property and development assets within property, plant and equipment.

(i) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (“ATO”). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables are stated with the amount of GST included. GST incurred is claimed from the ATO when a valid tax invoice is provided. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

19

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(j) Payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(k) Contributed Equity

Issued capital is recognised as the fair value of the consideration received by the Company.

Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(l) Earnings per Share

Basic earnings per share (“EPS”) are calculated based upon the net loss divided by the weighted average number of shares. Diluted EPS are calculated as the net loss divided by the weighted average number of shares and dilutive potential shares.

(m) Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

The minimum lease payments of operating leases, where the lesser effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense on a straight- line basis over the term of the lease.

(n) Share-based payment transactions

The Company provides benefits to employees (including Directors and consultants) of the Company in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (“Equity–settled transactions”).

There is currently one plan in place to provide these benefits being an Employee Share Option Plan (“ESOP”) which provides benefits to Directors, consultants and senior executives.

The cost of these equity-settled transactions is measured by reference to fair value at the date at which they are granted. The fair value is determined by an external valuer using the Black -Scholes model.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Australia Minerals and Mining Group Ltd. (“market conditions”).

The cost of equity settled securities is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“vesting date”).

Where the Company acquires some form of interest in an exploration tenement or an exploration area of interest and the consideration comprises share-based payment transactions, the fair value of the equity instruments granted is measured at grant date. The cost of equity securities is recognised within capitalised mineral exploration and evaluation expenditure, together with a corresponding increase in equity.

(o) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

20

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(p) Financial risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework, to identify and analyse the risks faced by the Company. These risks include credit risk, liquidity risk and market risk from the use of financial instruments. The Company has only limited use of financial instruments through its cash holdings being invested in short term interest bearing securities. The primary goal of this strategy is to maximise returns while minimising risk through the use of accredited Banks with a minimum credit rating of A1 from Standard & Poors. The Company has no debt, and working capital is maintained at its highest level possible and regularly reviewed by the full board.

(q) New accounting standards and interpretations

During the current year, the company adopted the revised Australian Accounting Standard AASB 101: Presentation of Financial Statements, which became mandatory. The adoption of this Standard had no material impact on the Company’s Financial Statements. Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2010 reporting periods as set out below:

AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136 & 139] AASB 2009-8 Amendments to Australian Accounting Standard – Group cash-settled Share-based Payment Transactions AASB 2009-10 Amendments to Australian Accounting Standards – Classification of Rights Issues [AASB 132] AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 131, 132, 136, 139, 1023 and 1038 and Interpretations 10 and 12 AASB 2009-12 Amendments to Australian Accounting Standards [AASB 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 and 1031 and Interpretations 2, 4, 16, 1039 and 1052] Interpretation 19 Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments

The Group has assessed the impact of these new standards and interpretations not to be material to the Group’s Financial Statements

COME Other Income Interest S Contributions to employees superannuation plans Depreciation - Plant and equipment - Motor vehicles Exploration Written off Share Based Payment expense Provision for employee entitlements		2010 $ 205,212	2009 $ -
		1,931 7,395 3,111 - 427,932 -	- - - - - -

2. OTHER INCOME

3. EXPENSES

21

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

4. AUDITORS’ REMUNERATION

Audit – Moore Stephens

Audit and review of the financial statements 10,000

5. INCOME TAX

No income tax is payable by the Company as it has incurred losses for income tax purposes for the year, therefore current tax, deferred tax and tax expense is $Nil (2009 - $Nil).

(a) Numerical reconciliation of income tax expense to prima facie tax payable

2010 $ Loss from continuing operations (613,894) Tax at the tax rate of 30% (2009: 30%) (184,168) Tax effect of amounts which are deductible in calculating taxable income: Non-deductible expenses 128,380 Other allowable expenditure Deferred tax asset not brought to account 55,789 Income tax expense - (b) Tax losses Unused tax losses for which no deferred tax asset has been recognised 1,674,812 Potential tax benefit at 30% 502,444 (c) Unbooked Deferred Tax Assets and Liabilities Unbooked deferred tax assets comprise: Provisions/Accruals/Other 185,663 Tax losses available for offset against future taxable income 209,556 395,219 Unbooked deferred tax liabilities comprise: Capitalised mineral exploration and evaluation expenditure 107,225 (d) Franking credits balance	2010 $ (613,894) (184,168) 128,380 55,789 -	2010 $ (613,894) (184,168) 128,380 55,789 -	2009 $ (424) (127) - - 127 - 106,161 31,848 - 127
	1,674,812
	502,444
		395,219	127
		107,225	31,721

The Company has no franking credits available as at 30 June 2010 (2009: $Nil).

