AVIRA RESOURCES LTD — Annual Report 2012

Jan 6, 2013

MGT RESOURCES LIMITED

ANNUAL REPORT

2012

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ACN 131 715 645

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TABLE OF CONTENTS

CHAIRMAN’S REPORT	3
GEOLOGICAL REPORT	5
DIRECTOR’S REPORT	18
CORPORATE GOVERNANCE STATEMENT	24
AUDITOR’S INDEPENDENCE DECLARATION	39
CONSOLIDATED FINANCIAL STATEMENTS	40
DIRECTORS DECLARATION	78
AUDITOR’S REPORT	79

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CHAIRMAN’S REPORT 30 JUNE 2012

CHAIRMAN’S REPORT

30[th] June 2012

On behalf of the Board of Directors, I present the Annual Report of MGT Resources Limited ("MGT" or the "Company") for the year ending 30th June 2012.

Over the past year MGT has continued to make substantial progress in achieving the goal of becoming mainland Australia's largest tin producer at our Mount Garnet sites in North Queensland. We have completed the commissioning of the first stage upgrade to the Mount Veteran Mill and obtained the first mining lease ("Heads or Tails", ML 20655). We continue to expect the final grant of the second mining lease ("Summer Hills", MLA 20547) in the near future.

A notable achievement was the agreement with the Bar Barrum people over the native title aspects of the mining leases we have applied for. We are delighted that an agreement was reached quickly with mutual benefits so that, for example, there will be long term employment and business opportunities for members of the Bar Barrum people as well as training and apprenticeships. MGT is determined to work with all stakeholders in the local community to ensure that our business and operations make a real contribution to the whole area.

The tin market is obviously important to MGT as we are focused on being a major tin producer. Tin continues to show fundamental strengths as a commodity. It has been affected by continuing economic uncertainty around the globe as have all metals, but it has shown resilience given the market dynamics.

One addition to our team I would like to highlight is the appointment of Dohn Taylor as the Managing Director of MGT Mining Limited. Dohn brings many years of experience including responsibility for getting new businesses and projects off the ground in, for example, Western Australia and the Middle East. As we look to the future it is critical that we have the best managers in place for all aspects of our business.

It has been a challenging environment to raise financing for all smaller companies in the resources sector given the performance of equity markets and generally lower commodity prices. Happily, however, MGT has continued to be able to raise financing including through two convertible bonds with an investor based in Hong Kong. We also expect to enhance our equity funding in the near future.

In terms of operations, the delay in obtaining the principal mining lease at Mount Garnet (MLA 20547) has meant that we have been unable to proceed as quickly as we would have liked in bringing the now completed first stage mill on line. However this has led us to reassess the timing of our upgrade to a higher capacity mill with the potential for this to be accelerated given the significant net present value benefits to shareholders of operating at higher capacity and lower operating costs. We will advise shareholders as soon as this assessment has been completed.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CHAIRMAN’S REPORT 30 JUNE 2012

We announced in February 2012 that we have signed an agreement with the owner of 16 alluvial tin mining leases plus an exploration permit known collectively as "California Creek". We are now in the process of due diligence on these assets and will report to shareholders on the results of this in due course. The obvious attraction of the assets is that they are close to our existing operations and can be brought into production very quickly, assuming that our due diligence is positive.

Exploration has been a major focus with a much larger geological team now able to cover much more of our ground and in more detail. Previous drilling showed widespread tin mineralisation at Summer Hills with some very high grades returned (the highest being 15.75% tin over one metre at "Extended") as well as much longer intercepts at lower grades (for example 24m at 0.55% tin at "Dalcouth"). Our team has continued to work intensively at the overall understanding of the geology at Summer Hills with recent work showing very encouraging results from ground surveys. Further drilling will be undertaken once all the ground work has been completed. The last year has also seen new targets identified both within Summer Hills and at the Nymbool EPM.

Previously we had identified gold and copper mineralisation, as well as tin, from the old tin mine workings at Smiths Creek which is on the Nymbool EPM. We have very recently begun more detailed work there although given the depths that such mineralisation is likely to be at, we regard this is a longer term project.

Finally on the exploration side, we are undertaking much more work at the "Pyramid" gold prospect close to Charters Towers in Queensland. A drilling campaign will begin there later in 2012 to test the extent of possible mineralisation and expand on the work previously done there some years ago.

Our goal remains to become an operational miner as quickly as possible, generating cashflow for further investment or to return to shareholders. As we do much more exploration work on our grounds we are excited by what we find - and as we grow our resources we will expand the existing mill so that we are generating optimal returns for shareholders which may involve an accelerated expansion of the capacity at Mount Veteran.

Finally, the Board of MGT would like to thank shareholders for their continuing support. We are fortunate to be focused on a metal with a very strong outlook and working in a region that is supportive of the mining industry. We are also fortunate to have an excellent team in the field and we would like to thank all of them for their contributions so far.

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Jonathan Back

Executive Chairman and Managing Director

Dated: 12 September 2012

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

2012 GEOLOGICAL AND TENEMENT REPORT

1. MOUNT GARNET TIN PROJECT

The Mount Garnet Project includes the following tenements (see Figure 1): ML 4349 “Mount Veteran”

MLA 20547 “Summer Hill” MLA 20655 “Heads or Tails” EPM 16948 “Nymbool”

The primary focus of these tenements is tin exploration and mining; however EPM16948 is also prospective for porphyry style copper-gold mineralisation.

The Mount Garnet tin field is situated within the Hodgkinson Province of the Tasman Orogenic Zone and the area is bounded to the west by Precambrian metamorphic rocks. The Siluro-Devonian aged Hodgkinson Formation comprises a thick sequence of clastic marine greywackes, shales, slates and sandstones which contain locally minor volcanic and chertinterbeds. It is intruded by, and overlain by extrusions of acid igneous rocks of Upper Palaeozoic age.

In the Mount Garnet district high-level granites of the O’Brien’s Creek Super Suite intrude the Hodgkinson Formation. They were formerly known as the Elizabeth Creek Granite - a very large batholith of leucocratic biotiteadamellite-granite. Greisen and pipe formation is common at the contacts between the Hodgkinson Formation and the O’Brien’s Creek member granites.

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Figure.1 Location and regional geology of the Mt Garnet Project

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

1.1 ML 4349 - MOUNT VETERAN

The Mount Veteran Mill

The Mount Veteran Mill (‘the Mill’) was constructed in 1980 to treat hard rock tin ores from deposits in the area now covered by MLA 20547. During the period 1984-2003, the tin price declined rapidly due to releases of metal from The Tin Council’s stockpile and the US strategic stockpile. As a result, mining activity eventually ceased as well as the mill operation.

MGT is now leading the resurgence of tin mining around Mount Garnet, including the refurbishment of the Mt Veteran Plant. MGT Mining has completed upgrading the Mount Veteran Plant to process hard rock tin ore at a processing rate of approximately 10 tons per hour, or around 70,000 tons per year input capacity. The company has been commissioning the plant and producing small amount of tin as trial production.

1.2 MLA 20547 – SUMMER HILL

In Mid-2010, MGT discovered several high-grade intersections of tin mineralisation in MLA 20547. Initial drilling returned some of the best tin intersections seen in the world for some time. Drilling Results confirmed outstanding potential for high grade intercepts at Summer Hill MLA 20547. Mineralisation is predominantly hosted in quartz and cassiterite veins and stockworks in the intensely chlorite altered quartz lithic greywackes and sandstones of the Hodgkinson Formation. Mineralisation is shallow (surface to <50m vertical depth).

Best high grade Tin intercepts received from initial assay results included: 4m @ 1.2% Sn (SH03) between 33 to 40m, includes 1m @ 1.7% Sn 2m @ 8% Sn (X02) between 25 to 28m, includes 1m @ 15.75% Sn 5m @ 0.8% Sn (DAL 48) from 7 to 12m, includes 1m @ 2.6% Sn 3m @ 1.6% Sn(DAL50) between 19 to 24m, includes 1m @ 3.2% Sn

The next phase of drilling focused on the Dalcouth prospect and was completed in late 2010 (see below). In late 2011 drilling continued to further define mineralisation at Dalcouth and Extended, in particular to determine whether Dalcouth mineralisation continues at depth. This drilling program also tested economic potential of the Summer Hill, Veteran and May Day prospects, all of which have been mined historically and have known tin mineralisation. In mid 2012 a systematic grid soil sampling program over MLA20547 was begun, initially targeting areas of interest identified from stream sediment sampling and expanding from there.

1.2.1 DalcouthProspect

The Dalcouth Prospect consists of a set of several parallel stock work tin mineralised zones with widths up to 20m in altered Hodgkinson sediments. Tin mineralisation also extends into quartz porphyry at depth.

During 2010-2011, a 38-hole infill drilling program was conducted at Dalcouth. The drilling confirmed the presence of high grade tin mineralisation at shallow depth at Dalcouth, suitable for mining and processing at the Mount Veteran Mill. Dalcouth is located approximately 500m from the plant.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

Best Tin intercepts from the 2010-2011 infill drilling program at Dalcouth: 7m @ 2.0% Sn (DAL65) between 15 to 22m, includes 1m @ 5.95% Sn 5m @ 1.1% Sn (DAL78) between 23 to 28m, includes 1m @ 4.43% Sn 7m @ 1.08% Sn (DAL55) between 19 to 26m, includes 1m @ 3.62% Sn 4m @ 1.32% Sn (DAL70) between 3 and 7m, includes 1m @ 2.91% Sn 2m @ 2.07% Sn (DAL66) between 28 and 30m, includes 1m@ 2.5% Sn 2m @1.96% Sn (DAL74) between 28 and 30m, includes 1m @ 2.38% Sn

In late 2011 further drilling was conducted at Dalcouth to test for extension of the mineralisation at depth. Results suggest there are opportunities to expand the Dalcouth resource at depth. For example DAL78, as drilled in 2010 had 7m @ 0.93% Sn and with the 30m extension to the hole now runs 24m @ 0.55% Sn.

Dalcouth currently has an inferred JORC resource of 102,400t @ 0.34% Sn and the plan is to upgrade this to a measured resource, with diamond drilling in key locations to provide structural information and density measurements.

1.2.2 Extended Prospect

The Extended Prospect is located approximately 2.5km from the Mount Veteran Plant. The tin mineralised zone is 5m wide. Tin mineralisation is hosted in stock work vein systems in altered sediments of the Hodginkson Formation. A quartz porphyry has been intersected at depth and also hosts minor tin mineralisation.

Best Tin intercepts from the 2010-2011 infill drilling program at Extended: 7m @ 2.48% Sn (X02) between 25 and 32m, includes 1m @ 15.75% Sn 4m @ 3.72% Sn (X02) between 35 and 39m, includes 1m @ 7.59% Sn 4m @ 1.09% Sn (X11) between 24 and 29m, includes 1m @ 1.67% Sn

A follow up drilling program was conducted in 2011 to test further extensions to the tinmineralisation. Results from the drilling suggested there was no extension of the mineralisation to the southeast.

Best Tin intercepts from the 2011 follow up drilling program at Extended: 3m @ 0.50% Sn (X19) between 32 and 35m, includes 1m @ 0.81% Sn 3m @ 1.68% Sn (X23) between 57 and 60m, includes 1 m @ 2.39% Sn

Further work needs to be completed at Extended to better define the areas of mineralisation. Extended has an inferred JORC resource of 9500t @ 0.35% Sn and the intention is to upgrade this to a measured resource.

1.2.3 May Day Prospect

The May Day prospect consists of an elevated ridge of silicified Hodgkinson Formation sediments hosting quartz and tin stock work veins. Outcropping quartz veins host medium to fine grained cassiterite. Drilling at May Day was conducted in 2011 and focused on testing the lateral continuity of the quartz-cassiterite stock work. The drilling results were ambiguous, with three of the holes intersecting sub-economic tin mineralisation over short intervals.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

While much of the cassiterite may have already been exploited at shallow depths by historical tin miners, the prospect cannot be considered fully tested at depth. The presence of a collapsed adit at the base of the ridge suggests that historical miners pursued mineralisation at a greater depth.

1.2.4 Summer Hill Prospect

The Summer Hill prospect consists of the historic Summer Hill Mine. This mine consisted of a small open cut and an underground drive completed by Noranda Australia Pty Ltd in the 1960s.

Geologically, the Summer Hill prospect consists of chlorite altered sediments of the Hodgkinson Formation. Cassiterite is hosted in quartz veins and disseminated in the sediments..

Best Tin intercepts from the 2010-2011 drilling program at Summer Hill:

1m @ 1.3% Sn (SH03) @ 33m 1m @ 1.0% Sn (SH03) @ 35m 4m @ 1.7% Sn (SH03) @ 37m

A further drilling program is planned to test the viability of this prospect.

1.3 EPM 16948 – NYMBOOL

Nymbool is located to the north east of Mount Garnet but lies within 20 road kilometers (13 kilometers direct line) of the Mount Veteran Plant (Figure 1). The tenement is dominated by the granites of the O’Briens Creek Suite which have intruded the Hodgkinson Formation. Portions of the tenement are shallowly covered by sand derived from the granites. There are numerous historical tin workings on the tenement including the Smiths Creek Mine.

1.3.1 SMITHS CREEK MINE PROSPECT

The Smiths Creek Mine is a historical tin mine worked in the early 1900s consisting of an open pit and extensive underground workings to a depth of approximately 167 meters. The tin mineralisation is hosted in a chloritic shear zone (6 to 12m wide) in the Nymbool Granite and was associated with copper sulphidemineralisation.

Production occurred between 1903 and 1909 with total tonnage of 60,000 tons of 4% Sn with a head grade of up to 15% Sn from the underground workings (Pyper 2010), primarily from Ore Body Number 1. The open pit produced 23,733t at 0.4 - 0.7% Sn.

It has been reported (Foord 1996) that up to 200,000 tons at 1% Sn remains in the ground at Smiths Creek and historical production reports that the Number 1 Ore Body ended in copper 30% by volume (Stacpoole 2007). Historical records also map the presence of Number 2 Ore Body (considered low grade at the time and not mined) and a 10,000t ore zone of unknown tin grade known as the Adelaide Block (Figure 2).

Smiths Creek Mine represents a potential copper-gold target. Copper Sulphide was reported in association with tin. At depth the copper proportion of the ore apparently increased. Tailings from the processing of the Smiths Creek Mine are located in the nearby MLA 20655 “Heads or Tails”. Assays of these tailings indicate the presence of significant copper sulphide and possibly gold in the Smiths Creek Mine ore.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

In June 2012 a 1065m drilling program was begun, consisting of three combined RC/diamond holes and 8 RC holes. The purpose of the deep diamond holes was to test tin distribution at depth and the grade of copper mineralisation below167m where production stopped on the Number 1 Ore Body and to intersect a shallow magnetic anomaly and possible mineralization to the west of the old shaft RC holes were planned to target Ore Body 2 and a number of magnetic anomalies in the area.

