AUSGOLD LIMITED - Annual Report 2012

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ABN 67 140 164 496

ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Table of Contents

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CORPORATE DIRECTORY ........................................................................................................................ 1	CORPORATE DIRECTORY ........................................................................................................................ 1
CHAIRMAN’S REPORT .............................................................................................................................. 2
REVIEW OF OPERATIONS ........................................................................................................................ 3
DIRECTORS’ REPORT ..............................................................................................................................15
REMUNERATION REPORT (AUDITED) ....................................................................................................21
CORPORATE GOVERNANCE ...................................................................................................................27
AUDITOR’S INDEPENDENCE DECLARATION .........................................................................................37
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME .............................................................38
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ......................................................................39
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ......................................................................40
CONSOLIDATED STATEMENT OF CASH FLOWS ...................................................................................42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ................................................................43
1.	REPORTING ENTITY ............................................................................................................................. 43
2.	STATEMENT OF COMPLIANCE ............................................................................................................ 43
3.	BASIS OF PREPARATION ..................................................................................................................... 43
4.	GOING CONCERN ................................................................................................................................. 44
5.	SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS............................. 44
6.	SIGNIFICANT ACCOUNTING POLICIES ............................................................................................... 45
7.	FINANCIAL RISK MANAGEMENT ......................................................................................................... 54
8.	SEGMENT REPORTING ........................................................................................................................ 58
9.	INCOME TAX EXPENSE ........................................................................................................................ 59
10.	CASH AND CASH EQUIVALENTS ......................................................................................................... 59
11.	TERM DEPOSITS ................................................................................................................................... 60
12.	TRADE AND OTHER RECEIVABLES .................................................................................................... 60
13.	SECURITY DEPOSITS ........................................................................................................................... 61
14.	PROPERTY, PLANT AND EQUIPMENT ................................................................................................ 61
15.	EXPLORATION AND EVALUATION EXPENDITURE & PREPAYMENT ............................................... 62
16.	TRADE AND OTHER PAYABLES .......................................................................................................... 62
17.	BORROWINGS ....................................................................................................................................... 62
18.	PROVISIONS .......................................................................................................................................... 63
19.	CONTRIBUTED EQUITY ........................................................................................................................ 63
20.	RESERVES ............................................................................................................................................. 64
21.	ACCUMULATED LOSSES ...................................................................................................................... 66
22.	LOSS PER SHARE ................................................................................................................................. 66
23.	CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATION ................................................... 67
24.	AUDITOR’S REMUNERATION ............................................................................................................... 68
25.	COMMITMENTS ..................................................................................................................................... 68
26.	RELATED PARTY DISCLOSURE .......................................................................................................... 69
27.	KEY MANAGEMENT PERSONNEL ....................................................................................................... 69
28.	PARENT ENTITY INFORMATION .......................................................................................................... 73
29.	CONTINGENT LIABILITIES .................................................................................................................... 73
30.	EVENTS SUBSEQUENT TO REPORTING DATE ................................................................................. 73
DIRECTORS’ DECLARATION ...................................................................................................................75
INDEPENDENT AUDIT REPORT ...............................................................................................................76
SHAREHOLDERS INFORMATION ............................................................................................................78
SCHEDULE OF MINERAL LICENCE INTEREST .......................................................................................80

ANNUAL REPORT 30 JUNE 2012 TOC

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Directory

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CORPORATE DIRECTORY

This financial report covers Ausgold Limited (“Ausgold” or “Parent entity” or “Company”) and its controlled entity (collectively known as “the Group” or “consolidated entity”) for the financial year ended 30 June 2012. The consolidated entity’s principal activities during the course of the financial year were the exploration for gold and other precious metals.

CHIEF EXECUTIVE OFFICER

Dr Andrew Tunks (Appointed 27 February 2012)

DIRECTORS

Mr Robert Pett (Non-Executive Chairman)

Mr Simon Trevisan (Non-Executive Director)

Mr Richard Lockwood (Non-Executive Director)

Mr Christopher Kelsall (Non-Executive Director)

Mr Ian Murchison (Alternate Director to Mr Trevisan) (Resigned 28 February 2012)

Mr Benjamin Bell (Chief Executive Officer) (Resigned 11 November 2011)

COMPANY SECRETARY

Mr Mark Di Silvio (Appointed 25 November 2011)

Ms Fleur Hudson (Resigned 25 November 2011)

AUDITORS

BDO Audit (WA) Pty Ltd 38 Station Street SUBIACO WA 6008

Telephone: (08) 6382 4600 Facsimile: (08) 6382 4601

SECURITIES EXCHANGE

Australian Securities Exchange Ltd Exchange Plaza 2 The Esplanade PERTH WA 6000

ASX Code: AUC

SHARE REGISTRY

Security Transfer Registrars Pty Ltd 770 Canning Highway APPLECROSS WA 6153 Telephone: (08) 9315 2333 Facsimile: (08) 9315 2233

SOLICITORS

Squire Sanders Level 21, 300 Murray Street PERTH WA 6000

BANKERS

REGISTERED OFFICE

80 Churchill Avenue SUBIACO WA 6008

Telephone: (08) 9466 9555 Facsimile: (08) 9466 9566

Web: www.ausgoldlimited.com Email: [email protected]

St George Bank Limited Level 1, Westralia Plaza 167 St Georges Tce PERTH WA 6000

Westpac Banking Corporation Level 6, 109 St Georges Terrace PERTH WA 6000

ANNUAL REPORT 30 JUNE 2012 1

AUSGOLD LIMITED ABN 67 140 164 496 Chairman’s Report

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CHAIRMAN’S REPORT

Dear Shareholders

Over the past 12 months Ausgold has developed a path to establish the Katanning greenstone belt as a significant gold province in Australia.

Following on from the discovery of gold mineralisation at Katanning last year, the continued evolution of your company has focussed on the definition of the Katanning greenstone belt in south Western Australia where your company currently holds over 9,000 square kilometres of exploration and mining tenure.

Throughout the past year, exploration activities continued at Katanning. Drilling activities at Katanning focused predominantly on the Jinkas Corridor, a four kilometre section of the Katanning Gold Project surrounding the recognised Jinkas gold deposit. The drilling activity throughout 2012 identified at least three stacked gold mineralised zones including Jinkas, White Dam and Jackson lodes with gold occurrence in close proximity to the foot and hanging wall of the granitic sills. The drilling has extended the strike length of the Jinkas high grade shoot by at least 600 metres during the most recent campaign and importantly, the strike remains open to the north, south and at depth. Over the next twelve months, activity shall be focused on identifying new targets adjacent to the known Jinkas Corridor.

Outside of the Katanning Gold Project, we have undertaken a large and intensive stream and soil sampling program within the wider Katanning Regional Project to identify future drilling targets. The achievements of this program to date have been outstanding. Over 54 regional gold targets have been identified through this process and your company has defined a major mineralised greenstone belt over 200 kilometres in length similar to other greenstone belts within the Yilgarn Province with attributes of the Giant Archaean gold camps. Our attention over the next year will be to progress the identified anomalies with a view to drill testing priority areas.

Throughout the last twelve months we have also undertaken key exploration activities at Yamarna, north east of Laverton in Western Australia and at Cracow in Queensland. Follow up drilling at Yamarna during 2011 identified significant copper & nickel intercepts within the Winchester Prospect whilst at Cracow, soil sampling and mapping have provided significant indication of geological characteristics similar to that of other major epithermal gold systems. Both Yamarna and Cracow continue to represent themselves as exciting areas to explore for your company.

Corporately the Company continues to evolve. In March, Dr Andrew Tunks was appointed Chief Executive Officer. Andrew’s experience in world class gold projects and structural geology will be invaluable as we continue to push for exploration success and company growth.

I would like to close by thanking our exploration team for their continued dedication throughout the year, my co-directors for their counsel during the year and our loyal shareholders for your continued support over the past twelve months. Your company is well placed and looking forward to both the challenges and the opportunities that lie ahead in future.

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Robert Pett Chairman

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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REVIEW OF OPERATIONS

KATANNING GREENSTONE BELT

The Katanning Greenstone Belt is located within the gold rich Archaean Yilgarn Craton of Western Australia, one of Australia’s premier mineral provinces and host to some of Australia’s most famous gold deposits such as the Golden Mile, Kanowna Belle and Mount Charlotte to name just a few. All major gold deposits of the Yilgarn occur in “Greenstone Belts” which comprise mafic, ultramafic and felsic volcanics and intrusives intercalated with sedimentary rocks that have all been metamorphosed and deformed. It is generally acknowledged that the gold deposits occur during the deformation events.

Throughout the past financial year, through its regional work in the Great Southern region of Western Australia, Ausgold has mapped a far larger greenstone belt than was previously known, spanning over 200km in strike that has attributes of other Giant Archaean gold camps. Whilst this does not in itself guarantee there will be gold discovered as many other factors contribute to the formation of an economic mineral deposit, an important factor in exploration prospectivity is the presence of gold itself. Activities completed by Ausgold over the past financial year has shown that there is a substantial amount of gold in the Katanning Greenstone Belt as evidenced by thick, high-grade intersections from drilling, such as:

BSRC0015 - 20m @ 15.6 g/t Au
BSRC0562 - 13m @ 10.4 g/t Au
BSRC0025 - 12m @ 10.1 g/t Au

Another important factor in our future exploration success is the physical nature of the alteration that accompanies the gold mineralisation. At Jinkas and Dingo, Ausgold has mapped a strong correlation between gold mineralisation and the minerals magnetite and pyrrhotite - both these minerals are magnetic and pyrrhotite is electrically conductive. These properties make the Katanning mineralisation geophysically “visible” and the use of magnetics and other geophysical tools will be an important exploration tool for Ausgold in future exploration campaigns.

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Figure 1: The Major Greenstone Belts of the Archaean Yilgarn Craton highlighting the levels of known production

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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Figure 2: Geographic location of Ausgold’s Katanning Tenure. Greenstone belt is highlighted in green.

One of the unique features of Ausgold’s exploration portfolio is its ground position in the Katanning Greenstone Belt, where Ausgold holds virtually 100% of the entire belt, aside from a single joint venture held with Quadrio Resources Pty Ltd (“Quadrio”). This gives the Company an exclusive opportunity to evaluate the entire belt from a geological perspective without the constraints of tenement position and competitor activity – quite a unique position for a junior of the Company’s size to be in.

KATANNING GOLD PROJECT (KGP)

The Company’s flagship project remains the Katanning Gold Project (“KGP”) which is defined by a linear belt of geochemical anomalism that straddles a major (340° trending) deformation zone. Within this zone Ausgold has identified a series of major geochemical anomalies that define a prospective target over twenty kilometres along strike and remaining open to both the North and South.

In the late 1990s, two small open pits were mined at KGP by Glengarry Mining; however the operation was unsuccessful due to an inadequate mill facility unable to treat the fresh rock and a historically low gold price. Building upon this previous work, Ausgold has achieved significant results to date by drilling underneath and along strike from these areas known as the Jinkas and Dingo Prospects.

Based on the limited diamond drilling completed by Ausgold during the 2012 financial year, there are at least two phases of gold mineralisation present within the project. Initially, gold was deposited in broad zones associated with pyrite and pyrrhotite alteration of the metamorphosed mafic wall-rocks. This style of mineralisation is overprinted by a later highergrade gold event associated with wall-rock brecciation and the additional of magnetite and gold.

DRILLING OPERATIONS

Drilling during the financial year focussed on the Jinkas and Dingo Corridors of the Katanning Gold Project (refer Figures 3 & 4). Up to five RC rigs, a diamond rig and an aircore rig were utilised in completing approximately 54,000m RC and 2,000 metres of diamond drilling targeting the continuity of high-grade gold mineralisation within these zones along strike and at depth. A further 40,000m of aircore was also completed. Drilling progressed generally on 40 metre section lines with drill holes 40 metres apart with a number of deep holes to scope mineralisation at depth.

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AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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Figure 3: The geochemical anomalies and selected drill results from exploration at the Katanning Gold Project The area is largely farmland and has very little exposure, contributing to the lack of historic exploration in the area.

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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Figure 4: Collar plan highlighting RC and Diamond Holes drilled 2011-2012. Previous drilling shown in black & aircore drilling not shown

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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JINKAS CORRIDOR

The Jinkas Corridor hosts the Jinkas open pit, one of two open pits originally mined in the 1990’s by Glengarry Mining. Ausgold commenced drilling in the area in 2011 and the campaign continued through until March 2012. Ore is hosted within strongly metamorphosed mafic amphibolites close to a contact with a metamorphosed granitic sill. Over the course of drilling many high grade intercepts have been completed in the Reverse Circulation Percussion Drilling (RC) program, including:

Hole	From (m)	Interval (m)	Au g/t
BSRC0562	86	13	10.4
BSRC0469	174	8	5.8
BSRC0565	99	20	3.2
BSRC0524	67	3	5.9
BSRC0621	114	11	2.6
BSRC0577	177	4	8.3
BSRC0466	131	10	3.6
BSRC0606	120	3	8.61

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Figure 5: Cross section through the Jinkas ore zone

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AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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Figure 6: Significant gold intercepts - Jinkas Section 19000mN

To confirm the RC intercepts, Ausgold also carried out a diamond drilling program and as at the end of the financial year, had received assays for 11 of 12 diamond core holes. Results from the diamond drilling include:

Hole	From(m)	Interval(m)	Aug/t
BSDD001	77	5	1.63
BSDD001	116	7	2.23
BSDD002	69	6	2.20
BSDD002	77	8	4.38
BSDD004	84	2	2.85
BSDD005	99	6	6.33
BSDD005	106	8	3.64
BSDD006	225	1	14.4

DINGO CORRIDOR

The Dingo open pit deposit is located less than 4 kilometres south of the Jinkas deposit. Work during the course of the year by Ausgold included RC and diamond drilling as well as aircore drilling to test soil anomalies to the south of Dingo which identified the largest gold anomaly to date at the Lukin Prospect.

Ausgold previously announced positive assay results from Dingo, which confirmed the continuation of mineralisation with highlights including:

Hole	From(m)	Interval(m)	Aug/t
BSRC211	79	20	2.7
BSRC214	90	15	3.6
BSRC121	121	22	2.3
BSRC111	107	11	4.2
BSRC191	58	8	4.1

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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Figure 7: Cross section through the Jinkas ore zone

KATANNING REGIONAL PROJECT

Throughout the 2012 financial year, Ausgold collected over 9,500 wide spaced regional soil samples, utilised in mapping the geology and allowing Ausgold to understand the prospectivity of the entire greenstone belt. During this program, Ausgold has identified large zones of gold anomalism that require further exploration review.

Geological interpretation of the Katanning Greenstone Belt has to date:

Identified 54 regional gold targets (Refer Figure 8);
Defined a major mineralised greenstone belt over 200 kilometres in length similar to other greenstone belts within the Yilgarn Province with attributes of the Giant Archaean gold camps;
Highlighted regional geochemical provinces within the belt characterised by base metal anomalism;
Related single and multi-element trends indicative of major structures and associated local and regional alteration halos.

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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Figure 8: Regional prospectivity of the Katanning Greenstone Belt

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AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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QUADRIO JOINT VENTURE

In May 2012, Ausgold announced the results of a large aircore drilling program within the Quadrio Joint Venture which resulted in the extension of two large gold systems, namely Woods Road/Bullock Pool Prospects and the Nanicup Bridge Prospect. Both systems have strong similarities to the main geochemical anomalies at the Katanning Gold Project (“KGP”) where significant gold mineralisation has already been discovered.

Previous exploration at Bullock Pool and Nanicup Bridge by Quadrio returned highly encouraging shallow gold intercepts, including:

Bullock Pool: 9m @ 2.0 g/t Au from 30m, Hole 00BPRC013 4m @ 2.4 g/t Au from 36m, Hole 00BPRC002 Nanicup Bridge: 3m @ 11.0 g/t Au from 0m, Hole 01NBR082 6m @ 2.1 g/t Au from 25m, Hole 04NBDH004 3m @ 4.5 g/t Au from 6m, Hole 01NVR011

As part of Ausgold’s ongoing regional exploration outside the Katanning Gold Project, it is the Company’s intention, subject to measured and appropriate funding, to RC drill test high priority target defined by aircore drilling and follow-up low-cost aircore drilling programs to constrain geochemical gold targets and corridors for future RC drilling.

OTHER AUSTRALIAN PROJECTS

In addition to the burgeoning Katanning Gold Project and Katanning Regional Project, highly prospective ground has also been identified and acquired at Doolgunna Station, Yamarna and Cracow.

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Figure 9: Area Map showing Ausgold’s current exploration projects

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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CRACOW

The Cracow Project comprises four tenements covering 1,200km² located approximately 375km north-west of Brisbane. Four additional tenement applications, covering an additional similar area, are pending grant. The tenements and applications enclose extensive areas of highly prospective Camboon Volcanics, host to the +1 million ounce Cracow gold mine located 16km south of Ausgold’s area of interest.

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Figure 10: Cracow Project tenement holding underlain by magnetic imagery with target areas highlighted

Exploration to date has included geological mapping, stream sediment sampling and follow-up by systematic soil geochemical sampling of target areas (Figure 10). Assays are awaited for approximately 1,600 soil samples but results received to date clearly define several multi-element geochemical anomalies with characteristics typical of high-grade epithermal Au-Aug mineralised systems.

YAMARNA

The Yamarna Copper-Nickel Project is located approximately 125 kilometres north-east of Laverton in central Western Australia and comprises around 600km² of prospective ground over the eastern-most Archaean greenstone belt of the Yilgarn – the Yamarna belt.

In late 2011, eight holes were completed for 2,462 metres at three main areas of focus; namely Winchester and electromagnetic (“EM”) anomalies Yam09 and Yam19.

It is the Company’s intention, subject to appropriate funding, to drill adjacent sections at Winchester during the 2012 field season in order to determine the extent of the mineralising system. Ausgold is also planning drilling solutions for targets generated from the recently completed downhole EM surveys.

Ausgold believes the recent work at Yamarna has enhanced the prospectivity of the immediate area.

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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Figure 11: Winchester Prospect Discovery Section, Yamarna

PERSONNEL AND CAPABILITY

One of the key ingredients to building a successful exploration team is the people. At Ausgold, our ongoing philosophy is to recruit and retain the best people for the job.

As such, the appointment of Mr Gary Brabham effective from 1 July 2012 as Ausgold’s new Exploration Manager was a key development for the Company. Gary was previously the Managing Director of ASX listed De Grey Mining Limited and the Technical Director of Adamus Resources Limited and has held senior positions in exploration and mining companies both here in Australia and overseas. Gary will bring to the Ausgold team substantial organizational expertise in exploration management and resource estimation, in addition to his vital knowledge of the delicate transition from explorer to producer – a transition that Ausgold is acutely focused on.

Mr Brabham’s appointment follows on from other key appointments throughout the year that have consolidated Ausgold’s core technical expertise and commercial strengths. Mr Russell Birrell was appointed Regional Exploration Manager during 2011 and has been responsible for the recognition and ongoing geological development of the Katanning Greenstone Belt as a core asset for the Company.

In October 2011, Ausgold appointed Mr Mark Di Silvio as Chief Financial Officer and Company Secretary. With an extensive level of experience in the gold and oil & gas industries, Mr Di Silvio is responsible for financial control and the development of Ausgold’s corporate and commercial practices.

ANNUAL REPORT 30 JUNE 2012 13

AUSGOLD LIMITED ABN 67 140 164 496 Review of Operations

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AUSGOLD’S FORWARD STRATEGY

Ausgold’s three-fold exploration strategy for the future will focus on the delivery of its maiden mineral resource estimate, continuing to grow the resource through systematic exploration and the identification and testing of regional anomalies within the Katanning Greenstone Belt.