6. OTHER RECEIVABLES

Current

GST recoverable

27,543

22

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

7. OTHER ASSETS Current Prepayments 8. PLANT AND EQUIPMENT AND MOTOR VEHICLES Plant and office equipment At cost Accumulated depreciation Motor vehicles At cost Accumulated depreciation		2010 $ 6,000	2009 $ -
		55,058 (7,395)	- - - - - - -
		47,663
		33,181 (3,111)
		30,070
		77,733

Reconciliation

Reconciliation of the carrying amounts for each class of plant and equipment and motor vehicles are set out below:

Plant and office equipment

Carrying amount at beginning of the year Additions Depreciation Carrying amount at the end of the year Motor vehicles Carrying amount at beginning of the year Additions Depreciation Carrying amount at the end of the year 9. CAPITALISED MINERAL EXPLORATION EXPENDITURE Non-Current In the exploration phase Cost brought forward Expenditure incurred during the year (at cost) Class A Performance shares – Gypsum value Exploration expenditure written off

- - 55,058 - (7,395) - 47,663 - - - 33,181 - (3,111) - 30,070 -

105,737 - 252,705 105,737 340,000 - - - 698,442 105,737

The recoupment of costs carried forward is dependent on the successful development and/or commercial exploitation or alternatively sale of the respective areas of interest.

23

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

10. TRADE AND OTHER PAYABLES Current (Unsecured) Trade creditors Other creditors and accruals		2010 $ 59,106 58,312	2009 $ - -
	117,418		-

Included within trade and other creditors and accruals is an amount of $8,651 (2009- Nil) relating to exploration expenditure.

11. BORROWINGS

Current

Current
Loan from A Atkins		-	110,358
CONTRIBUTED EQUITY
(a) Ordinary Shares
83,975,002 (2009: 47,002) fully paid ordinary
shares		8,804,581	472
(b) Share Movements During the Year
	2010		2009
	Number of	$	Number of	$
	Shares		Shares
Beginning of the financial year	47,000,002	472	2		2
New share issues during the year
Issue of Shares to Vendors	-	-	47,000,000		470
Consolidation of Vendors capital	(17,000,000)	(170)			-
Seed Capital Issue at 8 cents per share	16,475,000	1,318,000			-
IPO Share Issue at 20 cents per share	37,500,000	7,500,000	-		-
Proceeds from Option Issue	-	419,875
Valuation of A Class Performance Shares		340,000
Less costs of share issue		(773,596)
	83,975,002	8,804,581	47,000,002		472

12. CONTRIBUTED EQUITY

(c) Class A Performance Shares

The Company has on issue 17,000,000 Class A Performance Shares (“Performance Shares”). The Performance Shares will convert into fully paid ordinary shares in the capital of the Company upon the Company identifying a JORC compliant inferred resource of 25 million tonnes of gypsum from the Company’s tenements located in Lake Macleod, Western Australia ( Milestone ). The Performance Shares will convert into fully paid ordinary shares on one for one basis if the Milestone is achieved within 5 years from the date on which the Company becomes listed on the ASX. If the Milestone is not achieved within this timeframe, all Performance Shares will be redeemed for the sum of $0.000001 per Performance Share. At the date of this report the Milestone had not been achieved. The independent valuation for the Performance Shares was 2 cents each giving a total value of $340,000 which has been included in the exploration valuations.

