CANYON RESOURCES LIMITED — Annual Report 2013

Sep 29, 2013

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CANYON RESOURCES LIMITED (ABN 13 140 087 261)

Annual Report 30 June 2013

Canyon Resources Limited

TABLE OF CONTENTS

CORPORATE INFORMATION ......................................................................................................................... 2 CHAIRMAN’S LETTER ..................................................................................................................................... 3 DIRECTORS’ REPORT ..................................................................................................................................... 4 REVIEW OF OPERATIONS ........................................................................................................................... 5 REMUNERATION REPORT (AUDITED) ..................................................................................................... 17 AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................ 21 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ........ 22 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ........................................................................ 23 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ......................................................................... 24 CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................................................... 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 .............................. 26 INDEPENDENT AUDITOR’S REPORT .......................................................................................................... 60 ADDITIONAL SECURITIES EXCHANGE INFORMATION ............................................................................ 62 CORPORATE GOVERNANCE COMPLIANCE STATEMENT ...................................................................... 66

Annual Report 2013

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Canyon Resources Limited

CORPORATE INFORMATION

Canyon Resources Limited ABN 13 140 087 261

Directors

Rhoderick Grivas Phillip Gallagher Matthew Shackleton

Company Secretary

Phillip MacLeod

Registered office

7/29 The Avenue Nedlands WA 6009 Tel: +61 8 9389 7050

Solicitor

Steinepreis Paganin

Level 4, The Read Buildings

16 Milligan Street Perth WA 6000

Auditor

HLB Mann Judd Level 4, 130 Stirling Street Perth WA 6000

Securities Exchange Listing

ASX Limited ASX Code: CAY

Principal place of business

353 Rokeby Road Subiaco WA 6008 PO Box 270 West Perth WA 6872

Tel: +61 8 6143 4256 Fax: +61 8 9324 1502 Web: www.canyonresources.com.au

Share Register

Computershare Limited

Level 2, 45 St Georges Terrace

Perth WA 6000

Tel: +61 8 9323 2000 Fax: +61 8 9323 2033 Web: www.computershare.com.au

Annual Report 2013

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Canyon Resources Limited

CHAIRMAN’S LETTER

On behalf of your Board of Directors, I have pleasure in presenting the Annual Report of Canyon Resources Limited (“Canyon” or the “Company”) for the year ended 30 June 2013.

Canyon had a busy field season in Burkina Faso where the Company completed exploration on all project areas including drilling at Tao, extensive auger geochemistry at Pinarello and first pass exploration at Konkolikan.

This program of work will be followed by another busy exploration program in the 2013/2014 ‘dry season’ where the Company plans to drill test targets at Pinarello and Karga (Taparko North) as well as prepare Konkolikan targets for drill testing.

Canyon has continued to review a large number of new project opportunities in the West African region which have the potential to add to our existing portfolio. The Company will continue to look for additional projects in West Africa, but also further afield which have the potential for exploration success and through that shareholder value.

In a climate where many of our peers shut down exploration, Canyon reduced overhead costs and commitments, conducted a pragmatic exploration program while still advancing the Company exploration projects. This strategy should give the Company early momentum in a junior resources market where conditions appear to be improving and investors returning.

I wish to extend my thanks to the Board of Canyon for their contributions and efforts during the year. To our shareholders, I thank them for their patience and support during a challenging 12 months where negative sentiment surrounded the junior resources market. I and the Board remain committed to pursuing a strategy that will deliver long-term growth to shareholders and look forward to success in the financial year ahead.

Yours faithfully

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Rhoderick Grivas Chairman

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Canyon Resources Limited

DIRECTORS’ REPORT

Your directors submit the annual financial report of the consolidated entity comprising Canyon Resources Limited and the entities it controlled during the financial year ended 30 June 2013 (“consolidated entity” or “Group”). In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Directors:

The names of directors who held office during or since the end of the year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Names, qualifications and experience:

Rhoderick Grivas BSc, AICD, AusIMM, AIG, Non-Executive Chairman

Appointed 11 December 2009

Mr Grivas is a geologist with over 20 years of experience in corporate and technical management of junior exploration companies. He has held a number of executive director positions with junior resource companies including ASX and TSX listed entities.

During the past three years Mr Grivas was Non-Executive Chairman of Lodestar Minerals Ltd (August 2007 to April 2012), Equator Resources Limited (September 2011 to January 2013) and Coventry Resources Limited (August 2010 to December 2012). Mr Grivas is currently Non-Executive Chairman of Southern Crown Resources Limited.

Phillip Gallagher BBus, Managing Director

Appointed 19 October 2009

Mr Gallagher has extensive experience in senior commercial and operational roles in both private and public companies. He was previously Managing Director of ASX listed Empire Beer Group Ltd and Marketing Manager Western Australia for the Fosters Group.

During the past three years, Mr Gallagher has held no other directorships.

Matthew Shackleton BComm, MBA, FCA, Non-Executive Director

Appointed 19 October 2009

Mr Shackleton has over 18 years of experience in senior finance, corporate and general management roles in Western Australia and overseas. Mr Shackleton is a Fellow of the Institute of Chartered Accountants in Australia.

During the past three years Mr Shackleton held the position of Managing Director with Mount Magnet South NL (April 2008 to January 2012).

Company Secretary:

Phillip MacLeod BBus, ASA, MAICD

Appointed 6 January 2010.

Mr MacLeod has, over the past 20 years, provided corporate, management and accounting services to Australian and international public companies involved in the resources, technology, healthcare and property industries.

Annual Report 2013

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Canyon Resources Limited

Interests in the shares and options of the Company and related bodies corporate

As at the date of this report, the interests of the directors in the shares and options of the Company were:

Director	Number of fully paid ordinary shares	Number of options over ordinary shares
RhoderickGrivas	1,665,385	115,385
Phillip Gallagher	1,520,001	20,000
MatthewShackleton	1,655,001	20,000

Details of unissued ordinary shares in the Company under options as at the date of this report are as follows:

Options series	Number of options	Exercise price	Expiry date
Listed options	14,106,130	16 cents	29/2/2016
Brokers’unlisted options	3,000,000	16 cents	29/2/2016
Unlisted options	250,000	45 cents	12/4/2014

Dividends

No dividends have been paid or declared since the start of the financial year and the directors do not recommend the payment of a dividend in respect of the financial year.

Principal activities

The principal activity of the entities within the consolidated entity during the year was gold exploration.

REVIEW OF OPERATIONS

Canyon Resources Limited (Canyon) has completed its third year of exploration of its projects in Burkina Faso. The focus for the year was on completing first pass exploration on the newly acquired Pinarello Project, advancing the Tao Project and commencing exploration on the Konkolikan Project.

The Company continued its strategy of focussing on developing its existing projects while identifying and evaluating business development and expansion opportunities in Burkina Faso and the West African region.

Key milestones for the year include:

• Extension of the mineralisation on the Tao Project to over 13km;

• Identification of 7km extension of the Tankoro gold corridor and 3 new gold targets on the Pinarello Project; and

• Commencement of exploration on the Konkolikan Project.

Exploration Summary

Exploration activity for the 2012/2013 year was focussed on the Pinarello, Konkolikan and Tao Projects.

The Pinarello and Konkolikan Projects are located on the Houndé Greenstone Belt in south western Burkina Faso. Results from other exploration companies located on the Houndé Belt and in some cases contiguous to Canyon’s projects, highlighted the prospectivity of the belt and the potential for new gold discoveries on Canyon’s Projects. The Houndé Belt has been the location of some of the more significant discoveries in Burkina Faso in recent times and Canyon has a significant land holding, with a total 6 permits across more than 1,100km[2 ] over the Pinarello and Konkolikan Project areas.

Exploration conducted on the Pinarello Project has shown the continuation of the Tankoro Gold corridor into the project area and gold mineralisation was identified on artisanal working sites in the south of the project area.

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Canyon Resources Limited

Initial exploration on the Konkolikan Project has highlighted the potential for gold mineralisation on the permit area. The project is in close proximity to, and along the same geological structure as, multimillion ounce high grade gold deposits including the TSX-V listed Rox Gold’s Zone 55 deposit and ASX listed Endeavour Mining’s Vindaloo deposit. The geological setting of the Konkolikan Project has similarities to high grade gold deposits recently discovered in the area.

The Tao Project is a single permit located in north-eastern Burkina Faso, and is on the same greenstone belt as the multimillion ounce Essakane gold mine. Exploration completed on the Tao Project throughout the year focussed on testing the strike extent of identified mineralisation to the south of Tondoby Prospect. Canyon has identified a mineralised shear that extends over 13km and remains open in all directions. The Company believes the shear zone extends beyond the permit boundary to the south of the Tao permit into an area that is currently under application by Canyon Resources.

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Figure 1: Canyon Resources’ project areas over Burkina Faso regional interpreted geology map

Projects Overview

Pinarello Project

The Pinarello Project is situated in the Houndé Greenstone Belt in southwest Burkina Faso and comprises five permits covering approximately 1,000km². The project is contiguous to the south of TSX-V listed Sarama Resources Limited’s (“Sarama”) Tankoro Permit, which hosts their MM, Phantom and MM East Prospects, and ASX listed Orbis Gold Limited’s (“Orbis”) Dynikongolo Permit, hosting their Bantou and Tankoro Prospects.