Mineral Resource Estimate

Ausgold has completed a substantial amount of drilling over the last twelve months focused on the Jinkas and Dingo areas within the Katanning Gold Project. At this stage, only a limited amount (2,200m) of diamond drilling has been completed. As such, before Ausgold can produce a mineral resource estimate that is compliant with the JORC code, it is anticipated that the Company may carry out a further round of diamond drilling. Upon completion of logging and sampling, Ausgold will then be in a position to report its maiden resource.

Resource Growth

It is important to take into account that work towards Ausgold’s maiden resource estimate is likely to only be an interim estimate. There are multiple zones of mineralisation within the KGP and many of them remain open along strike and down dip. In addition, the Company has new targets such as Lukin and Seiben, which remain untested by drilling.

The geophysical data to be collected will be a key target generator and build an improved geological understanding to significantly grow Ausgold’s defined gold resource.

Regional Exploration

Ausgold holds over 9,000km² of ground within the Katanning Greenstone belt. Approximately half this area is underlain by highly prospective greenstone lithologies that host the bulk of the gold mineralisation in the Yilgarn Craton.

All the key indicators such as major 340° trending fault zones, complex intrusive history, rheology contrasts and multielement anomalies add to the prospectivity of the belt.

Ausgold has the opportunity to explore an entire greenstone belt with a number of major anomalies already identified and ready for drill testing. Given the nature of exploration, some of the anomalies will not be economically viable, however equally some of them could potentially host significant gold mineralisation. It is my vision to develop the expertise within the Ausgold team that will allow us to crystallize this exploration potential into defined resources.

The funding received from the Share Placement and Share Purchase Plan (as announced on 6 August 2012) will allow the Company to maintain a structured exploration programme in the highly prospective Katanning region and will also enable Ausgold to progress key anomalies identified at Yamarna in central of Western Australia Cracow in Queensland.

Competent Persons Statement

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr Andrew Tunks, who is a Member of the Australian Institute of Geoscientists. Dr Tunks is the CEO and full-time employee of Ausgold Limited, and has sufficient experience relevant to the style of mineralisation 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”. Dr Tunks consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Quoted co-ordinates are in MGA Zone 50 GDA94. All holes are drilled on an azimuth of 243 and dip at -60 degrees unless otherwise noted. Intercepts calculated using a 0.5 g/t Au lower cut, no upper cut, and a maximum 2 metre internal dilution. All assays determined by 1 metre split samples using fire assay by Ultra Trace and Quantum Analytical Services in Perth, Western Australia.

ANNUAL REPORT 30 JUNE 2012 14

AUSGOLD LIMITED ABN 67 140 164 496 Directors’ Report

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DIRECTORS’ REPORT

The Directors present their report together with the financial report of the consolidated entity consisting of Ausgold Limited and the entity it controlled at the end of, or during the year ended 30 June 2012 and the auditor’s report thereon.

Ausgold Limited (“Ausgold” or “Parent entity” or “Company”) and its controlled entity (collectively known as “the Group” or “consolidated entity”) are domiciled in Australia.

PRINCIPAL ACTIVITIES

The consolidated entity’s principal activities during the course of the financial year were the exploration for gold and other precious metals.

DIRECTORS

The Directors of the Group during or since the end of the financial year are:

Name	Period of Directorship
Mr Robert James Pett Non-Executive Chairman	Director since 23 October 2009
Mr Simon Trevisan Non-Executive Director	Director since 23 October 2009
Mr Richard Lockwood Non-Executive Director	Director since 12 November 2010
Mr Christopher David Kelsall Non-Executive Director	Director since 5 November 2009
Mr Benjamin John Bell Chief Executive Officer	Appointed 2 November 2009; Resigned 11 November 2011
Mr Ian Murchison Alternate Director to Simon Trevisan	Appointed 31 August 2010; Resigned 28 February 2012

The qualification, experience and special responsibilities of the Directors of the Group during or since the end of the financial year are:

Non - Executive Chairman

Robert James Pett BA(Hons), MA(Econ), FAICD, Minerals Economist

Mr Pett is a minerals economist with over 28 years’ experience in exploration and mining of gold and other metals. During that period he has overseen the successful exploration, development, operation and financing of more than ten mining projects worldwide. This includes gold and nickel mines in Australia and gold mines in East and West Africa, a number evolving from grass roots discovery, as well as numerous exploration projects. He holds a Master’s Degree from Queens University Canada. Mr Pett is a member of the Board's Audit Committee and chairman of the Remuneration Committee.

During the last 3 years Mr Pett has served on the boards of the following public companies: A-Cap Resources Ltd, Regalpoint Resources Ltd, Brazilian Metals Group Ltd, Senex Energy Ltd and Fortune Minerals Ltd.

Non-Executive Director

Simon Trevisan B Econ, LLB (Hons) MBT

Mr Trevisan is the managing director of the Transcontinental Group of Companies and for the past 16 years has been responsible for managing the Group's mining, oil and gas and property development projects.

Mr Trevisan has been involved in the promotion and management of a number of public companies, including the establishment and listing of Mediterranean Oil & Gas plc, an AIM listed oil and gas company with production and a substantial oil discovery in Italy. He was Executive Chairman of ASX-listed gold explorer Aurex Consolidated Ltd. In that role Mr Trevisan oversaw the recapitalisation of the company, the acquisition of gold tenements at Yamarna, and a farmout to AngloGold to fund a drilling campaign which ultimately led to a merger with TerraGold Mining Ltd. He has a Bachelor of Economics and a Bachelor of Law (UWA) and a Master’s Degree in Business and Technology from the University of New South Wales. Mr Trevisan initially practiced as a solicitor with Allens Arthur Robinson Legal Group firm, Parker and Parker, in the corporate and natural resources divisions and later acted as General Counsel to a group of public companies involved in the mining and exploration sectors. Mr Trevisan is currently an executive director of uranium explorer Regalpoint Resources Ltd and was a founding director of Ausgold Exploration Pty Ltd. Mr Trevisan is a member of the Board's Remuneration Committee.

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AUSGOLD LIMITED ABN 67 140 164 496 Directors’ Report

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Non-Executive Director

Richard Lockwood

Mr Lockwood has 36 years’ experience in mining, mining investment and stockbroking. Formerly a mining investment partner for Hoare Govett and McIntosh Securities he was involved in the development and financing of several gold and base metals projects in Europe, Australia and Africa.

Mr Lockwood is currently a director of Praetorian Resources Limited, a publicly listed investment company focussed on natural resources. Prior to joining Praetorian, Mr Lockwood held fund management positions with City Natural Resources High Yield Trust, New City High Yield Trust, Geiger Counter Limited and Golden Prospect Precious Metals. He is also currently a non-executive director of Regalpoint Resources Ltd, Kalahari Minerals Ltd, A-Cap Resources Limited and Fortune Minerals Ltd.

Non-Executive Director

Christopher David Kelsall B Econ, LLB, MSc

Mr Kelsall is currently Finance Director of Mediterranean Oil & Gas plc, an AIM listed oil and gas production and exploration company, based in London. He has spent most of his career in investment banking, advising clients in relation to capital markets, privatisation and corporate advisory projects in a wide range of developed and emerging markets. In his most recent role as a Director, Equity Capital Markets, at Deutsche Bank AG, Hong Kong, Mr Kelsall advised Chinese and other Asian issuers within the industrial and natural resources sectors. Mr Kelsall holds a Master of Science in Finance (Distinction) from the London Business School, a Bachelor of Economics and a Bachelor of Law from the University of Western Australia, in addition to a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia. Mr Kelsall is chairman of the Board's Audit Committee and a member of the Remuneration Committee.

Chief Executive Officer

Benjamin John Bell BSc, MMET, MBA (Resigned 11 November 2011)

Mr Bell is a geologist and geophysicist with 16 years in the mineral industry, including 10 years in gold exploration. Previously Mr Bell has consulted to a number of ASX listed gold explorers and has held senior exploration geologist roles with companies including Regis Resources Ltd. He has also managed the operations of UTS Geophysics and the airborne geophysical arm of the Australian Government Agency, Geoscience Australia.

Alternate Director to Mr Trevisan

Ian Murchison B.Comm., FCA, Dipl Naut Sc. (Resigned 28 February 2012)

Mr Murchison is an Investment Director and a founding shareholder of Perth-based private equity fund manager Foundation Capital. Foundation Capital was established in 1994 and has invested institutional funds of over $125 million, primarily in Western Australia. Mr Murchison is a Fellow of the Institute of Chartered Accountants and was a founding partner of Sothertons Chartered Accountants. Mr Murchison is director of Regalpoint Resources Ltd, TFS Corporation Ltd, Ausgold Limited (alternate to Mr Simon Trevisan), Austwide Distributors Pty Ltd and Skill Hire Pty Ltd.

MANAGEMENT

Chief Executive Officer

Dr Andrew Tunks B.Sc. (Hons.), Ph.D (Appointed 27 February 2012)

Dr Tunks holds a Bachelor of Science (Hons) from Monash University and a PhD obtained at the University of Tasmania. Dr Tunks has global experience within the mining industry having worked in Australia and in Southern and Central Africa, including Ghana, Tanzania and Botswana. Dr Tunks has lectured in Geology at the University of Tasmania and is an accredited member of The Australian Institute of Geoscientists. Dr Tunks is a Non-Executive Director of A-Cap Resources Limited.

Company Secretary & Chief Financial Officer

Mr Mark Di Silvio B.Bus, MBA, CPA (Appointed 25 November 2011)

Mr Di Silvio holds a Bachelor of Business from Curtin University in Western Australia and a Master of Business and Administration from the University of Western Australia. A Certified Practicing Accountant with over 20 years post graduate experience in the resources sector, Mr Di Silvio commenced his career with a variety of finance based roles within the gold mining sector whilst based in Kalgoorlie, Western Australia. Mr Di Silvio joined oil and gas independent Woodside Energy Limited in 1998, gaining oilfield experience through the financial management of joint ventures and the development of accounting and compliance management systems. Prior to leaving Woodside in 2007, Mr Di Silvio was responsible for the financial management of Woodside’s Mauritanian oilfield assets. Mr Di Silvio was CFO for Central Petroleum Limited, a junior oil and gas exploration company based in Perth, Western Australia prior to joining LSE and TSX listed gold miner Centamin Egypt Limited as CFO in 2008. During his tenure with Centamin, Mr Di Silvio was a key member of the executive team responsible for delivering the first modern gold mine in Egypt.

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AUSGOLD LIMITED ABN 67 140 164 496 Directors’ Report

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Company Secretary

Fleur Hudson BA, LLB, LLM (Disp. Res.) (Resigned 25 November 2011)

Fleur Hudson has a Bachelor of Arts, a Bachelor of Laws and Master of Laws degrees. Fleur has been a director of Transcontinental Group since 2009 and was appointed as company secretary of Ausgold Limited in 2010. Prior to that, Fleur has practiced as a solicitor with international law firms in Perth and in London since 1998. As a solicitor, Fleur has advised large national and international companies with respect to a variety of civil construction, infrastructure and commercial issues.

DIRECTORS’ MEETINGS

The following table sets out the number of Directors’ meetings (including meetings of the committees of directors) held during the financial year and the number of meetings attended by each Director (while they were a Director or committee member). During the financial year, 8 Board meetings, 2 Nomination and Remuneration Committee meetings, 2 Compliance/Corporate Governance Committee meetings and 6 Audit Committee meetings were held.

	Board of Directors	Board of Directors	Nomination and Remuneration Committee	Nomination and Remuneration Committee	Audit Committee	Audit Committee
Director	Held	Attended	Held	Attended	Held	Attended
Mr R Pett	13	13	1	1	2	2
Mr B Bell1	3	3	-	-	-	-
Mr S Trevisan	13	13	1	1	-	-
Mr R Lockwood	13	11	-	-	-	-
Mr C Kelsall	13	13	1	1	2	2
Mr I Murchison2	8	-	-	-	-	-

Note 1: Mr Bell resigned from the Board on 11 November 2011. Note 2: Mr Murchison resigned on 28 February 2012.

In addition to these formal meetings, during the year the Directors considered and passed 2 Circular Resolutions pursuant to clause 72 of the Company’s Constitution.

DIVIDENDS

No dividends have been declared or paid since the end of the previous financial year.

CHANGES IN STATE OF AFFAIRS

There was no change in the state of affairs of the consolidated entity during the financial year.

FUTURE DEVELOPMENTS

It is the objective of the Company to continue to explore for gold at the Katanning Gold Project, with a view to increasing the overall size of the potential geological resource whilst at the same time, exploring for gold and base metals at its recognised tenure in other parts of Australia.

Disclosure of information regarding likely developments of the consolidated entity in future financial years and the expected results of potential operations is likely to result in unreasonable prejudice to the consolidated entity. Accordingly, this information has not been disclosed in this report.

ANNUAL REPORT 30 JUNE 2012 17

AUSGOLD LIMITED ABN 67 140 164 496 Directors’ Report

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SHARE OPTIONS

Options converted during the financial year

A total of 12,451,945 listed options were exercised during the financial year to 30 June 2012. The details of these options are as follows:-

Number of ordinary shares under option	Exercise price $	Expiry date
12,451,945	0.20	31 March 2013

In addition to the above, 2,000,000 unlisted options were exercised during the financial year 2012. The details of these options are as follows:-

Number of ordinary shares under option	Exercise price $	Expiry date
700,000	0.20	31 December 2014
1,000,000	0.25	31 December 2014
300,000	0.30	31 December 2014

The issuing entity was Ausgold Limited. The market weighted average closing price of Ausgold Limited shares during the 2012 financial year was $1.22 (2011: $1.06). No amount was unpaid on these shares.

Employee options

The following options were not issued under any of the Employee Option Plans, however were issued in accordance with employment contracts and/or agreements and are in existence at the date of this report:-

Number of ordinary shares under option	Exercise price $	Expiry date
1,000,000	1.716	6 December 2014
1,500,000	1.38	6 December 2015
500,000	1.38	6 December 2015
500,000	1.48	6 December 2015
3,500,000	1.573	27 February2016

The holders of these options do not have the right, by virtue of the option, to participate in any share issue or interest issue of the Company, body corporate or registered scheme. The issuing entity for all options was Ausgold Limited.

Options lapsed during the financial year

A total of 1,500,000 unlisted options lapsed during the financial year to 30 June 2012, due to employees ceasing work with the Company. The details of these options are as follows:-

Number of ordinary shares under option	Exercise price $	Expiry date
1,500,000	1.38	6 December 2015

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Directors’ Report

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Options on issue at the date of this report

Number of ordinary shares under option1	Grant date	Exercise price $	Expiry date
72,861,176	14 January2010	0.20	31 March 2013
500,000	1 July2011	1.45	1 July2015
250,000	16 December 2009	0.25	31 December 2014
200,000	16 December 2009	0.20	31 December 2014
1,000,000	6 December 2011	1.716	6 December 2014
500,000	19 December 2011	1.38	19 December 2014
500,000	6 December 2011	1.38	6 December 2015
500,000	6 December 2011	1.48	6 December 2015
3,500,000	27 February2012	1.573	27 February2016

Note 1: All options issued for nil consideration .

Options exercised subsequent to balance date

181,794 options have been exercised subsequent to balance date. The issuing entity was Ausgold Limited. No amount was unpaid on these shares. The details of these options are as follows:-

Number	Exercise price $	Expiry date
181,794	0.20	31 March 2013

Options lapsed subsequent to balance date

No options have lapsed subsequent to balance date.

ENVIRONMENTAL REGULATIONS

The consolidated entity’s exploration activities are governed by a range of environmental legislation. As the group is in the early development phase of its exploration projects, Ausgold is not yet subject to the public reporting requirements of environmental legislation. To the best of the directors’ knowledge, the group has adequate systems in place to ensure compliance with the requirements of the applicable environmental legislation and is not aware of any material breach of those requirements during the financial year and up to the date of the Directors’ Report.

EVENTS SUBSEQUENT TO REPORTING DATE

On 20 September 2012, Ausgold concluded the placement of 20.7 million new fully paid ordinary shares at $0.33 per share to raise $6.8 million for continued exploration and working capital purposes.

The Placement was completed in two tranches:

Tranche 1: 5,498,637 shares to raise $1.8 million in cash (before costs). Settlement of Tranche 1 was completed on 13 August 2012; and
Tranche 2: 15,151,515 shares to raise $2.0 million in cash and $3.0 million in securities was approved by a meeting of shareholders on 18 September 2012.

As a component of Tranche 2, Ausgold entered into a Share Placement and Share Exchange Agreement with Praetorian Resources Limited (“Praetorian”), a company listed on the Alternative Investment Market of the London Stock Exchange.

Under the terms of the agreements:

Ausgold issued 4,545,455 ordinary fully paid shares to Praetorian at an issue price of $0.33 cash, to raise $1,500,000; and
Ausgold issued 9,090,909 ordinary fully paid shares to Praetorian at an issue price of $0.33 and in exchange Praetorian will allot to Ausgold 3,683,015 ordinary fully paid shares at an issue price of £0.55. The listed Praetorian shares are freely tradeable.

Ausgold also concluded a Share Purchase Plan on 21 September 2012 whereby eligible shareholders could purchase Ausgold shares at $0.33 per share. Ausgold raised a total of $0.4 million through this process.

ANNUAL REPORT 30 JUNE 2012 19

AUSGOLD LIMITED ABN 67 140 164 496 Directors’ Report

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REVIEW OF OPERATIONS

A review of the Company’s operations is located at the beginning of this Annual Report.

INDEMNIFICATION OF DIRECTORS

Indemnification

The Company has agreed to indemnify the current directors, chief executive officer and company secretary of the Company against all liabilities to another person (other than the Company or a related body corporate) that may arise from their designated position of the Company, except where the liability arises out of conduct involving a lack of good faith.

The agreement stipulates that the Company will meet to the maximum extent permitted by law, the full amount of any such liabilities, including costs and expenses.

Insurance premiums

The Company paid a premium during the year in respect of a director and officer liability insurance policy, insuring the directors of the Company, the company secretary, and all executives of the Company against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001.

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Remuneration Report

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REMUNERATION REPORT (AUDITED)

The Directors of Ausgold Limited present the Remuneration Report prepared in accordance with section 300A of the Corporations Act 2001 for the Company and the consolidated entity for the financial year ended 30 June 2012. For the purposes of this report, Directors and executives of the Company and consolidated entity are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and consolidated entity (“the Group”), directly or indirectly, including any director (whether executive or otherwise) of the parent company. This Remuneration Report forms part of the Directors’ Report.

OVERVIEW

Remuneration levels for directors and executives are competitively set to attract the most qualified and experienced candidates. Details of the Company’s remuneration strategy for the 2012 financial year are set out in this Remuneration Report.

This Remuneration Report:

explains the Board’s policies relating to remuneration of directors and executives;
discusses the relationship between these policies and the Company’s performance; and
sets out remuneration details for each Director and senior executive.

The fees paid to Non-Executive Directors are set at levels which reflect both the responsibilities of, and the time commitments required from, each Non-Executive Director to discharge their duties and are not linked to the performance of the Company.

The remuneration strategy for the Chief Executive Officer (CEO) and executives, including the Company Secretary, comprise a fixed cash component and where applicable, statutory superannuation contributions, a potential merit based performance bonus and the issue of share options or other share based incentives in the Company which is intended to provide competitive rewards to attract high calibre executives. The issue of performance bonuses and share options, whilst not dependent on the performance of the Company, are aligned with the ongoing performance assessment of the incumbent management team, following review and assessment by the Board of Directors.