24

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2009

12. CONTRIBUTED EQUITY (Continued)

(d) Unlisted Options

During the financial year the Company granted the following unlisted options over unissued shares:

Number of Options Granted	Exercise Price	Expiry Date
8,000,000 1,000,000 500,000 500,000 1,000,000	20 cents each 20 cents each 25 cents each 30 cents each 30 cents each	31 August 2015 8 February 2015 8 February 2015 8 February 2015 4 February 2015

There have been no other options issued by the Company since its incorporation, and none of the above options have been converted.

(e) Share Based Payments

The expense recognised in the income statement in relation to share-based payments is disclosed in Note 3. The average remaining contractual life for the share options outstanding as at 30 June 2010 is between 4 and 5 years. The range of exercise prices for options outstanding at the end of the year was between 20 cents and 30 cents. The fair value of options granted during the year was $619,950, of which $427,932 has been expensed in the current year (2009 - Nil).

The fair value of the equity-settled share options granted is estimated as at the date of grant using a BlackScholes model taking into account the terms and conditions upon which the options were granted.

The following table lists the inputs to the model used for the options issued during the year ended 30 June 2010 and 30 June 2009:

Date of Issue	31 Aug09	8 Feb 10	8 Feb 10	8 Feb 10	30 Mar 10
Number of Options	8,000,000	1,000,000	500,000	500,000	1,000,000
Volatility (%)	75%	75%	75%	75%	75%
Risk-free interest rate(%)	5.13%	5.02%	5.02%	5.02%	5.55%
Expected life of option(years)	5.0	5.0	5.0	5.0	5.0
Exerciseprice(cents)	20	20	20	20	30
Shareprice atgrant date(cents)	8	19	19	19	19
Valueper option(cents)	4.44	9.68	9.01	8.44	8.39

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.

(e) Terms and Conditions of Contributed Equity

Ordinary Shares

The Company is a public company limited by shares. The Company was incorporated in Perth, Western Australia. The Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid on the shares respectively held by them.

Ordinary shares have the right to receive dividends as declared and, in the event of the winding up of the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares held. Ordinary shares which have no par value, entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

25

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

13. ACCUMULATED LOSSES Accumulated losses at the beginning of the year Net loss attributable to members Accumulated losses at the end of the year 14. RESERVES Share Option Reserve Balance at the beginning of the year Add: Amounts expensed in current year Balance at the end of the year		2010 $ 424 613,894	2009 $ - 424
		614,318	424
		- 427,932	- -
		427,932	-

Share Option reserve

The share option reserve comprises any equity settled share based payment transactions. The reserve will be reversed against share capital when the underlying share options are exercised.

15. OPTION PLAN

The establishment of the Australian Minerals & Mining Group Limited Employee Incentive Option Plan (“the Plan”) was approved by special resolution at a General Meeting of shareholders. All eligible Directors, executive officers, employees and consultants of Australian Minerals & Mining Group Limited who have been continuously employed by the Company are eligible to participate in the Plan.

The Plan allows the Company to issue free options to eligible persons. The options can be granted free of charge and are exercisable at a fixed price calculated in accordance with the Plan.

26

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

16. RELATED PARTIES

Full remuneration details for Directors and Executives are included in the Directors’ report where the information has been audited. During the current financial year there were no loans made or outstanding at year end (2009 - $106,635).

Other transactions with Key Management Personnel

• (i) Mr Luke Atkins’ parents own the premises that the Company rents for its registered office. During the year the Company paid $50,398 (2009 – Nil) on normal commercial terms and conditions.

Movement in Shares

The aggregate numbers of shares and options of the Company held directly, indirectly or beneficially by Directors and Executive Officers of the Company or their personally-related entities are as follows:

2009/2010	Ordinary Shares	A Class Performance Shares	Listed Options	Unlisted Options
	30 June 2010	30 June 2010	30 June 2010	30 June 2009
Mr L Atkins	4,393,617	1,356,353	-	6,000,000
Mr D Brook	-	-	-	2,000,000
Mr C Forrester	2,232,447	542,553	1,119,223	-
Mr D Tenardi	5,968,085	2,531,915	-	-
Mr S Middlemas	150,000	-	10,000	1,000,000
2008/2009	30 June 2009	30 June 2009	30 June 2009	30 June 2009
Mr L Atkins		-	-	-
Mr D Brook		-	-	-
Mr C Forrester		-	-	-
Mr D Tenardi		-	-	-
Mr S Middlemas	-	-	-	-

Note all movements for the year are through purchases – there were no sales during the year.