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Canyon Resources Limited

Auger geochemical exploration conducted by Canyon has shown the Tankoro mineralised corridor continues onto the Pinarello Project.

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Figure 2: Pinarello Project western permit package and prospects

During the year Canyon completed a 5,563 metre auger geochemistry program at the Soukoura Prospect in the northern part of Canyon’s Pinarello Project. The results of the auger drilling have highlighted the south west striking continuation of the Tankoro mineralised trend over the 7 kilometres tested by the auger program.

The Soukoura Prospect remains open on to the southwest beyond the extent of the auger geochemistry.

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Canyon Resources Limited

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Figure 3: Results from auger drilling on the Pinarello Project’s Soukoura prospect

A soil sampling program along strike from the Gagnhy artisanal workings, located at the southwest part of the project, was conducted during the year. The artisanal mining at Gagnhy follows the strike of two quartz vein sets. The main quartz vein has a strike of 350 degrees, is up to 2 metres wide and strikes over 250 metres. This is crosscut by a number of smaller quartz veins striking 100 degrees with a strike length of up to 100 metres. Gold is associated with ferruginous quartz veining in felsic volcanic and intrusive rocks, with zones of strong silicification and sericite alteration noted around the workings.

Results from the program indicated the continuation of mineralisation to the north and south of the artisanal operations.

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Figure 4: Results from soil sampling on the Pinarello Project’s Gagnhy prospect

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Canyon Resources Limited

A total of 278 samples were collected at the Togoba artisanal workings site. The Togoba artisanal workings are located on the southeast part of the Pinarello Project and are relatively small in comparison to those at Gagnhy. A number of pits have been sunk on small veinlets located in sedimentary rock striking 45 degrees.

Gold results from the soil sampling program were high with a maximum of 967ppb Au (0.967g/t Au) followed by 883ppb Au.

From the 278 samples collected, 21 samples were above 100ppb Au which indicate significant +200ppb Au soil anomalism in and around the artisanal workings and extending over large portions of the sampled area.

The Company will continue exploration on the Pinarello Project at the commencement of the exploration season in the second half of 2013.

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Figure 5: Results from soil sampling on the Pinarello Project’s Togoba prospect

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Canyon Resources Limited

Konkolikan Project

Canyon’s Konkolikan Project is a single permit of 100.1km² situated in the Houndé Greenstone Belt. The project is situated on the same regional mineralised structure that hosts Endeavour Mining Corporation’s Houndé Project (indicated resource of 1,456,000 oz. @ 1.91g/t Au and inferred resource of 752,000oz @ 1.91 g/t Au) and Rox Gold Inc.’s Yaramoko Project (indicated resource of 679,000oz @ 15.7 g/t Au and an inferred resource of 215,811oz @ 8.9 g/t Au).

The central area of the Houndé Greenstone Belt, where Canyon’s Konkolikan Project is situated, has become known for hosting high grade gold deposits. The Konkolikan Project is located on a granite intrusion that is a similar geological type and age as the Rox Gold’s high grade Zone 55 deposit located at the Yaramoko Project.

A first pass program of detailed regolith mapping, and soil & rock chip sampling was completed on the project and results are currently being analysed and utilised in the design of the exploration program to commence in the upcoming season. The Company is planning an auger geochemistry program to focus follow-up drilling during the field season.

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Figure 6: Regional geology map highlighting Konkolikan Project

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Canyon Resources Limited

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Figure 7: Sheared volcanoclastic rocks along the contact of the granite intrusion on the Konkolikan Project

Tao Project

The Tao Project is a single permit over 189km[2] located in the northeast of Burkina Faso. In March 2013 the Company announced the results from a 6,959m RAB (Rotary Air Blast) drilling campaign completed over the project area. The program was successful in identifying gold and pathfinder arsenic anomalism, which has now been discovered over a +13km strike along a shear zone.

Best results from the drilling program included; o 8m @ 1.24 g/t Au from 26m (TNRABS064) o 2m @ 2.28 g/t Au from 30m (TNRABS133) o 2m @ 1.32 g/t Au from 26m (TNRABS105) o 6m @ 0.73 g/t Au from 4m (TNRABS083)

Auger geochemistry previously conducted by Canyon had highlighted a number of anomalous zones, which have been validated by the RAB drilling results and geological logging. Two separate mineralised zones are evident, the western zone is geologically equivalent to the Tondoby prospect, with mineralisation located at the sheared contact between diorite and metaschist (sedimentary derived) and the eastern zone located in an altered arkosic sediment (‘dirty sandstone’).

Mineralisation models in similar geological terrains suggest economic mineralisation is localised where the shear zone is either intersected by cross-cutting structures or faulting and folding has introduced a flexure or splay in the shear zone.

The identified mineralised shear appears to continue further south through the Tao permit into an adjoining area that is currently under application to Canyon.

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Canyon Resources Limited

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Figure 8: Tao Project drill hole location plan

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Canyon Resources Limited

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Figure 9: Tondoby Prospect – significant RC results

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Canyon Resources Limited

Taparko North Project

The Taparko North Project is a group of five contiguous permits along the highly mineralised Markoye Fault Corridor in Burkina Faso.

Previous exploration conducted by the Company has identified two polymetallic anomalies over 4km with coincident EM signatures on the Karga Prospect on the Taparko North Project.

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Figure 10: Karga Prospect auger soil base metal anomaly

The polymetallic anomalies at the Karga prospect extend up to 4km in strike length in a northwest – southeast direction. The trend of these anomalies is coincident with structures interpreted from aeromagnetic data that are thought to host the second order gold anomalies further to the northwest at the CS prospect.

The two polymetallic anomalies have a similar geochemical signature with one anomaly being copper rich and the other being copper-zinc rich. Both anomalies appear geochemically to be associated with a mafic lithology that shows a northwest trend. The copper rich anomaly is also associated with a northwest trend of anomalous sulphur which potentially indicates increased sulphide content of the bedrock associated with mineralisation.

The Company has conducted an electromagnetic (EM) survey over the Karga prospect areas to follow up the geochemical anomalies. The ground EM survey over the copper rich anomaly area uncovered several strong conductors coincident or adjacent to the copper geochemical anomalism. Preliminary modelling indicates the source is generally shallow with a near vertical dip possibly related to disseminated sulphides.

The EM survey carried out over the copper-zinc rich anomaly area also identified an extensive conductor with a strike length of over 2.5km. This conductor shows good correlation with the geochemical copper-zinc anomaly. The source is interpreted as a thick moderately conductive zone, likely to be at a shallow depth. Initial processing indicates the conductor dips moderately to the southwest.

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Canyon Resources Limited

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Figure 11: Karga Prospect with coincident Cu/Zn auger over EM anomaly and trends

Further geophysical analysis of these surveys during 2013 has identifies drilling targets that are planned to be tested with a drilling program during the 2013/2014 exploration season.

Derosa Project

On 1 May 2012, Canyon announced that it had entered into an agreement with ASX listed Rumble Resources Limited (Rumble) (ASX: RTR) for Rumble to earn a 75% interest in the Derosa project in Burkina Faso.

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Figure 12: De Rosa Project permits over magnetic image

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Canyon Resources Limited

Under the agreement, Rumble is entitled to earn a 75% interest in the Derosa project by spending $3,000,000 on the project by 31 March 2017. This agreement provided Canyon an opportunity to focus its efforts on its remaining four projects, whilst maintaining an interest in the Derosa project.

Rumble has focussed exploration on the Bompela artisanal area within the Derosa Project. They have completed extensive field mapping of the artisanal workings area which covers a small portion of a major regional structure. The gold mineralisation at Bompela occurs as a vein stockwork developed in competent granodiorite and granite and is typical of granitoid hosted gold deposits.

Rumble is planning to continue a staged exploration program of air-core drilling to test beneath areas of alluvial cover and RC drilling to test for depth extensions.

Competent Person’s Statement

The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Rhoderick Grivas, an employee of the Company and a Competent Person who is a Member or Fellow of The Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Mr Grivas has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Grivas consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Corporate

During the year the Company successfully completed a share placement raising a total of $1,833,800 before costs through the issue of 14,106,130 shares at an issue price of 13 cents per share. The shares were issued with an attaching option exercisable at 16 cents and an expiry date of 29 February 2016.

Operating result for the year

The consolidated entity’s operating loss for the year ended 30 June 2013 was $2,564,910 (year ended 30 June 2012: $4,723,473). The result included the write-off of exploration and evaluation expenditure incurred of $1,561,818 (30 June 2012: $3,703,767) in accordance with the consolidated entity’s accounting policy.

Review of financial condition

At 30 June 2013, the consolidated entity had $2,076,136 in cash and term deposit balances (30 June 2012 $3,008,811).

Significant changes in the state of affairs

In the opinion of directors there were no significant changes in the state of affairs of the consolidated entity that occurred during the year.