Criteria used to determine potential merit based performance bonus for the CEO and executives, during the exploration phase, is the setting of key objectives for each executive and measuring performance against these objectives. Key objectives will normally include criteria where performance will be measured against progress indicators. These key objectives will largely be determinable by the objective assessment of performance by the CEO. There are no specific performance based key financial indicators set and bonuses and/or options are at the discretion of the Board. The Nomination and Remuneration Committee reviews the CEO and CFO’s performance and makes a recommendation to the Directors.

Share options are offered to executives at the discretion of the Directors. Performance criteria is one of several elements utilised by the Board is assessing the issue of share options to employees. Length of service with the Group, past and potential contribution of the person to the Group is also considered when awarding shares options to employees. There is no Board policy in relation to limiting the recipient exposure to risk in relation to securities.

The table below sets out summary information about the movements in shareholder wealth for the financial periods arising since incorporation and through to 30 June 2012:

	30 June 2012 $’000	30 June 2011 $’000	30 June 2010 $’000
Revenue	593	302	241
Netprofit/(loss)before tax	(4,819)	(1,024)	(813)
Netprofit/(loss)after tax	(4,819)	(1,024)	(748)
Shareprice at start ofyear	$1.55	$0.12	$0.20
Shareprice at end ofyear	$0.41	$1.55	$0.12
Dividends	-	-	-
Basic lossper share(cents)	(4.02)	(1.11)	(1.39)
Diluted lossper share(cents)	n/a	n/a	n/a

ANNUAL REPORT 30 JUNE 2012 21

AUSGOLD LIMITED ABN 67 140 164 496 Remuneration Report

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KEY MANAGEMENT PERSONNEL

The following persons acted as Directors of the Company during or since the end of the financial year:-

Mr Robert Pett (Non-Executive Chairman)
Mr Simon Trevisan (Non-Executive Director)
Mr Richard Lockwood (Non-Executive Director)
Mr Chris Kelsall (Non-Executive Director)
Mr Ian Murchison (Alternate Director to Simon Trevisan), resigned 28 February 2012
Mr Benjamin Bell (Chief Executive Officer), resigned 11 November 2011

The following persons are the executives of the Company during or since the end of the financial year:-

Dr Andrew Tunks (Chief Executive Officer), appointed 27 February 2012
Mr Mark Di Silvio (Company Secretary & Chief Financial Officer), appointed 25 November 2011

REMUNERATION OF DIRECTORS AND EXECUTIVES

The Nomination and Remuneration Committee reviews the remuneration packages of all Directors and executives on an annual basis. Remuneration packages are reviewed and determined with due regard to current market rates and are benchmarked against comparable industry salaries. The table below shows the fixed and variable remuneration for key management personnel. 100% of remuneration was fixed during the current and preceding financial period with variable remuneration by way of bonus payable in relation to performance.

2012	Short-term benefits	Short-term benefits	Short-term benefits	Post- employment benefits	Share-based payment	Total $

	Salary & fees $	Bonus $	Other fees $	Superannuation $	Options & rights $1
Non-Executive	Directors
R Pett	60,000	-	1,928	2,700	-	64,628
S Trevisan~~2~~	-	-	171,928	-	-	171,928
R Lockwood	30,000	-	1,928	-	311,219	343,147
C Kelsall~~3~~	30,000	-	18,803	-	-	48,803
B Bell	110,880	-	1,928	7,982	267,261	388,051
I Murchison	-	-	1,928	-	-	-
Executives
A Tunks	137,949	-	1,928	12,415	595,755	748,047
M Di Silvio	180,488	-	1,928	16,244	436,659	635,319
Total	549,317	-	202,299	39,341	1,610,894	2,399,923

2011	Short-term benefits			Post- employment benefits	Share-based payment	Total $

	Salary & fees $	Bonus $	Other fees $	Superannuation $	Options & rights $1
Non-Executive	Directors
R Pett	47,667	-	2,571	4,290	-	54,528
S Trevisan~~2~~	-	-	154,571	-	-	154,571
R Lockwood	19,417	-	2,571	-	-	21,988
C Kelsall	30,000	-	2,571	-	11,428	43,999
B Bell	195,948	-	2,571	17,635	60,411	276,565
I Murchison	-	-	2,571	-	-	2,571
Total	293,032	-	167,426	21,925	71,839	553,922

Note 1: The fair value of the options is calculated at the date of grant using a Black-Scholes valuation model and allocated to each reporting period evenly over the period from grant date to vesting date. For the corresponding 2011 period, market conditions were not taken into account within the valuation model for options issued as the Company was not listed on the ASX at the date of grant.

Note 2: Mr Trevisan has not received director’s fees from the Company for the year ended 30 June 2012. Ausgold Ltd held an agreement with Transcontinental Investments Pty Ltd whereby Transcontinental Investments Pty Ltd charged an administration fee to Ausgold Ltd for office space and services and accounting, company secretarial and administration services. Mr Trevisan is a director and controlling shareholder of Transcontinental Investments Pty Ltd. The agreement was terminated on 15 December 2011.

Note 3: Mr Kelsall received a service fee, in accordance with the terms of his service agreement, for activities performed over and above his normal duties during 2012.

Note 4: Other fees include the attributable non-cash benefit applied by virtue of the Company’s Directors and Officers Liability policy.

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AUSGOLD LIMITED ABN 67 140 164 496 Remuneration Report

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No Director or executive person appointed during the period received a payment as part of his or her consideration for agreeing to hold the position.

EMPLOYMENT AGREEMENTS

Remuneration and other terms of employment for the following executives are formalised in employment agreements, the terms of which are set out below:-

Dr Andrew Tunks, Chief Executive Officer Term: Permanent Base salary: $436,000 inclusive of superannuation Employee options: 3,500,000 options exercisable at $1.573; 3 year option period Notice period: 3 months (Nil in the event of gross misconduct) Mr Mark Di Silvio, Chief Financial Officer & Company Secretary Term: Permanent Base salary: $287,000 inclusive of superannuation Employee options: 1,000,000 options exercisable at $1.716; 3 year option period Notice period: 2 months (Nil in the event of gross misconduct) 9 months’ notice in the event of a change in control of Company

No executive is entitled to any termination payments apart from remuneration payable up to and including the date of termination and all payments due by way of accrued leave.

NON EXECUTIVE DIRECTOR AGREEMENTS

The current annual fee for Non-Executive Directors is a base fee of $30,000 per annum. Due to the additional time requirements and relevant experience, the Non-Executive Chairman receives a base fee of $60,000 per annum. These amounts include any statutory superannuation payments where applicable. The exception to this is Mr Simon Trevisan who has a controlling interest in Transcontinental Investments Pty Ltd, a company that provided corporate administration services to Ausgold Limited. An administration fee of $170,000 was paid to Transcontinental Investments Pty Ltd during the year. The service arrangement was terminated on15 December 2011.

USE OF REMUNERATION CONSULTANTS

Due to the size and nature of the organisation, the company has not engaged remuneration consultants to review and measure its remuneration policy and strategy. The Board reviews remuneration strategy periodically and may engage remuneration consultants in future to assist with this process.

VOTING AND COMMENTS MADE AT THE COMPANY’S 2011 ANNUAL GENERAL MEETING

Ausgold Limited received more than 91% of yes votes on its remuneration report for the 2011 financial year. The Company did not receive any specific feedback at the annual general meeting or throughout the year regarding it remuneration practices.

ANNUAL REPORT 30 JUNE 2012 23

AUSGOLD LIMITED ABN 67 140 164 496 Remuneration Report

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Options issued to Directors and executives

Options are offered to Directors and executives at the discretion of the Directors, having regard, among other things, to the length of service with the Group, the past and potential contribution of the person to the Group. Specific performance criteria which may be applicable is described in the notes below. The following options have been issued to Directors and executives up to 30 June 2012 and granted subsequent to reporting date:-

Name	Office	Grant date	No. of unquoted options	Fair value at grant date $	Exercise price $	Expiry date
C Kelsall 1	Non-Executive Director	16 December 2009	250,000	0.1414	0.20	31 December 2014
C Kelsall	Non-Executive Director	16 December 2009	250,000	0.1342	0.25	31 December 2014
B Bell 2	Chief Executive Officer	16 December 2009	700,000	0.1414	0.20	31 December 2014
B Bell 2	Chief Executive Officer	16 December 2009	500,000	0.1342	0.25	31 December 2014
B Bell 2	Chief Executive Officer	16 December 2009	500,000	0.1342	0.25	31 December 2014
B Bell 2	Chief Executive Officer	19 December 2011	300,000	0.8909	0.30	31 December 2014
R Lockwood 3	Non-Executive Director	19 December 2011	500,000	0.6224	1.38	19 December 2014
A Tunks 4	Chief Executive Officer	27 February 2012	3,500,000	0.7516	1.573	26 February 2016
M Di Silvio 5	Chief Financial Officer & Company Secretary	6 December 2011	1,000,000	0.6735	1.716	6 December 2014

Note 1: As at 30 June 2012, 100% of these non-performance based options had vested. 50,000 options were exercised by Mr Kelsall during the 2010 financial period.

Note 2: Mr Bell resigned on 11 November 2011. As at 30 June 2012, 100% of these options had vested and were exercised. 300,000 options were issued to Mr Bell based upon meeting performance criteria under the terms of his employment contract. The performance criteria related to the achievement of a JORC compliant resource within a two year period following the company’s initial public offering. The Board considered the performance criteria to be satisfied prior to Mr Bell’s resignation and the issuance was ratified at a meeting of shareholders on 24 November 2011.

Note 3: As at 30 June 2012, 100% of these non-performance based options had vested and remain unexercised.

Note 4: As at 30 June 2012, no options had vested. 1,500,000 options vest on the 1[sd ] anniversary date of Dr Tunks employment with the balance vesting in equal instalments on the 2[nd] and 3[rd] anniversary of employment.

Note 5: As at 30 June 2012, 33% of these options had vested and remain unexercised. The remaining options vest in equal proportions on both the first anniversary and 18 month anniversary of employment.

Value of Director and executives options granted, exercised and lapsed during the year

The following table shows the value of Director and executives options granted, exercised and lapsed during the year:-

	Optionsgranted	Options exercised	Options lapsed	Value of options included in remuneration for the year $	Percentage of total remuneration for the year that consists of options %
Name	Value at grant date1 $	Value at exercise date2 $	Value at time of lapse $
B Bell	267,261	1,406,000	-	267,261	69%
R Lockwood	311,219	-	-	311,219	91%
A Tunks	2,630,450	-	-	595,755	80%
M Di Silvio	673,477	-	-	436,659	70%

Note 1: The value of options granted during the period is recognised in compensation over the vesting period of the grant, in accordance with Australian Accounting Standards

Note 2: The value of the options exercised, or disposed of, during the year is calculated as the market price of the shares of the Group as at the close of trading on the date the options were exercised after deducting the price paid to exercise the option. Mr Bell’s options noted on the table on Page 24 were exercised in full and no unpaid amounts remained outstanding as at the time of exercise.

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AUSGOLD LIMITED ABN 67 140 164 496 Remuneration Report

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Vesting of options issued during the year to Directors and Executives

Name	Number of options issued	Yeargranted	Vested%	Forfeited%	Date which options may vest
M Di Silvio	333,333	2011	100%	0%	6 June 2012
M Di Silvio	333,333	2011	0%	0%	6 December 2012
M Di Silvio	333,334	2011	0%	0%	6 June 2013
R Lockwood	500,000	2011	100%	0%	19 December 2011
B Bell	300,000	2011	100%	0%	19 December 2011
A Tunks	1,500,000	2012	0%	0%	27 February 2013
A Tunks	1,000,000	2012	0%	0%	27 February 2014
A Tunks	1,000,000	2012	0%	0%	27 February 2015

DIRECTORS’ SHAREHOLDINGS

The relevant interest of each Director in the share capital of the Company shown in the Register of Directors’ Shareholdings as at the date of this report are:-

Director	No. of fully paid ordinary shares	No. of share options
R Pett1	8,300,000	3,300,000
S Trevisan2	19,100,000	13,100,000
R Lockwood3	500,000	500,000
C Kelsall	385,000	835,000

Note 1: Relevant interest as director and controlling shareholder of Batterbury Holdings Pty Ltd. Note 2: Relevant interest as director and controlling shareholder of Transcontinental Investments Pty Ltd.

Note 3: Relevant interest in ordinary shares held by Nefco Nominees Pty Ltd, a company controlled by Mr Lockwood.

Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by Directors shown in the consolidated accounts) because of a contract made by the Company, its controlled entities or a related body corporate with the Director or with a firm of which the Director is a member, or with an entity in which the Director has a substantial interest.

END OF REMUNERATION REPORT

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Directors’ Report

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NON-AUDIT SERVICES

The Board and the Audit and Risk Committee have considered the non-audit services provided during the financial year by the auditor and confirmed that the auditors did not provide any non-audit services during the financial year and therefore, the auditors independence requirements of the Corporations are satisfied that the provision of those non-audit services during the financial year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the followings reasons:

all non-audit services were subject to the corporate governance procedures adopted by the Company; and
� the non-audit services provided do not undermine the general principals relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

Details of the amount paid to the auditor of the Company, BDO Audit and its related practices for audit and non-audit services provided are set out below:

	Consolidated	Consolidated
	Jun 2012	Jun 2011
	$	$
Audit and other assurance services - BDO Audit (WA) Pty Ltd	36,084	34,175
Tax compliance services - BDO Tax (WA) Pty Ltd	-	15,665
Corporate finance services - BDO Corporate Finance (WA) Pty Ltd	-	11,312
Total	36,084	61,152

AUDITOR’S INDEPENDENCE DECLARATION

The Auditor’s Independence Declaration is included on page 37 of the financial report.

The report is signed in accordance with a resolution of the directors.

For and on behalf of the Directors

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Robert Pett Chairman

Perth, Western Australia 24 September 2012

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Governance

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CORPORATE GOVERNANCE

The Board of Directors of Ausgold Limited is responsible for the corporate governance of the consolidated entity. The Board guides and monitors the business and affairs of Ausgold Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.

Unless disclosed below, the best practice recommendations of the ASX Corporate Governance Council (“ASXCGC”) have been applied for the entire financial year ended 30 June 2012. Where there has been any variation from the recommendations, those practices continue to be the subject of the scrutiny of the full Board.

Copies of the current Board and Committee Charters and Policies are available on the Company’s website at www.ausgoldlimited.com.

Board Composition:

The Board comprises four Directors, none of whom are Executive Directors of the Company. The best practice recommendations of the ASXCGC favour that the Chairman be an independent Director. In his capacity as NonExecutive Chairman, Mr Robert Pett has overseen the Company’s exploration activities and ongoing development, in conjunction with the Chief Executive Officer. During the financial year, Mr Pett acted as the company’s Chief Executive Officer during the transitional period following the resignation of Mr Bell and the appointment of Dr Tunks. The Board undertook these steps in an appropriate manner given the Company's circumstances during the course of the year.

The period of office held, skills, experience and expertise relevant to the position of each Director who is in office at the date of the annual report, their attendances at meetings and their term of office are detailed in the Directors’ Report.

The names of the Directors and executives of the Company in office at the date of this statement are:

Name	Position	Committees
Robert Pett	Non-Executive Chairman	Audit Committee Nomination and Remuneration Committee
Simon Trevisan	Non-Executive Director	Nomination and Remuneration Committee
Richard Lockwood	Independent Non-Executive Director	-
Christopher Kelsall	Independent Non-Executive Director	Audit Committee Nomination and Remuneration Committee
Andrew Tunks	Chief Executive Officer	-
Mark Di Silvio	Chief Financial Officer&CompanySecretary	-

Mr Robert Pett and Mr Simon Trevisan are also Directors of the wholly owned subsidiary company, Ausgold Exploration Pty Ltd. External Directorships of the Company’s Directors are detailed in the Directors’ Report.

Non-Executive Directors have the right to seek independent professional advice in the furtherance of their duties as Directors, at the Company’s expense. Written approval must be obtained from the Chief Executive Officer prior to incurring expenses on behalf of the Company.

When determining whether a Director is independent, the Board has established a Directors’ Test of Independence Policy governed by the Nomination and Remuneration Committee. The policy is available on the Company’s website or upon request. Based on this policy, Mr Lockwood and Mr Kelsall are considered to be independent Non-Executive Directors. The Board considers Mr Lockwood and Mr Kelsall as independent on the basis that they do not hold a material personal interest in the Company and furthermore, the Board believes that Mr Lockwood and Mr Kelsall exert independent judgment when carrying out their responsibilities as non-executive directors.

The Directors are aware of the need for the composition of Board to evolve with the development of Company, and propose to revise the composition of the Board in due course, including the possibility of transitioning and/or appointing additional independent Non-Executive Directors.

Meetings of Independent Directors:

The Company’s independent Directors meet at least once a year without the non-independent Directors and members of management present. Although the Company has not implemented formal structures or procedures for the independent functioning of the Board of Directors, the Board of Directors believes that it operates independently of management.

ANNUAL REPORT 30 JUNE 2012 27

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Governance

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Position Descriptions:

The roles of Chairman and Chief Executive Officer are separated as defined in the Company’s Board Charter, and with the Company’s continued growth and development, written position descriptions for the Chair of each Board committee will also be developed.

Charter of the Board of Directors:

The Board of Directors supervises the management of the business and affairs of the Company. The Board of Directors assumes responsibility for the stewardship of the Company, and the functions the Company has established that are reserved to the Board include:

Strategic Planning: The Board of Directors regularly reviews and approves strategic plans and initiatives of the Company at Board of Directors meetings, and otherwise as required.
Risk Assessment: The Board of Directors has primary responsibility to identify principal risks in the Company’s business and ensure the implementation of appropriate systems to manage these risks.
Succession Planning: The Board of Directors is responsible for succession planning, including the appointment, training and monitoring of executives.
Communications: The Board of Directors oversees the Company’s public communications with shareholders and others interested in the Company.
Internal Controls: The Board of Directors and the audit committee of the Board of Directors oversee the Company’s internal control and management information systems.

In addition to its general oversight responsibilities, significant transactions out of the ordinary course of the Company’s business or which may be material to the Company are considered and approved by the Board of Directors. The Board of Directors generally has a minimum of six scheduled meetings in each financial year. Additional meetings may be held depending upon issues to be dealt with by the Company from time to time. During the financial year ended 30 June 2012, the Board of Directors held 13 meetings and passed 2 circular resolutions pursuant to the Company’ Constitution. Wherever possible, the Board of Directors look to discuss and resolve issues at scheduled Board meetings as opposed to considering circular resolutions, hence the higher than usual volume of Board meetings.

A full copy of the Company’s Board Charter is available on the Company’s website or upon request.

Board Performance Monitoring:

In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of all Directors is reviewed by the Chairman in conjunction with fellow Directors. Due to the size of the organisation, the Company does not have a formal process for evaluation of the Board, the Board members, or Board committees during the financial year.

Risk Management:

The Board meets regularly to evaluate, control, review and implement the Company’s operations and objectives.

Regular controls established by the Board include:

timely monthly financial and operational reporting;
implementation of exploration work programs and budgets by management; and
procedures to allow Directors to monitor progress of key activities undertaken by management.

The Board is responsible for reviewing and approving the Company’s risk management strategy, including determining the Group’s appetite for significant investment decisions. Management reports to the Board on the Company’s key risks periodically.

The Board is also responsible for satisfying itself that management has developed and implemented a sound system of risk management and internal control. The Company’s internal control framework and risk management process is governed by the Audit Committee.

The Board regularly discusses risks associated with the Company’s business and exploration activities along with the Company’s risk tolerance. As the Company evolves and grows, a series of operational risks and mitigation strategies will be considered and adopted on a fit for purpose basis.

The Risk Management Policy is available on the Company’s website or upon request.

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Governance

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Remuneration Strategy:

The Nomination and Remuneration Committee comprises Mr Robert Pett, Mr Simon Trevisan and Mr Christopher Kelsall.