SMITHS CREEK TIN MINE LONG SECTION

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Facing North
Open Pits
Adelade Outcrop
Block No 1 Ore Body
33 m
66 m
??
??
100 m ?? UNKNOWN Number 2
ORE BODY
??
??
132 m
?? ?? ??
Copper
Rich Tin
Ore
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Figure 2. Smiths Creek Mine Long Section

1.3.2 MLA 20655 – HEADS OR TAILS

Heads or Tails lies within EPM16948 (Nymbool) and is now a granted mining lease. The ML area holds fine tin tailings from the historical tin processing in the Smith’s Creek area. The tailings are on the surface, have an average grade of 0.44% Sn and have assayed in some areas as high as 1.35%Sn. Bulk metallurgical testing has shown 75% of the tin is recoverable by the Mount Veteran Mill. This positive assay result from the tailings confirms the high potential for discovering a high grade tin deposit as well as a body for a copper/gold deposit. Work is almost completed to install the appropriate floatation cells for copper and gold recovery as part of the tin ore cleaning process at the Mount Veteran mill.

The historical Queen Mine is also located within ML 20655. A ground magnetic survey has been conducted over the mine which showed an anomaly slightly offset to the workings. This anomaly was targeted in the recent drilling program.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

1.3.3 California Creek

MGT Resources has entered into an agreement with Bookall Mining Company Pty Ltd and has thereby acquired an option to buy a number of Mining Leases along the California Creek, approximately 10 km Northwest of the Nymbool EPM. These are alluvial tin deposits which have been previously mined to a limited extent. Due diligence studies are being conducted and if they are satisfactory, the option will be exercised in order for MGT to acquire outright the mining leases and the processing plant associated with them. There is no guarantee that this due diligence will be satisfactory.

2. THE PYRAMID GOLD PROJECT (EPM 12887)

The Pyramid project is located within EPM 12887 in the Drummond Basin, North Queensland and is located on a major north-northeast trending belt of gold mineralisation developed over a strike length of 20 km. Access is from Townsville via the Flinders Highway to Mingela, then sealed road to the Burdekin Dam Falls and then by graded council road to Pyramid Station (Figure 3).

This northern route via the Burdekin Dam is frequently closed during the wet season. Alternative access routes are by sealed road from Charters Towers to the Scartwater Homestead turn off, then by graded council road to Ukalunda Homestead which continues east to Collinsville and Bowen. Station tracks afford reasonable access to most parts of the EPM. The area is essentially open range grazing country, accessible by 4WD vehicle.

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Figure 3. Pyramid Project Location

Pyramid is composed of low hills and ranges between 200 and 300 m in elevation, with scattered topographic highs being generally formed by igneous plutons. Within the project area the highest elevation is 408 m, corresponding with the small volcanic peak at the Sugarloaf Prospect known as Breccia Knoll. The Bulgonnunna Volcanics form an elevated volcanic range to the northeast, with elevations up to 610 m.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

Within the project area, the land surface is in an advanced state of dissection, with only a few scattered remnants of a Tertiary sediment and laterite profile (at approximately 300 m elevation), having been largely stripped off to reveal scattered low hills and a small range of Anakie Metamorphics.

The Pyramid Project lies in the northeast of the Devonian to Carboniferous Drummond Basin and contains a north-northeast trending inlier of Late Ordovician Anakie Metamorphics. The inlier of Anakie Metamorphics divides this region from the main area of Drummond Basin sedimentation to the west. A thick wedge of the Late Carboniferous Bulgonunna Volcanics forms the Bulgonunna Block to the east.

The Drummond Basin is a large intracratonic basin that formed in response to east-west directed extension during the Late Devonian - Early Carboniferous. The basin has a NNW trend and is terminated at its northern boundary by a series of E-W trending faults, which define the southern margin of the Ordovician to Devonian Lolworth - Ravenswood Igneous Complex. To the east, the Drummond Basin is overlain by sediments of the Permian Bowen Basin, while Permo-Triassic sediments overlie the basin to the west.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

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Figure 4. Geological Map EPM 12887 Pyramid
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GETTYSBERG PROSPECT

Gold at the Gettysberg prospect is hosted in the Saint Ann’s Formation sediments ( siltstones, and sandstones). The Saint Ann’s For m ation is dominated by a sedimentary packag e consisting of feldspathic quartz sandstones, mica c eous siltstones, thin beds of algal limestone’s an d quartz pebble conglomerates. Other surrounding S aint Ann’s Formations that consist of gold hostin g mineralisation in the Drummond Basin are located at the Pajingo, Yandan, Wirralie and Twin Hills gold deposits.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

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Figure 5. Quartz Breccia at the Gettysberg Prospect

Structurally the area is complex and consists of a series of NNE and NNW plunging anticlines, with fault contacts near the conglomerates. An argillic altered rhyodacite dyke is present in the NW and narrow NNW trending andesite porphyry (boninite) dykes are also present.

Mineralisation at the Pyramid Project consists of Epithermal quartz veins, graphite-pyrite-sericite stylolitic veinlets and breccia matrix infills. This mineralisation is only hosted in micaceous sandstones of the Saint Anns Formation and appears to be of epithermal style. The gold mineralisation appears to plunge shallowly to the north and there has been limited drilling in this direction. Potential for extensions to the high-grade mineralisation is high.

Previous Investigations

The Pyramid Project is located near the Sellheim River area, where numerous small silver-lead-zinc deposits were worked during the late 1880's, including the Sunbeam, Sunset, Carrington and Walhalla deposits From the late 1970's, several mining companies have explored the area around the EPM 12887 including Pajinngo Gold Mine Pty Limited, Newcrest Mining Limited and Dalrymple Resources NL. Exploration in the area has been mainly directed towards locating epithermal gold mineralisation.

Previous Drilling and Soil Sampling Results at the Gettysberg Prospect

Gettysberg prospect was discovered from follow up of a stream sediment anomaly. Highly anomalous rock chip assays up to 2000 g/t Au were located in siliceous breccias. Soil sampling delineated a 400 x 100 m anomaly of >175 ppb Au (1500 ppb Au peak) at the Devils Den and Culps areas, trending NE. Several zones of >50 ppb Au occur outside the main anomalous zone.

Dalrymple drilled 26 RC holes (MRDC-25 to MRDC-50) and 2 diamond core holes (MDD-1 to MDD-2; MDD-3 was a diamond extension) over a strike extent of 400m, which intersected widespread significant gold mineralisation in 21 holes. The highlights of this drill program are presented in table 1. The holes intersected fine grained micaceous quartzose sandstone and interbedded fissile siltstones. Mineralisation consists of comb/cockade quartz vein stockworks and graphite-pyritedolomite breccia zones (Plate 1). Visible gold was noted in the core holes associated with the

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

graphite-pyrite matrix (Plate 2). An d esite porphyry dykes (boninite) were also asso c iated with the breccia zones.

Table 1. Best Drilling Intersections – Gettysberg Prospect

Hole No.	Depth From	Depth From	Depth To	Width	Grade
MDRC-31		0	8	8m	18.10 g/t Au
MDRC-33		52	76	24m	5.00 g/t Au
MDRC-34		28	44	16m	2.48 g/t Au
MDD-01		40	80	40m	1.0 g/t Au
MDD-02		21	51	26m	2.80 g/t Au
MDRC-39		8	72	64m	0.50 g/t Au
MDRC-42		8	72	64m	0.40 g/t Au
MDRC-37		28	64	26m	0.70 g/t Au

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Plate 1. Photograph of drill core from M DD-001. Typical chalcedony-comb quartz vein stock w ork mineralised zones in sericite altered thinly bedded s andstone at the Gettysberg prospect. Note the black c hlorite-graphitepyrite stylolite margins to chalcedony-c o mb quartz vein breccia. (Assay 70-71m: 0.37 ppm Au).

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

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Plate 2. Photograph of drill core from M DD-001. Note presence of visible gold within a low amplitude, black graphite-chlorite-pyrite stylolite seam, w ithin sericite altered, hydrofractured sandstone. (As s ay 75-76m: 12.0 g/t Au).

Proposed Drilling Program – Gettysberg Prospect

A preliminary project of 10 RC holes up to 150m deep is proposed with the following a ims:

• Infill drill sections with pre v iously high grade gold intercepts to increase J O RC confidence and define the geometry an d structure of these zones for follow up drill targe t ing

• � Drill beneath sections whe r e mineralisation is open at depth to increase t he size of the known gold resource

Preliminary work has been complet e d in preparation to commence drilling and land a ccess has been negotiated. A commencement date o f later 2012 is expected.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

Summary of Previous Drilling conducted over Pyramid

Prospect	Company	Type	Hole No’s	No. of Holes	Metreage
Sellheim
	BMA	RC	EBR-1 to 9	9	-
	BMA	RC	EBR-40 to 48	9	-
	Dalrymple	RC	MDRC-22 to 24	3	236
	Dalrymple	RC	MDRC-60	1	80
Gettysberg
	Dalrymple	RC	MDRC-25, 27-54	24	2430
	Dalrymple	Diamond	MDD-1 to 3	2	284
	Dalrymple	RC	MDRC-59	1	150
	Dalrymple	RC	MDRC-64	1	-
Marrakesh	Dalrymple	RC	MDRC-1 to 6	6	543
Pradesh	Dalrymple	RC	MDRC-7 to 10	4	418
Madras	Dalrymple	RC	MDRC-20 to 21	2	120
Rutherfords	Dalrymple	RC	MDRC-17 to 19	3	192
Carey Guille	Dalrymple	RC	MDRC-11 to 16	6	594
Sugarloaf
	Dalrymple	RC	MDRC-55 to 56	3	573
	Dalrymple	Diamond	MDRC-65 to 67	2	80
	Newcrest	RC	MDRC-68 to 71	4	738
Dempsey's	Dalrymple	RC	MMDRC-57 to 58	2	100
TM-64	Dalrymple	RC	MDRC-61 to 63	3	100
Beacazon	BMA	RC	-	8	-
Mt Stone	BMA	RC	-	11	1364
Buried Hatchet	alrymple	RC	MSRC-1 to 2	2	100

3. The Southern Gold Project (EPM8402, EPM12834 and EPM15426)

MGT has three separate gold prospect areas in Southeast Queensland, Yarrol (EPM 8402), Mt Steadman (EPM12834) and Gooroolba (EPM 15426). MGT aims to advance these projects with further drilling and to assess the amenability of heap leaching at Mt Steadman and of trucking higher grade gold from Yarrol.

At the Yarrol prospect an Indicated Resource of 1.15 Mt @ 1.5 g/t gold is present, mineable by open cut. Porphyry style gold mineralisation here is associated with a suite of dioritic bodies.

At Mount Steadman, porphyry style gold and molybdenum is associated with various granitoids and acid dykes with gold located in a shallow dipping zone of sheeted quartz veining within the granitoids.

At Gooroolba, porphyry style gold-molybdenum has not yet been assessed by MGT.

A literature review of the three tenements was conducted during the financial year and a reconnaissance field trip undertaken to locate and review the prospects at Yarrol and Mt Steadman. The plan for the coming financial year is to continue review with a complete compilation of historic data from previous exploration. This will then be followed with site visits to validate the data and a

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES GEOLOGICAL REPORT 30 JUNE 2012

program of soil sampling and ground magnetics over identified areas of interest.

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Figure 6. Southern Queensland Project and main gold prospects

References

Pyper, R.C.W, 2010 Independent Geological Report for MGT Mining Limited , Minnelex Pty Ltd Stacpoole, J, 2007 Smiths Creek Tin Deposit , Xtreme Resources Limited internal report.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES DIRECTOR’S REPORT 30 JUNE 2012

The Directors of MGT Resources Limited submit herewith the annual financial report of the company for the financial year ended 30 June 2012. In order to comply with the provisions of the Corporations Act 2001, the directors reports as follows:

Information about the directors and senior management

The names of the Directors in office at any time during or since the end of the financial year are:

Name Jonathan Paul Back George Monemvasitis Gary Kuo Hai Jun Li Robert Vagnoni	Particulars Chairman, appointed 1 February 2010 Director, appointed 30 June 2008, resigned as Executive Director 1 July 2011, and appointed as Non-Executive Director 1 July 2011 Director, appointed 7 January 2011 Non-Executive Director, appointed 14April 2009 Non-Executive Director, appointed 1 February 2011

The above named directors held office during the whole of the financial year and since the end of the financial year except for:

George Monemvasitis Director, appointed 30 June 2008, resigned as Executive Director 1 July 2011, and appointed as Non-Executive Director 1 July 2011

Background of the MGT Directors and senior management:

Mr Jonathan Paul Back (LLB, BCL) – Executive Chairman and Managing Director

Mr Jonathan Back is a qualified solicitor in England and Wales. Prior to working as a lawyer, Jonathan graduated from Oxford University having won the Vinerian Scholarship for the best performance in the Bachelor of Civil Laws Degree. Jonathan has over 18 years of experience in law and finance internationally, having spent significant periods in Europe, Hong Kong and Australia. Jonathan first worked as a lawyer for the leading UK firm Linklaters for 4 years, specialising in large project finance transactions. This included the acquisition of the Gladstone Power Station in Queensland by a consortium expanding the Boyne Island aluminium smelter. Jonathan then worked for Schroders in the UK and in Hong Kong where he also focused on large infrastructure and energy projects including large power station projects in Portugal and the UK as well as port and energy projects across Australia and Asia. Following this Jonathan worked with Goldman Sachs in Hong Kong focusing on raising equity capital for telecoms and technology companies. Jonathan was then recruited by JPMorgan to join their equity team in Hong Kong, which he ran until 2007. During this time he worked on numerous transactions across different industries.

Mr Gary Kuo – Executive Director and Chief Operating Officer

Mr Kuo has more than 10 years’ experience in international import & exporting, commodities trading, international business development and strategic alliance planning. Before MGT Resources, he was the vice general manager for BAAO Mining which was a subsidiary of the Xiamen C&D Inc. based in Tianjin, China. Having bases in both Australia and China, Gary specialises in dealing with corporations in the mining & steel production sector and is familiar with the transactions and logistics for raw material trading.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES DIRECTOR’S REPORT 30 JUNE 2012

Mr George Monemvasitis (OMIE Aust, MAICD) – Non-Executive Director

Mr George Monemvasitis is an Engineer and an investor. A graduate in Mechanical Engineering from the Institute of Technology, Sydney, Mr Monemvasitis has over 10 years experience in engineering analysis of resource sector capital raising both within Australia and China. A member of the Australian Institute of Company Directors, Mr Monemvasitis brings a wealth of technical knowledge and corporate governance.