Significant events after balance date

There have been no material events subsequent to the reporting date.

Likely developments and expected results

Subject to cash reserves and the ability to replenish those reserves, the consolidated entity will continue its mineral exploration activity at and around its exploration projects with the object of identifying commercial resources.

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Canyon Resources Limited

Environmental legislation

With respect to its environmental obligations regarding its exploration activities the consolidated entity endeavours to ensure that it complies with all regulations when carrying out any exploration work and is not aware of any breach at this time.

Indemnification and insurance of Directors and Officers

The Company has entered into Director and Officer Protection Deeds (“Deed”) with each Director and the Company Secretary (“Officers”). Under the Deed, the Company indemnifies the relevant Officer to the maximum extent permitted by law against legal proceedings, and any damage or loss incurred in connection with the Officer being an officer of the Company. The Company has paid insurance premiums to insure the Officers against liability arising from any claim against the Officers in their capacity as officers of the Company.

REMUNERATION REPORT (AUDITED)

This report outlines the remuneration arrangements in place for the key management personnel of Canyon for the financial year ended 30 June 2013. The information provided in this remuneration report has been audited as required by Section 308 (3C) of the Corporations Act 2001.

The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the Company, and includes the executives in the Company and the Group.

Key Management Personnel:

(i) Directors

Rhoderick Grivas (Chairman)

Philip Gallagher (Managing Director)

Matthew Shackleton (Non-Executive Director)

(ii) Executives

Chris Connell (Exploration Manager, resigned 15 March 2013)

Philip MacLeod (Company Secretary)

Remuneration philosophy

The performance of the Company depends upon the quality of the directors and executives. The philosophy of the Company in determining remuneration levels is to:

• set competitive remuneration packages to attract and retain high calibre employees;

• link executive rewards to shareholder value creation; and

• establish appropriate, demanding performance hurdles for variable executive remuneration.

Remuneration Committee

All directors at this time are members of the Remuneration Committee. The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of directors and executives on a periodic basis by reference to relevant employment market conditions with an overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.

Remuneration structure

In accordance with best practice corporate governance, the structure of non-executive director and executive remuneration is separate and distinct.

Non-executive director remuneration

The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

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Canyon Resources Limited

The ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time to time by a general meeting. The maximum aggregate payable to non-executive directors approved by shareholders is $300,000 per annum.

Each non-executive director receives a fee for being a director of the Company. The remuneration of nonexecutive directors for the year ended 30 June 2013 is detailed in Table 1 in this report.

Director and executive remuneration

Remuneration may consist of fixed remuneration and variable remuneration (comprising short-term and longterm incentive schemes).

Fixed remuneration

Fixed remuneration is reviewed annually by the Board. The process consists of a review of relevant comparative remuneration in the market and internally and, where appropriate, obtaining external advice on policies and practices. The Board has access to external, independent advice where necessary.

Directors and executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Company. The fixed remuneration component of the Company directors and the most highly remunerated executives is detailed in Table 1.

Variable remuneration

The objective of the short term incentive program is to link the achievement of the Company's operational targets with the remuneration received by the executives charged with meeting those targets. The total potential short term incentive available is to be set at a level so as to provide sufficient incentive to the executive to achieve the operational targets and such that the cost to the Company is reasonable in the circumstances.

Actual payments which may be granted to each executive depend on the extent to which specific operating targets set at the beginning of the financial year are met. For the year to 30 June 2013, and to the date of this report, the Company had not made any payments under a short term incentive program.

The Company may also make long term incentive payments to reward senior executives in a manner that aligns this element of remuneration with the creation of shareholder wealth.

Employee Share Option Plan

Under the terms of the Company’s employee share option plan (Plan), the Board may offer free options to eligible persons or Directors of the Company or any subsidiary based on a number of criteria including contribution to the Company, period of employment, potential contribution to the Company in future and other factors the Board considers relevant. Upon receipt of such an offer, the eligible person may nominate an associate to be issued with the options. The maximum number of options to be issued under the Plan at any one time is 5% of the total number of shares on issue in the Company provided that the Board may increase this percentage, subject to the Corporations Act and the ASX listing rules.

Employment Contracts

The Company has executed an Executive Service agreement with Mr Phillip Gallagher, the Managing Director. The agreement provides for the following terms and conditions:

• Remuneration of $185,000 per annum plus superannuation (reduced from $230,000 plus superannuation on 1 August 2013).

• The agreement may be terminated by the Company giving 6 months’ notice. Mr Gallagher can terminate the agreement by giving 3 months’ written notice.

Mr Rhod Grivas was engaged effective from 1 February 2013 to provide geological and management services following the resignation of the Exploration Manager, Mr Chris Connell. The arrangement provides for monthly remuneration equivalent to $70,000 per annum plus superannuation (reduced from $100,000 plus superannuation on 1 August 2013) for a time commitment to the Company of up to 50% of the working month. There is no specific termination clause. Mr Grivas also receives a fee of $50,000 per annum plus superannuation as Chairman.

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Canyon Resources Limited

Table 1: Remuneration of key management personnel (KMP) for the year ended 30 June 2013 and the year ended 30 June 2012:

Non-Executive director Matthew Shackleton (1) Sub-total Non-Executive director Executive directors Rhoderick Grivas(2) Phillip Gallagher Sub-total Executive directors Other KMP Chris Connell (resigned 15 March 2013) Phillip MacLeod Sub-total Other KMP Total	2013 2012	Short-term employee benefits	Short-term employee benefits	Post-employment benefits	Equity	Total	Option Related
		Salary & fees	Bonus	**Superannuation **	Share options
		48,600 - - - 48,600 - 48,600 - - - 48,600 -
	2013 2012 2013 2012 2013 2012	48,600 - - - 48,600 - 48,600 - - - 48,600 - 91,667 - 8,250 - 99,917 - 50,000 - 4,500 - 54,500 - 230,000 - 20,700 - 250,700 - 217,500 - 19,575 - 237,075 -
	2013 2012 2013 2012 2013 2012	321,667 - 28,950 - 350,617 - 267,500 - 24,075 - 291,575 - 249,714 18,540 - 268,254 - 224,076 - 17,989 - 242,065 - 48,000 - - - 48,000 - 48,000 - - - 48,000 -
	2013 2012	297,714 - 18,540 - 316,254 - 272,076 - 17,989 - 290,065 -
	2013 2012	667,981 - 47,490 - 715,471 - 588,176 - 42,064 - 630,240 -

1. Both 2012 and 2013 include consulting fees of $5,000 paid for financial management services.

2. 2013 includes $41,667 plus superannuation paid for geological and management services. Prior to 1 February 2013 Mr Grivas was a non-executive director

No element of remuneration noted above is performance-related.

There were no options granted to KMP as part of remuneration for the financial year ended 30 June 2013 (2012: nil). No options granted to directors or executives were exercised during the year. 6,000,000 options lapsed during the year.

There were no alterations to the terms and conditions of options granted as remuneration since their grant date.

END OF REMUNERATION REPORT

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Canyon Resources Limited

DIRECTORS’ REPORT continued

Directors’ meetings

The number of meetings of directors held during the year and the number of meetings attended by each director were as follows:

director were as follows:
	Board Meetings
Director	Number of meetings eligible to attend	Number of meetings attended
Rhoderick Grivas	5	5
Phillip Gallagher	5	5
Matthew Shackleton	5	5

The Company has an Audit & Risk Committee, Nomination Committee and Remuneration Committee. These committees did not meet formally during the year. All matters relating to these Committees are covered in meetings of the full board.

Proceedings on behalf of the Company

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

Auditor Independence and Non-Audit Services

Section 307C of the Corporations Act 2001 requires our auditor, HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the audit of the financial report. This Independence Declaration is set out on page 23 and forms part of this directors’ report for the year ended 30 June 2013.

Non-Audit Services

There were no non-audit services provided by our auditor, HLB Mann Judd during the year (2012: nil).

Signed in accordance with a resolution of the directors.

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Phillip Gallagher Managing Director Perth WA, 27th September 2013

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the consolidated financial report of Canyon Resouces Limited for the year ended 30 June 2013, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• b) any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Canyon Resouces Limited and the entities it controlled during the year.

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Perth, Western Australia L Di Giallonardo 27 September 2013 Partner

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers.

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Canyon Resources Limited

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2013

E YEAR ENDED 30 JUNE 2013
Notes Revenue from Earn In agreement 2 Gain on sale of exploration assets 2 Other revenue 2 Foreign exchange gains 2 Interest received 2 Exploration and evaluation expensed as incurred Employee expenses Consultants and contractors Occupancy Depreciation 2 Compliance and regulatory Directors’ fees Administration Impairment of exploration assets Impairment of financial assets 10 Impairment of trade receivables Foreign exchange (losses)/gains 2 Interest expense 2 Loss before income tax Income tax expense 3 Loss for the year Other comprehensive income Items that may be reclassified to profit or loss: Exchange differences on translation of foreign operations Total other comprehensive income Total comprehensive loss Basic loss per share (cents per share) 5	CONSOLIDATED 2013 2012 $ $ 264,422 - 360,000 70,000 36,514 - 372 - 75,906 192,818
	737,214 262,818 (1,574,973) (3,703,767) (60,516) (114,715) (257,205) (235,429) (124,942) (85,860) (54,559) (44,569) (42,255) (63,436) (394,217) (335,174) (289,678) (395,775) (164,359) - (330,000) - (9,342) - - (5,164) (78) (2,403)
	(2,564,910) (4,723,474) - -
	(2,564,910) (4,723,474)
	96,868 73,633
	96,868 73,633
	(2,468,042) (4,649,841)
	(4.13) (9.46)

The accompanying notes form part of these financial statements.