The Committee’s primary functions are to oversee and recommend to the Board:-

Company remuneration, retention, termination and incentive policies and procedures for Directors and senior executives;
The development of Board and director evaluation processes;
The review of desirable competencies, skills, knowledge and experience of Directors;
Recommend the appointment, re-election and removal of Directors to/from the Board.

The Board believes that whilst the Company has the current number of independent Non-Executive Directors located in various jurisdictions (Australia and the United Kingdom), a single committee combining both nomination and remuneration functions, rather than separate committees, is appropriate given the Company’s size. Such a combined committee is consistent with Australian corporate governance practices.

The Nomination and Remuneration Committee establishes guidelines for the future nomination and selection of potential new Directors. The full Board (subject to members voting rights in general meeting) is ultimately responsible for selection of new members and has regard to a candidate’s experience and competence in areas such as mining, exploration, geology, finance, administration and other areas of relevance that can assist the Company in meeting its corporate objectives and plans.

Under the Company’s current Constitution:

the maximum number of Directors on the Board is seven;
a Director may not retain office for more than three years without submitting for re-election;
at the Annual General Meeting (AGM) each year effectively one third of the Directors in office retire by rotation and must seek re-election by shareholders; and
any Director appointed by the Board must have their election confirmed by shareholders at the next AGM.

The Company has established a Remuneration Policy which sets out the structure of the remuneration of key senior executives, Executive Directors, Non-Executive Directors, termination, disclosure of remuneration etc. The Board has also established a Selection, Appointment and Re-Appointment of Directors Policy which details the procedures for the selection, appointment, re-appointment and evaluation of the Company’s Directors. The Committee considers both policies before making recommendations to the Board on nomination and remuneration matters. Both Policies, along with the Nomination and Remuneration Committee Charter are available on the Company’s website or upon request.

All compensation arrangements for Directors and senior executives are determined by the Committee and approved by the Board, after taking into account the current competitive arrangements prevailing in the market. This approach is consistent with the practices of other Australian companies.

The amount of remuneration for all Directors including the full remuneration packages, comprising all monetary and nonmonetary components of the Executive Directors and executives, are detailed in the Directors’ Report. Non-Executive Directors may receive annual fees within an aggregate Directors’ fee pool limited to an amount which is approved by shareholders. The Board Nomination and Remuneration Committee reviews and recommends, for Board approval, remuneration levels and policies for Directors within this overall Directors’ fee pool. The fees which are paid are also periodically reviewed. The current annual fee for Non-Executive Directors is a base fee of $30,000 per annum. Due to the additional time requirements and relevant experience, the Non-Executive Chairman receives a base fee of $60,000 per annum. These amounts include any statutory superannuation payments where applicable. The exception to this is Mr Simon Trevisan who has a controlling interest in Transcontinental Investments Pty Ltd, a company that provided corporate administration services to Ausgold Limited. An administration fee of $170,000 was paid to Transcontinental Investments Pty Ltd during the year. The service agreement was terminated in December 2011.

ANNUAL REPORT 30 JUNE 2012 29

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Governance

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Although no formal written policy has been established, the executive is responsible for:-

managing the day to day business of the Company;
developing corporate strategy, performance objectives and budgets for review and approval by the Board;
appointing staff, evaluating their performance and training requirements as well as development of Company policies; and
ensuring all available information in connection with items to be discussed at a meeting of the Board is provided to each Director prior to the meeting.

The Chief Executive Officer is responsible for ensuring executives properly discharge the responsibilities delegated and for keeping the Board informed on these matters.

The performance of senior executives is evaluated by the Nomination and Remuneration Committee, often taking into account recommendations from the Chief Executive Officer and/or Chairman. The Board can exercise its discretion in relation to approving incentives, bonuses and options and can recommend changes to the Committee’s recommendations. All executives receive base salary and superannuation (if applicable) and in some cases, performance incentives and fringe benefits. These packages are reviewed on an annual basis. All remuneration paid to executives is valued at the cost to the Company and is measured in accordance with the applicable accounting standards.

Directors, executives and employees, are from time to time invited to participate in the shareholder approved shares options. Separate shareholder approval is sought before any Director can be issued options. Shares issued are valued as the difference between the market price of those shares and the amount paid by the Executive. Options are valued using the Black-Scholes methodology. Non-Executive Directors have long been encouraged by the Board to hold shares in the Company to align their interests more closely to those of the Company's shareholders.

The Board expects that the remuneration structure that is implemented will result in the Company being able to attract and retain the best executives to manage the economic entity. It will also provide the executives with the necessary incentives to work to grow long-term shareholder value. Please refer to the Remuneration Report which forms part of the Directors’ Report for information on remuneration paid to Directors and executives during the financial year.

The Company does not hold schemes for retirement benefits other than statutory superannuation for Non- Executive Directors.

Audit Committee:

The Audit Committee comprises Mr Christopher Kelsall (Chairman) and Mr Robert Pett.

The Company has a duly constituted Audit Committee which comprises two Directors whose names, qualifications and attendances are included in the Directors’ Report. The responsibilities of the Audit Committee are laid out in its charter, and amongst other things, includes the responsibility to ensure that an effective internal control framework exists within the entity, and to review half yearly and annual financial statements for submission to the Board for approval. The Committee receives regular reports from management and external auditors on accounting and internal control matters. This includes the safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information as well as non-financial considerations.

The Audit Committee will also recommend the appointment, and will review the fees, of external auditors.

A copy of the Audit Committee Charter is available on the Company’s website or upon request.

External auditors:

The auditors of the Company, BDO Audit (WA) Pty Ltd (“BDO”), have open access to the Board of Directors at all times. BDO have audited the Company and its subsidiary for a number of years and have a policy of rotating audit partners every five years.

BDO do attend the Company’s Annual General Meeting and it is consistent with their current business practice, and is in accordance with s250RA of the Corporations Act 2001.

ANNUAL REPORT 30 JUNE 2012 30

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Governance

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Securities Trading Policy:

The Company has adopted a formal Securities Trading Policy restricting Directors, senior executives and employees from acting on material information until it has been released to the market in accordance with the requirements of continuous disclosure.

Directors and executives are restricted in a number of ways to deal in the Company’s securities. The policy stipulates that Directors and certain employees and persons connected with them do not abuse and do not place themselves under suspicion of abusing price-sensitive information that they have or are thought to have, especially in periods leading up to announcement of results (close periods).

The Company’s Securities Trading Policy is available on the Company’s website or upon request.

Code of Conduct:

The Board supports the highest standards of corporate governance and requires its members and the management and staff of the Company to act with integrity and objectivity in relation to:

Compliance with laws and regulations affecting the Company’s operations;
Australian Securities Exchange Listing Rules;
Employment practices;
Responsibilities to the community and the environment;
Conflict of interests;
Confidentiality;
Corporate opportunities arising for personal gain or to compete with the Company;
Protection of and proper use of the Company’s assets; and
Active promotion of ethical behaviour.

The Company has a formal Code of Conduct, which all Directors, employees and contractors are required to observe.

A copy of the Code of Conduct is available on the Company’s website or upon request.

Shareholder Communication:

The Board of Directors aims to ensure that shareholders are provided with important information in a timely manner through written and electronic communications. It is for this reason that the Company has established a Shareholder Communications Policy.

The Board of Directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary to assess the performance of the Company. Information is communicated to the shareholders through:

the Annual Report;
the availability of the Company’s Quarterly Report, Half-Yearly Report and other announcements distributed to shareholders so requesting;
adherence to continuous disclosure requirements;
the Annual General Meeting and other meetings called to obtain shareholder approval for Board action as appropriate; and
the provision of the Company's website containing all of the above mentioned reports and its constant update and maintenance.

The Chairman and CEO along with other Directors communicate with major shareholders on a regular basis in the way of face to face contact, telephone conversations, and analyst and broker briefings, to help better understand the views of the shareholders. Material feedback is discussed at Board level.

A copy of the Shareholder Communications Policy is available on the Company’s website or by request.

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Governance

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Continuous Disclosure:

The Board recognises the importance of keeping the market fully informed of the Company’s activities and of communicating openly and clearly with all stakeholders. The Company established a formal Continuous Disclosure Policy designed to ensure compliance with the listing rules of the Australian Securities Exchange.

In accordance with the Continuous Disclosure Policy, Company information considered to be material is announced immediately to the ASX. All key communications are placed immediately on the Company website, and when necessary, provided directly to shareholders. A copy of this Policy is available on the Company’s website or by request.

Employment and Gender Diversity:

Ausgold recognises that a diverse and talented workforce is a key competitive advantage. A workplace climate that promotes diversity is a key to business success, including diversity in gender, race and cultural background. A copy of Ausgold’s Diversity Policy is available on the Company’s website or by request.

During the financial period, the percentage of female attrition remained steady and female employees comprised 38% of the total permanent workforce across various levels of the organisation. A focus in the forthcoming year will continue to be on identifying female talent to fill senior roles.

Statement by the Chief Executive Officer and Chief Financial Officer

The Board receives written assurance from the Chief Executive Officer and Chief Financial Officer to confirm that to the best of their knowledge and belief, the group’s financial position presents a true and fair view and that the financial statements are founded on a sound system of risk management, internal compliance and control. Further, it is confirmed that the group’s risk management and internal compliance is operating efficiently and effectively. The Board notes that due to its nature, internal control assurance from the Chief Financial Officer and Chief Financial Officer can only be reasonable rather than absolute, and therefore is not and cannot be designed to detect all weaknesses in control procedures.

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Governance

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Principles of Good Governance and Best Practice Recommendations:

Principle		Action taken
*Establish and disclose the respective roles and responsibilities of* *board and management.* Principle 1: Lay solid foundation for management and oversight 1.1. Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions. 1.2. Companies should disclose the process for evaluating the performance of senior executives. 1.3. Companies should provide the information indicated in the Guide to reporting on Principle 1.	Adopted by the Board.
*Have a board of an effective composition, size and commitment to* *adequately discharge its responsibilities and duties.* Principle 2: Structure the Board to add value 2.1. A majority of the board should be independent directors. 2.2. The chair should be an independent director. 2.3. The roles of chair and chief executive officer should not be exercised by the same individual. 2.4. The board should establish a nomination committee. 2.5. Companies should disclose the process for evaluating the performance of the board, its committees and individual directors. 2.6. Companies should provide the information indicated in the Guide to reporting on Principle 2.	Adopted by the Board except as follows: � The Board considers that its current structure is appropriate given its size and that the current directors provide the necessary diversity of skills and experience which is appropriate for the company’s business. � Mr Pett was employed as Non- Executive Chairman and during the year also held the role of CEO during the transitional period prior to Dr Tunks appointment as CEO. � Mr Pett is a substantial shareholder of a company holding more than five percent of the Company’s voting stock and is therefore not independent. � Mr Trevisan is a substantial shareholder of a company holding more than five percent of the Company’s voting stock and is therefore not independent.

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Governance

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Principle	Action taken
*Actively promote ethical and responsible decision-making.* Principle 3: Promote ethical and responsible decision-making 3.1. Companies should establish a code of conduct and disclose the code or a summary of the code as to: � the practices necessary to maintain confidence in the company’s integrity; � the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders; � the responsibility and accountability of individuals for reporting and investigating reports of unethical practices. 3.2. Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measurable objectives for achieving gender diversity for the board to assess annually both the objectives and progress in achieving them. 3.3. Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress towards achieving them. 3.4. Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board. 3.5. Companies should provide the information indicated in the Guide to reporting on Principle 3.	Adopted by the Board except as follows: � The Board considers that the current structure and gender diversity is appropriate given the size of the entity at this point in time.
*Have a structure in place to independently verify and safeguard the* *integrity of the Company’s financial reporting.* Principle 4: Safeguard integrity in financial reporting 4.1 The board should establish an audit committee. 4.2 The audit committee should be structured so that it: � consists only of non-executive directors � consists of a majority of independent directors � is chaired by an independent chair, who is not chair of the board � has at least three members. 4.3 The audit committee should have a formal charter. 4.4 Companies should provide the information indicated in the Guide to reporting on Principle 4.	Adopted by the Board except as follows: � The Company has an Audit Committee comprising Mr Kelsall (independent non- executive director and Chairman of the Audit Committee) and Mr Pett (Non-Executive Chairman of the Board). The Board considers that the current structure is appropriate given the size of the entity and the skills and experience that the current audit committee members bring to these meetings.

Principle

Action taken

Actively promote ethical and responsible decision-making.
Principle 3: Promote ethical and responsible decision-making
3.1.
Companies should establish a code of conduct and disclose the
code or a summary of the code as to:
�
the practices necessary to maintain confidence in the
company’s integrity;
�
the practices necessary to take into account their legal
obligations
and the reasonable expectations
of
their
stakeholders;
�
the responsibility and accountability of individuals for reporting
and investigating reports of unethical practices.
3.2.
Companies should establish a policy concerning diversity and
disclose the policy or a summary of that policy. The policy should
include requirements for the board to establish measurable
objectives for achieving gender diversity for the board to assess
annually both the objectives and progress in achieving them.
3.3.
Companies should disclose in each annual report the measurable
objectives for achieving gender diversity set by the board in
accordance with the diversity policy and progress towards achieving
them.
3.4.
Companies should disclose in each annual report the proportion of
women employees in the whole organisation, women in senior
executive positions and women on the board.
3.5.
Companies should provide the information indicated in the Guide to
reporting on Principle 3.

Adopted by the Board except as
follows:
�
The Board considers that the
current
structure
and
gender
diversity is appropriate given the
size of the entity at this point in
time.

Have a structure in place to independently verify and safeguard the
integrity of the Company’s financial reporting.
Principle 4: Safeguard integrity in financial reporting
4.1
The board should establish an audit committee.
4.2
The audit committee should be structured so that it:
�
consists only of non-executive directors
�
consists of a majority of independent directors
�
is chaired by an independent chair, who is not chair of the
board
�
has at least three members.
4.3
The audit committee should have a formal charter.
4.4
Companies should provide the information indicated in the Guide to
reporting on Principle 4.

Adopted by the Board except as
follows:
�
The Company has an Audit
Committee comprising Mr Kelsall
(independent
non-
executive
director and Chairman of the
Audit Committee) and Mr Pett
(Non-Executive Chairman of the
Board). The Board considers that
the
current
structure
is
appropriate given the size of the
entity
and
the
skills
and
experience that the current audit
committee members
bring
to
these meetings.

ANNUAL REPORT 30 JUNE 2012 34

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Governance

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Principle	Action taken
*Promote timely and balanced disclosure of all material matters* *concerning the Company.* Principle 5: Make timely and balanced disclosure 5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies. 5.2 Companies should provide the information indicated in the Guide to reporting on Principle 5.	Adopted by the Board
*Respect the rights of shareholders and facilitate the effective exercise* *of those rights.* Principle 6: Respect the rights of shareholders 6.1 Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy. 6.2 Companies should provide the information indicated in the Guide to reporting on Principle 6.	Adopted by the Board
*Establish a sound system of risk oversight and management and* *internal control.* Principle 7: Recognise and manage risk 7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies. 7.2 The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks. 7.3 The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks. 7.4 Companies should provide the information indicated in the Guide to reporting on Principle 7.	Adopted by the Board.

ANNUAL REPORT 30 JUNE 2012 35

AUSGOLD LIMITED ABN 67 140 164 496 Corporate Governance

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Principle	Action taken
*Establish a sound system of risk oversight and management and* *internal control.* Principle 7: Recognise and manage risk 7.5 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies. 7.6 The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks. 7.7 The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks. 7.8 Companies should provide the information indicated in the Guide to reporting on Principle 7.	Adopted by the Board.
*Ensure that the level and composition of remuneration is sufficient* *and reasonable and that its relationship to performance is clear.* Principle 8: Remunerate fairly and responsibly 8.1 The board should establish a remuneration committee. 8.2 The remuneration committee should be structured so that it: � consists of a majority of independent directors � is chaired by an independent chair � has at least three members. 8.3 Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives. 8.4 Companies should provide the information indicated in the Guide to reporting on Principle 8.	Adopted except for: � A Remuneration and Nomination Committee is established and currently comprises Mr Kelsall (independent non-executive director) and Mr Pett (Non- Executive Chairman of the Board) and Mr Trevisan (Non-Executive Director). The board considers that the current structure is appropriate given the size of the company and the skills and experience that the remuneration and nomination committee members possess.

Principle

Action taken

Establish a sound system of risk oversight and management and
internal control.
Principle 7: Recognise and manage risk
7.5
Companies should establish policies for the oversight and
management of material business risks and disclose a summary of
those policies.
7.6
The board should require management to design and implement
the risk management and internal control system to manage the
company’s material business risks and report to it on whether those
risks are being managed effectively. The board should disclose that
management has reported to it as to the effectiveness of the
company’s management of its material business risks.
7.7
The board should disclose whether it has received assurance from
the chief executive officer (or equivalent) and the chief financial
officer (or equivalent) that the declaration provided in accordance
with section 295A of the Corporations Act is founded on a sound
system of risk management and internal control and that the system
is operating effectively in all material respects in relation to financial
reporting risks.
7.8
Companies should provide the information indicated in the Guide to
reporting on Principle 7.

Adopted by the Board.

Ensure that the level and composition of remuneration is sufficient
and reasonable and that its relationship to performance is clear.
Principle 8: Remunerate fairly and responsibly
8.1
The board should establish a remuneration committee.
8.2
The remuneration committee should be structured so that it:
�
consists of a majority of independent directors
�
is chaired by an independent chair
�
has at least three members.
8.3
Companies should clearly distinguish the structure of non-executive
directors’ remuneration from that of executive directors and senior
executives.
8.4
Companies should provide the information indicated in the Guide to
reporting on Principle 8.

Adopted except for:
�
A Remuneration and Nomination
Committee is established and
currently comprises Mr Kelsall
(independent
non-executive
director)
and
Mr
Pett
(Non-
Executive Chairman of the Board)
and Mr Trevisan (Non-Executive
Director). The board considers
that
the current
structure is
appropriate given the size of the
company and the skills and
experience that the remuneration
and
nomination
committee
members possess.

ANNUAL REPORT 30 JUNE 2012 36

38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

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24 September 2012

Ausgold Limited The Board of Directors 80 Churchill Avenue, SUBIACO WA 6008

Dear Sirs,

DECLARATION OF INDEPENDENCE BY CHRIS BURTON TO THE DIRECTORS OF AUSGOLD LIMITED

As lead auditor of Ausgold Limited for the year ended 30 June 2012, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Ausgold Limited and the entity it controlled during the period.