Mr Hai Jun Li – Non- Executive Director

Mr Li holds a Bachelor of Mechanical Engineering degree from the Beijing Architecture Engineering University, China. He has worked as a Mechanical Engineer for the Beijing Engineering Research Institute and as a Project Manager for the China National Technical Import and Export Corporation (CTNIC). Since the 1850’s, CNTIC has imported plant and equipment for more than 280 projects for the nation in the iron & steel sector, with the total contract value reaching 7.8 billion US Dollars. Large sized complete plants and equipment have been imported by CNTIC for 46 iron & steel works and 66 non-ferrous metal enterprises. CNTIC was the biggest importer at that time in charge of governmental purchasing in new production lines and know-how transfer from abroad during Mr Li’s employment. Most notably he worked with the First Business division on over 30 key projects including Ma An Shan Steel. From 1990-1993 Mr Li worked as assistant to the Asia Pacific regional director for Thyssen Wagner in Germany and then moved to Inter Fx Service in Beijing. He also worked for Inter and Golden Mall in Singapore for several years as Managing Director. At present Mr Li is General Manager of Unico Development Limited in Beijing providing consulting services to clients globally. From 2006 Mr Li has represented Murchison Metals in China and he established Iron Ore off-take agreements for Murchison with Shougang International and assisted in establishing Murchison’s relationship with Sinosteel.

Mr Robert Vagnoni – Non-Executive Director

Mr Vagnoni is a mechanical engineer with 28 years in the global mining and construction industry and has extensive experience in corporate, project development and implementation of a diverse range of projects in Australia and overseas. He has held senior executive roles with major mining companies and engineering consultants specialising in project development and management, feasibilities, plant design and commissioning. He was a co-founder of publically listed mining companies, Murchison Metals and Extract Resources.

Ms Jacqueline Butler – Chief Financial Officer

Ms Jacqueline Butler qualified as a Chartered Accountant with the Institute of Chartered Accountant, England and Wales (ICAEW) whilst working and training at Arthur Andersen in London. Prior to that Jacqueline graduated from the University of Exeter, UK with a Bachelor of Arts in Economics and Geography.

Ms Butler has worked within the UK and Europe in various financial roles before coming to Australia in 2005. Prior to joining MGT Resources Limited, Jacqueline was an Associate Director at a small Chartered Accounting firm, Azure Group Pty Ltd, in Sydney where she acted as CFO for a variety of clients including those in the resource sector.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES DIRECTOR’S REPORT 30 JUNE 2012

Mr Alexander Moody – Company Secretary

Mr Alexander Moody has ten years of management and administrative experience in the small business sector. He holds company secretary roles at a number of Australian public resources companies.

Mr Moody holds a Bachelor of International Relations from Bond University, Queensland, and is currently completing an MBA at the Australian Graduate School of Management, University of NSW. He is a member of the Australian Institute of Company Directors.

Directors' shareholdings

The following table sets out each director's relevant interest in shares, and rights or options in shares of the company or a related body corporate as at the date of this report.

	MGT Resources Ltd
Directors	Fully paid ordinary shares Number
Jonathan Paul Back	79,029,727
George Monemvasitis	4,482,358
Gary Kuo	27,208,000
Robert Vagnoni	8,443,000
Hai Jun Li	22,800,000

Remuneration of directors and senior management

Information about the remuneration of directors and senior management is set out in Note 24 of the financial report.

Principal activities

The principal activities of the consolidated entity during the financial year included exploration and evaluation activities. There were no significant changes in the nature of the principal activities during the year.

Operating and Financial Review

(a) Review of operations

The consolidated net loss for the financial year after providing for income tax and before minority interest was $3,030,890 (2011: loss of $1,627,246).

The company has finalised the Stage 1 upgrade of the Mt Veteran tin mill and it has invested further funds in drilling programs and it continues to pursue its objective of seeking further investment opportunities in the resource sector.

(b) Exploration and Evaluation Activities

The focus during this financial year for the company moved to exploration and a systematic geological appraisal of the company’s grounds has been undertaken by the company’s geological team.

On the 23 of September 2011, the company and the Bar Barrum people have reached Native Title Agreement for MLA 20655 and MLA 20547. Subsequently ML 20655 was granted in December 2011 and MLA 20547 is expected to be granted in the coming months.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES DIRECTOR’S REPORT 30 JUNE 2012

The first hard rock mining target for MGT Mining Limited will be the Dalcouth prospect within MLA 20547. A mining plan is currently being drafted for Dalcouth which is located 500 meters from the mill. Based on the milling capacity of 70K tpa, we expect 5 to7 years of mine life from the Dalcouth prospect. Further exploration work is being conducted and if Dalcouth proves to have higher tonnage than expected, the company intends to increase the mill processing capacity to 250K tpa.

On 6 February 2012, MGT Resources Limited signed a Deed of Option with Bookall Mining Company Pty Limited granting the Company the option to acquire mining tenements for total consideration of $2,100,000. The acquisition is subject to due diligence procedures and the option period expires on 6 November 2012. A non-refundable deposit of $15,000 was paid on 28 February 2012.

(c) Financial Activities

On 11 November 2011 the Company received an investment of $1,500,000 in the form of convertible note from a Hong Kong based investment group, Armstrong Industries HK Ltd. The note is unsecured, has a term of two years, a coupon of 8% per annum, and is convertible at 15 cents per share. On 4 May 2012 the Company received a further $1,500,000 investment from Armstrong Industries HK Ltd in the form of another convertible note. This note is also unsecured, has a term of three years and a coupon of 8% per annum, and is convertible at 20 cents per share.

On 2 March 2012, Jonathan Back and Li Hai Jun exercised their option in respect of 1,600,000 and 1,000,000 ordinary shares at the exercise price of $0.125 per share for the amount of $200,000 and $125,000 respectively.

On 29 February 2012 Jonathan Back exercised his right to convert 400,000 convertible notes into fully paid ordinary shares in the capital of MGT Resources Limited.

During the financial year, MGT Resources Limited acquired an additional 6% of the issued shares of MGT Mining Limited. The acquisition took place via share placements totalling 16,979,593 new ordinary shares with total consideration of $848,979. The share placements were paid partly in cash $365,223 and via conversion of intercompany loan balance $483,756.

This brings the total shareholding of MGT Resources Limited from 78.33% as at 30 June 2011 to 81.33% as at 30 June 2012.

Significant changes in state of affairs

There were no significant changes in the state of affairs of the consolidated entity during the financial year.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES DIRECTOR’S REPORT 30 JUNE 2012

Subsequent events

The company is expecting to receive the final judgement on the granting of MLA 20547. The final court hearing was concluded in August 2011.

On 2 August 2012, MGT Resources Limited acquired a further 2.15% of the issued capital in MGT Mining Limited by purchasing 1,500,000 shares at $0.065 per share for a total of $97,500. This brings the total shareholding of MGT Resources Limited from 81.33% as at 30 June 2012 to 83.48% as at the signing of these accounts.

On 5 August MGT Resources Limited entered into an off-take agreement with Taimetco International Co, Limited agreeing to MGT Resources Limited selling a minimum of 20% of its annual production of tin metal or, in the event that 20% of tin production is less than 50 tonnes of tin metal, 100% of its tin production to Taimetco International Co, Limited. In exchange, Taimetco International Co, Limited injected $1,250,000 in cash into MGT Resources Limited to obtain 7,812,500 shares on the 22 August 2012. The agreement shall run from the date of Taimetco International Co, Limited’s Investment until the earlier to occur of:

• (a) Taimetco International Co, Limited selling its interest in the Company below 6,250,000 Shares within 2 years from the date of the agreement;

• (b) An unremedied Event of Default as set out in the agreement

• (c) The date being 20 years from the date of first shipment of tin from the Company to the purchaser.

Since year end, MGT Resources Limited has received $1,491,520 in cash as part of the ongoing placement initiated in June 2012. Prior to year end, $1,622,400 was raised in June 2012 as part of this placement. However, as the placement was not yet closed as at year end and the shares not yet allocated to investors, the cash received pre-year end have been treated as ‘other creditors’ (Refer to Note 11).

There has not been any other matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

Future developments

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

Environmental regulations

The operations and proposed activities of the consolidated entity are subject to laws and regulations concerning the environment. As with most exploration projects and mining operations, the consolidated entity’s activities are expected to have an impact on the environment. It is the consolidated entity’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all applicable environmental laws. Mining operations may have previously been conducted on some of the Company’s project areas and old workings including tailings dumps may remain from these operations. There may be a liability to rehabilitate these areas, details in relation to the abandonment and restoration obligation are included in Note 1 of the Notes to the financial statements.

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MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES DIRECTOR’S REPORT 30 JUNE 2012

Dividends

There were no dividends paid or declared by the consolidated entity during the financial year.

Indemnification of officers and auditors

The company has insured all the Directors MGT Resources and its controlled entities against liabilities incurred while performing duties as Directors or Officers to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits the disclosure of the nature of the liabilities covered and amount the amount of the premium paid. The consolidated entity has not indemnified its auditor.

Directors’ meetings

The following table sets out the number of directors’ meetings held during the financial year and the number of meetings attended by each director (while they were a director).

Directors Jonathan Paul Back George Monemvasitis Gary Kuo Hai Jun Li Robert Vagnoni	Board of directors
	Directors’ meetings eligible to attend Attended
	6 6 6 6 3 6 6 6 5 6

Non-audit services

No non-audit services were performed by the auditors during the financial year ended 30 June 2012.

Proceedings on behalf of the company

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

Auditor’s independence declaration

The auditor’s independence declaration is included on page 39 of the financial report.

This directors’ report has been made and signed in accordance with a resolution of the directors made pursuant to s.298(2) of the Corporations Act 2001.

On behalf of the Directors

==> picture [78 x 76] intentionally omitted <==

Gary Kuo Executive Director Dated: 12 September 2012

23

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

INTRODUCTION

The MGT Resources Limited Board of Directors is committed to the principles underpinning good corporate governance, applied in a manner which is most suited to MGT Resources Limited, and to best addressing the directors' accountability to shareholders and other stakeholders. This is supported by a commitment to the highest standards of legislative compliance and financial and ethical behaviour.

The Company continues to address directors’ accountability to stakeholders in a manner consistent with the Company’s individual circumstances enhanced through the introduction of publicly available policies and procedures which are designed to foster a culture of transparency in the way MGT Resources Limited is directed and managed.

As a measure of its stated commitment to good corporate governance principles, the Board will continue to review and continually improve its governance practices and monitor developments in good corporate governance.

The Board considers that except to the extend expressly indicated in this statement, those corporate governance practices comply with the ASX Corporate Governance Council’s (“ASXCGC”) Principles of Good Corporate Governance and Best Practice Recommendations (ASX Principles and Recommendations) Except to the extent expressly indicated in this statement, those practices were followed throughout the year.

For the reasons expressed within this Statement, MGT Resources Limited has elected not to adopt Recommendations 2.1, 2.2, 2.3, 2.4, 4.1, 4.2, 4.3, and 8.1.

Revised Corporate Governance Principles

On 30 June 2010, the ASXCGC released amendments to the ASX principles of good corporate governance and best practice recommendations (Aug 2007). These amendments relate to diversity, remuneration, trading policies and briefings. The changes require disclosure in the 2012 Annual Report of MGT Resources Limited.

� Adopted Not adopted x

PRINCIPLE

Principle 1: Lay solid foundations for management and oversight

�

Companies should establish and disclose the respective roles and responsibilities of board and management.

� Recommendation 1.1:

Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.

Recommendation 1.2:

�

Companies should disclose the process for evaluating the performance of senior executives.

24

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

Recommendation 1.3:

�

Companies should provide the information indicated in the Guide to reporting on Principle 1.

The Board acts on behalf of and is responsible to its Shareholders. This responsibility has been instrumental in defining the responsibilities of the Board.

The Board has formalised its roles and responsibilities into a Charter. The Board Charter clearly defines the matters that are reserved for the Board and those that the Board has delegated to management.

In summary, the responsibilities of the MGT Resources Limited Board include:

• oversight of the company, including its control and accountability systems;

• setting the company’s major goals including the strategies and financial objectives to be implemented by management;

• appointing, removing and controlling the Managing Director;

• ratifying the appointment and, where appropriate, the removal of the Company Secretary;

• input into and final approval of management’s development of corporate strategy and performance objectives;

• reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct and legal compliance;

• monitoring senior management’s performance and implementation of strategy, and ensuring that appropriate resources are available;

• approving and monitoring the progress of major capital expenditure, capital management, and acquisitions and divestitures;

• approving and monitoring financial and other reporting; and

• corporate governance.

The Board has delegated responsibility to the Managing Director for:

• developing and implementing corporate strategies and making recommendations on significant corporate strategic initiatives;

• maintaining an effective risk management framework and keeping the Board and market fully informed about material risks;

• developing MGT Resources Limited’s annual budget, recommending it to the Board for approval and managing day-to-day operations within the budget;

• managing day-to-day operations in accordance with standards for social and ethical practices which have been set by the Board;

• approval of capital expenditure and business transactions within predetermined limits set by the Board.

Senior Executive Performance Evaluation

The Board is responsible for approving the performance objectives and measures for the Managing Director and assessing whether these objectives have been satisfied by the performance of the Managing Director during the relevant period and in accordance with agreed terms of engagement.

The Managing Director is responsible for approving the performance objectives and measures of other senior executives in consultation with the Board. The Board provides input into the evaluation of performance by senior executives against the established performance objectives.

25

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

The performance of senior executives is monitored by means of scrutiny by the Board of regular monthly reports provided by management regarding the group financial performance and forecasted results, presentations and operational reports, and the achievement of predetermined performance objectives.

PRINCIPLE

� Principle 2: Structure the board to add value

Companies should have a board of effective composition, size and commitment to adequately discharge its responsibilities and duties.

Recommendation 2.1: A majority of the board should be independent directors. Recommendation 2.2: The chair should be an independent director. Recommendation 2.3: x

The role of the chair and chief executive officer should not be exercised by the same individual.

Recommendation 2.4: The board should establish a nomination committee. � Recommendation 2.5:

Companies should disclose the process for evaluating the performance of the board, its committees and individuals.