Annual Report 2013

Page 22

Canyon Resources Limited

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013

30 JUNE 2013
Notes Assets Current assets Cash and cash equivalents 6 Trade and other receivables 7 Term deposit investments 8 Other current assets 9 Total current assets Non-current assets Available for sale financial assets 10 Property, plant and equipment 11 Capitalised exploration expenditure 12 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 14 Provisions 15 Total current liabilities Total liabilities Net assets Equity Issued capital 17 Reserves 18 Accumulated losses 19 Total equity	CONSOLIDATED 2013 2012 $ $ 2,076,136 2,258,811 19,099 287,221 - 750,000 66,642 58,943
	2,161,877 3,354,975
	30,000 - 212,501 245,894 5,838,671 5,261,732
	6,081,172 5,507,626
	8,243,049 **8,862,601 **
	461,964 360,620 45,937 110,183
	507,901 470,803
	507,901 470,803
	7,735,148 8,391,798
	17,514,184 15,709,055 375,970 709,035 (10,155,006) (8,026,292)
	7,735,148 8,391,798

The accompanying notes form part of these financial statements.

Annual Report 2013

Page 23

Canyon Resources Limited

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2013

Consolidated Balance at 1 July 2011 Loss for the year Movement in foreign exchange on translation Total comprehensive income/(loss) for the year Shares issued for cash Shares issued for tenements Transaction costs Options issued to brokers Transfer from reserve on expiry of options Balance at 30 June 2012 Consolidated Balance at 1 July 2012 Loss for the year Movement in foreign exchange on translation Total comprehensive income/(loss) for the year Shares issued for cash Shares and options issued for tenements Transaction costs Options issued to brokers Transfer from reserve on expiry of options Balance at 30 June 2013	Issued capital Accumulated losses Foreign currency translation reserve Option reserve Total $ $ $ $ $ 8,999,565 (3,302,818) 61,460 747,089 6,505,296 - (4,723,474) - - (4,723,474) - - 73,633 - 73,633
	- (4,723,474) 73,633 - (4,649,841) 5,138,300 - - - 5,138,300 1,752,000 - - - 1,752,000 (353,957) - - - (353,957) (193,545) - - 193,545 - 366,692 - - (366,692) -
	15,709,055 (8,026,292) 135,093 573,942 8,391,798
	Issued capital Accumulated losses Foreign currency translation reserve Option reserve Total $ $ $ $ $ 15,709,055 (8,026,292) 135,093 573,942 8,391,798 - (2,564,910) - - (2,564,910) - - 96,868 - 96,868
	- (2,564,910) 96,868 - (2,468,042) 1,833,800 - - - 1,833,800 149,500 - - 4,394 153,894 (176,302) - - - (176,302) (139,615) - - 139,615 - 137,746 436,196 - (573,942) -
	17,514,184 (10,155,006) 231,961 144,009 7,735,148

The accompanying notes form part of these financial statements.

Annual Report 2013

Page 24

Canyon Resources Limited

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2013

Notes Cash flows from operating activities Payments to suppliers & employees Interest received Interest paid Net cash used in operating activities 6 Cash flows from investing activities Transfers from term deposit investments Payments for exploration and evaluation Payments for property, plant and equipment Proceeds from sale/earn in of prospects Payments for prospects Net cash used in investing activities Cash flows from financing activities Proceeds from share issues Cost of share issues Net cash provided by financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Effect of foreign exchange movements on cash balances Cash and cash equivalents at end of the year 6	CONSOLIDATED 2013 2012 $ $ (1,044,725) (1,358,724) 87,738 211,661 (78) (2,403)
	(957,065) (1,149,466)
	750,000 1,319,699 (1,669,661) (3,647,177) (1,983) (162,303) 548,034 150,000 (383,327) (567,975)
	(756,937) (2,907,756)
	1,833,800 5,138,300 (176,302) (353,957)
	1,657,498 4,784,343
	(56,504) 727,121 2,258,811 1,463,220 (126,171) 68,470
	2,076,136 2,258,811

The accompanying notes form part of these financial statements.

Annual Report 2013

Page 25

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

a. Basis of preparation

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

The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated. The financial statements are for the consolidated entity consisting of Canyon Resources Limited and its subsidiaries.

The financial report has also been prepared on a historical cost basis. Cost is based on the fair values of the consideration given in exchange for assets.

The financial report is presented in Australian dollars.

The Company is a listed public company, incorporated in Australia and operating in Australia and Burkina Faso, West Africa. The entity’s principal activity is gold exploration.

b. Adoption of new and revised standards

Changes in accounting policies on initial application of Accounting Standards

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current year.

New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Group include:

Amendments to AASB 1, 5, 7, 101, 112, 121, 132, 133 and 134 as a consequence of AASB 2011-9 ‘Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income”. The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Group’s accounting policies and has no effect on the amounts reported for the current or prior years. However the application of AASB 2011-9 has resulted in changes to the Group’s presentation of, or disclosure in, its financial statements. AASB 2011-9 introduces new terminology for the statement of comprehensive and income statement. Under the amendments to AASB 101, the statement of comprehensive income is renamed as a statement of profit or loss and other comprehensive income and the income statement is renamed as a statement of profit or loss. The amendments to AASB 101 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However the amendments to AASB 101 require items of other comprehensive income to be grouped into two categories in the other comprehensive income section, (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met.

Income tax on items of other comprehensive income is required to be allocated on the same basis – the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. The amendments have been applied retrospectively, and hence the presentation of items of other comprehensive income has been modified to reflect the changes. Other than the above mentioned presentation changes, the application of the amendments to AASB 101 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income

Standards and Interpretations in issue not yet adopted

The Directors have reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2013. As a result of this review the Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Group and, therefore, no change is necessary to the Groups accounting policies.

Annual Report 2013

Page 26

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

c. Statement of compliance

The financial report was authorised for issue on 27 September 2013.

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

d. Critical accounting estimates and judgements

The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based upon historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Share-based payment transactions:

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black and Scholes model and is based on assumptions disclosed in periods disclosed when the equity instruments are granted.

Exploration and evaluation costs carried forward:

The recoverability of the carrying amount of exploration and evaluation costs carried forward has been reviewed by the directors. In conducting the review, the recoverable amount has been assessed by reference to the higher of “fair value less costs to sell” and “value in use”. In determining value in use, future cash flows are based on various parameters.

Variations to expected future cash flows and timing thereof, could result in significant changes to the impairment test results, which in turn could impact future financial results.

e. Basis of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Canyon Resources Limited (‘Company’ or ‘parent entity’) as at 30 June 2013 and the results of all subsidiaries for the year then ended. Canyon Resources Limited and its subsidiaries are referred to in this financial report as the Group or the consolidated entity.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies.

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

Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Control exists where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing when the Group controls another entity.

Annual Report 2013

Page 27

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

e. Basis of consolidation (cont.)

Unrealised gains or transactions between the Group and its associates are eliminated to the extent of the Group’s interests in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position. Losses are attributed to the non-controlling interests even if that results in a deficit balance.

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity attributable to owners of Canyon Resources Limited.

f. Revenue recognition

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

Interest income

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

Sale of exploration assets

Revenue is recognised when title to the exploration assets has passed at which time all the following conditions are satisfied:

• the Group has transferred to the buyer the significant risks and rewards of ownership of the assets;

• the Group retains no effective control over the assets sold;

• the amount of revenue can be measured reliably; and

• it is probable that the economic benefits associated with the transaction will flow to the Group.

Earn In agreements

Reimbursements which can be claimed by the Company under the terms of the Earn In agreement are recognised as income at the time the Company is entitled to those reimbursements.

g. Income tax

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

Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Annual Report 2013

Page 28

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

g. Income tax (cont.)

Deferred income tax liabilities are recognised for all taxable temporary differences except:

• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

• when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

• when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables, which are stated with the amount of GST included.

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

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

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

Annual Report 2013

Page 29

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

h. Cash and cash equivalents

Cash includes cash on hand and at call and deposits with banks or financial institutions and investments in money market instruments which are readily convertible to cash and used in the cash management function on a day to day basis, net of bank overdraft.

i. Acquisition of assets

The purchase method of accounting is used for all acquisitions of assets regardless of whether equity instruments or other assets are acquired. Cost is determined as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs, other than share issue costs, directly attributable to the acquisition.

j. Exploration and evaluation expenditure

Exploration and evaluation costs, excluding the costs of acquiring tenements and permits, are expensed as incurred. Acquisition costs will be assessed on a case by case basis and, if appropriate, they will be capitalised. These acquisition costs are carried forward only if the rights to tenure of the area of interest are current and either:

• They are expected to be recouped through successful development and exploitation of the area of interest or;

• The activities in the area of interest at the reporting date have not 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 area of interest, are continuing.