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CHRIS BURTON Director

BDO Audit (WA) Pty Ltd Perth, Western Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

ANNUAL REPORT 30 JUNE 2012

AUSGOLD LIMITED ABN 67 140 164 496 Consolidated Statement of Comprehensive Income

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Note Revenue from continuing operations Other income Share based payments expenses Corporate and administration expenses Management fees Occupancy expenses Depreciation and amortisation expenses Directors' fees Other expenses Legal fees Accounting expenses Finance costs Consulting fees Impairment exploration expenses Research and development (CET) Loss before income tax Income tax benefit / (expense) 9 Loss for the year Loss is attributable to: Owners of the Company Other Comprehensive Income / (Loss) Other comprehensive income / (loss) Total comprehensive loss for the year (net of tax) Loss per share From continuing operations: Basic loss per share (cents per share) 22 Diluted loss per share (cents per share) 22	Jun 2012 Jun 2011 $ $
	592,814 301,700 - - (2,246,581) (71,839) (1,210,623) (309,132) (170,000) (152,000) (256,165) (8,605) (216,490) (49,802) (139,575) (101,373) (175,847) (122,321) (125,473) (50,039) (51,011) (76,225) (18,589) (12,521) (46,696) (5,215) (754,582) (297,836) - (69,198)
	(4,818,818) (1,024,406)
	- -
	(4,818,818) (1,024,406)

	(4,818,818) (1,024,406)
	- -
	(4,818,818) (1,024,406)
	(4.02) (1.11) N/A N/A

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

ANNUAL REPORT 30 JUNE 2012 38

AUSGOLD LIMITED ABN 67 140 164 496 Consolidated Statement of Financial Position

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

Note ASSETS Current Assets Cash and cash equivalents 10 Term deposits 11 Trade and other receivables 12 Total Current Assets Non-Current Assets Security deposits 13 Property, plant and equipment 14 Exploration and evaluation expenditure 15 Prepayment for exploration assets 15 Total Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables 16 Borrowings 17 Provisions 18 Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity 19 Reserves 20 Accumulated losses 21 TOTAL EQUITY	Jun 2012 Jun 2011 $ $
	1,221,297 831,971 - 12,000,000 86,173 461,530
	1,307,470 13,293,501
	451,740 395,000 527,378 374,672 39,100,252 17,739,048 71,447 197,499
	40,150,817 18,706,219

	41,458,287 31,999,720
	2,058,343 1,806,123 504,000 - 39,130 29,836
	2,601,473 1,835,959

	2,601,473 1,835,959

	38,856,814 30,163,761
	42,488,508 26,809,422 3,056,107 5,223,322 (6,687,801) (1,868,983)
	38,856,814 30,163,761

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

ANNUAL REPORT 30 JUNE 2012 39

AUSGOLD LIMITED ABN 67 140 164 496 Consolidated Statement of Changes in Equity

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Balance as at 1 July 2011 Total comprehensive income for the year Transactions with owners, recorded directly in equity: Shares issued during the year Shares to be issued Options to be issued Share issue costs Shares issued during the year on exercise of options Share based payments Balance as at 30 June 2012	Contributed Equity Accumulated Losses Reserves Total Equity $ $ $ $
	26,809,422 (1,868,983) 5,223,322 30,163,761 - (4,818,818) - (4,818,818) 13,183,797 - (4,413,796) 8,770,001 - - - - - - - (475,100) - - (475,100) 2,970,389 - - 2,970,389 - - 2,246,581 2,246,581
	42,488,508 (6,687,801) 3,056,107 38,856,814

The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes

ANNUAL REPORT 30 JUNE 2012 40

AUSGOLD LIMITED ABN 67 140 164 496 Consolidated Statement of Changes in Equity

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

Balance as at 1 July 2010 Total comprehensive income for the year Transactions with owners, recorded directly in equity: Shares issued during the year 12 million shares issued at $1.35 per share Share issue costs Shares to be issued Options to be issued Share based payments Balance as at 30 June 2011	Contributed Equity Accumulated Losses Reserves Total Equity $ $ $ $
	10,392,085 (844,577) 230,241 9,777,749 - (1,024,406) - (1,024,406) 1,027,337 - - 1,027,337 16,200,000 - - 16,200,000 (810,000) - - (810,000) - - 4,413,796 4,413,796 - - 507,446 507,446 - - 71,839 71,839
	26,809,422 (1,868,983) 5,223,322 30,163,761

The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes

ANNUAL REPORT 30 JUNE 2012 41

AUSGOLD LIMITED ABN 67 140 164 496 Consolidated Statement of Cash Flows

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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Note Cash flows from operating activities Interest received Payments to suppliers and employees Net cash flows used in operating activities 23 Cash flows from investing activities Payments for plant and equipment Payments for exploration expenditure Prepayment for exploration expenditure Security deposit Funds from term deposit Net cash flows used in investing activities Cash flows from financing activities Proceeds from borrowings Proceeds from the issue of share capital (net) Net cash flows generated by financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 10	Jun 2012 Jun 2011 $ $
	592,814 301,700 (1,634,186) (601,096)
	(1,041,372) (299,396)
	(369,196) (383,963) (21,891,932) (10,429,497) (16,724) (14,675) (56,740) (255,000) 12,000,000 (7,000,000)
	(10,334,593) (18,083,135)
	500,000 - 11,265,290 16,417,337
	11,765,290 16,417,337
	389,326 (1,965,194) 831,971 2,797,165
	1,221,297 831,971

The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes

ANNUAL REPORT 30 JUNE 2012 42

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

1. REPORTING ENTITY

Ausgold Limited (“Ausgold” or “Parent entity” or “Company”) and its controlled entity (collectively known as “the Group” or “consolidated entity”) are domiciled in Australia.

The annual financial report of the Group for the financial year ended 30 June 2012 was authorised for issue in accordance with a resolution of the directors on 24 September 2012.

The consolidated entity’s principal activities during the course of the financial year were the exploration for gold and other precious metals.

2. STATEMENT OF COMPLIANCE

The consolidated annual financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001.

The consolidated financial statements of the consolidated entity have also been prepared using policies based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board (IASB).

3. BASIS OF PREPARATION

The results of the Group are expressed in Australian dollars ($), which are the functional and presentation currency for the consolidated financial report.

The financial report is presented on the historical cost basis except for share based payments measured at fair value.

The preparation of a financial report in conformance with Australian Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various factors that are believed to be reasonable under the circumstances. The results of which forms the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The 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 if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

In the financial year ended 30 June 2012, all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2011 have been reviewed. It has been determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the operations of the Group and consolidated entity and, therefore, no change is necessary to the accounting policies.

The Group has not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2011.

ANNUAL REPORT 30 JUNE 2012 43

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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4. GOING CONCERN

The Group recorded a consolidated loss of $4,818,818 for the financial year ended 30 June 2012 (2011: $1,024,406). At 30 June 2012, the Group has $1,221,297 in cash and cash equivalents (2011: $831,971).

The accounts have been prepared on a going concern basis. Subsequent to year end, Ausgold Limited has raised capital to continue the Group’s rapid exploration and development of its mining tenements. In addition to those capital raising amounts, the Directors have determined that further funding is required or alternatively the Group will require a reduction in committed costs to manage the Groups’ working capital over the coming year.

The Directors have prepared a cash flow forecast for the next 12 month period reflecting the need for further funding as mentioned above. While the directors are reasonably confident this will occur, the timing and extent of any additional funding is always uncertain.

In the event that sufficient funding at an amount and timing necessary to meet the future budgeted operational and investing activities of the Group is unfavourable, the Directors would undertake steps to contain the operating and investment activities. This may include a review of assets held to rationalise the number of tenements on hand which would substantially reduce commitments to ensure that the Company can meet its obligations as and when they become due and payable.

In the event that the above results in a negative outcome, then the going concern basis of accounting may not be appropriate with the result that the Group may have to realise its assets and extinguish its liabilities other than in the normal course of business and at an amount different from that stated in the financial statements.

The financial statements do not include any adjustment relating to the recoverability or classification of the recorded amounts or classification of liabilities that might be necessary should the Company not be able to continue as a going concern.

5. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.

Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events, which are believed to be reasonable under the circumstances. However, actual outcomes would differ from these estimates if different assumptions were used and different conditions existed.

The Group has identified the following areas where significant judgements, estimates and assumptions are required, and where actual results were to differ, may materially affect the financial position or financial results reported in future periods.

(A) SHARE BASED PAYMENT TRANSACTIONS

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using Black-Scholes option pricing model.

As a performance incentive, senior employees were granted options during the financial year ended 30 June 2012 which contain assumptions of a real risk of forfeiture where performance targets are not achieved. Management has ascribed various probabilities based upon stretch criteria and operational factors toward the achievement of nominated performance targets. Accordingly, the said probability was taken into account when calculating the share based payment expense of the options and in the formulation of the resultant expense to the profit and loss statement.

(B) EXPLORATION EXPENDITURE

The write-off and carrying forward of exploration acquisition costs is based on an assessment of an area of interest’s viability and / or the existence of economically recoverable reserves. Information may come to light in a later period which results in the asset being written off as it is not considered viable.

(C) ESTIMATION OF USEFUL LIVES OF ASSETS

The estimation of the useful lives of assets has been based on historical experience. The condition of the assets is assessed at least once per year and considered against the remaining useful life.

ANNUAL REPORT 30 JUNE 2012 44

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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(D) IMPAIRMENT OF ASSETS

At each reporting date, the Group assesses whether there is any indication that individual assets are impaired. Where impairment indicators exist, recoverable amount is determined and impairment losses are recognised in the statement of comprehensive income where the asset's carrying value exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount is determined for the cash-generating unit to which the asset belongs.

6. SIGNIFICANT ACCOUNTING POLICIES

(A) PRINCIPLES OF ACCOUNTING

The consolidated financial statements incorporate the assets and liabilities of all the subsidiaries that Ausgold has the power to control the financial and operating policies as at 30 June 2012 and the results of all subsidiaries for the year then ended. All inter-company balances and transactions between the Group in the consolidated entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the consolidated entity.

(i) Subsidiaries

Subsidiaries are entities controlled by the consolidated entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the consolidated entity.

In the consolidated entity’s financial statements, investments in subsidiaries are carried at cost. The financial statements of the subsidiary are prepared for the same reporting period as the Company, using consistent accounting policies.

In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from inter-entity transactions have been eliminated in full.

The investment in subsidiary held by Ausgold is accounted for at cost in the separate financial statements of the Company less any impairment charges. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of accounting involves allocating the cost of the business combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition.

(B) SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”). The CODM is responsible for allocating resources and assessing performance of the operating segments, has been identified as the strategic steering committee.

(C) FOREIGN CURRENCY

(i) Functional and Presentation Currency

The results of the Group are expressed in Australian dollars ($), which are the functional and presentation currency for the consolidated financial report.

(ii) Foreign Currency Transactions

Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are re-translated at the rate of exchange ruling at the statement of financial position date.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

ANNUAL REPORT 30 JUNE 2012 45

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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(D) REVENUE RECOGNITION

(i) Interest Income

Revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset.

(E) CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash at bank and in hand, deposits held at call with financial institutions, other shortterm highly liquid deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above.

(F) OTHER FINANCIAL ASSETS

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not a fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of the financial assets carried at fair value through profit or loss are expensed in profit or loss.

Regular way purchases and sales of financial assets are recognised on trade date – the date on which the Group commits to purchase or sell the asset. Financial assets are de-recognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. Accounting policies for each category of the other financial assets are set out below.

(i) Term deposits

Term deposits are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. They are included in current assets, except for those with maturities greater than 12 months after reporting period which are classified as non-current assets.

(ii) Trade and other receivables

Trade and other debtors are recognised as the amount receivable and are due for settlement within 30 days from the end of the month in which services were provided. They are included in current assets, except for those with maturities greater than 12 months after reporting period which are classified as non-current assets. Collectability of the receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off against the receivable directly unless a provision for impairment has previously been recognised.

A provision for impairment of receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. Loans granted are recognised at the amount of consideration given or the cost of services provided to be reimbursed.

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

(G) FAIR VALUE ESTIMATION FOR FINANCIAL INSTRUMENTS

Fair values may be used for financial asset and liability measurement as well as for sundry disclosures. Fair values for financial instruments traded in active markets are based on quoted market prices at statement of financial position date. The quoted market price for financial assets is the current bid price and the quoted market price for financial liabilities is the current ask price.

The fair values of financial instruments that are not traded in an active market are determined using valuation techniques. Assumptions used are based on observable market prices and rates at statement of financial position date. The fair value of long-term debt instruments is determined using quoted market prices for similar instruments. Estimated discounted cash flows are used to determine fair value of the remaining financial instruments. The fair value of forward exchange contracts is determined using forward exchange market rates at the statement of financial position date. The fair value of interest rate swaps is calculated as the present value of estimated future cash flows.

ANNUAL REPORT 30 JUNE 2012 46

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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The fair value of receivables and payables is their nominal value less estimated credit adjustments. A financial instrument is recognised if the consolidated entity becomes a party to the contractual provisions of the instrument. Financial assets are de-recognised if the consolidated entity’s contractual rights to the cash flows from the financial assets expire or if the consolidated entity transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular purchases and sales of financial assets are accounted for at trade date, i.e., the date that the consolidated entity commits itself to purchase or sell the asset. Financial liabilities are de-recognised if the consolidated entity’s obligations specified in the contract expire or are discharged or cancelled. Cash and cash equivalents comprise cash balances and call deposits greater than 3 months are classified as held to maturity investments and valued at amortised costs.

(H) EXPLORATION AND EVALUATION EXPENDITURE

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. 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.

Exploration and evaluation expenditure encompasses expenditures incurred by the Group in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.

Exploration and evaluation expenditure incurred by the Group is accumulated for each area of interest and recorded as an asset if:

the right to tenure of the area of interest are current; and
at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; and
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the areas of interest are continuing.

For each area of interest, expenditure incurred on the Exploration of Tenements throughout Australia is capitalised, classified as tangible or intangible, and recognised as an exploration and evaluation asset. Exploration and evaluation assets are measured at cost at recognition. The recoverable amount of each area of interest is determined on a biannual basis and the provision recorded in respect of that area adjusted so that the net carrying amount does not exceed the recoverable amount. For areas of interest that are not considered to have any commercial value, or where exploration rights are no longer current, the capitalised amounts are written off against the provision and any remaining amounts are charged against profit. Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

(I) PROPERTY, PLANT AND EQUIPMENT

Items of property, plant and equipment are initially recorded at cost, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition, and depreciated. Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the assets employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in determining recoverable amounts.

Depreciation is provided on plant and equipment. Items of property, plant and equipment are depreciated using the diminishing value method over their estimated useful lives to the consolidated entity. The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each of the statement of financial position date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

ANNUAL REPORT 30 JUNE 2012 47

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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The useful economic life for each class of depreciable asset is:

Vehicles 3 - 5 years Furniture Fittings and Equipment 3 - 5 years

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When the re-valued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

(J) IMPAIRMENT

(i) Financial Assets

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 that asset.

(ii) Non-Financial Assets

The carrying amounts of the non-financial 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. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, recoverable amount 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 group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in the statement of comprehensive income. 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 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.

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 if there has been a change in the estimates used to determine the recoverable amount. 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.

(K) TAXATION

The income tax expense or benefit (revenue) for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base 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 all temporary differences, between carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases, at the tax rates expected to apply when the assets are recovered or liabilities settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. Exceptions are made for certain temporary differences arising on initial recognition of an asset or a liability 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. Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities, associates and interests in joint ventures where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Current and deferred tax balances relating to amounts recognised directly in equity are also recognised directly in equity.

Ausgold Limited and its subsidiary have unused tax losses. However, no deferred tax balances have been recognised, as it is considered that asset recognition criteria have not been met at this time.

(L) TRADE AND OTHER PAYABLES

Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the consolidated entity. Trade accounts payable are normally settled within 60 days.

ANNUAL REPORT 30 JUNE 2012 48

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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(M) BORROWINGS

Borrowings are initially recognised at fair value, net of transactions costs incurred. Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.

Borrowings are removed from the consolidated statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities, assumed, is recognised in profit or loss as other income or finance cost.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(N) BORROWING COSTS

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.

(O) PROVISIONS

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

(P) EMPLOYEE BENEFITS

(i) Short term obligations

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the statement of financial position date are recognised in respect of employees' services rendered up to statement of financial position date and measured at amounts expected to be paid when the liabilities are settled. The liability for annual leave and non-accumulating sick leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables.

(ii) Other long term employee benefit obligations

Liabilities for long service leave are recognised as part of the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees to the statement of financial position date using the projected unit credit method. Consideration is given to expect future salaries and wages levels , experience of employee departures and periods of service. Expected future payments are discounted using national government bond rates at the statement of financial position date with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) Share-based payments

Share-based compensation benefits are provided to employees of Ausgold Limited.

The fair value of options granted under Ausgold Limited is recognised as an employee benefit expense with a corresponding increase in equity (share-based payments reserve). The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options. The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each statement of financial position date, the entity revises its estimate of the

ANNUAL REPORT 30 JUNE 2012 49

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate.

The market value of shares issued to employees for no cash consideration is recognised as an employee benefits expense with a corresponding increase in equity when the employees become entitled to the shares.

(iv) Termination benefits

Termination benefits are payable when employment is terminated before normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating employment of current employees according to a detailed formal plan without possibility of withdrawal or to providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

(Q) CONTRIBUTED EQUITY

Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or options are shown as a deduction from the equity proceeds, net of any income tax benefit. Costs directly attributable to the issue of new shares or options associated with the acquisition of a business are included as part of the purchase consideration.

(R) EARNINGS / (LOSS) PER SHARE

Basic earnings or loss per share are calculated by dividing the net profit or loss attributable to members of the parent entity for the reporting period by the weighted average number of ordinary shares of the Company.

Diluted earnings or loss 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 additional shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(S) GOODS AND SERVICES TAX

Revenues, expenses and assets are recognised net of GST except where 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.

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 flow 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 authorities are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(T) COMPARATIVES

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

(U) ROUNDING OF AMOUNTS

The company is of a kind referred to in Class Order 98/100, issued by ASIC, relating to the ‘rounding off’ of amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance with that Class Order to the nearest dollar.

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(V) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS

AASB reference	Title	Summary	Application date of standard	Impact on consolidated financial report	Application date
AASB 9 (issued December 2009)	Financial Instruments (AASB 2009-11)	Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. It only permits the recognition of fair value gains and losses in other comprehensive income if they relate to equity investments that are not held for trading.	Periods beginning on or after 1 January 2015 (expecting an amendment from AASB delaying application date)	The group does not expect the standard to have a significant impact on it's composition	1 January 2015
AASB 10	Consolidated Financial Statements	Replaces all of the guidance on control and consolidation in AASB 127 and interpretation 12 The standard introduces a single definition of control that applies to all entities. It focuses on the need to have both pow er and rights or exposure to variable returns. Control exists w hen the investor can use its pow er to affect the amount of its returns.	Periods beginning on or after 1 January 2013	The group does not expect the standard to have a significant impact on it's composition	1 January 2013
AASB 11	Joint Arrangments	Focus is now on how rights and obligations are shared by the parties to the joint arrangement. A joint arrangement w ill be either classified as a joint operation or a joint venture. Joint Ventures are acounted for using the equity method, and the choice to consolidate w ill no longer be permitted.	Periods beginning on or after 1 January 2013	The group does not expect the standard to have a significant impact on it's composition	1 January 2013

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AASB reference	Title	Summary	Application date of standard	Impact on consolidated financial report	Application date
AASB 12	Disclosure of Interest in other Entities	AASB 12 sets out the required disclosures for entities reporting under the tw o new standards, AASB 10 and AASB 11, and replaces the disclosure requirements currently found in AASB 127 and AASB 128. Amendments to AASB 128 provide clarification that an entity continues to apply the equity method and does not remeasure its retained interest as part of ow nership changes w here a joint venture becomes an associate, and vice versa.	Periods beginning on or after 1 January 2013	The group does not expect the standard to have a significant impact on it's composition	1 January 2013
AASB 13 & AASB 2011-8	Fair Value Measurement	It explains how to measure fair value and aims to enhance fair value disclosures.	Periods beginning on or after 1 January 2013	The group does not expect the standard to have a significant impact on it's composition	1 January 2013
Revised AASB 119, AASB 2011- 10 and AASB 2011-11	Employee Benefits, Amendments to Australian Accounting Standards Arising from AASB 19 and Amendments to AASB 119	Requires the recognition of all remeasurements of defined benefit liabilities/assets immediately in other comprehensive income (removal of the so-called 'corridor' method) and the calculation of a net interest expense or income by applying the discount rate to the net defined benefit liability or asset. This replaces the expected return on plan assets that is currently included in profit or loss.	Periods beginning on or after 1 January 2013	The group does not expect the standard to have a significant impact on it's composition	1 January 2013

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AASB reference	Title	Summary	Application date of standard	Impact on consolidated financial report	Application date
AASB 2011-4 (issued July 2011)	Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements	Amendments to remove individual key management personnel (KMP) disclosure requirements from AASB 124 to eliminate duplicated information required under the_Corporation_ Act 2001	Annual periods commencing on or after 1 July 2013	When this standard is first adopted for the year ended 30 June 2014 the entity w ill show reduced disclosures under Key Management Personnel note to the financial statements.	1 July 2013
AASB 2011-9 (issued September 2011)	Amendments to Australian Accounting Standards - Presentation of Items of Other Comprehensive Income	Amendments to align the presentation of items of other comprehensive income (OCI) w ith US GAAP. Various name changes of statements in AASB 101 as follow s: • 1 statement of comprehensive income – to be referred to as ‘statement of profit or loss and other comprehensive income’ • 2 statements – to be referred to as ‘statement of profit or loss’ and ‘statement of comprehensive income’. • OCI items must be grouped together into tw o sections: those that could subsequently be reclassified into profit or loss and those that cannot.	Annual periods commencing on or after 1 July 2012	When this standard is first adopted for the year ended 30 June 2013, there w ill be no impact on amounts recognised for transactions and balances for 30 June 2013 (and comparatives).	1 July 2012

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7. FINANCIAL RISK MANAGEMENT

(A) OVERVIEW

The overall financial risk management strategy focuses on the unpredictability of the finance markets and seeks to minimise the potential adverse effects on financial performance and protect future financial security.