� Recommendation 2.6:

Companies should provide the information indicated in the Guide to Reporting on Principle 2.

The Board has adopted a policy of ensuring that it is composed of a number of non executive directors with varied experience and skills such that the Board has a proper understanding of and competence to deal with emerging issues within the business, exercise independence and perform effective reviews of management.

Independence

An MGT Resources Limited director will be considered independent where he or she is:

• independent of management, that is, a non-executive director; and,

• free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of his or her unfettered and independent judgment.

Materiality is assessed on a case by case basis by reference to the director’s individual circumstances rather than general materiality thresholds.

26

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

The MGT Resources Limited Board has made its own assessment to determine the independence of each director on the Board. It is the Board’s view that one current non-executive director, Robert Vagnoni, is independent.

In view of the size of the Company and the nature of its activities, the Board considers that the current mix of skills, qualifications and experience on the Board is consistent with the long-term interests of the Company. The Board will continue to monitor the requirement for independent directors in the context of the Company’s communicated long term objectives.

The Board has established criteria for assessing independence of its directors.

Composition of the Board

The MGT Resources Limited Board currently comprises three (3) non-executive directors and two (2) executive directors.

The composition of the Board is set based on the following factors:

• the Company’s Constitution provides for the number of directors to be not less than three (3) and not more than ten (10) as determined by the directors from time to time;

• consistent with the Company's objective that the Board should encompass a broad range of relevant expertise, the present Board consists of directors with a collective of diverse skills, qualifications and experience as more fully detailed in the Company’s Annual Report.

There is no shareholding requirement imposed upon directors under the Company’s Constitution, however, all of the directors of MGT Resources Limited do hold shares in the Company. Details of all holdings by directors in the Company are detailed within the Directors’ Report.

Chairman

The Chairman (and Managing Director) is selected by the Board from the non-executive directors. The current chairman is an executive director appointed by the Board, due to the small size of the Company, its specific needs, his particular skills set and experience and his history as a co-founder of the Company.

The Board has considered:

• whether it would be beneficial to appoint a lead independent director;

• other positions held by the existing chair and the other non-executive director and the available time of each director; and

• the skills, qualifications and experience of the existing non-executive directors;

and based on its overall assessment of these factors it has elected not to adopt Recommendation 2.2 to appoint:

• a lead independent director; or

• alternative chairman.

The Board will continue to assess the requirements of this recommendation in the context of the Company’s individual circumstances and its communicated long term objectives.

Establishment of Nomination Committee

MGT Resources Limited has elected not to adopt Recommendation 2.4 because it considers that its existing selection and appointment practices, detailed within this Statement, are an efficient means of meeting the needs of the company, particularly having regard to the fact that MGT Resources

27

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

Limited is a relatively small publicly listed company by comparison to other listed entities which is reflected by the size of its operations, board structure and composition.

The MGT Resources Limited Board currently consists of only five (5) members. It is considered that further division of the Board for the purposes of establishing a formal committee structure would not achieve enhanced efficiency or enable the Board to add greater value to this process.

The small size of the MGT Resources Limited Board, and the nature of its business, means that MGT Resources Limited has the present capacity to consider director competencies, selection and nomination practices in the context of duly constituted meetings of the Board and as a part of its self-evaluation processes.

Board Performance Evaluation

The Board has adopted an on-going, self-evaluation process to measure its own performance and the performance of its committee during the reporting period.

The Chairman meets periodically with individual directors to discuss the performance of the Board and the director. In addition, an evaluation is undertaken by the Chairman of the contribution of directors retiring by rotation prior to the Board endorsing their candidature.

The review process involves consideration of all of the Board’s key areas of responsibility and accountability and is based on an amalgamation of factors including capability, skill levels, understanding of industry complexities, risks and challenges, and value adding contribution to the overall management of the business.

A performance evaluation for the Board, its committee and directors took place during the reporting period in accordance with the process detailed within this Statement.

The outcomes of the self-assessment program are used to enhance the effectiveness of individual directors and the Board collectively.

Enhanced effectiveness of the Board and management is also addressed through:

Board Meetings

The frequency of Board meetings and director’s attendance at those meetings is detailed within the Directors’ Report. Directors are expected to prepare for meetings in a manner which will enable them to attend and participate at the meeting. Directors are also required to make on-site visits and attend workshops as required.

Induction Program

Procedures for induction of new directors are in place to allow new directors to participate fully and actively in board decision making at the earliest opportunity.

All directors are offered an induction program appropriate to their experience upon appointment so as to familiarise them with matters relating to the business, strategy and any current issues under consideration by the Board. This program consists of written background material on the company, its products, services and operations; scheduled meetings with the Chairman and Managing Director of the Company.

Director education

The Board encourages directors to continue their education by participating in applicable workshops and seminars, attending relevant site visits and undertaking relevant external education.

28

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

The Company Secretary provides directors with on-going guidance on matters such as corporate governance, the Company’s constitution and the law.

Board Papers & Agendas

Board agendas are structured throughout the year in order to ensure that each of the significant responsibilities of the Board is addressed.

Directors receive board packs prior to each meeting which detail financial, operational and strategy reports from senior management who are available to discuss reports with the Board.

Access to information

All directors have access to company records and information, and receive regular detailed financial and operational reports from senior management.

The Company Secretary is available to all Directors and may be consulted on on-going issues of corporate governance, the MGT Resources Limited Constitution and the law. In addition, the nonexecutive directors regularly consult with the Managing Director, and may confer and request additional information from any MGT Resources Limited employee. Management are available to discuss reports, and any issue arising, with the Board as required.

The Board collectively, each Board Committee and each individual Director has the right, following appropriate consultation, to seek independent professional advice at MGT Resources Limited’s expense to help them carry out their responsibilities.

Term of office, skills, experience and expertise of each director

The qualifications, experience and expertise of the directors, and the respective terms in the office held by individual directors, are set out in the Directors’ Report contained within the MGT Resources Limited 2011 Annual Report.

Independent Professional Advice

MGT Resources Limited has in place a procedure whereby, after appropriate consultation, directors are entitled to seek independent professional advice, at the expense of MGT Resources Limited, to assist them to carry out their duties as directors. The policy of MGT Resources Limited provides that any such advice is made available to all directors.

Procedure for Selection and Appointment of New Directors

The process for appointing a director within MGT Resources Limited is that, when a vacancy exists, the Board identifies candidates with the appropriate expertise and experience, using external consultants as appropriate. The most suitable candidate is appointed but must stand for election at the next annual general meeting following the appointment.

Consistent with the current law there is no retirement age for directors fixed by the Corporations Act 2001(Cth) or ASX Listing Rules, although a person of or over the age of seventy-two (72) years of age may not be appointed, or re-appointed as a director except pursuant to a resolution of the Company in accordance with the Company’s Constitution.

The process for re-election of a director is in accordance with the Company’s Constitution, which requires that each year, at least one-third of the non-executive directors retire from office at the Annual General Meeting. The retiring directors may be eligible for re-election.

29

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

Principle 3: Promote ethical and responsible decision-making

�

Companies should actively promote ethical and responsible decision-making.

Recommendation 3.1:

�

Companies should establish a code of conduct and disclosure 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

Recommendation 3.2:

�

Companies should establish a policy concerning trading in company securities by directors, senior executives and employees, and disclose the policy or a summary of that policy.

Recommendation 3.3:

�

Companies should provide the information indicated in the Guide to reporting on Principle 3

Code of Conduct

MGT Resources Limited is committed to the operation of its business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of the company and the industry in which it operates.

The Board has approved a Code of Conduct and Ethics which applies to all directors, executives, management and employees without exception. In addition, the conduct of directors and executives is also governed by Code of Conduct for Directors and Executives.

Each Code of Conduct is designed to ensure that:

• high standards of corporate and individual behaviour are observed by all MGT Resources Limited directors and executives in the context of their respective roles and the performance of their duties with MGT Resources Limited;

• directors and executives are aware of their responsibilities to MGT Resources Limited under the terms of their appointment or contract of employment; and

• all of the stakeholders of the Company can be guided by the stated values and policies of MGT Resources Limited.

In summary, the Code provides that directors and senior executives must:

• act honestly, in good faith and in the best interests of the company;

• use due care, skill and diligence in the fulfilling their duties;

• use the powers of their position for a proper purpose, in the interests of the company;

• not make improper use of information acquired their position;

• not allow personal interests, or those of associates, conflict with the interests of the company;

• exercise independent judgement and actions;

• maintain the confidentiality of company information acquired by virtue of their position;

• not engage in conduct likely to bring discredit to the company; and

• comply at all times with both the spirit and the letter of the law, as well as, policies of the company.

30

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

Directors of the company may act in a professional capacity for the Company or its controlled entities, other than as auditor of the Company. These arrangements are subject to the restrictions of the Corporations Act 2001 (Cth) .

Under the Constitution of the Company, and the Corporations Act 2001 (Cth) ,where the possibility of a conflict of interest exists and involves a director, directly or indirectly, the director must declare the fact, nature, character and extent of the conflict at the first meeting of directors held after the relevant facts come to the director’s knowledge.

The director concerned does not receive copies of the relevant Board papers, if any, and withdraws from the Board meeting while such matters are considered by the remainder of the Board. Accordingly, the interested director takes no part in discussions nor exercises any influence over other members of the Board if a potential conflict of interest exists.

In addition, MGT Resources Limited has developed a series of policies designed to promote ethical and responsible decision making by directors, executives, employees and contractors of the Company, including:

• Trading Policy;

• Market Disclosure Policy;

• Privacy Policy;

• Occupational Health & Safety Policy;

• Code of Conduct and Ethics (General); and

• Code of Conduct for Directors’ & Executives.

Employees are actively encouraged to report activities or behaviour to senior management, the Company Secretary or the Board, which are a breach of the Code of Conduct and Ethics, other MGT Resources Limited policies or regulatory requirements or laws.

The Company will investigate any concerns raised in a manner that is fair, objective and affords natural justice to all people involved. The Company is committed to making necessary changes to its processes and taking appropriate action in relation to employees found to have behaved contrary to legal and company standard requirements.

Trading Policy

Directors, senior executives and employees are subject to the Corporations Act 2001 (Cth) relative to restrictions applying for, acquiring and disposing of securities in, or other relevant products of, the Company (or procuring another person to do so), if they are in possession of inside information.

Inside information is that information which is not generally available, and which if generally available, a reasonable person would expect it to have a material effect on the price or value of the securities in the Company.

Under the MGT Resources Limited Trading Policy , directors, senior executives and employees of the Company are restricted from trading in the Company’s securities during the period of one (1) month preceding the making of an announcement to the market by the Company relating to the:

• Company’s Annual results;

• Company’s Half Year results; and

• Chairman’s Address.

The Company notifies the ASX of any change in a director’s interests in securities, and in contracts relevant to securities, as required by the ASX Listing Rules.

31

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

Principle 4: Safeguard integrity in financial reporting.

�

Companies should have a structure to independently verify and safeguard the integrity of their financial reporting

Recommendation 4.1:

x

The board should establish an audit committee.

Recommendation 4.2:

x

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

Recommendation 4.3:

x

The audit committee should have a formal charter.

Recommendation 4.4:

�

Companies should provide the information indicated in the Guide to reporting on Principal 4.

Establishment of Audit Committee

MGT Resources Limited does not comply with Recommendation 4.1 regarding the establishment of an audit committee. The Board will, however, continue to monitor the requirements of this recommendation in the context of the Company’s prevailing position and circumstances.

Reflecting the relative small size of the company, the full Board remain responsible for:

• review of the annual and half yearly financial reporting carried out by MGT Resources Limited;

• review of the accounting policies of MGT Resources Limited;

• review the scope and audit programmes of the internal and external auditors and any material issues arising from these audits;

• oversee the independence of external auditors and determining procedures for the rotation of audit partners; and

• report to the Board on the effectiveness of MGT Resources Limited’s systems of accounting and internal controls.

• the sufficiency of, and compliance with, ethical guidelines and company policies affecting corporate governance, financial reporting and corporate control together with compliance with laws and external regulations;

• identification of the full range of actual or potential risk exposures which are material to MGT Resources Limited; and

• the effectiveness of the group’s risk management systems and strategies.

Engagement & Rotation of External Auditor

In the absence of an audit committee, the full Board is responsible for nominating the external auditor to the Board for re-appointment. If the Board recommends a change in external auditor, the Board’s nomination of external auditor requires the approval of shareholders.

32

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

The Board meets with the external auditor throughout the year to review the adequacy of the existing external audit arrangements with particular emphasis on the scope, quality and independence of the audit.

It has been determined by the Board that the external auditor will not provide services to the company where the auditor would:

• have a mutual or conflicting interest with the company;

• be in a position where they audit their own work;

• function as management of the Company; or

• have their independence impaired or perceived to be impaired in any way.

Specifically, the external auditor will not normally provide the following types of services to the Company:

• bookkeeping or other services relating to the accounting records or financial statements of the Group;

• financial information or information technology systems design and implementation;

• appraisal and valuation services, fairness opinions or contributions-in-kind reports;

• actuarial services;

• internal audit outsourcing services;

• management functions, including temporary staff assignments or human resource services, including recruitment of senior management;

• broker or dealer services, investment advisor, corporate finance or investment banking services; and

• legal and litigation support services.

Procedures are in place governing approval of any non-audit work before the commencement of any engagement.

The Board has elected to adopt a policy which is consistent with the primary and secondary rotation obligations regarding auditors such that:

• the lead or review audit partner’s responsibilities may not be performed by the same person for longer than five (5) successive years (“primary rotation obligation”); and

• the lead or review audit partner’s responsibilities may not be performed by the same person for more than five (5) out of seven (7) successive years (“secondary rotation obligation”).

In addition, the Board requires a minimum of two (2) consecutive years “cooling off” period before an auditor undergoing rotation can return to playing a significant role in the audit of the Company.

Ms Rosemary Megale of Duncan Dovico Chartered Accountants was the lead audit partner for MGT Resources Limited for the period ended 30 June 2012.

Principle 5: Make timely and balanced disclosure.

�

Companies should promote timely and balanced disclosure of all material matters concerning the company

Recommendation 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.

33

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

Recommendation 5.2:

�

Companies should provide the information indicated in the Guide to reporting on Principle 5

Policies & procedures regarding disclosure requirements

The MGT Resources Limited Board is committed to keeping its shareholders, and the market, fully informed of major developments having an impact on the Company.

Comprehensive procedures are in place to identify matters that are likely to have a material effect on the price, or value, of the MGT Resources Limited securities and to ensure those matters are notified to the NSX in accordance with NSX Listing Rule disclosure requirements.