Accumulated acquisition costs in relation to an abandoned area are written off in full to the statement of profit or loss and other comprehensive income in the year in which the decision to abandon the area is made.

The carrying values of acquisition costs are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

k. Impairment of assets

At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of profit or loss and other comprehensive income.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where it is not possible to estimate the recoverable amount of an individual asset, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

l. Recoverable amount

Non-current assets are not carried at an amount above their recoverable amount, and where carrying values exceed this recoverable amount assets are written down. In determining recoverable amount, the expected net cash flows have not been discounted.

Annual Report 2013

Page 30

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

m. Trade and other payables

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months.

n. Issued capital

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 new business are not included in the cost of acquisition as part of the purchase consideration.

o. Share based payment transactions

Equity settled transactions:

The Group may provide benefits to full and part time employees (including senior executives), officers and directors in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

There is a plan currently in place to provide these benefits being the Employee Share Option Plan (ESOP), which provides benefits to directors, officers and employees.

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black and Scholes model, further details of which are given in Note 13.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Canyon Resources Limited (market conditions) if applicable. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Company’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

Annual Report 2013

Page 31

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

p. Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation.

Depreciation is calculated on a diminishing value basis over the estimated useful life of the assets as follows:

Motor vehicles – 4 years

Equipment – 5 years

The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

(i) Impairment

The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired. The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its fair value.

An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.

For plant and equipment, impairment losses are recognised in the statement of comprehensive income in the other expenses line item.

(ii) De-recognition and disposal

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss and other comprehensive income in the year the asset is derecognised.

q. Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate assets but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit or loss and other comprehensive income net of any reimbursement.

Annual Report 2013

Page 32

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

q. Provisions (cont.)

Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

Employee leave benefits

(i) Wages, salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

(ii) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

(iii) In-country time in lieu

The liability for weekends worked on exploration activity outside Australia is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made.

r. Trade and other receivables

Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for settlement within periods ranging from 15 days to 30 days.

Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the Company will not be able to collect all amounts due according to the original contractual terms. Factors considered by the Company in making this determination include known significant financial difficulties of the debtor, review of financial information and significant delinquency in making contractual payments to the Company. The impairment allowance is set equal to the difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at the original effective interest rate. Where receivables are short-term discounting is not applied in determining the allowance.

The amount of the impairment loss is recognised in the statement of profit or loss and other comprehensive income within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of profit or loss and other comprehensive income.

Annual Report 2013

Page 33

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

s. Earnings per share

Basic earnings per share is calculated as net profit/loss, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit/loss, adjusted for:

• costs of servicing equity (other than dividends) and preference share dividends;

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

t. Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of Canyon Resources Limited.

u. Financial assets

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Company determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end. All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Company commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-tomaturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-tomaturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.

Annual Report 2013

Page 34

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

u. Financial assets (cont.)

If the Group were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available-for-sale.

Available-for-sale investments

Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions, reference to the current market value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.

v. Foreign currency translation

Both the functional and presentation currency of Canyon Resources Limited and its Australian subsidiaries is Australian dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance date.

All exchange differences in the consolidated financial report are taken to profit or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.

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

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

The functional currency of the foreign operations in Burkina Faso is the West African Franc (XOF).

As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation currency of Canyon Resources Limited at the rate of exchange ruling at the balance date and their statements of profit or loss and other comprehensive income are translated at the weighted average exchange rate for the year.

The exchange differences arising on the translation are taken directly to a separate component of equity, being recognised in the foreign currency translation reserve.

On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.

Annual Report 2013

Page 35

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

w. Parent Entity Financial Information

The financial information for the parent entity, Canyon Resources Limited, disclosed in Note 24 has been prepared on the same basis as the consolidated financial statements, except as set out below.

(i) Investments in subsidiaries, associates and joint venture entities

Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of Canyon Resources Limited. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.

(ii) Share-based payments

The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

x. Going Concern

The financial report is prepared on a going concern basis.

At the balance date, the Group had an excess of current assets over current liabilities of $1,653,976 (2012: $2,884,172). Notwithstanding this positive working capital position, the Group has forecast that, depending on exploration results, it may need to seek additional funding in the coming year in order to meet its planned exploration expenditure for the next twelve months from the date of signing this financial report. These arrangements may include a capital raising or entering into a sale or joint venture of assets.

The Directors are confident that they will be able to manage the Group’s available funds in a manner that will ensure that the Group remains a going concern (including, if necessary, deferring planned exploration expenditure) for at least the next twelve months from the date of signing this financial report.

Annual Report 2013

Page 36

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 2. REVENUE AND EXPENSES

(a) Revenue Revenue from Earn in agreement Gain on sale of exploration asset Bank interest received and receivable Foreign exchange gains Other revenue (b) Expenses Depreciation Foreign exchange losses Bank interest paid and payable NOTE 3. INCOME TAX The prima facie income tax expense on pre-tax accounting (loss) from operations reconciles to the income tax expense in the financial statements as follows: Accounting (loss) before tax from continuing operations Tax at the applicable tax rate of 30% Tax effect of amounts which are not deductible (taxable) in calculating taxable income Movement in unrecognised temporary differences Tax effect of current year tax losses for which no deferred tax asset has been recognised Income tax expense Unrecognised temporary differences Deferred tax assets at 30% Capital raising costs Investments Legal fees Accruals Provisions Carry forward tax losses	CONSOLIDATED 2013 2012 $ $ 264,422 - 360,000 70,000 75,906 192,818 372 - 36,514 - 54,559 44,569 - 5,164 78 2,403 CONSOLIDATED 2013 $ 2012 $
	(2,564,910) (4,723,474)
	(769,473) (1,417,042) 1,344 1,040 1,183 (115,259) 766,946 1,531,261
	- -
	274,084 251,993 99,000 - 4,038 2,782 31,057 44,580 14,454 33,054 3,051,886 2,284,941
	3,474,519 2,617,350

Annual Report 2013

Page 37

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 3. INCOME TAX (CONTINUED)

Unrecognised temporary differences (continued) Deferred tax liabilities at 30% Unearned revenue	CONSOLIDATED 2013 2012 $ $ 1,310 4,860
	1,310 4,860

The potential deferred tax benefit of tax losses has not been recognised as an asset because recovery of tax losses is not considered probable in the context of AASB 112.The benefit of these tax losses will only be realised if:

• a) The Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deduction for the losses to be realised.

• The Company complies with the conditions for deductibility imposed by the law; and

• b)

• c) No changes in tax legislation adversely affect the Company in realising the benefit from the deduction for the loss.

NOTE 4. DIVIDENDS

The Company has not declared a dividend for the year ended 30 June 2013 (2012: Nil).

NOTE 5.	LOSS PER SHARE
		CONSOLIDATED
		2013	2012
		Cents per	Cents per
		share	share
Basic loss per share from continuing operations		(4.13)	(9.46)
Basic loss per share
The loss and weighted average number of ordinary shares used in the calculation of basic loss per share is
as follows:
- Loss ($)		(2,564,910)	(4,723,474)
- Weighted average number of ordinary shares (number)		62,175,973	49,922,847

Diluted loss per share

Diluted loss per share has not been calculated as the result is anti-dilutive in nature.

Annual Report 2013

Page 38

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 6. CASH AND CASH EQUIVALENTS

NOTE 6. CASH AND CASH EQUIVALENTS
Cash at bank and on hand Short-term deposits	CONSOLIDATED 2013 2012 $ $
	2,076,136 1,508,811 - 750,000
	2,076,136 2,258,811

Cash at bank earns interest at floating rates based on daily bank deposit rates.

Short-term deposits are recognised as term deposits maturing in less than 3 months at the reporting date. Those maturing in over 3 months are recognised as term deposit investments (see Note 8).

These deposits earn interest at the respective short-term deposit rates. At 30 June 2013, the Group did not have any borrowing facilities in place.

Cash and cash equivalents as shown in the statement of cash flows is equivalent to the balance in the statement of financial position as noted above.