The Group have exposure to the following risks from their use of financial instruments:

Credit risk
Liquidity risk
Market risk (including foreign currency risk and interest rate risk)

This note presents information about the consolidated entity’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk and the management of capital.

Ausgold’s risk management framework is supported by the Board, management and the Audit and Risk Committee. The Board is responsible for approving and reviewing consolidated entity risk management strategy and policy. Management is responsible for monitoring that appropriate processes and controls are in place to effectively and efficiently manage risk. The Audit and Risk Committee is responsible for identifying, monitoring and managing significant business risks faced by consolidated entity and considering the effectiveness of its internal control system. Management and the Audit and Risk Committee report to the Board.

The consolidated entity holds the following financial instruments:

Financial assets Cash and cash equivalents Term deposits Trade and other receivables Security deposits Financial liabilities Trade and other payables Borrowings	Jun 2012 Jun 2011 $ $ Consolidated
	1,221,297 831,971 - 12,000,000 86,173 461,530 451,740 395,000
	1,759,210 13,688,501
	2,058,343 1,806,123 504,000 -
	2,562,343 1,806,123

(B) CREDIT RISK

Credit risk is the risk of financial loss to the consolidated entity if counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s cash and cash equivalents, deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.

The consolidated entity does not hold any credit derivatives to offset its credit exposure.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to historical information about counterparty default rates.

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Trade receivables Counterparties without external credit rating1 Group 1 Group 2 Deposits AAA AA Term deposits AAA	Jun 2012 Jun 2011 $ $ Consolidated
	86,173 461,530 - -
	86,173 461,530
	1,221,297 783,314 451,740 48,657
	1,673,037 831,971
	- 12,000,000
	- 12,000,000

Note 1: Group 1 – New customers (less than 6 months); Group 2 – Existing customers (more than 6 months) with no defaults in the past.

(i) Exposure to Credit Risk

The carrying amount of the consolidated entity’s financial assets represents the maximum credit exposure. The consolidated entity’s maximum exposure to credit risk at reporting date was:

Financial assets Cash and cash equivalents Term deposits Trade and other receivables Security deposits	Jun 2012 Jun 2011 $ $ Consolidated
	1,221,297 831,971 - 12,000,000 86,173 461,530 451,740 395,000
	1,759,210 13,688,501

(C) LIQUIDITY RISK

Liquidity risk arises from the financial liabilities of the consolidated entity and the consolidated entity’s subsequent ability to meet their obligations to repay their financial liabilities as and when they fall due.

The following are the contractual maturities of financial liabilities on an undiscounted basis, including estimated interest payments. Cash flows for liabilities without fixed amount or timing are based on conditions existing at year end.

Financial liabilities Trade and other payables Borrowings	Jun 2012 Jun 2011 $ $ Consolidated
	2,601,473 1,835,959 504,000 -
	3,105,473 1,835,959

Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Board has determined an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves and regularly monitoring budgeted and actual cash flows and matching the maturity profiles of financial assets, expenditure commitments and liabilities.

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The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant.

Contractual maturities of financial liabilities	Less than 6 months 6 - 12 months Total Carrying amount $ $ $ $
Consolidated - at 30 June 2012 Trade and other payables Borrowings	2,601,473 - 2,601,473 2,601,473 - 504,000 504,000 504,000
	2,601,473 504,000 3,105,473 3,105,473
Contractual maturities of financial liabilities	Less than 6 months 6 - 12 months Total Carrying amount $ $ $ $
Consolidated - at 30 June 2011 Trade and other payables	1,835,959 - 1,835,959 1,835,959
	1,835,959 - 1,835,959 1,835,959

(D) MARKET RISK

Market risk is the risk that changes in market prices, such as foreign exchange rates and commodity prices will affect the consolidated entity’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising return.

(i) Foreign Currency Risk

The consolidated entity is exposed to currency risk on transactions that are denominated in a currency other than the respective functional currencies or the consolidated entities, primarily the Australian dollar (AUD).

The Board does not consider the consolidated entity is materially exposed to changes in foreign exchange rates. As a result, the consolidated entity does not currently seek to mitigate its foreign currency exposures.

The Board believes the reporting risk exposures are representative of the risk exposure inherent in financial instruments.

The Group surrendered New Zealand tenements at the end of financial year ended 30 June 2011, as a result, there is no foreign currency risk for Ausgold Limited in current or future reporting.

(ii) Interest Rate Risk

The consolidated entity’s exposure to interest rates primarily relates to the consolidated entity’s cash and cash equivalents and held to maturity investments. The consolidated entity manages market risk by monitoring levels of exposure to interest rate risk and assessing market forecasts for interest rates.

At reporting date, the interest rate profile of the Group’s interest bearing financial instruments was:

Variable rate financial instruments Financial assets Financial liabilities	Jun 2012 Jun 2011 $ $ Consolidated
	1,221,297 12,831,971 - -
	1,221,297 12,831,971

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The Group manages its interest rate risk by monitoring available interest rates while maintaining an overriding position of security whereby the majority of cash and cash equivalents are held in AA- rated bank accounts. The Group’s exposure to interest rate risk and effective weight average interest rate by maturing periods is set out in tables below:

Weighted average effective interest rate Fixed & floating interest rate Maturing within 1 Year Non-interest bearing Total % $ $ $ $	Weighted average effective interest rate Fixed & floating interest rate Maturing within 1 Year Non-interest bearing Total % $ $ $ $
Financial assets Cash and cash equivalents 6.42% 1,221,297 - - 1,221,297 Term deposits - - - - - Trade and other receivables - - - 86,173 86,173 1,221,297 - 86,173 1,307,470 Financial liabilities Trade and other payables - - - 2,601,473 2,601,473 Borrowings 9.60% 504,000 - - 504,000 504,000 - 2,601,473 3,105,473 Consolidated - at 30 June 2012
	1,221,297 - 86,173 1,307,470
	- - - 2,601,473 2,601,473 9.60% 504,000 - - 504,000
	504,000 - 2,601,473 3,105,473
	Weighted average effective interest rate Fixed & floating interest rate Maturing within 1 year Non-interest bearing Total % $ $ $ $
Financial assets Cash and cash equivalents 4.75% 783,314 48,657 - 831,971 Term deposits 6.22% 12,000,000 - - 12,000,000 Trade and other receivables - - - 461,530 461,530 12,783,314 48,657 461,530 13,293,501 Financial liabilities Trade and other payables - 1,835,959 1,835,959 - - 1,835,959 1,835,959 Consolidated - at 30 June 2011
	12,783,314 48,657 461,530 13,293,501
	- 1,835,959 1,835,959
	- - 1,835,959 1,835,959

Cash Flow Sensitivity Analysis for Variable Rate Instruments

A change of a 100 basis points in interest rates at reporting date would have increase / (decreased) equity and profit or loss by the amounts shown below. The Board assessed a 100 points basis point movement as being reasonably possible based on forward treasury rate projections. This analysis assumed that all other variables remain constant.

Financial assets Cash and cash equivalents Term deposits	+1% (100 basis pts) -1% (100 basis pts) Jun 2012 Jun 2012 $ $ Consolidated
	12,213 (12,213) - -
	12,213 (12,213)

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(iii) Other Market Price Risk

The Group is involved in the mineral exploration of gold and base metals. Should the Group successfully progress to a producer, revenues associated with mineral sales and the ability to raise funds through equity and debt will have some dependence upon commodity prices.

(E) CAPITAL MANAGEMENT

When managing capital, the Board’s objective is to ensure the consolidated entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. The Board also aims to maintain a capital structure that ensures the lowest cost of capital available to the consolidated entity.

The Board is constantly adjusting the capital structure to take advantage of favorable costs of capital or high return on assets. As the market is constantly changing management may issue new shares, sell assets to reduce debt or consider payment of dividends to shareholders.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position although there is no formal policy regarding gearing levels.

The consolidated entity has no formal financing and gearing policy or criteria during the year having regard to the early status of its development and low level of activity. Whilst this position has not changed from the previous year, the Company entered into a short term loan agreement with a director for the sum of $500,000. Details of the loan agreement are described in Note 26.

There were no changes in the consolidated entity’s approach to capital management during the year. The consolidated entity is not subject to any externally imposed capital requirements.

(F) FAIR VALUE MEASUREMENTS

The fair values of financial assets and liabilities are determined in accordance with generally accepted pricing models based on estimated future cash flow. There are currently no assets and liabilities which require fair valuing under the measurement hierarchy.

8. SEGMENT REPORTING

Operating segments are now reported in a manner that is consistent with the internal reporting to the Chief Operating Decision Maker (“CODM”), which has been identified by the Group as the Chief Executive Officer and other members of the Board of Directors.

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors in assessing performance and determining the allocation of resources. Reportable segments disclosed are based on aggregating operating segments, where the segments have similar characteristics. For the current reporting period, the Directors of the Group have amended its policy of segment reporting. The Group’s sole activity is mineral exploration and resource development wholly within Australia; therefore it has aggregated all operating segments into the one reportable segment being mineral exploration.

The reportable segment is represented by the primary statements forming this financial report.

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9. INCOME TAX EXPENSE

Income tax benefit (R & D tax offset)

	Consolidated	Consolidated
Jun	2012	Jun	2011
	$		$
		-		-

Loss before income tax expense Income tax benefit calculated at rates noted above Tax effects on amounts which are not tax deductible R & D expenditure offset received Deferred tax asset not brought to account Income tax benefit Numerical reconciliation between tax expenses and pre-tax net loss	Jun 2012 Jun 2011 $ $ Consolidated
	(4,818,818) (1,024,406)
	(1,445,645) (307,321) 677,439 23,856 - - 768,206 283,465
	- -

Deferred tax assets not brought to account Unused tax losses Timing differences Capital raising cost in equity Tax at 30%	Jun 2012 Jun 2011 $ $ Consolidated
	36,593,435 13,095,903 (39,209,589) (12,196,593) 380,080 648,000
	(670,822) 464,193

The benefit for tax losses will only be obtained if:

the Company derives future assessable income of a nature and an amount sufficient to enable the benefit from the deductions for the losses to be realised;
the Company continues to comply with the conditions for deductibility imposed by Law; and
no changes in tax legislation adversely affect the ability of the Company to realise these benefits.

10. CASH AND CASH EQUIVALENTS

Current assets Cash at bank and in hand Short term deposits	Jun 2012 Jun 2011 $ $ Consolidated
	1,221,297 48,657 - 783,314
	1,221,297 831,971

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(A) RECONCILIATION TO CASH AT THE END OF THE YEAR

The above figures are reconciled to cash at the end of the financial year as shown in the consolidated statement of cash flows as follows:

Current assets Cash at bank and in hand Short term deposits Balance per Consolidated Statement of Cash Flow	Jun 2012 Jun 2011 $ $ Consolidated
	1,221,297 48,657 - 783,314
	1,221,297 831,971

(B) RISK EXPOSURE

The Group’s exposure to interest rate risk is discussed in Note 7.The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above. The consolidated entity’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are discussed in Note 7.

11. TERM DEPOSITS

Current assets Term deposits	Jun 2012 Jun 2011 $ $ Consolidated
	- 12,000,000
	- 12,000,000

12. TRADE AND OTHER RECEIVABLES

Current assets Sundry and other debtors Taxation receivables	Jun 2012 Jun 2011 $ $ Consolidated
	25,899 5,661 60,274 455,869
	86,173 461,530

(A) IMPAIRED TRADE RECEIVABLES

There were no impaired trade receivables for the Group for the financial years ended 30 June 2012 and 30 June 2011.

The ageing of these receivables is as follows: 1 to 3 months 3 to 6 months Over 6 months	Jun 2012 Jun 2011 $ $ Consolidated
	86,173 455,869 - 5,661 - -
	86,173 461,530

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(B) PAST DUE BUT NOT IMPAIRED

3 to 6 Months Over 6 months The ageing of these receivables is as follows:	Jun 2012 Jun 2011 $ $ Consolidated
	- 5,661 - -
	- 5,661

(C) FOREIGN EXCHANGE AND INTEREST RATE RISK

Information about the Group’s exposure to foreign currency and interest rate risk in relation to trade and other receivables is provided in Note 7.

(D) FAIR VALUE AND CREDIT RISK

Due to the short-term nature of the trade receivables, the carrying amount is assumed to approximate their fair value. The exposure to credit risk at the end of the reporting period is the carrying amount of each class of receivables mentioned above. Refer to Note 7 for more information on the risk management policy of the group and the credit quality of the entity’s trade receivables.

13. SECURITY DEPOSITS

Non-current assets At 1 July 2011, security deposits Additions At 30 June 2012, security deposits 14. PROPERTY, PLANT AND EQUIPMENT Non-current assets Additions Depreciation charge for the year Balance at the start of the period, net of accumulated depreciation Balance net of accumulated depreciation Non-current assets Accumulated deprecation Net carrying amount Cost	Jun 2012 Jun 2011 $ $ Consolidated
	395,000 140,000 56,740 255,000
	451,740 395,000
	Jun 2012 Jun 2011 $ $ Consolidated
	374,672 40,511 369,196 383,963 (216,490) (49,802)
	527,378 374,672
	Jun 2012 Jun 2011 $ $ Consolidated
	798,889 429,694 (271,512) (55,022)
	527,378 374,672

14. PROPERTY, PLANT AND EQUIPMENT

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15. EXPLORATION AND EVALUATION EXPENDITURE & PREPAYMENT

Exploration and evaluation expenditure Prepayment for exploration assets Reconcilation: Carrying amount at start of year Expenditure during the year - exploration Prepayment expenditure during the year - exploration Expenditure written off Carrying amount at the end of the period Non-current assets Exploration, evaluation, prepayment and development costs carried forward in respect of areas of interest (net of amounts written off)	Jun 2012 Jun 2011 $ $ Consolidated
	39,100,252 17,739,048 71,447 197,499
	39,171,699 17,936,547
	17,936,547 1,868,968 21,918,287 16,237,114 71,447 197,499 (754,582) (367,034)
	39,171,699 17,936,547

The ultimate recoupment of exploration and evaluation expenditure is dependent upon successful development and commercial exploitation, or alternatively, sale of the respective areas. During the year, the Group wrote off the expenditure totaling $754,582 (2011: $367,034).

16. TRADE AND OTHER PAYABLES

Current liabilities Trade creditors Other creditors	Jun 2012 Jun 2011 $ $ Consolidated
	2,011,915 1,806,123 46,428 -
	2,058,343 1,806,123

Information about the Group’s exposure to foreign currency risk in relation to trade and other payables is provided in Note 7.

17. BORROWINGS

Current liabilities Borrowings	Jun 2012 Jun 2011 $ $ Consolidated
	504,000 -
	504,000 -

On 1 June 2012, Mr Lockwood provided an unsecured loan to the Company for $500,000 at an interest rate of 0.8% per month. The repayment of the loan with interest to Mr Lockwood is subject to the Group raising at least $3,000,000 in capital funding. The loan is repayable with interest to Mr Lockwood within 12 months.

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18. PROVISIONS

Current liabilities Provision for employee benefits	Jun 2012 Jun 2011 $ $ Consolidated
	39,130 29,836
	39,130 29,836

19. CONTRIBUTED EQUITY

Balance at the start of the period Shares issued Less: share issue costs Shares issued on exercise of options	Jun 2012 Jun 2011 $ $ Parent Entity
	26,809,422 10,392,085 13,183,797 16,200,000 (475,100) (810,000) 2,970,389 1,027,337
	42,488,508 26,809,422

Effective 1 July 1998, the Corporations legislation abolished the concepts of authorised capital and par value shares. Accordingly, the Company does not have authorised capital or par value in respect of its issued shares.

(A) MOVEMENTS IN SHARE CAPITAL DURING THE YEAR

Balance at the start of the period Shares issued for acquisition of Katanning Gold Project1 Shares issued for capital raising purposes Shares issued on exercise of options	Jun 2012 Jun 2011 Number of shares Number of shares Parent Entity
	106,911,686 90,050,000 2,758,621 - 6,518,519 12,000,000 14,451,945 4,861,686
	130,640,771 106,911,686

Note 1: Ausgold entered into a Boddington South Joint Venture Acquisition Agreement (“BSJVA”) with Great Southern Resources Pty Ltd (“GSR”) on 20 April 2011. The Company paid GSR $900,000 of the cash amount payable under the BSJVA during the financial year ended 30 June 2011. On 1 July 2011, the Company issued to GSR 1,379,311 ordinary shares and 500,000 unlisted options with an exercise price of $1.45, expiring on 1 July 2015, as part consideration (first instalment) for the acquisition of a 20% interest in the “Boddington South” Joint Venture pursuant to the BSJVA.

On 22 July 2011, the Company issued 6,518,519 ordinary shares at $1.35 per share pursuant to a shareholder approval on 18 July 2011, to fund the company’s drilling program at the Katanning Gold Discovery and for regional exploration at the greater Boddington South Exploration Project and the company’s other exploration projects and for working capital.

On 27 July 2011 Ausgold settled the acquisition of the remaining 20% interest in the Katanning Gold Project from GSR. Ausgold paid GSR a final instalment of $1,000,000 in cash and issued 1,379,311 ordinary shares as the second tranche of the consideration pursuant to the BSJVA.