Senior management and the Board are responsible for scrutinising events and information to determine whether the disclosure of the information is required in order to maintain the market integrity of the Company’s shares listed on the NSX.

The Company Secretary is responsible for all communications with the NSX.

� Principle 6: Respect the rights of shareholders.

Companies should respect the rights of shareholders and facilitate the effective of those rights � Recommendation 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.

� Recommendation 6.2:

Companies should provide the information indicated in the Guide to reporting on Principle 6.

In addition to complying with continuous disclosure obligations, MGT Resources Limited is committed to ensuring that shareholders are kept informed in other ways.

Shareholder Communication Policy

MGT Resources Limited recognises the right of shareholders to be informed of matters, in addition to those prescribed by law, which affect their investments in the Company.

MGT Resources Limited is committed to:

• dealing fairly, transparently and openly with both current and prospective shareholders;

• the use of available channels and cost effective technologies to reach shareholders who may be geographically dispersed and in order to communicate promptly with all shareholders; and

• facilitating participation in shareholders meetings and dealing promptly with shareholder enquiries.

MGT Resources Limited communicates information to shareholders through:

• the annual report;

• disclosures to the NSX and ASIC;

34

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

• notices and explanatory memoranda of annual general meetings and general meetings;

• occasional letters from the Chairman/MD to inform shareholders of key matters of interest; and

• the Company’s website on the internet at www.mgt.net.au

The Board encourages active participation by shareholders at each Annual General Meeting, or other general meetings, to ensure a high level of accountability and understanding of MGT Resources Limited ‘s strategy, performance and goals.

Consistent with best practice, important issues are presented to shareholders as single resolutions expressed in plain, unambiguous language. Proceedings are held in a locality, and at a readily accessible venue, conducive to maximising the number of shareholders present, and able to participate, at the meeting. Shareholders are provided with opportunities of asking the Board questions regarding the management of the Company.

Principle 7: Recognise and manage risk

�

Companies should establish a sound system of risk oversight and management and internal control

Recommendation 7.1:

�

Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.

Recommendation 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.

Recommendation 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.

Recommendation 7.4:

�

Companies should provide information indicated in the Guide to reporting on Principle 7.

Oversight and Management of Material Business Risks

The Board of MGT Resources Limited:

• recognise that effective management of risk is an integral part of good management and vital to the continued growth and success of MGT Resources Limited;

• is responsible for the oversight of the group’s risk management and control framework including the development of risk profiles as a part of the overall business and strategic planning process; and

• has implemented a policy framework designed to ensure that the group’s risks are identified, analysed, evaluated, monitored, and communicated within the organisation on an on-going basis, and that adequate controls are in place and functioning effectively.

35

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

The MGT Resources Limited risk management and control policy framework incorporates the maintenance of appropriate policies, procedures and guidelines which address the Company’s unique operating environment and is utilised by the Board as a means of identifying opportunities and avoiding or mitigating losses in the context of its businesses.

In the absence of an Audit Committee, the Board assumes its risk management role by reviewing the financial and reporting aspects of the group’s risk management and control practices.

The Managing Director has ultimate responsibility for control and management of operational risk and the implementation of avoidance or mitigation measures within the group and may delegate control of these risks to the appropriate level of management at each site.

The Board regularly monitors the operational and financial performance of the Company and the economic entity against budget and other key performance measures. The Board also receives and reviews advice on areas of operational and financial risk and develops strategies, in conjunction with management, to mitigate those risks.

Each month, a report is presented to the Board by the Managing Director. The reports encompass matters including actual financial performance against budgeted forecasts, workplace health and safety, legal compliance, corporate governance, strategy, quality assurance and standards, human resources, industry and market information, operational developments and environmental conformance. Reports are prepared and submitted on a monthly basis by the Chief Financial Officer in relation to the overall financial position and performance of the Company. In addition to formalised written reporting procedures, the Board is regularly briefed by the Managing Director on emerging or developed trends in market and operational conditions having the potential to impact on the performance of the group.

Management has reported to the Board on the effectiveness of the Company’s management of its material business risks in respect of the year ended 30 June 2010. This report was undertaken in accordance with the process outlined in this Statement.

MD & CFO Assurance

The Managing Director and Chief Financial Officer of MGT Resources Limited report annually in writing to the Board that:

• consolidated financial statements of MGT Resources Limited and its controlled entities for each subsequent half year and full financial year present a true and fair view, in all material respects, of the Group’s financial condition and operational results and are in accordance with accounting standards; and

• declarations provided in accordance with section 295A of the Corporations Act are 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.

The Board has received assurance from the Managing Director and the Chief Financial Officer equivalent under Recommendation 7.3 in respect of the year ended 30 June 2012. This assurance was provided in accordance with the process outlined in this Statement.

Principle 8: Remunerate fairly and responsibly Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to performance is clear.

�

36

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

Recommendation 8.1:

x

The board should establish a remuneration committee.

Recommendation 8.2:

�

Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.

Recommendation 8.3:

�

Companies should provide the information indicated in the Guide to reporting on Principle 8.

Establishment of Remuneration Committee

MGT Resources Limited has elected not to adopt Recommendation 8.1 because it considers that its existing remuneration practices, detailed within this Statement, are an efficient means of meeting the needs of the company, particularly having regard to the fact that MGT Resources Limited is a relatively small publicly listed company by comparison to other listed entities which is reflected by the size of its operations, board and management structure and composition.

The MGT Resources Limited Board currently consists of only five (5) members. It is considered that further division of the Board for the purposes of establishing a formal remuneration committee structure would not achieve enhanced efficiency or enable the Board to add greater value to this process.

The small size of the MGT Resources Limited Board, the nature of its business and its management structure, means that MGT Resources Limited has the present capacity of giving due consideration to the overall remuneration policies and strategies of the company during the conduct of its regular board meetings and by appropriate recourse to relevant market data and, where applicable, to external executive remuneration consultants.

Executive director & Non-executive director remuneration

The aggregate remuneration of non-executive directors is approved by shareholders.

Individual directors’ remuneration is determined by the board within the approved aggregate total. In determining the appropriate level of director’s fees, data from surveys undertaken of other public companies similar in size or market section to MGT Resources Limited is taken into account.

Non-executive directors of MGT Resources Limited are:

• not entitled to participate in performance based remuneration practices unless approved by shareholders; and

• currently remunerated by means of the payment of cash benefits in the form of directors’ fees.

MGT Resources Limited does not currently have in place a retirement benefit scheme or allowance for its non-executive directors.

A review of the compensation arrangements for the Managing Director and Senior Executives is conducted by the full Board at a duly constituted Directors' Meeting. The review is performed annually and is based on criteria including the individual's performance, market rates paid for similar positions and the results of the Company during the relevant period.

37

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

The broad remuneration policy objective of MGT Resources Limited is to ensure that the emoluments provided properly reflect the person’s duties and responsibilities and is designed to attract, retain and motivate executives of the highest possible quality and standard to enable the organisation to succeed.

MGT Resources Limited is committed to making timely disclosure of all relevant information relating to its remuneration practices and policies in the context of its reporting obligations in the corporate governance statement, in its annual report, and pursuant to continuous disclosure requirements.

Policy Disclosure

The Company’s policies relating to the remuneration of Directors and Senior Executives and the level of their remuneration are detailed in the Directors’ Report contained within the MGT Resources Limited 2012 Annual Report and Notes to and forming part of the 2012 Financial Statements.

38

DUNCAN DOVICO

AUDITORS’ INDEPENDENCE DECLARATION

In accordance with section 307C of the Corporations Act 2001, I declare that, to the best of my knowledge and belief, during the year ended 30 June 2012 there have been:

• (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

• (ii) no contraventions of any applicable code of professional conduct in relation to the audit

This declaration is in respect of MGT Resources Limited and its controlled entities during the period.

DUNCAN DOVICO CHARTERED ACCOUNTANTS

==> picture [157 x 70] intentionally omitted <==

ROSEMARY MEGALE PARTNER Dated in Sydney, this 12[th] day of September 2012

D U N C A N D O V I C O C H A R T E R E D A C C O U N T A N T S LEVEL 12, 90 ARTHUR STREET, NORTH SYDNEY NSW 2060  PO BOX 1994 , NORTH SYDNEY NSW 2059 T: (02) 9922 1166  F: (02) 9922 2044  E: email@duncandovico.com.au  ABN 19 173 326 199 Liability limited by a scheme approved under Professional Standards Legislation

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Revenue Other income Employee benefits expense Depreciation and amortisation expense Interest expense Administration expense Other expenses Loss before tax Income tax expense/(benefit) Loss for the year Other comprehensive income Available-for-sale financial assets Total comprehensive income for the year Attributable to: Equity holders of the parent Non-controlling interest Earnings per share Basis (cents per share) Diluted (cents per share)	Note 4 5a 5b 17 17	Consolidated 2012 $ 58,188 - (1,625,181) (291,655) (130,249) (385,214) (656,779) (3,030,890) - (3,030,890) 199,887 (2,831,003) (2,363,558) (467,445) (2,831,003) (0.98) (0.95)	Consolidated 2011 $
			25,049 47,523 (547,586) (80,966) (54,067) (359,918) (657,281)
			(1,627,246) -
			(1,627,246)
			(40,936)
			(1,668,182)
			(1,380,606) (287,576)
			(1,668,182)
			(1.26) (1.19)

The above consolidated statement of comprehensive income should be read in conjunction with the accompany notes

40

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Current assets Cash and cash equivalents Trade and other receivables Other financial assets Total current assets Non-current assets Trade and other receivables Other financial assets Exploration and evaluation expenditure Plant & Equipment Total non-current assets Total assets Total liabilities Trade and other payables Borrowings Provisions Total current liabilities Non-current liabilities Borrowings Provisions Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained earnings Non-controlling interest Total equity	Note 20(a) 7 8 7 8 9 10 11 12 13 12 13 14 15 16	Consolidated 2012 $ 3,185,842 113,920 - 3,299,762 36,108 10,364 4,719,367 3,856,618 8,622,457 11,922,219 2,226,756 21,932 60,144 2,308,832 2,945,321 21,823 2,967,144 5,275,976 6,646,243 9,831,962 1,942,503 (4,881,246) (246,976) 6,646,243	Consolidated 2011 $
			2,644,364 149,993 144,000
			2,938,357 - - 3,845,068 3,313,471
			7,158,539
			10,096,896
			368,405 924,646 53,687
			1,346,738
			21,796 4,427
			26,223
			1,372,961
			8,723,935
			9,076,237 1,742,616 (2,371,855) 276,937
			8,723,935

The above consolidated statement of financial position should be read in conjunction with the accompany note

41

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Consolidated

Balance at 1 July 2011 (Loss) for the period Transactions with owners in their capacity as owners Contributions of equity, net of transaction costs and tax Business combination Balance at 30 June 2012 Balance at 1 July 2010 Retrospective adjustments (Loss) for the period Transactions with owners in their capacity as owners Contributions of equity, net of transaction costs and tax Business combination Balance at 30 June 2011	Fully paid ordinary shares Retained Earnings Reserves Non- controlling Interest Total $ $ $ $ $
	9,076,237 (2,371,855) 1,742,616 276,937 8,723,935 - (2,563,445) 199,887 (467,445) (2,831,003) 755,725 - - - 755,725 - 54,054 - (56,468) (2,414)
	9,831,962 (4,881,246) 1,942,503 (246,976) 6,646,243
	Fully paid ordinary shares Retained Earnings Reserves Non- controlling Interest Total $ $ $ $ $
	4,252,508 802,518 (51,151) 567,019 5,570,894 - (1,834,703) 1, 834,703 - - - (1,339,670) (40,936) (287,576) (1,668,182) 4,823,729 - - - 4,823,729 - - - (2,506) (2,506)
	9,076,237 (2,371,855) 1,742,616 276,937 8,723,935

The above consolidated statement of changes in equity should be read in conjunction with the accompany notes

42

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Cash flows from operating activities Payments to suppliers and employees Interest received Interest paid Net cash provided by/(used in) operating activities Cash flows from investing activities Payment for investment in subsidiary Proceeds from sale of investment Payment for investment in shares Payment for property, plant & equipment Payments for exploration costs Net cash provided by/(used in) investing activities Cash flows from financing activities Proceeds from issues of equity securities Proceeds from borrowings – related parties Proceeds from borrowings Proceeds received from shares not yet issued Repayment of borrowings – related parties Lease payments Proceeds from conversion of options to shares Net cash provided by/(used in) financing activities Net (decrease)/increase in cash and cash equivalents Cash at the beginning of the financial year Cash at the end of the financial year	Note 20(b) 11 20(a)	Consolidated 2012 $ (1,874,997) 50,590 (87,202) (1,911,609) - - - (846,382) (876,799) (1,723,181) (266,402) - 3,000,000 1,622,400 (424,483) (80,247) 325,000 4,176,268 541,478 2,644,364 3,185,842	Consolidated 2011 $
			(1,465,395) 25,049 (54,067)
			(1,494,413)
			(2,506) 92,826 (20,303) (1,687,781) (512,982)
			(2,130,746)
			4,823,729 498,983 - - (3,039) (9,276) -
			5,310,397
			1,685,238 959,126
			2,644,364

The above consolidated statement of cash flows should be read in conjunction with the accompany notes

43

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

1. Summary of significant accounting policies

The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law.

Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘A-IFRS’). Compliance with A-IFRS ensures that the financial statements and notes of the group comply with international financial reporting standards.

(a) Basis of preparation

The financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

Critical accounting estimates and judgements

The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are:

Exploration and evaluation assets

The Group’s accounting policy for exploration and evaluation expenditure is set out below. The application of this policy necessarily required management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of reserves are found. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised expenditure under our policy, we conclude that we are unlikely to recover the expenditure by future exploitation or sale, then the relevant capitalised amount will be written off to the income statement.

Estimated useful lives of assets

The estimation of the useful lives of assets has been based on historical experience as well as manufacturers’ warranties. In addition, the condition of assets is assessed at least once per year and considered against the remaining useful life. Adjustments to useful lives are made when considered necessary.

(b) Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of MGT Resources Limited (''company'' or ''parent entity'') as at 30 June 2012 and entities controlled by the company for the year then ended. MGT Resources Limited and its subsidiaries together are referred to in this financial report as the Group or the consolidated entity.

44

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Principles of consolidation (Continued)

Subsidiaries are all those entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The Group applies a policy of treating transactions with non-controlling interests as transactions with parties external to the Group. Disposals to non-controlling interests result in gains and losses for the Group that are recorded in the statement of comprehensive income. Purchases from non-controlling interests result in goodwill, being the difference between any consideration paid and the relevant share acquired of the carrying value of identifiable net assets of the subsidiary.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income and statement of financial position respectively.