Reconciliation of loss for the year to net cash flows from operating activities:

Loss from ordinary activities after income tax Exploration and evaluation expenditure reclassified Revenue derived from exploration activities reclassified Depreciation Impairment of exploration assets Impairment of financial assets Impairment of trade receivables Gain on sale of exploration assets Foreign exchange movements Changes in net assets and liabilities: (Increase)/Decrease in other receivables (Increase)/Decrease in other assets Increase/(Decrease) in trade creditors and accruals Increase/(Decrease) in provisions Cash flows from operations	CONSOLIDATED 2013 2012 $ $
	(2,564,910) (4,723,474) 1,561,818 3,703,767 (264,422) (70,000) 54,559 44,569 164,359 - 330,000 - 9,342 - (360,000) - 100,973 5,164 (18,184) 28,361 (7,699) 83,803 101,345 (265,469) (64,246) 43,813
	(957,065) (1,149,466)

Annual Report 2013

Page 39

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 6. CASH AND CASH EQUIVALENTS (CONTINUED)

Non-cash financing and investing activities:

Issue of options to brokers Shares issued for tenements Sale of tenements – shares received from Rumble Resources Limited	CONSOLIDATED 2013 2012 $ $
	139,615 193,545 149,500 1,752,000 360,000 -

NOTE 7. TRADE AND OTHER RECEIVABLES Sale of exploration asset - proceeds receivable Earn in agreement recoupment of costs PAYG Tax withheld Interest receivable GST recoverable NOTE 8. TERM DEPOSIT INVESTMENTS Term deposits A term deposit investment attracting an interest rate of 5.50% matured in NOTE 9. OTHER CURRENT ASSETS Deposits Prepayments Other current assets NOTE 10. AVAILABLE FOR SALE FINANCIAL ASSETS Non-current Shares in Rumble Resources Ltd at cost Decrease in fair value recognised in statement of profit or loss and other comprehensive income Fair value at end of year	CONSOLIDATED 2013 2012 $ $
	- 250,000 978 - 9,504 9,504 4,368 16,200 4,249 11,517
	19,099 287,221
	- 750,000
	October 2012. 20,797 23,031 41,424 35,338 4,421 574
	66,642 58,943
	360,000 - (330,000) -
	30,000 -

Annual Report 2013

Page 40

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 11. PROPERTY, PLANT AND EQUIPMENT

Consolidated Year ended 30 June 2012 At 1 July 2011 net of accumulated depreciation Additions Depreciation charge for the year Foreign currency exchange differences At 30 June 2012 net of accumulated depreciation Year ended 30 June 2013 At 1 July 2012 net of accumulated depreciation Additions Depreciation charge for the year Foreign currency exchange differences At 30 June 2013 net of accumulated depreciation Consolidated At 30 June 2012 Cost or fair value Accumulated depreciation Foreign currency exchange differences At 30 June 2012 net of accumulated depreciation At 30 June 2013 Cost or fair value Accumulated depreciation Foreign currency exchange differences At 30 June 2013 net of accumulated depreciation	Motor vehicle Office equipment Computer equipment Field equipment $ $ $ $ 37,074 84,424 5,784 878 99,078 13,493 8,712 52,978 (24,597) (17,560) (1,976) (436) (7,276) (4,652) 178 (208)	Total $ 128,160 174,261 (44,569) (11,958)
	104,279 75,705 12,698 53,212	245,894
	104,279 75,705 12,698 53,212 - 573 1,410 - (26,897) (22,665) (3,967) (1,030) 9,474 8,019 1,421 269	245,894 1,983 (54,559) 19,183
	86,856 61,632 11,562 52,451	212,501
	Motor vehicle Office equipment Computer equipment Field equipment $ $ $ $ 142,381 103,706 15,383 54,033 (31,040) (23,460) (2,863) (613) (7,062) (4,541) 178 (208)	Total $ 315,503 (57,976) (11,633)
	104,279 75,705 12,698 53,212	245,894
	142,381 104,279 16,793 54,033 (57,937) (46,125) (6,830) (1,643) 2,412 3,478 1,599 61	317,486 (112,535) 7,550
	86,856 61,632 11,562 52,451	212,501

Annual Report 2013

Page 41

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 12. CAPITALISED EXPLORATION EXPENDITURE

Acquisition of tenements - at cost Exploration and evaluation phase Balance at the beginning of the year Carrying value of tenement on sale Purchase of tenements – cash Purchase of tenements – shares Impairment of exploration assets Effect of movement in exchange rates on carrying value Total exploration expenditure	CONSOLIDATED 2013 2012 $ $ 5,261,732 3,271,757 - (330,000) 383,327 567,975 149,500 1,752,000 (164,359) - 208,471 -
	5,838,671 5,261,732

The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phase is dependent on the successful development and commercial exploitation or sale of the respective areas. The Company relinquished its rights to the Wilier Project during the year resulting in an impairment of exploration assets of $164,359 (2012: nil).

NOTE 13. SHARE BASED PAYMENTS

Unlisted options

There were 3,250,000 options granted during the year by the Company (2012: nil). Of these, 250,000 options (Series No. 1) were issued to a consultant for past services in relation to the acquisition of mineral permits in Burkina Faso. The remaining options (Series No. 2) were issued to a broker for their services in assisting with a raising capital undertaken by the Company during the year.

Outstanding at the beginning of the year Granted during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year	CONSOLIDATED 2013 2012 Number of options Weighted average exercise price Number of options Weighted average exercise price No. $ No. $ 12,500,000 0.325 14,500,000 0.340 3,250,000 0.182 - - (12,500,000) 0.325 (2,000,000) 0.425
	3,250,000 0.182 12,500,000 0.325
	3,250,000 0.182 12,500,000 0.325

Annual Report 2013

Page 42

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 13. SHARE BASED PAYMENTS (CONTINUED)

Unlisted options (continued)

The options outstanding at 30 June 2013 had a weighted average exercise price of $0.182 and a remaining average contractual life of 3 years and 2 months. 12,500,000 options expired on 30 June 2013.

The value of the options issued to the sponsoring broker was $139,615 (2012:$193,545) and is charged against issued capital as a capital raising cost. The value of the options has been calculated using the BlackScholes method and has been recognised in the option reserve over the period of vesting (from date of issue to 30 June 2013).

The inputs to the options valuation were:

	Series No. 1	Series No. 2
	250,000	3,000,000
	options	options
Dividend yield (%)	n/a	n/a
Expected volatility (%)	62	86
Risk-free interest rate (%)	2.62	2.94
Expected life of option (years)	1.29	3.00
Exercise price (cents)	45	16
Grant date share price (cents)	23	13

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

NOTE 14. TRADE AND OTHER PAYABLES

Trade payables (i) Accrued expenses	CONSOLIDATED 2013 2012 $ $ 344,394 212,108 117,570 148,512
	461,964 360,620

(i) Trade payables are non-interest bearing and are normally settled on 30 day terms

Annual Report 2013

Page 43

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 15. PROVISIONS Employee leave entitlements Other employee entitlements NOTE 16. REMUNERATION OF AUDITORS The auditor of the Group is HLB Mann Judd Amounts received & receivable by the auditor : - audit and review of the financial reports of the Group	CONSOLIDATED 2013 2012 $ $ 45,937 71,520 - 38,663
	45,937 110,183
	CONSOLIDATED 2013 2012 $ $ 30,985 35,280
	30,985 35,280

Annual Report 2013

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Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 NOTE 17. ISSUED CAPITAL

	2013	2012
	$	$
Issued capital
Ordinary shares issued and fully paid	17,514,184	15,709,055

Ordinary shares entitle the holder to participate in dividends and in the proceeds and winding up of the Company in proportion to the number of and amounts paid on the shares held.

Fully paid ordinary shares carry one vote per share and the right to dividends.

Movement in ordinary shares on issue At beginning of year - Shares issued for cash - Shares issued for tenements - Cost of options issued to brokers - Cost of share issues - Transfer from option reserve (1) At end of year	2013 2012 Number of shares $ Number of shares $ 56,750,832 15,709,055 41,047,002 8,999,565 14,106,130 1,833,800 11,953,830 5,138,300 650,000 149,500 3,750,000 1,752,000 - (139,615) - (193,545) - (176,302) - (353,957) - 137,746 - 366,692
	71,506,962 17,514,184 56,750,832 15,709,055

(1) Issue costs relating to options issued to brokers amounting to $137,746 were transferred from the option reserve to share capital on their expiry date of 30 June 2013 (2012: $366,692).

Annual Report 2013

Page 45

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 18. RESERVES

Option Reserve Balance at beginning of year Options issued to consultant Options issued to broker Options transferred to accumulated losses on expiry Options transferred to issued capital on expiry Balance at end of year Foreign currency translation reserve Balance at beginning of year Movement in foreign exchange on translation Balance at end of year Total	CONSOLIDATED 2013 2012 $ $ 573,942 747,089 4,394 - 139,615 193,545 (436,196) - (137,746) (366,692)
	144,009 573,942
	135,093 61,460 96,868 73,633
	231,961 135,093
	375,970 709,035

The option reserve is used to record the value of equity benefits provided to employees and directors as part of their remuneration. Refer to Note 13 for further information on these options. The reserve is also used to record the value of options granted to a sponsoring broker as part of the Company’s share placements as well as options granted to consultants for services rendered.

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

NOTE 19. ACCUMULATED LOSSES

Movement in accumulated losses: Balance at beginning of year Transfer from reserve on expiry of options Loss for the year Balance at end of year	CONSOLIDATED 2013 2012 $ $ (8,026,292) (3,302,818) 436,196 - (2,564,910) (4,723,474)
	(10,155,006) (8,026,292)

Annual Report 2013

Page 46

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 20. FINANCIAL INSTRUMENTS

The Group’s principal financial instruments comprise cash, term deposits, trade payables and trade receivables. These financial instruments arise directly from the Group’s operations.