17. EXPENDITURE COMMITMENTS

(a) Exploration

The Company has certain obligations to perform minimum exploration work on mineral leases held. These obligations may vary over time, depending on the Company’s exploration programs and priorities. As at balance date, total exploration expenditure commitments on tenements held by the Company have not been provided for in the financial statements and those which cover the following twelve month period amount to $155,507 (2009: $Nil). These obligations are also subject to variations by farm-out arrangements or sale of the relevant tenements.

(b) Operating Lease Commitments Total operating lease expenditure contracted for at balance date but not provided for in the financial statements, payable: Not later than one year Between one and five years		2010 $ 13,200 -	2009 $ - -
		13,200	-

The operating lease relates to the Company’s registered office premises in Claremont. The operating lease is for a one year term expiring on 30 September 2010. The operating lease entitles the Company to renew the term of the lease for a further period after the expiry date, or continue on a monthly basis.

(c) Capital Commitments

The Company had no capital commitments at 30 June 2010 (2009 - $Nil).

27

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

18. SEGMENT INFORMATION

The Company operates predominantly in one segment involved in the mineral exploration and development industry. Geographically the Company is domiciled and operates in one segment being Australia.

EARNINGS/ (LOSS) PER SHARE The following reflects the loss and share data used in the calculations of basic and diluted earnings/ (loss) per share: Earnings/ (loss) used in calculating basic and diluted earnings/ (loss) per share Weighted average number of ordinary shares used in calculating basic earnings/(loss) per share: Effect of dilutive securities Share options* Adjusted weighted average number of ordinary shares used in calculating diluted earnings/ (loss) per share Basic and Diluted loss per share (cents per share)

2010 $ (613,894)

19. EARNINGS/ (LOSS) PER SHARE

*Non-dilutive securities

As at balance date, 11,000,000 unlisted options (30 June 2009: Nil) which represent potential ordinary shares were not dilutive as they would decrease the loss per share.

28

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

2010 $ OTES TO THE STATEMENT OF CASH FLOWS a) Cash and Cash Equivalents Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows: Cash on hand 2 Cash at bank 140,118 Deposits at call 7,785,775 7,925,895 b) Reconciliation of the loss from ordinary activities after income tax to the net cash flows used in operating activities Loss from ordinary activities after income tax (613,894) Non-cash items: Depreciation 10,506 Expense of share-based payments 427,932 Change in operating assets and liabilities: Decrease (Increase) in prepayments (6,000) Increase in trade creditors and accruals 81,223 Net cash outflows used in operating activities (100,233)	2010 $ 2 140,118 7,785,775	2009 $ 2 4,667 -
	7,925,895	4,669
		(424) - - - -
	(100,233)	(424)

20. NOTES TO THE STATEMENT OF CASH FLOWS

(a) Cash and Cash Equivalents

(b) Reconciliation of the loss from ordinary activities after income tax to the net cash flows used in operating activities

(c) Stand-By Credit Facilities

As at 30 June 2010 the Company has a business credit card facility available totalling $5,000 of which $Nil was utilised.

29

AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2010

21. FINANCIAL INSTRUMENTS

The Company's activities expose it to a variety of financial risks and market risks. The Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company.

(a) Interest Rate Risk

The Company’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market, interest rates and the effective weighted average interest rates on those financial assets, is as follows:

2010

2010
	Note	Weighted	Funds Available	Fixed Interest	Assets/	Total
		Average	at a Floating	Rate	(Liabilities)
		Effective	Interest Rate		Non Interest
		Interest			Bearing
		%	$	$	$	**$ **
Financial Assets
Cash and
cash equivalents	20(a)	5.22%	3,022,921	4,902,972	2	7,925,895
Other receivables	6	-	-	-	27,543	27,543
			___
Total Financial Assets			3,022,921	4,902,972	27,545	7,953,438
			___
Financial Liabilities
Payables	10	-	-	-	(117,417)	(117,417)
			___
Total Financial Liabilities			-	-	(117,417)	(117,417)
			___
Net Financial Assets			3,022,921	4,902,972	(89,872)	7,836,021
2009
Financial Assets
Cash and
cash equivalents	20(a)	0%	-	-	4,669	4,669
			___
Total Financial Assets			-	-	4,669	4,669
			___
Financial Liabilities
Borrowings	11	-	-	-	(110,358)	(110,358)
			___
Total Financial Liabilities			-	-	(110,358)	(110,358)
			___
Net Financial Assets			-	-	(105,689)	(105,689)

(b) Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date, is the carrying amount, net of any provisions for doubtful debts, as disclosed in the balance sheet and in the notes to the financial statements.

The Company does not have any material credit risk exposure to any single debtor or group of debtors, under financial instruments entered into by it.

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AUSTRALIAN MINERALS & MINING GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2009

21. FINANCIAL INSTRUMENTS (Continued)

(c) Commodity Price Risk and Liquidity Risk

At the present state of the Company’s operations it has minimal commodity price risk and limited liquidity risk due to the level of payables and cash reserves held. The Company’s objective is to maintain a balance between continuity of exploration funding and flexibility through the use of available cash reserves.

(d) Net Fair Values

For assets and other liabilities, the net fair value approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form. The Company has no financial assets where the carrying amount exceeds net fair values at balance date.

The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the balance sheet and in the notes to the financial statements.

22. EMPLOYEE ENTITLEMENTS AND SUPERANNUATION COMMITMENTS

Employee Entitlements

There were no employee entitlements at 30 June 2010.

Directors, Officers, Employees and Other Permitted Persons Option Plan

Details of the Company’s Directors, Officers, Employees and Other Permitted Persons Option Plan are disclosed in Note 15.

Superannuation Commitments

The Company contributes to individual employee accumulation superannuation plans at the statutory rate of the employees’ wages and salaries, in accordance with statutory requirements, to provide benefits to employees on retirement, death or disability.

Accordingly no actuarial assessment of the plans is required.

Funds are available for the purposes of the plans to satisfy all benefits that would have been vested under the plans in the event of:

• termination of the plans;

• voluntary termination by all employees of their employment; and

• compulsory termination by the employer of the employment of each employee.

• during the year employer contributions (including salary sacrifice amounts) to superannuation plans totaled $1,931 (2009: $Nil).

23.

CONTINGENT LIABILITIES

There were no material contingent liabilities not provided for in the financial statements of the Company as at 30 June 2010 other than:

Native Title and Aboriginal Heritage

Native title claims have been made with respect to areas which include tenements in which the Company has an interest. The Company is unable to determine the prospects for success or otherwise of the claims and, in any event, whether or not and to what extent the claims may significantly affect the Company or its projects. Agreement is being or has been reached with various native title claimants in relation to Aboriginal Heritage issues regarding certain areas in which the Company has an interest.

24. EVENTS SUBSEQUENT TO BALANCE DATE

There has not arisen since the end of the financial year any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial years.

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AUSTRALIAN MINERALS & MINING GROUP LIMITED

DIRECTORS’ DECLARATION

In the opinion of the Directors of Australian Minerals & Mining Group Limited (“the Company”):

• (a) the accompanying financial statements and notes are in accordance with the Corporations Act 2001, including:

• (i) complying with Accounting Standards in Australia and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• (ii) giving a true and fair view of the financial position of the Company as at 30 June 2010 and of its performance, as represented by the results of its operations, for the financial year ended on that date.

• (b) there are reasonable grounds to believe that Australian Minerals & Mining Group Limited will be able to pay its debts as and when they become due and payable.

The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Executive Chairman and the Company Secretary for the financial year ended 30 June 2010.

This declaration is made in accordance with a resolution of the Directors.

Signed at Perth this 24[th] day of September 2010.

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L Atkins

Executive Chairman

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AUSTRALIAN MINERALS & MINING GROUP LIMITED

AUDIT REPORT

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AUSTRALIAN MINERALS & MINING GROUP LIMITED

AUDIT REPORT

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