Investments in subsidiaries are accounted for at cost in the individual financial statements of MGT Resources Limited.

(c) Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

The interest of minority shareholders in the acquiree is initially measured at the minorities proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

45

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

(d) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group's activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Revenue is recognised for the major business activities as follows:

Interest income

Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

(e) Income tax

Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax

Deferred tax is accounted for using the balance sheet liability method. Temporary differences are differences between the tax base of an asset or liability and its carrying amount in the balance sheet. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes.

In principle, deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from the initial recognition of goodwill.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

46

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Income tax (Continued)

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the income statement, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.

(f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a maturity of three months or less at the date of acquisition.

(g) Financial assets

Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs except for those financial assets classified as at fair value through profit or loss which are initially measured at fair value.

Subsequent to initial recognition, investments in subsidiaries are measured at cost in the company financial statements.

Other financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’, ‘held-to-maturity investments’, ‘available-for-sale’ financial assets, and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Assets in this category are classified as current assets if they are expected to be settled within 12 months; otherwise they are classified as non-current.

Available-for-sale financial assets

Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the end of the reporting period. Investments are designated as available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term.

47

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Financial assets (Continued)

Loans and receivables

Trade receivables, loans and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non-current assets.

Measurement

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

Loans and receivables are subsequently carried at amortised cost using the effective interest method. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in profit or loss within other income or other expenses in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in profit or loss as part of revenue from continuing operations when the group's right to receive payments is established. Interest income from these financial assets is included in the net gains/(losses).

Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences related to changes in the amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income. Changes in the fair value of other monetary and non-monetary securities classified as available-for-sale are recognised in other comprehensive income.

Impairment of financial assets

The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator that the assets are impaired.

48

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Financial assets (Continued)

Assets carried at amortised cost

For loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the group may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated income statement.

Assets classified as available-for-sale

If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss. Impairment losses on equity instruments that were recognised in profit or loss are not reversed through profit or loss in a subsequent period. If the fair value of a debt instrument classified as available-for-sale increases in a subsequent period and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through profit or loss.

(h) Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the income statement during the reporting period in which they are incurred.

Depreciation is calculated using the straight-line method to allocate their cost or re-valued amounts, net of their residual values, over their estimated useful lives. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, which the effect of any changes recognised on a prospective basis.

The following useful lives are used in the calculation of depreciation:

• Office equipment 3 - 10 years

• • Mine infrastructure 20 years - Motor Vehicle 5 – 8 years

49

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Property, plant and equipment (Continued)

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting 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.

(i) Leases

Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.

Finance leased assets are amortised on a straight-line basis over the estimated useful life of the asset.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

(j) Impairment of assets

At each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

(k) Exploration and evaluation of assets

Exploration and evaluation expenditure in relation to each separate area of interest are recognised as an exploration asset in the year in which they are incurred where the following conditions are satisfied:

• (i) The rights to tenure of the area of interest are current; and

• (ii) At least one of the following conditions is also met:

• (a) 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

50

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Exploration and evaluation of assets (Continued)

• (b) 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.

Exploration and evaluation assets are initially measured at cost and include acquisition rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities in relation to evaluating the technical feasibility and commercial viability of extracting a mineral resource. General and administrative costs are allocated to, and included in, the cost of an exploration and evaluation asset, but only to the extent that those costs can be related directly to operational activities in the area of interest to which the exploration and evaluation asset relates.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation of asset may exceed its recoverable amount.

(l) Trade and other payables

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

(m) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. The dividends on these preference shares are recognised in profit or loss as finance costs.

The fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders' equity, net of income tax effects.

Borrowings are removed from the balance sheet 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 costs.

51

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Borrowings (Continued)

Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.

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) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable 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.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Site Restoration

A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of exploration and development activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the provision can be measured reliably. The estimated future obligations include the costs of abandoning sites and restoring the affect areas.

The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date based on current legal and other requirements and technology. Future restoration costs are reviewed annually and any changes in the estimate are reflected in the present value of the restoration provision at each reporting date.

At financial year end, the company was in the evaluation stage, and no development had taken place. The Directors have determined that no provision for site restoration and rehabilitation is required at this time.

(o) Employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

52

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Employee benefits (Continued)

Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date.

(p) Contributed equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.

If the entity reacquires its own equity instruments, for example as the result of a share buy-back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in equity.

(q) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

(i) Where the amount of GST incurred is not recoverable from the taxation authority. It is recognised as part of the cost of acquisition of an asset or as part of an item of expense. Or (ii) For receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

All cash outflows in respect of GST, including payments to suppliers and employees, payments for exploration and evaluation, property, plant and equipment, and payments for exploration inventory are included in payments to suppliers and employees from operation activities.

All cash inflows in respect of GST, including receipts from customers and receipts of GST paid by the company and subsequently refunded by taxation authorities are included in receipts from customers from operating activities.

All cash flows from investing activities and from financing activities are net of GST as all associated GST cash flows are included in operating activities.

53

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

(r) New accounting standards and interpretations

The accounting policies adopted are consistent with those of the previous financial year except the following which the entity adopted from 1 July 2011:

AASB 124 Related Party Disclosures (December 2009) simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition; effective 1 January 2011.

AASB 2009-12 Amendments to Australian Accounting Standards (AASB 5, 8, 108, 110, 112, 119, 133, 137 & 139 and interpretations 2, 4, 16, 1039 & 1052) making numerous editorial changes; effective 1 January 2011.

AASB 2010-4 Amendments to Australian Accounting Standards arising from the Annual Improvements Project (AASB1, 7, 101, 134 and interpretation 13) emphasises the interaction between quantitative and qualitative AASB 7 disclosures and the nature and extent of risks associated with financial instruments; effective 1 January 2011.

AASB 2010-5 Amendments to Australian Accounting Standards (AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and interpretations 112, 115, 127, 132 & 1042) making numerous editorial changes; effective 1 January 2011.

AASB 1054 Australian Additional Disclosures this standard, with AASB 2011-1 relocates all Australian specific disclosures from other standards to one place; effective 1 July 2011.

(s) New accounting standards and interpretations but not yet effective

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the entity for the annual reporting period ended 30 June 2012. The new standards, interpretations and amendments are not expected to have a significant impact on the financial statements.

AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (effective from 1 January 2013). AASB 9 Financial Instruments addresses the classification, measurement and de-recognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2013 but is available for early adoption. When adopted, the standard will affect in particular the company’s accounting for its availablefor-sale financial assets, since AASB 9 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.

AASB 13 Fair Value Measurement (effective from 1 January 2013) establishes a single source of guidance for determining the fair value of assets and liabilities when fair value is required or permitted. Application may result in different fair values being determined for the relevant assets. AASB 13 also expends the disclosure requirements for all assets or liabilities carried at fair value including assumptions made and the qualitative impact of those assumptions on the fair value determined.

AASB 119 Employee Benefits (effective from 1 January 2013). The revised standard changed the definition of short-term employee benefits. The distinction between short-term and other longterm employee benefits is now based on whether the benefits are expected to be settled wholly within 12 months after the reporting date.

54

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

(t) Correction of error

The following adjustments were made to the financial statements with respect to share options issued by the Company to correctly reflect the fair value of share options at the grant date:

As of 1 July 2011:
Increase in Share-based payment transaction in Equity:	$1,742,616
Increase in Available-for-sale Reserve:	$92,087
Decrease in Opening Retained Earnings:	$1,834,703
As of and for the year ended 30 June 2011:
Increase in Share-based payment transaction in Equity:	$1,742,616
Increase in Available-for-sale Reserve:	$92,087
Increase in employee benefit:	$1,436,019
Increase in professional services:	$306,597
Net increase in loss after tax:	$1,834,703

(u) Going Concern

The financial statements are prepared on a going concern basis, which contemplates the continuation of normal business activity and the realisation of assets and liabilities in the normal course of business.

As at 30 June 2012 the consolidated entity incurred a net loss after tax of $2,831,003 and cash outflows from operating and investing activities of $3,634,790. The ability of the company to continue as a going concern and to pay their debts as and when they due is dependent on the consolidated entity’s ability to raise additional funds through either debt financing or capital raising arrangement. Further, the Directors have the ability to reduce discretionary expenditure such that the impact on cash outflows is minimised whilst maintaining key operational activities.

Having regard to the above, the Directors have a reasonable expectation that the entity will have adequate resources to continue operating for the foreseeable future. For this reason they continue to adopt the going concern basis in preparation of the accounts.

2. Financial Risk Management

The consolidated group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The consolidated group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effect on the financial performance of the Group.

55

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Financial Risk Management (Continued)

The Group hold the following financial instruments:

Financial Assets Cash & cash equivalents Trade & other receivables Other financial assets Financial Liabilities Trade & other payable Interest bearing liabilities	Consolidated Consolidated 2012 $ 2011 $
	3,185,842 2,644,364 113,920 149,993 10,364 144,000
	3,310,126 2,938,357
	2,226,756 368,405 2,967,253 521,959
	5,194,009 890,364

(a) Market Risk

i. Foreign exchange risk

Consolidated Group Sensitivity – foreign exchange risk

The consolidated entity has no foreign currency exposure risk as at reporting date.

ii. Price Risk

The consolidated group is exposed to equity securities price risk. This arises from investments held by the Group and classified on the balance sheet either as available-for-sale or at fair value through profit or loss. The consolidated group is not exposed to commodity price risk.

The majority of the group’s equity investments are publicly traded on the Australian NSX and the Canadian stock exchange.

The table below summarises the impact of increase/decrease of these two indexes on the Group’s post-tax loss for the year and on equity. The analysis is based on the assumption that the equity indexes had increased/decreased by 10% with all other variables held constant and all the Group’s equity instruments moved according the historical correlation with the index.

Index	Impact onpost-tax loss	Impact onpost-tax loss	Impact on other components of equity	Impact on other components of equity
	Consolidated	Consolidated	Consolidated	Consolidated
	2012 $	2011 $	2012 $	2011 $
Increase 10%(10%)	-	-	1,000	14,400
Decrease 10 %(10%)	-	-	(1,000)	(14,400)

56

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Financial Risk Management (Continued)

iii. Interest rate risk

The consolidated group’s exposure to interest rate risk is summarised in the table below:

	Weighted Average Effective Interest Rate	Non Interest Bearing	Floating Interest	Fixed Interest Rate	Total
	2012 %	2012 $	2012 $	2012 $	2012 $
Financial Assets
Bank	1.82%	1,670,526	1,380,316	135,000	3,185,842
Financial liabilities
Lease liabilities	30.07%	-	-	21,932	21,932
Borrowings	4.11%	-	-	3,000,000	3,000,000
	Weighted Average Effective Interest Rate	Non Interest Bearing	Floating Interest	Fixed Interest Rate	Total
	2011 %	2011 $	2011 $	2011 $	2011 $
Financial Assets
Bank	0.89%	495,128	2,005,512	142,290	2,642,930
Financial liabilities
Lease liabilities	11.87%	-	-	121,959	121,959
Borrowings	4%	424,483	-	400,000	824,483

Consolidated Group Sensitivity – interest rate risk

The following sensitivity analysis has been based on the interest rate risk exposures in existence at 30 June 2012, had the variable interest rate on cash balances increased by 100 basis points and decreased by 50 basis points. The effect is calculated on year end balances and the impact on pre tax loss is outlined below.

	30 June 2012	30 June 2011
	$	$
Consolidated
+ 1%(100 basispoints)	15,153	21,478
-.5 %(50 basispoints)	7,576	10,709

57

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Financial Risk Management (Continued)

(b) Credit Risk

Credit risk is managed on a group basis and reviewed regularly. Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, including outstanding receivables and committed transactions.

As at 30 June 2012 there were no trade receivable balances.

Credit risk from balances with banks and financial institutions is regularly monitored and reviewed by The Board. No material exposure is considered to exist as the consolidated group’s policy is to invest its cash and cash equivalents with financial institutions having a credit rating of at least AAA.

	Consolidated	Consolidated
	2012 $	2011 $
Cash at bank and short-term bank deposits	3,185,842	2,644,364

(c) Liquidity Risk

Liquidity risk arises from the possibility that there will be sufficient funds available to make payment as and when required. The consolidated group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

Maturities of financial liabilities

The tables below analyses the consolidated Group’s and the parent entity’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

30 June 2012	Less than 6 months	6-12 months	Between 1 & 2years	Between 2 & 5years	Over 5 years	Total
	$	$	$	$	$	$
Non interest bearing
Accounts payables	154,012	46,253	-	-	-	200,265
Fixed rate
Lease liabilities	21,932	-	-	-	-	21,932
Borrowings	-	-	1,500,000	1,500,000	-	3,000,000

58

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Financial Risk Management (Continued)

30 June 2011	Less than 6 months	6-12 months	Between 1 & 2years	Between 2 & 5years	Over 5 years	Total
	$	$	$	$	$	$
Non interest bearing
Accounts payables	227,767	-	-	-	-	227,767
Fixed rate
Lease liabilities	49,958	50,206	21,796	-	-	121,960
Borrowings	424,483	400,000	-	-	-	824,483

(d) Fair value of financial instruments

The directors consider that the carrying amounts of financial assets and financial liabilities recognised at amortised cost in the financial statements were stated at approximate their fair values.

3. Segment information

The Group operates predominantly in one business segment and one geographical segment being the mining industry in Australia. The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

No revenue from this activity has been earned to date as the Group is still in the exploration and evaluation stage.