Ordinary fully paid shares have the right 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 to the shares held. Ordinary fully paid shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

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(B) MOVEMENTS IN SHARE OPTIONS DURING THE YEAR

Balance at the start of the period Options issued Options cancelled Options exercised	Jun 2012 Jun 2011 Number of options Number of options Parent Entity
	87,588,314 - 8,300,000 92,450,000 (1,500,000) - (14,451,945) (4,861,686)
	79,936,369 87,588,314

20. RESERVES

Balance at the start of period Share based payments reserve Shares to be issued / (then issued) Options issued	Jun 2012 Jun 2011 $ $ Parent Entity
	5,223,322 230,241 2,246,581 71,839 (4,413,796) 4,413,796 - 507,446
	3,056,107 5,223,322

(A) SHARE BASED PAYMENTS RESERVE

This reserve is used to record the value of equity settled share based payments provided to employees and directors as part of their remuneration. Set out below are summaries of the options granted to the employees of Ausgold for nil consideration during the current and preceding financial years:

Grant date Expiry date Exercise price	Balance at 1 Jul 2011 (Number) Granted (Number) Exercised (Number) Forfeited (Number) Balance at 30 Jun 2012 (Number) Vested at 30 Jun 2012 (Number)
16-Dec-09 31-Dec-14 $0.20 16-Dec-09 31-Dec-14 $0.25 16-Dec-09 31-Dec-14 $0.20 16-Dec-09 31-Dec-14 $0.25 16-Dec-09 31-Dec-14 $0.25 6-Dec-11 6-Dec-15 $1.48 6-Dec-11 6-Dec-15 $1.38 6-Dec-11 6-Dec-15 $1.38 6-Dec-11 6-Dec-14 $1.72 19-Dec-11 19-Dec-14 $1.38 19-Dec-11 31-Dec-14 $0.30 27-Feb-12 26-Feb-16 $1.57 Total Weighted Average Exercise Price	200,000 - - - 200,000 200,000 250,000 - - - 250,000 250,000 700,000 - (700,000) - - - 500,000 - (500,000) - - - 500,000 - (500,000) - - - - 500,000 - - 500,000 - - 1,500,000 - (1,000,000) 500,000 - - 500,000 - (500,000) - - - 1,000,000 - - 1,000,000 333,333 - 500,000 - - 500,000 500,000 - 300,000 (300,000) - - - - 3,500,000 - - 3,500,000 -
	2,150,000 7,800,000 (2,000,000) (1,500,000) 6,450,000 1,283,333
	$0.23 $1.47 $0.24 $1.38 $1.46 $1.06

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Grant date Expiry date Exercise price	Balance at 1 Jul 2010 (Number) Granted (Number) Exercised (Number) Forfeited (Number) Balance at 30 Jun 2011 (Number) Vested at 30 Jun 2011 (Number)
16-Dec-09 31-Dec-14 $0.20 16-Dec-09 31-Dec-14 $0.25 16-Dec-09 31-Dec-14 $0.20 16-Dec-09 31-Dec-14 $0.25 16-Dec-09 31-Dec-14 $0.25 Total Weighted Average Exercise Price	200,000 - - - 200,000 200,000 250,000 - - - 250,000 250,000 700,000 - - - 700,000 700,000 500,000 - - - 500,000 500,000 500,000 - - - 500,000 500,000
	2,150,000 - - - 2,150,000 2,150,000
	$0.23 - - - $0.23 $0.23

The market weighted average price of Ausgold Limited shares during the 2012 financial year was $1.22 (2011: $1.06).

The weighted average remaining contractual life of share options outstanding at the end of the period was 3.26 years (2011: 3.50 years).

Set out below are options that were issued for the financial year ended 30 June 2012:

	Number				Exercise	Fair value at
Options	originally	Number at		Expiry /	price	grant date
series	issued	30 June 2012	Grant date	Exercise date	$	$
Series 1	500,000	500,000	6-Dec-11	6-Dec-15	$1.48	$0.8025
Series 2	1,500,000	500,000	6-Dec-11	6-Dec-15	$1.38	$0.8163
Series 3	500,000	-	6-Dec-11	6-Dec-15	$1.38	$0.8163
Series 4	1,000,000	1,000,000	6-Dec-11	6-Dec-14	$1.72	$0.6737
Series 5	500,000	500,000	19-Dec-11	19-Dec-14	$1.38	$0.6224
Series 6	300,000	-	19-Dec-11	31-Dec-14	$0.30	$0.8909
Series 7	3,500,000	3,500,000	27-Feb-12	26-Feb-16	$1.57	$0.6224
	7,800,000	6,000,000

Key terms and conditions for the above options included:

	Series 1	Series 2	Series 3	Series 4	Series 5	Series 6	Series 7
Grant date share price	$1.20	$1.20	$1.20	$1.20	$1.07	$1.07	$1.17
Exercise price	$1.48	$1.38	$1.38	$1.72	$1.38	$0.30	$1.57
Expected vesting probability	100%	100%	50%	100%	100%	100%	100%
Expected volatility	99.6%	99.6%	99.6%	99.6%	99.6%	99.6%	99.2%
Option life	4 years	4 years	4 years	3 years	3 years	3 years	4 years
Dividend yield	-	-	-	-	-	-	-
Risk-free interest rate	3.41%	3.41%	3.41%	3.41%	3.37%	3.37%	3.71%

ANNUAL REPORT 30 JUNE 2012 65

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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The following share based payments were made through the issue of equity during the year:

		Value of	Options			Exercise
Options	Number of	options	expensed		Expiry /	price
series	options	$	$	Grant date	Exercise date	$
Series 1	500,000	401,256	227,562	6-Dec-11	6-Dec-15	$1.48
Series 2	500,000	1,224,378	408,126	6-Dec-11	6-Dec-15	$1.38
Series 3	-	408,126	-	6-Dec-11	6-Dec-15	$1.38
Series 4	1,000,000	673,477	436,659	6-Dec-11	6-Dec-14	$1.72
Series 5	500,000	311,219	311,219	19-Dec-11	19-Dec-14	$1.38
Series 6	300,000	267,260	267,261	19-Dec-11	31-Dec-14	$0.30
Series 7	3,500,000	2,630,450	595,755	27-Feb-12	26-Feb-16	$1.57
	6,300,000	5,916,166	2,246,581

In addition to the above, on 1 July 2011, 500,000 options exercisable at $1.45 and expiring on 1 July 2015 were issued to Great Southern Resources Pty Ltd pursuant to a Sale & Purchase Agreement entered into during the financial year.

On 12 April 2012, the Company reduced the number of unlisted employee options (contained in Series 2 & 3) by 1,500,000 with an exercise price of $1.38 and expiry date of 6 December 2015 following the cessation of employment. It should be noted in conjunction with this change, an amendment to the conditions associated with option Series 2 was affected whereby the terminating employee retained a portion of the options following agreement with management. As a consequence, there was no change to the fair value of the options granted under Series 2, with the amended conditions resulting in the immediate expense to the profit and loss account.

The fair value of option at grant date is independently determined using a Black and Scholes option valuation methodology that takes into account the exercise price. Options are granted for nil consideration. The volatility is calculated based upon the share price performance of the company over the last three years since listing on the ASX.

Management has ascribed various probabilities based upon stretch criteria and operational factors toward the achievement of nominated performance targets. Accordingly, the said probability was taken into account when calculating the share based payment expense of the options and in the formulation of the resultant expense to the profit and loss statement.

21. ACCUMULATED LOSSES

Accumulated losses at the start of period Loss after income tax attributable to owners	Jun 2012 Jun 2011 $ $ Consolidated
	(1,868,983) (844,577) (4,818,818) (1,024,406)
	(6,687,801) (1,868,983)

22. LOSS PER SHARE

From continuing operations: Basic loss per share Diluted loss per share	Jun 2012 Jun 2011 Cents per share Cents per share Consolidated
	(4.02) (1.11) N/A N/A

The calculation of basic loss per share at 30 June 2012 was based on the loss attributable to ordinary shareholders of $4,818,818 (2011: $1,024,406) and a weighted average number of ordinary shares outstanding during the year of 119,901,738 (2011: 92,550,355).

ANNUAL REPORT 30 JUNE 2012 66

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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(A) EARNINGS USED IN CALCULATING LOSS PER SHARE

For basic loss per share Loss after income tax for the year	Jun 2012 Jun 2011 $ $ Consolidated
	(4,818,818) (1,024,406)

(B) WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR

Weighted Average Number of Ordinary Shares (WANOS) Weighted average number of ordinary shares	Jun 2012 Jun 2011 Number Number Consolidated
	119,901,738 92,550,355

Diluted loss per share must be calculated where potential ordinary shares on issues are dilutive. As the potential ordinary shares on issue would decrease the loss per share in the current period, they are not considered dilutive and not shown.

23. CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATION

Reconciliation of cash flow from operating activities with the loss from continuing operations after income tax:

Loss after income tax for the year Adjustments for: Depreciation and amortisation expenses Share based payment expenses Impairment exploration expenses (Increase) / Decrease in trade and other receivables Increase / (Decrease) in trade and other payables Increase / (Decrease) in provisions Net cash flows (used in) operating activities	Jun 2012 Jun 2011 $ $ Consolidated
	(4,818,818) (1,024,406) 216,490 49,802 2,246,581 71,839 754,582 367,034 375,357 (234,668) 175,142 471,003 9,294 -
	(1,041,372) (299,396)

(A) NON CASH INVESTING AND FINANCING ACTIVITIES

Issuance to Great Southern Resources Pty Ltd 2,758,621 ordinary fully paid shares 500,000 unlisted options with an exercise price of $1.45	Jun 2012 Jun 2011 $ $ Consolidated
	4,413,796 - 507,446 -
	4,921,242 -

Ausgold entered into a Joint Venture Acquisition Agreement with Great Southern Resources Pty Ltd (“GSR”) on 20 April 2011. As a part of the agreement, on 1 July 2011, the Company issued to GSR 2,758,621 ordinary shares and 500,000 unlisted options with an exercise price of $1.45, expiring on 1 July 2015, as part consideration for the acquisition of a 20% interest in the “Boddington South” Joint Venture.

ANNUAL REPORT 30 JUNE 2012 67

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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24. AUDITOR’S REMUNERATION

The following fees were paid or payable for services provided by the auditor of the consolidated entity:

Audit and Other Assurance Services BDO Audit (WA) Pty Ltd Audit and review of financial report Taxation Services BDO Tax (WA) Pty Ltd Tax compliance services	Jun 2012 Jun 2011 $ $ Consolidated
	36,084 34,175
	36,084 34,175
	- 15,665
	- 15,665

25. COMMITMENTS

(A) REMUNERATION COMMITMENTS

Names and positions held of key management personnel remuneration have been included in the Remuneration Report section of the Directors’ Report during the financial year.

(B) OTHER TENEMENT COMMITMENTS

The expenditure required to maintain exploration tenements in which the group has an interest in:

Not later than one year Later than one year but not later than five years Later than five years	Jun 2012 Jun 2011 $ $ Consolidated
	4,664,419 3,403,714 18,657,676 10,180,000 - -
	23,322,095 13,583,714

(C) CORPORATE COMMITMENTS

Not later than one year Later than one year but not later than five years Later than five years	Jun 2012 Jun 2011 $ $ Consolidated
	160,000 - 156,333 - - -
	316,333 -

ANNUAL REPORT 30 JUNE 2012 68

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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26. RELATED PARTY DISCLOSURE

(A) SUBSIDIARY

The consolidated financial statements include the financial statements of Ausgold and its subsidiary as below:

Name Country of incorporation	Jun 2012 Jun 2011 Equity interest %
Parent entity Ausgold Limited Australia Directly controlled by Ausgold Limited Ausgold Exploration Pty Ltd Australia	- - 100% 100%

Loans made by Ausgold Limited to wholly-owned subsidiary Ausgold Exploration Pty Ltd are contributed to meet required expenditure payable on demand and are not interest bearing.

(B) KEY MANAGEMENT PERSONNEL

Disclosures relating to key management personnel are included in Note 27.

(C) MANAGEMENT FEES TO TRANSCONTINENTAL INVESTMENTS

Ausgold entered into an agreement with Transcontinental Investments, under which the Company agreed to retain Transcontinental Investments to provide corporate administration services to the Company. The agreement stated that the Company must pay a monthly fee of $20,000 (plus GST) to Transcontinental Investments plus reimbursement each month for certain costs, expenses and liabilities incurred and/or paid by Transcontinental Investments on behalf of the Company during the month. The initial term of the agreement was two years from the date of Official Quotation. The agreement was terminated on 15 December 2011. Total compensation paid to Transcontinental Group during the financial year was $170,000 (2011: $152,000).

(D) LOAN FROM DIRECTOR

On 1 June 2012, Mr Lockwood provided an unsecured loan to the Company for $500,000 at an interest rate of 0.8% per month. The loan is repayable with interest to Mr Lockwood within 12 months.

(E) TRANSACTIONS WITH OTHER RELATED PARTIES

Transactions between related parties are on normal commercial terms and conditions no more favorable than those available to other parties unless otherwise stated.

27. KEY MANAGEMENT PERSONNEL

(A) DETAILS OF KEY MANAGEMENT PERSONNEL

The following persons acted as Directors of the Company during the financial year:

Mr Robert Pett (Non-Executive Chairman)
Mr Simon Trevisan (Non-Executive Director)
Mr Richard Lockwood (Non-Executive Director)
Mr Chris Kelsall (Non-Executive Director)
Mr Ian Murchison (Alternate Director to Simon Trevisan), resigned 28 February 2012
Mr Benjamin Bell (Chief Executive Officer), resigned 11 November 2011

The following persons are the executives of the Company during the financial year:

Dr Andrew Tunks (Chief Executive Officer), appointed 27 February 2012
Mr Mark Di Silvio (Company Secretary & Chief Financial Officer), appointed 25 November 2011

ANNUAL REPORT 30 JUNE 2012 69

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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(B) KEY MANAGEMENT PERSONNEL COMPENSATION

Short term employee benefits Post employment benefits Share based payments	Jun 2012 Jun 2011 $ $ Consolidated
	736,192 445,032 39,341 21,925 1,610,894 71,839
	2,386,427 538,796

Detailed remuneration disclosures are provided in the Remuneration Report on pages 21 to 25.

Key management personnel received compensation in the form of short term employee benefits, post-employment benefits and share based payment awards. Remuneration and other terms of employment for the following executives are formalised in employment agreements during the financial year, the terms of which are set out below:

Dr Andrew Tunks,	Chief Executive Officer
Term:	Permanent
Base salary:	$436,000 inclusive of superannuation
Employee options:	3,500,000 options exercisable at $1.573; 3 year option period
Notice period:	3 months (Nil in the event of gross misconduct)
Mr Mark Di Silvio, Chief Financial Officer & Company Secretary
Term:	Permanent
Base salary:	$287,000 inclusive of superannuation
Employee options:	1,000,000 options exercisable at $1.716; 3 year option period
Notice period:	2 months (Nil in the event of gross misconduct)
	9 months’ notice in the event of a change in control of Company

No executive is entitled to any termination payments apart from remuneration payable up to and including the date of termination and all payments due by way of accrued leave.

Following shareholder approval received on 24 November 2011, the Company issued share based payment awards to key management personnel during the period. These include:

500,000 options exercisable on or before 19 December 2014 at $1.38 each to Mr Richard Lockwood (Series 5);
300,000 options exercisable on or before 31 December 2014 at $0.30 each to Mr Benjamin Bell (Series 6). The options were issued to Mr Bell pursuant to his employment agreement.

Details of the above share based payment awards are provided in the Remuneration Report on pages 21 to 25.

(C) EQUITY INSTRUMENTS DISCLOSURES RELATING TO KEY MANAGEMENT PERSONNEL

Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and conditions of the options, can be found in the Remuneration Report on pages 21 to 25.

ANNUAL REPORT 30 JUNE 2012 70

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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(i) Shareholdings

Number of shares held by Directors and Executives of the Group, including their personally related parties, are set out below:

Number of Shares	Balance at 1 July 2011 Allotment Received on the exercise of options Other changes Balance at 30 June 2012
Non-Executive Directors Robert Pett¹ Benjamin Bell² Simon Trevisan³ Richard Lockwood4 Christopher Kelsall Ian Murchison7 Executives Andrew Tunks5 Mark Di Silvio6	5,800,000 - 2,500,000 - 8,300,000 85,000 - 2,000,000 (2,085,000) - 16,600,000 - 2,500,000 - 19,100,000 500,000 - - - 500,000 385,000 - - - 385,000 7,288,686 - - (4,461,888) 2,826,798 - - - - - - - - - - -
	30,658,686 - 7,000,000 (6,546,888) 31,111,798

Note 1: Relevant interest as director and controlling shareholder of Batterbury Holdings Pty Ltd.

Note 2: Relevant interest as the trustee for Kestrel Investment Fund. Mr Bell also has an interest as a beneficiary of Kestrel Investment Fund. Mr Bell resigned as Chief Executive Officer on 11 November 2011.

Note 3: Relevant interest as director and controlling shareholder of Transcontinental Investments Pty Ltd.

Note 4: Shares held prior to Mr Lockwood’s appointment as a director on 12 November 2010.

Note 5: Dr Tunks was appointed Chief Executive Officer on 27 February 2012.

Note 6: Mr Di Silvio was appointed Chief Financial Officer & Company Secretary on 25 November 2011.

Note 7: Relevant interest as director of Tenalga Pty Ltd the trustee of Murchison Superannuation Fund. Mr Murchison also has an interest as a beneficiary of the Murchison Superannuation Fund. Mr Murchison resigned as Alternate Director to Simon Trevisan on 28 February 2012.

Number of Shares	Balance at 1 July 2010 Allotment Received on the exercise of options Other changes Balance at 30 June 2011
Non-Executive Directors Robert Pett¹ Benjamin Bell² Simon Trevisan³ Richard Lockwood4 Christopher Kelsall Ian Murchison5	5,800,000 - - - 5,800,000 85,000 - - - 85,000 16,600,000 - - - 16,600,000 500,000 - - - 500,000 385,000 - - - 385,000 7,800,000 - - (511,314) 7,288,686
	31,170,000 - - (511,314) 30,658,686

Note 1: Relevant interest as director and controlling shareholder of Batterbury Holdings Pty Ltd.

Note 2: Relevant interest as the trustee for Kestrel Investment Fund. Mr Bell also has an interest as a beneficiary of Kestrel Investment Fund. Note 3: Relevant interest as director and controlling shareholder of Transcontinental Investments Pty Ltd.

Note 4: Shares held prior to Mr Lockwood’s appointment as a director on 12 November 2010.

Note 5: Relevant interest as director of Tenalga Pty Ltd the trustee of Murchison Superannuation Fund. Mr Murchison also has an interest as a beneficiary of the Murchison Superannuation Fund.

ANNUAL REPORT 30 JUNE 2012 71

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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(ii) Option Holdings

The number of options over ordinary shares in the Company held during the financial year by each director of Ausgold Limited and other key management personnel of the Group, including their personally related parties, are set out below:

Number of Options	Balance at 1 July 2011 Granted as compensation Exercised Other changes Balance at 30 June 2012 Vested Unvested
Non-Executive Directors Robert Pett¹ Benjamin Bell² Simon Trevisan³ Richard Lockw ood Christopher Kelsall Ian Murchison� Executives Andrew Tunks5 Mark Di Silvio6	5,800,000 - (2,500,000) - 3,300,000 3,300,000 - 1,750,000 300,000 (2,000,000) (50,000) - - - 15,600,000 - (2,500,000) - 13,100,000 13,100,000 - - 500,000 - - 500,000 500,000 - 835,000 - - - 835,000 835,000 - 7,581,888 - - (4,461,888) 3,120,000 3,120,000 - 23,000 3,500,000 - - 3,523,000 - 3,523,000 - 1,000,000 - - 1,000,000 333,333 666,667
	31,589,888 5,300,000 (7,000,000) (4,511,888) 25,378,000 21,188,333 4,189,667

Note 1: Relevant interest as director and controlling shareholder of Batterbury Holdings Pty Ltd.

Note 2: Relevant interest as the trustee for Kestrel Investment Fund. Mr Bell also has an interest as a beneficiary of Kestrel Investment Fund. Mr Bell resigned as Chief Executive Officer on 11 November 2011.

Note 3: Relevant interest as director and controlling shareholder of Transcontinental Investments Pty Ltd.

Note 4: Relevant interest as director of Tenalga Pty Ltd the trustee of Murchison Superannuation Fund. Mr Murchison also has an interest as a beneficiary of the Murchison Superannuation Fund. Mr Murchison resigned as Alternate Director to Simon Trevisan on 28 February 2012.