The main risks arising from the Group’s financial instruments are cash flow interest rate risk, liquidity risk, foreign exchange risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements.

(a) Categories of financial instruments Financial assets Cash and cash equivalents Term deposit investments Trade and other receivables Financial liabilities Trade and other payables	CONSOLIDATED 2013 2012 $ $ 2,076,136 2,258,811 - 750,000 19,099 287,221
	461,964 360,620

(b) Interest rate risk

The Group is exposed to interest rate risk due to variable interest being earned on its assets held in cash and cash equivalents.

The Company has no borrowings.

Profile

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

	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED
	2013		2012
	Carrying	Interest rate	Carrying	Interest rate
	amount		amount
	$	%	$	%
Fixed rate instruments
Cash and bank balances	-	-	750,000	5.30
Term deposit investments	-	-	750,000	5.50
	-	-	1,500,000	5.40
Variable rate instruments
Cash and bank balances	2,076,136	2.56	1,508,811	3.36

Annual Report 2013

Page 47

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 20. FINANCIAL INSTRUMENTS (CONTINUED)

Cash flow sensitivity analysis for fixed rate instruments

A change of 100 basis points would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2012.

30 June 2013: Consolidated Fixed rate instruments 30 June 2012: Consolidated Fixed rate instruments	Equity 100bp 100bp increase decrease - - 15,000 (15,000)	Profit and loss 100bp 100bp increase decrease - -
		15,000 (15,000)

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2012.

30 June 2013: Consolidated Variable rate instruments 30 June 2012: Consolidated Variable rate instruments	Equity 100bp 100bp increase decrease 20,761 (20,761) 15,088 (15,088)	Profit and loss 100bp 100bp increase decrease 20,761 (20,761)
		15,088 (15,088)

Funds that are not required in the short term are placed on deposit for a period of no more than 6 months at a fixed interest rate. The Group’s exposure to interest rate risk and the effective interest rate by maturity is set out below. As the Group has no borrowings its exposure to interest rate movements is limited to the amount of interest income it can potentially earn on surplus cash deposits.

(c) Net fair values

The net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and liabilities approximates their carrying value.

(d) Commodity price risk

The Group’s exposure to price risk is minimal.

Annual Report 2013

Page 48

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 20. FINANCIAL INSTRUMENTS (CONTINUED)

(e) Credit risk

There are no significant concentrations of credit risk within the Group.

With respect to credit risk arising from the other financial assets of the Company, which comprise cash and cash equivalents, and trade receivables, the Company’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these instruments.

Since the Group trades only with recognised third parties, there is no requirement for collateral.

(f) Liquidity risk

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash reserves.

The following table details the Group’s expected contractual maturity for its financial liabilities:

30 June 2013: Consolidated Financial liabilities Non-interest bearing 30 June 2012: Consolidated Financial liabilities Non-interest bearing	Less than 1 month 1 to 3 months 3 months to 1 year 1 to 5 years $ $ $ $ 461,964 - - -	Total $ 461,964
	461,964 - - -	461,964
	Less than 1 month 1 to 3 months 3 months to 1 year 1 to 5 years $ $ $ $ 360,620 - - -	Total $ 360,620
	360,620 - - -	360,620

(g) Capital Management

The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it may continue to provide returns for shareholders and benefits for other stakeholders. Due to the nature of the Group’s activities, being mineral exploration, it does not have ready access to credit facilities and therefore is not subject to any externally imposed capital requirements, with the primary source of Group funding being equity raisings. Accordingly, the objective of the Group’s capital risk management is to balance the current working capital position against the requirements to meet exploration programmes and corporate overheads. This is achieved by maintaining appropriate liquidity to meet anticipated operating requirements, with a view to initiating capital raisings as required.

Annual Report 2013

Page 49

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 20. FINANCIAL INSTRUMENTS (CONTINUED)

(h) Foreign currency risk management

The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. The Group has no hedging policy in place to manage those risks however all foreign exchange purchases are settled promptly.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the balance date expressed in Australian dollars are as follows:

	Liabilities		Assets
	2013	2012	2013	2012
	$	$	$	$
CFA Francs	(172,615)	(44,430)	34,184	57,062
US dollars	(101,714)	(18,464)	-	-

Foreign currency sensitivity analysis

The Group is exposed to CFA Franc (XOF) and US Dollar (USD) currency fluctuations.

The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian dollar against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number indicates an increase in profit or loss and other equity where the Australian Dollar strengthens against the respective currency. For a weakening of the Australian Dollar against the respective currency there would be an equal and opposite impact on the profit or loss and other equity and the balances below would be negative:

	Increase		Decrease
	2013	2012	2013	2012
	$	$	$	$
CFA Franc impact
Profit or loss (i)	13,843	12,068	(13,843)	(12,068)
Other equity	-	-	-	-
USD impact
Profit or loss (i)	10,171	8,260	(10,171)	(8,260)
Other equity	-	-	-	-

(i) This is mainly attributable to the exposure outstanding on CFA Franc and USD payables at year end in the Group.

Annual Report 2013

Page 50

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 21. COMMITMENTS

a) Exploration expenditure commitments

In order to maintain current rights of tenure to mining tenements and permits, the Group has the following discretionary exploration expenditure requirements up until expiry of leases. These obligations, which are subject to renegotiation upon expiry of the leases, are not provided for in the financial statements and are payable:

Within one year Later than one year but not later than 5 years b) Operating lease commitments Within one year Later than one year but not later than 5 years	CONSOLIDATED 2013 2012 $ $ 1,310,293 1,147,125 5,241,172 4,588,500
	6,551,465 5,735,625
	16,988 46,928 9,910 80,154
	26,898 127,082

If the Company decides to relinquish certain leases and/or does not meet these obligations, assets recognised in the statement of financial position may require review to determine the appropriateness of carrying values. The sale, transfer or farm-out of exploration rights to third parties will reduce or extinguish these obligations.

NOTE 22. SEGMENT INFORMATION

The Group is managed primarily on the basis of its exploration projects. Operating segments are therefore determined on the same basis. Reportable segments disclosed are based on aggregating tenements and permits where the tenements and permits are considered to form a single project. This is indicated by:

• having the same ownership structure;

• exploration being focused on the same mineral or type of mineral;

• exploration programs targeting the tenements and permits as a group, indicated by the use of the same exploration team, and shared geological data, knowledge and confidence across the areas; and

• shared mining economic considerations such as mineralisation, metallurgy, marketing, legal, environmental, social and government factors.

Basis of accounting for purposes of reporting by operating segments

Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors as the chief operating decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

Annual Report 2013

Page 51

Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 22. SEGMENT INFORMATION (CONTINUED)

Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible assets have not been allocated to operating segments.

Segment liabilities

Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables.

Year ended 30 June 2013: Consolidated Segment revenue Segment result Included within segment result: Depreciation Interest revenue Segment assets Segment liabilities	Exploration (Western Australia) Exploration (Africa) Unallocated Total $ $ $ $ - 660,936 76,278 727,872
	- (1,078,394) (1,486,516) (2,564,910)
	- (25,033) (29,526) (54,559) - - 75,906 75,906 - 5,851,019 2,392,030 8,243,049 - (329,996) (177,905) (507,901)

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Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 22. SEGMENT INFORMATION (CONTINUED)

Year ended 30 June 2012: Consolidated Segment revenue Segment result Included within segment result: Depreciation Interest revenue Segment assets Segment liabilities	Exploration (Western Australia) Exploration (Africa) Unallocated Total $ $ $ $ 70,000 - 192,818 262,818
	7,247 (3,680,698) (1,050,023) (4,723,474)
	(3,778) (37,454) (3,337) (44,569) - - 192,818 192,818 296,071 5,404,385 3,162,145 8,862,601 - (223,634) (247,169) (470,803)

NOTE 23. RELATED PARTY DISCLOSURES

The consolidated financial statements include the financial statements of Canyon Resources Limited and the subsidiaries listed in the following table.

	Country of	% Equity	Interest	Investment $	Investment $
Name	Incorporation	2013	2012	2013	2012
Neufco Pty Ltd	Australia	100	100	1	1
Canyon West Africa Pty Ltd	Australia	100	100	1	1
Askia Sarl Pty Ltd	Australia	100	100	1	1
Canyon Derosa Pty Ltd	Australia	100	100	1	1
Askia Minerals Sarl	Burkina Faso	100	100	1	1
Canyon West Africa Sarl	Burkina Faso	100	100	1	1
CSO Sarl	Burkina Faso	100	100	1	1
Derosa Sarl	Burkina Faso	100	-	1	-

Canyon Resources Limited is the ultimate Australian parent entity and ultimate parent of the Group.

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

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Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 23. RELATED PARTY DISCLOSURES (CONTINUED)

Transactions with related entities:

Director related entities

Remuneration (excluding the reimbursement of costs) received or receivable by directors of the Company and aggregate amounts paid to superannuation funds in connection with the retirement of directors are disclosed in the Remuneration Report included in the Directors’ Report.

During the year there were no other related party transactions between the Group and related parties.