Revenue An analysis of the Group’s revenue for the year is as follows: Interest revenue	Consolidated 2012 $ 58,188	Consolidated 2011 $
		25,049

4. Revenue

5. Loss for the year before tax

(a) Gains and losses

Loss for the year has been arrived at after

crediting the following gains and losses:

• Gain on disposal of investment 47,523

59

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

5. Loss for the year before tax (Continued) (b) Other expenses Vehicle and Freight Costs Repairs and Maintenance Costs Travel Expense Legal and Professional Expense Other Expenses 6. Income taxes Tax expense/(income) comprises: Current tax expense/(income) in respect of the current year	Consolidated 2012 $ 36,294 20,126 64,620 283,019 252,720 656,779 -	Consolidated 2011 $
		63,091 40,261 60,334 231,402 262,193 657,281 -

(a) The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the financial statements as follows:

Loss before income tax Income tax expense calculated at 30% Effect of expenses that are not deductible in determining taxable profit Non-deductible items Unrecognised losses and timing differences Net adjustment to deferred tax assets and liabilities for tax losses and temporary difference not recognised (b) Unused tax losses for which no deferred tax assets has been recognised Temporary differences for which no deferred tax liability has been recognised: - Exploration expenditure Potential tax benefit at 30%	(2,563,445) (769,033) 173,537 (176,121) (771,617) 771,617 - 9,058,574 (4,609,850) 4,448,724 1,334,617	(1,339,670)
		(401,901) 146 (98,697)
		(500,452) 500,452
		-
		5,266,329 (3,845,068)
		1,421,261
		426,378

60

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

7. 8.	Consolidated 2012 $ Trade and other receivables Current Prepayments 33,433 Other receivables 36,845 GST refund 43,642 113,920 Non-current Rental bond 36,108 Other financial assets Available for sale investments carried at fair value: Current Shares - - Non-Current Shares 10,364 10,364	Consolidated 2011 $
		28,136 38,249 83,608 149,993 - 144,000 144,000 - -

9. Exploration and evaluation expenditure

Costs carried forward in respect of areas of interest in the exploration and evaluation phase:

Balance at the beginning of the year Tenement impairment Expenditure incurred during the year Balance at the end of the year	3,845,068 (2,500) 876,799 4,719,367	3,332,086 - 512,982
		3,845,068

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation of asset may exceed its recoverable amount. The ultimate recoverability of exploration and evaluation expenditure is dependent upon the successful development or sale.

61

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

10. Plant and Equipment

At 30 June 2012 Cost or fair value Accumulated depreciation Net book value Year ended 30 June 2012 Balance at the beginning of the financial year: Additions Written down value Depreciation expense Balance at the end of the financial year At 30 June 2011 Cost or fair value Accumulated depreciation Net book value Year ended 30 June 2011 Balance at the beginning of the financial year: Additions Depreciation expense Balance at the end of the financial year	Office Equipment $ Mine infrastructure $ Motor Vehicle $ Total $ 490,853 3,641,483 186,799 4,319,135 (141,131) (222,605) (98,781) (462,517)
	349,722 3,418,878 88,018 3,856,618
	216,303 2,993,677 103,491 3,313,471 222,366 605,789 18,227 846,382 (11,580) - - (11,580) (77,367) (180,588) (33,700) (291,655)
	349,722 3,418,878 88,018 3,856,618
	Office Equipment $ Mine infrastructure $ Motor Vehicle $ Total $ 281,174 3,035,694 168,572 3,485,440 (64,871) (42,017) (65,081) (171,969)
	216,303 2,993,677 103,491 3,313,471
	63,151 1,509,715 133,790 1,706,656 192,202 1,495,579 - 1,687,781 (39,050) (11,617) (30,299) (80,966)
	216,303 2,993,677 103,491 3,313,471

11. Trade and other payables Trade payables Other payables Cash received on shares not yet issued Accrued expenses	Consolidated 2012 $ 200,265 57,553 1,622,400 346,538 2,226,756	Consolidated 2011 $
		227,767 83,355 - 57,283
		368,405

62

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

**12. **	Borrowings Current Related party loan (i) Convertible note (ii) Finance lease liabilities (iii) Commercial loan (iv) Other loan (v) Non-current Convertible note (ii) Finance lease liabilities (iii) Commercial loan (iv) Convertible note (vi) Convertible note (vii)	Consolidated 2012 $ - - - 21,932 - 21,932 - - - 1,481,672 1,463,649 2,945,321	Consolidated 2011 $
			424,483 400,000 35,204 39,335 25,624
			924,646
			- - 21,796 - -
			21,796

• (i) During the prior year an interest free loan of $424,483 was made from the Director to the parent entity, MGT Resources Limited. The loan was fully repaid on 31 July 2011. (Refer to Note 19c).

• (ii) The parent entity, MGT Resources Limited issued convertible notes with a principal amount of $400,000 and a term of 2 years at 9% interest on 29 June 2010. The notes are convertible into 6,400,000 ordinary shares in the parent entity. On 29 February 2012 Jonathan Back exercised his right to convert 400,000 convertible notes into fully paid ordinary shares in the capital of MGT Resources Limited. (Refer to Note 19c and Note 24b).

• (iii) The chattel mortgage was secured by way of a fixed charge over a motor vehicle of MGT Resources Limited. The charge was registered on 3 July 2009 and was in favour of Mercedes-Benz Financial Services Australia Pty Ltd. The chattel mortgage has now been completed paid off.

• (iv) A commercial loan was entered into on 17 July 2009. The term of the loan prescribe a fixed repayment period of 37 months and interest of 10.99% per annum. The loan is secured by the entity’s fixed assets. The loan was fully repaid on 11 July 2012. (Refer to Note 18a)

• (v) Insurance funding secured by way of a fixed charge over the term of the insurance taken by MGT Resources Limited. The applicable weighted average interest rate is 7.65%. This funding has been completely paid off in the current period.

• (vi) The parent entity MGT Resources Limited issued convertible notes to Armstrong Industries HK Limited on 11 November 2011 with a principal sum of $1,500,000 and a term of 2 years. Interest on the convertible notes is payable at the rate of 8% per annum. The convertible note may be redeemed or converted into 10,000,000 ordinary shares in the parent entity if the share price is 15 cents per share of less at maturity.

• (vii) The parent entity MGT Resources Limited issued convertible notes to Armstrong Industries HK Limited on 11 May 2012 with a principal sum of $1,500,000 and a term of 3 years. Interest on the convertible notes is payable at the rate of 8% per annum. The convertible note may be redeemed or converted into 10,000,000 ordinary shares in the parent entity if the share price is 20 cents per share of less at maturity.

63

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

13. Provisions Current Employee benefits Rental provision Non-Current Employee benefits Rental provision Disclosed in the financial statements as: Current provisions Non-current provisions 14. Issued capital (a) Share capital 268,635,040 fully paid ordinary shares (2011: 259,635,040) Share option conversion Capital raising costs (b) Movements in ordinary share capital 1 July 2010 Opening balance January 2010 Issues of shares October 2010 Issues of shares March 2011 4 for 1 Share split April 2011 Issues of shares May 2011 Issues of shares June 2011 Issues of shares February 2012 for cash on exercise of convertible loan March 2012 for cash on exercise of director share options Total:	Consolidated 2012 $ 48,743 11,401 60,144 9,004 12,819 21,823 60,144 21,823 81,967 9,973,096 297,126 (438,261) 9,831,962 No. of shares Issue price 259,635,040 - - - - - - 6,400,000 0.0625 2,600,000 0.1250 268,635,040		Consolidated 2011 $
			53,687 -
			53,687 4,427 -
			4,427 53,687 4,427
			58,114
			9,248,096 - (171,859)
			9,076,237
			No. of shares 52,750,426 - 6,800,000 178,651,278 1,085,332 120,000 20,228,004 - -
			259,635,040

64

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Consolidated 2012 $ 15. Reserves (a) Revaluation reserves Balance at beginning of financial year (92,087) Revaluation increments/(decrements) 92,087 Balance at end of financial year - (b) Share option reserves Balance at beginning of financial year 1,834,703 Retrospective adjustment - Share option issued 340,570 Fair value share option converted (297,126) Balance at end of financial year 1,878,147 (c) Embedded derivative element of convertible loan Balance at beginning of financial year - Embedded derivative created on issue of convertible loan 64,356 Balance at end of financial year 64,356 Balance at end of financial year 1,942,503 16. Retained earnings Balance at beginning of financial year (2,371,855) Retrospective adjustment - Business combination cost 54,054 Net loss attributable to members of the parent entity (2,563,445) Balance at end of financial year (4,881,246)	Consolidated 2011 $
	(51,151) (40,936)
	(92,087)
	- 1,834,703 -
	1,834,703
	- -
	-
	1,742,616
	802,518 (1,834,703) - (1,339,670)
	(2,371,855)

65

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

17. Earnings per share Basis earning per share Diluted earnings per share Basis earning per share The earning and weighted average number of ordinary share used in the calculation of basis earning per share are as follows: Net loss Earning used in the calculation of basic EPS from continuing operations Weighted average number of ordinary shares for the purpose of basic earnings per share Diluted earnings per share The earning and weighted average number of ordinary share used in the calculation of diluted earning per share are as follows: Net loss Earning used in the calculation of diluted EPS from continuing operations Weighted average number of ordinary shares for the purpose of basic earnings per share	Cents per share (0.98) (0.95) $ (2,563,445) (2,563,445) No. 262,590,654 $ (2,690,312) (2,690,312) No. 284,090,928	Cents per share (1.26) (1.19) $ (1,339,670)
		(1,339,670) No. 106,517,047 $ (1,343,670)
		(1,343,670) No. 112,917,047

Options were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive.

66

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED30 JUNE2012
18. Commitments (a) Chattel Mortgage Chattel Mortgage related to motor vehicle with lease term of 3 years. No later than 1 year Later than 1 year and not later than 5 years Later than five years Minimum future lease payments Less future finance charges Present value of minimum lease payments Disclosed in the financial statements as borrowing: - Current - Non current (b) Non-cancellable operating leases Operation leases related to office rented with an option to extend. No later than 1 year Later than 1 year and not later than 5 years Later than five years (c) Capital commitments Property, plant and equipment payables: No later than 1 year Later than 1 year and not later than 5 years Later than five years	Consolidated 2012 $ 21,932 - - 21,932 - 21,932 21,932 - 21,932 68,862 65,717 - 134,579 - - - -	Consolidated 2011 $
		74,540 21,796 -
		96,336 (6,750)
		89,586
		74,540 21,796
		96,336
		38,542 134,579 -
		173,121
		26,780 - -
		26,780

67

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

19. Related party transactions

(a) Subsidiaries

19. Related party transactions (a) Subsidiaries
		Ownership	Ownership
		interest	interest
	Country of	2012	2011
Name of subsidiary	incorporation	%	%
MGT Mining Limited	Australia	81.33%(ii)	75.33%
Garimperos Pty Limited (i)	Australia	100.00%	100.00%

• (i) Garimperos Pty Limited is 100% owned by MGT Mining Limited.

• (ii) During the financial year, MGT Resources Limited acquired an additional 6% of the issued shares of MGT Mining Limited. The acquisition took place via share placements totalling 16,979,593 new ordinary shares with total consideration of $848,979. The share placements were paid partly in cash $365,223 and via conversion of intercompany loan balance $483,756.

The carrying values of the additional interest acquired of MGT Mining Limited at the time of acquisition were $211,901. As a result of this acquisition, a notional transfer of $54,054 from the non-controlling interest to MGT Resources Limited’s retained earnings was recorded.

(b) Key management personnel

Disclosures relating to key management personnel are set out in Note 24.

• (c) Transactions with related parties

Loan to directors Beginning of the year Loan advanced Loan repayments received Interest charged End of the year Loan from directors Beginning of the year Loan advanced Loan repayments Loan conversion to equity (i) Interest charged (ii) End of the year	Consolidated 2012 $ - - - - - 860,483 - (424,483) (400,000) 23,819 59,819	Consolidated 2011 $
		- 74,500 (74,500) -
		-
		400,000 424,483 - - 36,000
		860,483

(i) The interest is charged at 9% per annum with $36,000 interest charged during the year ended 30 June 2011. The $400,000 loan was converted to equity on 28 February 2012 by way of 6,400,000 shares in MGT Resources Ltd at $0.0625 per share.

(ii) The interest is charged at 9% per annum with $23,819 interest charged in the period prior to the conversion of the $400,000 loan to equity on 28 February 2012.

68

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

20. Notes to the cash flow statement

(a) Reconciliation of cash and cash equivalents

For the purpose of the cash flow statement, cash and cash equivalents included cash on hand and in bank. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows:

	Consolidated	Consolidated
	2012	2011
	$	$
Cash and cash equivalents	3,185,842	2,644,364
	3,185,842	2,644,364
Reconciliation of profit for the period to net cash flows from operating		activities
Loss for the year	(3,030,890)	(1,627,246)
Non-cash flow items
Gain on sale of shares	-	(47,523)
Share-based payment transaction expenses	432,657	-
Accrued interest expenses	(7,598)	-
Tenement impairment	2,500	-
Depreciation expense	291,655	80,966
Add back of shares	(12,773)	-
Written down revaluation reserve	144,000	-
Written down fixed assets value	11,580	-
Other	(2,412)	-
Decrease in current receivables	43,671	49,082
Increase in non-current assets	(44,063)	-
Increase in trade creditors	236,211	36,673
Increase in Provisions	23,853	13,637
Net cash from operating activities	(1,911,609)	(1,494,413)

(b) Reconciliation of profit for the period to net cash flows from operating activities

69

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

21. Parent entity disclosure

(a) Financial position

**22. **	Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Equity Issued equity Retained earning Reserve Investment revaluation Total equity (b) Financial performance Loss for the year Other comprehensive income Total comprehensive income Auditors remuneration Audit services Audit and review of financial reports		2012 $ 9,992,436 3,143,661 13,136,097 1,878,180 2,962,820 4,841,000 9,831,961 (3,479,367) 1,942,503 8,295,097 2012 $ (664,402) - (664,402) Consolidated 2012 $ 72,500		2011 $ 6,774,481 2,162,000
					8,936,481
					957,651 1,804
					959,455
					9,076,237 (2,814,962) 1,715,751
					7,977,026
					2011 $ (461,554) (40,936) (502,490) Consolidated 2011 $ 57,100

70

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

23. Share-based payments

(a) Employee share option plan

The Group has an ownership-based compensation scheme for executives and senior employees. In accordance with the terms of the plan, as approved by shareholders at a previous annual general meeting, executives and senior employees may be granted options to purchase ordinary shares at various exercise prices.

Each employee share option converts into one ordinary share of MGT Resources Ltd on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.

The following share-based payment arrangements were in existence during the current and prior reporting periods:

Option	No. of	Grant date	Expiry date	Exercise	Fair value at
series	options			price	grant date
				($)	($)
A	300,000	17 October 2011	17 October 2014	0.3000	0.1109
B	1,200,000	25 November 2011	25 November 2014	0.2000	0.1262
C	2,250,000	25 November 2011	25 November 2014	0.3000	0.1102

In accordance with the terms of the share-based arrangement, options issued during the financial year ended 30 June 2011 and 30 June 2012, vest at the date of their issue.