Note 5: Dr Tunks was appointed Chief Executive Officer on 28 February 2012. Dr Tunks held 23,000 options prior to his appointment on 27 February 2012. Note 6: Mr Di Silvio was appointed Chief Financial Officer & Company Secretary on 25 November 2011.

Number of Options	Balance at 1 July 2010 Granted as compensation Exercised Other changes Balance at 30 June 2011 Vested Unvested
Non-Executive Directors Robert Pett¹ Benjamin Bell² Simon Trevisan³ Richard Lockw ood Christopher Kelsall Ian Murchison�	5,800,000 - - - 5,800,000 - 5,800,000 1,750,000 - - - 1,750,000 1,750,000 - 16,600,000 - - (1,000,000) 15,600,000 - 15,600,000 - - - - - - - 835,000 - - 835,000 835,000 - 7,800,000 - (218,112) - 7,581,888 - 7,581,888
	32,785,000 - (218,112) (1,000,000) 31,566,888 2,585,000 28,981,888

Note 1: Relevant interest as director and controlling shareholder of Batterbury Holdings Pty Ltd. Note 2: Relevant interest as the trustee for Kestrel Investment Fund. Mr Bell also has an interest as a beneficiary of Kestrel Investment Fund. Note 3: Relevant interest as director and controlling shareholder of Transcontinental Investments Pty Ltd.

Note 4: Relevant interest as director of Tenalga Pty Ltd the trustee of Murchison Superannuation Fund. Mr Murchison also has an interest as a beneficiary of the Murchison Superannuation Fund.

(D) LOAN FROM DIRECTOR

(E) LOAN TO KEY MANAGEMENT PERSONNEL

No loans have been granted to key management personnel during the current financial year.

(F) OTHER KEY MANAGEMENT PERSONNEL TRANSACTIONS WITH THE COMPANY

A number of key management personnel or their related parties hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities.

ANNUAL REPORT 30 JUNE 2012 72

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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A number of those entities transacted with the Group during the year. The terms and conditions of those transactions were no more favourable than those available or, which might reasonably be expected to be available, on similar transactions to unrelated entities on an arm’s length basis.

28. PARENT ENTITY INFORMATION

The individual financial statements for the parent entity show the following aggregate amount:

Current assets Non-current assets Total Assets Current liabilities Non-current liabilities Total Liabilities NET ASSETS Contributed equity Reserves Accumulated earnings / (losses) TOTAL EQUITY Loss for the year Other comprehensive income / (loss) Total comprehensive loss for the year	Jun 2012 Jun 2011 $ $ Parent Entity
	1,203,144 12,827,425 38,346,174 20,584,950
	39,549,318 33,412,375
	692,504 52,594 - 21,355
	692,504 73,949

	38,856,814 33,338,426
	49,372,950 33,693,865 3,056,107 (657,519) (13,572,243) 302,080
	38,856,814 33,338,426
	Jun 2012 Jun 2011 $ $ Parent Entity
	(12,914,723) (657,519) - -
	(12,914,723) (657,519)

The parent entity has guaranteed the loan of Ausgold Exploration Pty Ltd.

29. CONTINGENT LIABILITIES

There are no contingent items at reporting date.

30. EVENTS SUBSEQUENT TO REPORTING DATE

On 20 September 2012, Ausgold concluded the placement of 20.7 million new fully paid ordinary shares at $0.33 per share to raise $6.8 million for continued exploration and working capital purposes.

The Placement was made in two tranches:

Tranche 1: 5,498,637 shares to raise $1.8 million in cash (before costs). Settlement of Tranche 1 was completed on 13 August 2012; and
Tranche 2: 15,151,515 shares to raise $2.0 million in cash and $3.0 million in securities was approved by a meeting of shareholders on 18 September 2012.

Ausgold issued 4,545,455 ordinary fully paid shares to Praetorian at an issue price of $0.33 cash, to raise $1,500,000; and

ANNUAL REPORT 30 JUNE 2012 73

AUSGOLD LIMITED ABN 67 140 164 496 Notes To The Consolidated Financial Statements

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Ausgold issued 9,090,909 ordinary fully paid shares to Praetorian at an issue price of $0.33 and in exchange Praetorian will allot to Ausgold 3,683,015 ordinary fully paid shares at an issue price of £0.55. The listed Praetorian shares are freely tradeable.

ANNUAL REPORT 30 JUNE 2012 74

AUSGOLD LIMITED ABN 67 140 164 496 Directors’ Declaration

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DIRECTORS’ DECLARATION

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;
the attached consolidated financial statements and notes are in accordance with the Corporations Act, 2001, including:
a. complying with Accounting Standards, the Corporations Regulations 2001, International Reporting Standards as issued by the International Accounting Standards Board and other mandatory professional reporting requirements; and
b. giving a true and fair view of the consolidated entity’s position as at 30 June 2012 and its performance for the financial year ended that date; and
the directors have been given the declarations as required by s295A of the Corporations Act 2001.

Signed in accordance with a resolution of the directors made pursuant to section 295(5) of the Corporations Act 2001.

For and on behalf of the Directors

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Robert Pett Chairman

Perth, Western Australia 24 September 2012

ANNUAL REPORT 30 JUNE 2012

Tel: +8 6382 4600 38 Station Street Fax: +8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AUSGOLD LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Ausgold Limited, which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated 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 of the entity comprising the company and the entity it controlled at year’s end.

Directors’ Responsibility for the Financial Report

The directors of the consolidated entity 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 gives a true and fair view and 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 consolidated 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 consolidated 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.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Ausgold Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

ANNUAL REPORT 30 JUNE 2012 76

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Opinion

In our opinion:

(a) the financial report of Ausgold Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 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.

Emphasis of Matter

Without modifying our opinion, we draw attention to Note 4 in the financial report, which indicates that the consolidated entity incurred a net loss of $4,818,818 during the year ended 30 June 2012 and the consolidated entity will seek additional funding in order to progress its exploration and development of its mining tenements. These conditions, along with other matters as set forth in Note 4, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business at the values stated in this financial report.

Report on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2012. The directors of the consolidated entity are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . 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 Ausgold Limited for the year ended 30 June 2012 complies with section 300A of the Corporations Act 2001 .

BDO Audit (WA) Pty Ltd

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Chris Burton Director

Perth, Western Australia Dated this 24[th] day of September 2012

ANNUAL REPORT 30 JUNE 2012 77

AUSGOLD LIMITED ABN 67 140 164 496 Schedule of Mineral Licence Interest

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SHAREHOLDERS INFORMATION

The shareholder information set out below was applicable as at 24 September 2012.

(A) DISRIBUTION OF SHAREHOLDERS

Analysis of the number of shareholders by size of holding is as below:

Analysis of the number of shareholders by size of holding is as below:
Category of holding	Number of holders Number of shares
1 - 1,000 1,001 - 5,000 5,001 - 10,000 100,001 - shares and over 10,001 - 100,000	94 47,543 237 726,380 149 1,261,766 350 12,069,550 78 137,367,478
	908 151,472,717

(B) TWENTY LARGEST SHAREHOLDERS

The names of the twenty largest holders of quoted shares are:

The names of the twenty largest holders of quoted shares are:
Shareholders	Number of shares Percentage of total shares %
HSBC Custody Nominees Australia Ltd Transcontinental Investments Pty Ltd JP Morgan Nominees Australia Ltd Nefco Nominees Pty Ltd JP Morgan Nominees Australia Ltd Batterbury Holdings Pty Ltd HSBC Custody Nominees Australia Ltd Mr Denis Ivan Rakich National Nominees Ltd Shertim Investments Pty Ltd Bedford Investments Pty Ltd Tenalga Pty Ltd Intersuisse Nominees Pty Ltd RBC Investor Services Australia FGL Asset Management Ltd Ancestral Pty Ltd Brahma Finance BVI Ltd Citicorp Nominees Pty Ltd Fitel Nominees Ltd Elstree Nominees Pty Ltd	21,922,308 14.47% 19,100,000 12.61% 14,041,231 9.27% 10,109,645 6.67% 9,878,485 6.52% 8,300,000 5.48% 8,105,000 5.35% 7,780,000 5.14% 6,896,761 4.55% 3,150,196 2.08% 3,120,000 2.06% 2,701,888 1.78% 2,200,000 1.45% 2,021,468 1.33% 1,655,000 1.09% 1,395,000 0.92% 900,000 0.59% 755,341 0.50% 600,000 0.40% 545,000 0.36%
	125,177,323 82.62%

(C) VOTING RIGHTS

All ordinary shares (whether fully paid or not) carry one vote per share without restriction.

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(D) TWENTY LARGEST OPTION HOLDERS

The names of the twenty largest holders of quoted options are:

The names of the twenty largest holders of quoted options are:
Shareholders	Number of shares Percentage of total shares %
Transcontinental Investments Pty Ltd HSBC Custody Nominees Australia Ltd HSBC Custody Nominees Australia Ltd Mr Denis Ivan Rakich Talex Investments Pty Ltd Tenalga Pty Ltd Bedford Investments Pty Ltd Arredo Pty Ltd Ancestral Pty Ltd FGL Asset Management Ltd Nefco Nominees Pty Ltd Vetter Anthony John + J Farr Andrew and Caroline Talex Investments Pty Ltd Berenes Nominees Pty Ltd Berenes Nominees Pty Ltd National Nominees Ltd Custodial Services Ltd Bovell David John Batterbury Holdings Pty Ltd	13,100,000 17.99% 10,000,000 13.74% 6,265,250 8.61% 5,700,248 7.83% 3,300,000 4.53% 3,204,000 4.40% 3,120,000 4.29% 3,120,000 4.29% 1,450,000 1.99% 1,431,500 1.97% 1,000,000 1.37% 906,000 1.24% 732,000 1.01% 700,000 0.96% 680,000 0.93% 575,000 0.79% 556,000 0.76% 504,700 0.69% 471,000 0.65% 440,000 0.60%
	57,255,698 78.64%

(E) SUBSTANTIAL SHAREHOLDERS

The names of the substantial shareholders who have notified the company in accordance with section 671B of the Corporations Act 2001 are:

Corporations Act 2001 are:
Shareholders	Number of shares Percentage of total shares %
Transcontinental Investments Pty Ltd Praetorian Portfolio Holding L.P JP Morgan Chase & Co. CQS Asset Management Limited Denis Ivan Rakich Batterbury Holdings Pty Ltd	19,100,000 12.61% 13,636,364 9.01% 11,023,210 8.09% 11,944,127 7.89% 8,000,000 6.87% 8,300,000 5.48%
	72,003,701 49.95%

(F) UNLISTED OPTIONS

(F) UNLISTED OPTIONS
Option details Expiry dates	Number of unlisted options
Unlisted options exercisable at $0.20 per share 31 Dec 2014 Unlisted options exercisable at $0.25 per share 31 Dec 2014 Unlisted options exercisable at $1.45 per share 1 Jul 2015 Unlisted options exercisable at $1.48 per share 6 Dec 2015 Unlisted options exercisable at $1.38 per share 6 Dec 2015 Unlisted options exercisable at $1.716 per share 6 Dec 2014 Unlisted options exercisable at $1.38 per share 19 Dec 2014 Unlisted options exercisable at $1.573 per share 27 Feb 2016	200,000 250,000 500,000 500,000 500,000 1,000,000 500,000 3,500,000
	6,950,000

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AUSGOLD LIMITED ABN 67 140 164 496 Schedule of Mineral Licence Interest

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SCHEDULE OF MINERAL LICENCE INTEREST

State	Lease	Lease status	Grant date	Project	Interest %
Western	Australia Tenements
WA	E38/2128	Granted	29 Oct 2009	Yamarna	100%
WA	E38/2129	Granted	13 Oct 2008	Yamarna	100%
WA	E52/2162	Granted	7 Jan 2009	Doolgunna Station	100%
WA	E69/2463	Application	-	Marymia	100%
WA	E70/2590	Granted	3 Jul 2008	Katanning Regional	100%
WA	E70/3342	Granted	6 Dec 2010	Katanning Regional	100%
WA	E70/3343	Granted	6 Dec 2010	Katanning Regional	100%
WA	E70/3344	Granted	4 Jun 2010	Katanning Regional	100%
WA	E70/3345	Granted	16 Jun 2010	Katanning Regional	100%
WA	E70/3721	Granted	22 Nov 2010	Katanning Regional	100%
WA	E70/3722	Granted	22 Nov 2010	Katanning Regional	100%
WA	E70/3723	Granted	29 Aug 2011	Katanning Regional	100%
WA	E70/3724	Granted	14 Dec 2010	Katanning Regional	100%
WA	E70/3725	Granted	22 Nov 2010	Katanning Regional	100%
WA	E70/3735	Granted	22 Nov 2010	Katanning Regional	100%
WA	E70/3736	Granted	22 Nov 2010	Katanning Regional	100%
WA	E70/3737	Granted	30 Aug 2011	Katanning Regional	100%
WA	E70/3738	Granted	22 Nov 2010	Katanning Regional	100%
WA	E70/3952	Granted	18 Jan 2011	Katanning Regional	100%
WA	E70/3953	Granted	4 Oct 2011	Katanning Regional	100%
WA	E70/3954	Granted	4 Oct 2011	Katanning Regional	100%
WA	E70/3955	Granted	4 Oct 2011	Katanning Regional	100%
WA	E70/3957	Granted	16 Aug 2011	Katanning Regional	100%
WA	E70/3958	Granted	4 Oct 2011	Katanning Regional	100%
WA	E70/3959	Granted	4 Oct 2011	Katanning Regional	100%
WA	E70/3960	Granted	4 Oct 2011	Katanning Regional	100%
WA	E70/3961	Granted	19 Jan 2011	Katanning Regional	100%
WA	E70/3962	Granted	4 Oct 2011	Katanning Regional	100%
WA	E70/4045	Granted	16 Dec 2011	Katanning Regional	100%
WA	E70/4046	Granted	16 Dec 2011	Katanning Regional	100%
WA	E70/4047	Granted	20 Dec 2011	Katanning Regional	100%
WA	E70/4048	Granted	20 Dec 2011	Katanning Regional	100%
WA	E70/4049	Granted	20 Dec 2011	Katanning Regional	100%
WA	E70/4050	Granted	20 Dec 2011	Katanning Regional	100%
WA	E70/4051	Granted	20 Dec 2011	Katanning Regional	100%
WA	E70/4052	Granted	20 Dec 2011	Katanning Regional	100%
WA	E70/4061	Granted	1 Jun 2011	Katanning Regional	100%
WA	E70/2928	Granted	26 Nov 2008	Katanning Gold Project	100%
WA	G70/84	Granted	13 Jun 1989	Katanning Gold Project	100%
WA	G70/85	Granted	13 Jun 1989	Katanning Gold Project	100%
WA	L70/13	Granted	24 May 1989	Katanning Gold Project	100%
WA	L70/32	Granted	11 Dec 1995	Katanning Gold Project	100%
WA	L70/33	Granted	11 Dec 1995	Katanning Gold Project	100%
WA	M70/210	Granted	28 Mar 1985	Katanning Gold Project	100%
WA	M70/211	Granted	28 Mar 1985	Katanning Gold Project	100%
WA	M70/488	Granted	19 Apr 1994	Katanning Gold Project	100%
WA	E70/4255	Application	-	Katanning Regional	100%
WA	E70/4268	Application	-	Katanning Regional	100%
WA	E70/4269	Application	-	Katanning Regional	100%
WA	E70/4285	Application	-	Katanning Regional	100%
WA	E70/4287	Application	-	Katanning Regional	100%
WA	E70/4385	Application	-	Katanning Regional	100%

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State	Lease	Lease status	Grant date	Project	Interest %
Queensland	Tenements
QLD	EPM17054	Granted	26 Nov 2010	Cracow	100%
QLD	EPM17055	Granted	27 Mar 2008	Cracow	100%
QLD	EPM17057	Granted	28 Mar 2008	Cracow	100%
QLD	EMP17059	Granted	28 Mar 2008	Cracow	100%
QLD	EPM19576	Application	-	Cracow	100%
QLD	EPM19577	Application	-	Cracow	100%
QLD	EPM19578	Application	-	Cracow	100%
QLD	EPM19579	Application	-	Cracow	100%
Western Australia - Quadrio JV (Ausgold 60%)
WA	E70/2908	Granted	31 May 2007	Quadrio JV	60%
WA	E70/2910	Granted	31 May 2007	Quadrio JV	60%
WA	E70/2970	Granted	25 Mar 2008	Quadrio JV	60%
WA	E70/3012	Granted	23 Jun 2009	Quadrio JV	60%
WA	E70/3201	Granted	31 May 2012	Quadrio JV	60%
WA	E70/3754	Granted	17 Sep 2010	Quadrio JV	60%

ANNUAL REPORT 30 JUNE 2012 81

AI assistant

AUSGOLD LIMITED — Annual Report 2012

64457_rns_2012-09-24_57bcc73b-9e93-4241-8021-6aaf0fe08499.pdf

ABN 67 140 164 496

CORPORATE DIRECTORY

CHIEF EXECUTIVE OFFICER

DIRECTORS

COMPANY SECRETARY

AUDITORS

SECURITIES EXCHANGE

SHARE REGISTRY

SOLICITORS

BANKERS

REGISTERED OFFICE

CHAIRMAN’S REPORT

Dear Shareholders

Robert Pett Chairman

REVIEW OF OPERATIONS

KATANNING GREENSTONE BELT

KATANNING GOLD PROJECT (KGP)

DRILLING OPERATIONS

JINKAS CORRIDOR

DINGO CORRIDOR

KATANNING REGIONAL PROJECT

QUADRIO JOINT VENTURE

OTHER AUSTRALIAN PROJECTS

CRACOW

YAMARNA

PERSONNEL AND CAPABILITY

AUSGOLD’S FORWARD STRATEGY

Mineral Resource Estimate

Resource Growth

Regional Exploration

Competent Persons Statement

DIRECTORS’ REPORT

PRINCIPAL ACTIVITIES

DIRECTORS

Non - Executive Chairman

Non-Executive Director

Non-Executive Director

Richard Lockwood

Non-Executive Director

Christopher David Kelsall B Econ, LLB, MSc

Chief Executive Officer

Alternate Director to Mr Trevisan

MANAGEMENT

Chief Executive Officer

Dr Andrew Tunks B.Sc. (Hons.), Ph.D (Appointed 27 February 2012)

Company Secretary & Chief Financial Officer

Company Secretary

DIRECTORS’ MEETINGS

DIVIDENDS

CHANGES IN STATE OF AFFAIRS

FUTURE DEVELOPMENTS

SHARE OPTIONS

Options converted during the financial year

Employee options

Options lapsed during the financial year

Options on issue at the date of this report

Options exercised subsequent to balance date

Options lapsed subsequent to balance date

ENVIRONMENTAL REGULATIONS

EVENTS SUBSEQUENT TO REPORTING DATE

REVIEW OF OPERATIONS

INDEMNIFICATION OF DIRECTORS

Indemnification

Insurance premiums

REMUNERATION REPORT (AUDITED)

OVERVIEW

KEY MANAGEMENT PERSONNEL

REMUNERATION OF DIRECTORS AND EXECUTIVES

EMPLOYMENT AGREEMENTS

NON EXECUTIVE DIRECTOR AGREEMENTS

USE OF REMUNERATION CONSULTANTS

VOTING AND COMMENTS MADE AT THE COMPANY’S 2011 ANNUAL GENERAL MEETING

Options issued to Directors and executives

Value of Director and executives options granted, exercised and lapsed during the year

Vesting of options issued during the year to Directors and Executives

DIRECTORS’ SHAREHOLDINGS

END OF REMUNERATION REPORT

AUSGOLD LIMITED Annual Report 2012