Movements in share options during the year

The following reconciles the share options outstanding at the beginning and end of the year:

Balance at beginning of year Granted during the year Granted via 4 for 1 share split Forfeited during the year Exercised during the year Expired during the year Balance at end of the year Exercisable at end of year	2012 No. of options Weighted average exercise price $ 16,250,000 0.1518 3,750,000 0.2875 - - - - (2,600,000) 0.1250 - - 17,400,000 0.2366 - -	2011
		No. of options Weighted average exercise price $ 3,500,000 0.4800 750,000 0.2500 12,000,000 0.1354 - - - - - - 16,250,000 0.1518 - -

71

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

24. Key management personnel disclosures

Details of key management personnel

The directors and other members of key management personnel of the Group during the year were:

Name Position Date J. Back Chairman & Executive Director Appointed 1 Feb 2010 Non-executive Director Appointed 4 Sept 2008 G. Monemvasitis Managing Director & Director Appointed 30 June 2008 Executive Director Resigned 1 July 2011 Non-executive Director Appointed 1 July 2011 G. Kuo Executive Director Appointed 7 Jan 2011 Chief Operating Officer Appointed 7 Jan 2011 H. Li Non-executive Director Appointed 14 Apr 2009 R. Vagnoni Non-executive Director Appointed 1 Feb 2011

(a) Key management personnel compensation

	Short-term	Post-	Long-term		Share-based	Total
2012	employee	employment	benefits		payments
	benefit	benefit
	$	$	$		$	$
Non-executive directors
G. Monemvasitis	-	-		-	27,546	27,546
R. Vagnoni	25,000	-		-	179,031	204,031
H. Li	-	-		-	27,546	27,546
Total:	25,000	-		-	234,123	259,123
Key management	personal compensation (Group)
J. Back	120,000	-		-	82,637	202,637
G. Kuo	134,400	10,800		-	82,637	227,837
Total:	254,400	10,800		-	165,274	430,474

72

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

(a) Key management personnel compensation (Continued)

	Short-term	Post-	Long-term		Share-based	Total
2011	employee	employment	benefits		payments
	benefit	benefit
	$	$	$		$	$
Non-executive directors
R. Rebek	-	-		-	-	-
H. Li	-	-		-	114,279	114,279
Total:	-	-		-	114,279	114,279
Key management	personal compensation (Group)
J. Back	-	-		-	392,234	392,234
G. Monemvasitis	133,945	12,055		-	349,128	495,128
G. Kuo	99,229	8,931		-	174,564	282,724
Total:	233,174	20,986		-	915,926	1,170,086

(b) Directors of Consolidated Group - Share holdings

(i) Ordinary shares

2012	Balance at the start of the year	Received during the year on exercise of options	Received during the year on conversion of loan	Other changes during the year	Balance at the end of the year
J. Back(Direct)	68,029,727	1,600,000	6,400,000	3,000,000	79,029,727
J. Back(Indirect)	2,400,000	-	-	-	2,400,000
G. Monemvasitis	5,415,692	-	-	(933,334)	4,482,358
G. Kuo	39,160,000	-	-	(11,952,000)	27,208,000
H. Li	19,800,000	1,000,000	-	2,000,000	22,800,000
R.Vagnoni	4,500,000	-	-	3,943,000	8,443,000

73

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

(b) Directors of Consolidated Group - Share holdings (Continued)

(i) Ordinary shares

2011	Balance at the start of the year	Received during the year on exercise of options	Received during the year on conversion of loan	Other changes during the year*	Balance at the end of the year
J. Back(Direct)	12,700,000	-	-	55,329,727	68,029,727
G. Monemvasitis	8,700,000	-	-	(3,284,308)	5,415,692
G. Kuo	7,540,000	-	-	31,620,000	39,160,000
R. Rebek**	-	-	-	-	-
H. Li	200,000	-	-	19,600,000	19,800,000
R.Vagnoni	-	-	-	4,500,000	4,500,000

• Includes 4 for 1 share split

• ** R. Rebek resigned as director on 6 Jan 2011

74

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

(ii) Share options

2012	Balance at the start of the year	Received during the year	Option exercised during the year	Other changes during the year	Balance at the end of the year*
J. Back	4,000,000 exercisable @ 12.5 cents, expiry 29 June 2013	750,000 exercisable @ 30 cents, expiry 25 November 2014	(1,600,000)	-	2,400,000 exercisable @ 20 cents, expiry 29 June 2013 and 750,000 exercisable @ 30 cents expiring 25 November 2014
G. Monemvasitis	4,000,000 exercisable @12.5 cents, expiry 29 June 2013	250,000 exercisable @ 30 cents, expiry 25 November 2014	-	-	4,000,000 exercisable @20 cents, expiry 29 June 2013 and 250,000 exercisable @ 30 cents, expiry 25 November 2014
G. Kuo	2,000,000 exercisable @ 12.5 cents, expiry 29 June 2013	750,000 exercisable @ 30 cents, expiry 25 November 2014	-	-	2,000,000 exercisable @ 20 cents, expiry 29 June 2013 and 750,000 exercisable@ 30 cents, expiry 25 November 2014
H. Li	1,000,000 exercisable @ 10 cents, expiry 29 June 2013	250,000 exercisable @ 30 cents, expiry 25 November 2014	(1,000,000)	-	250,000 exercisable @ 30 cents, expiry 25 November 2014
R.Vagnoni	-	1,200,000 exercisable @ 20 cents, expiring 25 November 2014 and 250,000 exercisable @30 cents, expiring 25 November 2014			1,200,000 exercisable @ 20 cents, expiring 25 November 2014 and 250,000 exercisable @30 cents, expiring 25 November 2014

75

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

*On 5 March 2012, an option amendment agreement was signed by Directors holding share options valued at 12.5 cents, agreeing to have the exercise price amended from 12.5 cents to 20.0 cents. J. Back exercised 1,600,000 of his 12.5 cents share options for $200,000 prior to signing the option amendment agreement to have the exercise price of the remaining 2,400,000 options changed from 12.5 cents to 20.0 cents. H. Li exercised all his 1,000,000 options held at 12.5 cents for $125,000. The remaining Directors holding 12.5 cents options signed the option amendment agreement to have the exercise price changed to 20.0 cents.

2011	Balance at the start of the year	Received during the year	Option exercised during the year	Other changes during the year	Balance at the end of the year*
J. Back	1,000,000 exercisable @ 50 cents, expiry 29 June 2013	-	-	Changes in accordance with the 4 for 1 share split	4,000,000 exercisable @ 12.5 cents, expiry 29 June 2013
G. Monemvasitis	1,000,000 exercisable @ 50 cents, expiry 29 June 2013	-	-	Changes in accordance with the 4 for 1 share split	4,000,000 exercisable @12.5 cents, expiry 29 June 2013
G. Kuo	500,000 exercisable @ 50 cents, expiry 29 June 2013	-	-	Changes in accordance with the 4 for 1 share split	2,000,000 exercisable @ 12.5 cents, expiry 29 June 2013
R. Rebek**	750,000 exercisable @ 40 cents, expiry 29 June 2013	-	-	Changes in accordance with the 4 for 1 share split	3,000,000 exercisable @ 10 cents, expiry 29 June 2013
H. Li	250,000 exercisable @ 50 cents, expiry 29 June 2013	-	-	Changes in accordance with the 4 for 1 share split	1,000,000 exercisable @ 12.5 cents, expiry 29 June 2013
R.Vagnoni	-	-	-	-	-

• Includes 4 for 1 share split

• ** R. Rebek resigned as director on 6 Jan 2011

76

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

(iii) Convertible notes

2012	Balance at the start of the year	Received during the year	Option exercised during the year	Other changes during the year*	Balance at the end of the year
J. Back	6,400,000	-	(6,400,000)	-	-
2011
J. Back	1,600,000	-	-	4,800,000	6,400,00

25. Events occurring after the reporting period

The company is expecting to receive the final judgement on the granting of MLA 20547. The final court hearing was concluded in August 2011.

On 2 August 2012, MGT Resources Limited acquired a further 2.15% of the issued capital in MGT Mining Limited by purchasing 1,500,000 shares at $0.065 per share for a total of $97,500. This brings the total shareholding of MGT Resources Limited from 81.33% as at 30 June 2012 to 83.48% as at the signing of these accounts.

On 5 August MGT Resources Limited entered into an off-take agreement with Taimetco International Co, Limited agreeing to MGT Resources Limited selling a minimum of 20% of its annual production of tin metal or in the event that 20% of tin production is less than 50 tonnes of tin metal, 100% of its tin production to Taimetco International Co, Limited. In exchange, Taimetco International Co, Limited injected $1,250,000 in cash into MGT Resources Limited to obtain 7,812,500 shares on the 22 August 2012. The agreement shall run from the date of Taimetco International Co, Limited’s Investment until the earlier to occur of:

• (a) Taimetco International Co, Limited selling its interest in the Company below 6,250,000 Shares within 2 years from the date of the agreement;

• (b) An unremedied Event of Default as set out in the agreement

• (c) The date being 20 years from the date of first shipment of tin from the Company to the purchaser.

Since year end, MGT Resources Limited has received $1,491,520 in cash as part of the ongoing placement initiated in June 2012. Prior to year end, $1,622,400 was raised in June 2012 as part of this placement. However, as the placement was not yet closed as at year end and the shares not yet allocated to investors, the cash received pre-year end has been treated as ‘other creditors’ (Refer to Note 11).

77

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES DIRECTOR’S DECLARATION 30 JUNE 2012

The directors declare that:

• (a) 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;

• (b) In the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the company and the consolidated entity;

• (c) In the directors’ opinion, the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board; and

• (d) The directors’ have been given the declarations required by s.295A of the Corporations Act 2001.

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

On behalf of the Directors

==> picture [78 x 76] intentionally omitted <==

Gary Kuo Executive Director Dated: 12 September 2012

78

DUNCAN DOVICO

Independent Auditor’s Report to the members of MGT Resources Limited

Report on the Financial Report

We have audited the accompanying financial report of MGT Resources Limited (“the Company”) which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income , consolidated statement of cash flows and consolidated statement of changes in equity for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year as set out on pages 40 to 78.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretation) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

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 company’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’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.

D U N C A N D O V I C O C H A R T E R E D A C C O U N T A N T S

LEVEL 12, 90 ARTHUR STREET, NORTH SYDNEY NSW 2060  PO BOX 1994 , NORTH SYDNEY NSW 2059 T: (02) 9922 1166  F: (02) 9922 2044  E: email@duncandovico.com.au  ABN 19 173 326 199 Liability limited by a scheme approved under Professional Standards Legislation

DUNCAN DOVICO

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Auditor’s Opinion

In our opinion:

• a) the financial report of MGT Resources Limited is in accordance with the Corporations Act 2001 , including:

• (i) giving a true and fair view of the company’s and 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 (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ; and

• b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included in note 22 for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion the Remuneration Report of MGT Resources Limited for the year ended 30 June 2012, complies with section 300A of the Corporations Act 2001 .

LEVEL 12, 90 ARTHUR STREET, NORTH SYDNEY NSW 2060  PO BOX 1994 , NORTH SYDNEY NSW 2059 T: (02) 9922 1166  F: (02) 9922 2044  E: email@duncandovico.com.au  ABN 19 173 326 199 Liability limited by a scheme approved under Professional Standards Legislation

D U N C A N D O V I C O C H A R T E R E D A C C O U N T A N T S

DUNCAN DOVICO

Material uncertainty regarding continuation as a going concern

Without qualification to the opinion expressed above, we draw attention to the financial report which indicates that the Company incurred a net loss of $2,831,003 during the year ended 30 June 2012 and had net operating cash outflows of $1,911,609 over the same period.

As disclosed in note 1(u) the financial statements have been prepared on a going concern basis. Notwithstanding this, the ability of the Company to continue as a going concern is dependent on the ability of the Company to raise additional capital or establish sufficient revenue streams. Should additional capital not be raised or revenue streams generated then there is a material uncertainty which may cast significant doubt as to the Company’s ability to continue as a going concern and therefore, the Company may be unable to realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report.

DUNCAN DOVICO CHARTERED ACCOUNTANTS

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ROSEMARY MEGALE PARTNER Dated in Sydney, this 12[th] day of September 2012

LEVEL 12, 90 ARTHUR STREET, NORTH SYDNEY NSW 2060  PO BOX 1994 , NORTH SYDNEY NSW 2059 T: (02) 9922 1166  F: (02) 9922 2044  E: email@duncandovico.com.au  ABN 19 173 326 199 Liability limited by a scheme approved under Professional Standards Legislation

D U N C A N D O V I C O C H A R T E R E D A C C O U N T A N T S

MGT RESOURCES LIMITED AND ITS CONTROLLED ENTITIES ADDITIONAL STOCK EXCHANGE INFORMATION AS AT 14 AUGUST 2012

The shareholder information set out below was applicable as at 14 August 2012

A. Distribution of equity securities

Analysis of numbers of equity security holder by size of holding:

Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	Class of equity security Ordinary shares Redeemable preference shares Convertible notes Shares Options 2 - - - 7 - - - 1 - - - 169 - - - 131 7 - 1
	310 7 - 1

B. Equity security holders

Twenty largest quoted equity security holders

The names of the twenty largest holders of quoted equity securities are listed below:

	Ordinary Shares	Ordinary Shares
		Percentage of
Name	Number held	issued shares
JONATHAN PAUL BACK	79,029,727	29.42%
KUOKAI PTY LTD	27,208,000	10.13%
LI HAI JUN	22,800,000	8.49%
ALAN KAI-YUAN CHENG	9,050,000	3.37%
ARMSTRONG INDUSTRIES HK LTD	6,700,000	2.49%
MR KOKI INOMATA	6,700,000	2.49%
IRON ORE TRADING PTY LTD	4,482,354	1.67%
WILLIAM RICHARD PIRIE	4,200,000	1.56%
MR DAVID WALSH	4,000,000	1.49%
TSUMO H.K. CO. LIMITED	3,500,000	1.30%
MS LISA HUANG	3,364,000	1.25%
JASON RALPH COX	3,200,000	1.19%
NATIONAL NOMINEES LIMITED	3,200,000	1.19%
MR SING FUNG STEVE NGAN	3,200,000	1.19%
CLIVE JAMES MCKERR <MCKERR SUPER FUND
A/C>	3,015,000	1.12%
JENNYWAN-CHEN CHENG	3,000,000	1.12%
ERIDITUS PTY LTD <THE ROBERT VAGNONI FAM
A/C>	3,000,000	1.12%
ROBERT HOWE +	2,920,000	1.09%
PANOS LEVENDIS + ATHENA LEVENDIS <ITHACA
SUPER FUND A/C>	2,660,000	0.99%
DAYTON WAY FINANCIAL PTY LTD	2,497,015	0.93%

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