NOTE 24. PARENT ENTITY DISCLOSURES

Financial position as at 30 June 2013

Assets Current assets Non-current assets Total assets Liabilities Current liabilities Total liabilities Equity Issued capital Accumulated losses Reserves Foreign currency translation reserve Share-based payments Total equity Financial performance for the year ended 30 June 2013 Loss for the year Other comprehensive income Total comprehensive loss	30 June 2013 $ 30 June 2012 $
	2,119,797 3,300,326 5,287,351 5,562,274
	7,417,670 8,862,600
	162,215 470,802
	162,215 470,802
	17,514,184 15,709,055 (10,402,738) (8,026,292) - 135,093 144,009 573,942
	7,255,455 8,391,798
	Year ended 30 June 2013 Year ended 30 June 2012 $ $
	(2,812,644) (4,723,474) - 73,633
	(2,812,644) (4,649,841)

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Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 25. EVENTS SUBSEQUENT TO REPORTING DATE

There were no materials events subsequent to the balance date.

NOTE 26. CONTINGENT LIABILITIES

• a) Under the agreement to acquire the Tigou and Tyekobo permits which form part of the Taparko North project, the consolidated entity is required to pay a 2% net smelter royalty to the vendors or pay US$2,000,000 per permit to pay out the royalty.

• b) Under the agreement to acquire the Derosa project the consolidated entity is required to make the following payments and share issues:

• US$100,000 on the second anniversary of the permits being granted

• US$290,000 and the issue of 100,000 shares on the third anniversary of the permits being granted

Canyon may withdraw from the agreement at any time however, should Canyon not make the purchase payments the agreement will be terminated and Canyon will forfeit its right to ownership and will not have the right to be reimbursed.

• c) As part of the agreement whereby Canyon through its subsidiary CSO Sarl will have the option to acquire 100% of the Pinarello project the following payments are required to be made:

• US$240,000 on 21[st] October 2013

• US$310,000 on 21[st] October 2014

Canyon may withdraw from the agreement at any time however, should Canyon not make the purchase payments the agreement will be terminated and Canyon will forfeit its right to ownership and will not have the right to be reimbursed.

Under the agreement the consolidated entity is required to pay a 1% net smelter royalty to the vendors.

Other than those disclosed above there are no contingent liabilities outstanding at the end of the year.

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Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 27. DIRECTORS’ AND EXECUTIVES’ DISCLOSURES

(a) Details of Key Management Personnel

(i) Directors

Rhoderick Grivas Chairman Phillip Gallagher Managing Director Matthew Shackleton Director (non-executive) (ii) Executives Chris Connell Exploration Manager (resigned 15 March 2013) Phillip MacLeod Company Secretary

Key management personnel remuneration has been included in the Remuneration Report section of the

Directors’ Report.

Total remuneration paid is as follows:

2013 2012 $ $ Short-term benefits 662,981 588,176 Post-employment benefits 47,490 42,064 710,471 630,240 )Option holdings of Key Management Personnel Options over ordinary shares held in Canyon Resources Limited (number): Vested as at end of year 30 June 2013 Balance at beginning ofyear Granted as remune- ration Options exercised Net change Other # Balance at end of year Total Exercisable Not Exercis- able Directors Rhoderick Grivas 2,000,000 - - (1,884,615) 115,385 115,385 115,385 - Phillip Gallagher 3,000,000 - - (2,980,000) 20,000 20,000 20,000 - Matthew Shackleton 1,000,000 - - (980,000) 20,000 20,000 20,000 - Executives Chris Connell (1) 2,000,000 - - (2,000,000) - - - - Phillip MacLeod 500,000 - - (500,000) - - - - Total 8,500,000 - - (8,344,615) 155,385 155,385 155,385 -	2013 2012 $ $ Short-term benefits 662,981 588,176 Post-employment benefits 47,490 42,064 710,471 630,240 )Option holdings of Key Management Personnel Options over ordinary shares held in Canyon Resources Limited (number): Vested as at end of year 30 June 2013 Balance at beginning ofyear Granted as remune- ration Options exercised Net change Other # Balance at end of year Total Exercisable Not Exercis- able Directors Rhoderick Grivas 2,000,000 - - (1,884,615) 115,385 115,385 115,385 - Phillip Gallagher 3,000,000 - - (2,980,000) 20,000 20,000 20,000 - Matthew Shackleton 1,000,000 - - (980,000) 20,000 20,000 20,000 - Executives Chris Connell (1) 2,000,000 - - (2,000,000) - - - - Phillip MacLeod 500,000 - - (500,000) - - - - Total 8,500,000 - - (8,344,615) 155,385 155,385 155,385 -	2013 2012 $ $ Short-term benefits 662,981 588,176 Post-employment benefits 47,490 42,064 710,471 630,240 )Option holdings of Key Management Personnel Options over ordinary shares held in Canyon Resources Limited (number): Vested as at end of year 30 June 2013 Balance at beginning ofyear Granted as remune- ration Options exercised Net change Other # Balance at end of year Total Exercisable Not Exercis- able Directors Rhoderick Grivas 2,000,000 - - (1,884,615) 115,385 115,385 115,385 - Phillip Gallagher 3,000,000 - - (2,980,000) 20,000 20,000 20,000 - Matthew Shackleton 1,000,000 - - (980,000) 20,000 20,000 20,000 - Executives Chris Connell (1) 2,000,000 - - (2,000,000) - - - - Phillip MacLeod 500,000 - - (500,000) - - - - Total 8,500,000 - - (8,344,615) 155,385 155,385 155,385 -
	2,000,000 - - (1,884,615) 115,385 115,385 3,000,000 - - (2,980,000) 20,000 20,000 1,000,000 - - (980,000) 20,000 20,000 2,000,000 - - (2,000,000) - - 500,000 - - (500,000) - -	115,385 - 20,000 - 20,000 - - - - -
	8,500,000 - - (8,344,615) 155,385 155,385	155,385 -

(b) Option holdings of Key Management Personnel

Includes forfeitures, expired options and balance on resignation

(1) Resigned 15 March 2013

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Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 27. DIRECTORS’ AND EXECUTIVES’ DISCLOSURES (CONTINUED)

(b) Option holdings of Key Management Personnel (continued)

30 June 2012 Directors Rhoderick Grivas Phillip Gallagher Matthew Shackleton Executives Chris Connell Phillip MacLeod Total	Vested as at end of year Balance at beginning ofyear Granted as remune- ration Options exercised Net change Other # Balance at end of year Total Exercisable Not Exercis- able	Vested as at end of year Balance at beginning ofyear Granted as remune- ration Options exercised Net change Other # Balance at end of year Total Exercisable Not Exercis- able
	2,000,000 - - - 2,000,000 2,000,000 3,000,000 - - - 3,000,000 3,000,000 1,000,000 - - - 1,000,000 1,000,000 2,000,000 - - - 2,000,000 2,000,000 500,000 - - - 500,000 500,000	2,000,000 - 3,000,000 - 1,000,000 - 2,000,000 - 500,000 -
	8,500,000 - - - 8,500,000 8,500,000	8,500,000 -

Includes forfeitures expired options and balance on resignation

(c) Shareholdings of Key Management Personnel

Ordinary shares held in Canyon Resources Limited (number):

30 June 2013 Directors Rhoderick Grivas Phillip Gallagher Matthew Shackleton Executives Chris Connell (1) Phillip MacLeod Total	Balance at beginning of year Purchased on market On exercise of options Net change other # Balance at end of year
	1,550,000 - - 115,385 1,665,385 1,500,001 - - 20,000 1,520,001 1,635,001 - - 20,000 1,655,001 20,000 - - (20,000) - 40,000 - - - 40,000
	4,745,002 - - 135,385 4,880,387

(1) Resigned 15 March 2013

includes balance on resignation

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Canyon Resources Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 27. DIRECTORS’ AND EXECUTIVES’ DISCLOSURES (CONTINUED)

(c) Shareholdings of Key Management Personnel (continued)

30 June 2012 Directors Rhoderick Grivas Phillip Gallagher Matthew Shackleton Executives Chris Connell Phillip MacLeod Total	Balance at beginning of year Purchased on market On exercise of options Net change other # Balance at end of year
	1,550,000 - - - 1,550,000 1,500,001 - - - 1,500,001 1,635,001 - - - 1,635,001 20,000 - - - 20,000 50,000 - - (10,000) 40,000
	4,755,002 - - (10,000) 4,745,002

includes balance on resignation

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Canyon Resources Limited

DIRECTORS’ DECLARATION

1. In the opinion of the directors of Canyon Resources Limited (the ‘Company’):

2. a. the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including:

   • i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and of its performance for the year then ended; and

   • ii. complying with Australian Accounting Standards and Corporations Regulations 2001 professional reporting requirements and other mandatory requirements;

3. b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and

4. c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.

5. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2013.

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

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Phillip Gallagher

Director

Dated this 27th day of September 2013

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INDEPENDENT AUDITOR’S REPORT

To the members of Canyon Resources Limited

Report on the Financial Report

We have audited the accompanying financial report of Canyon Resources Limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2013, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

In Note 1(c), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements , that the financial report 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. Those 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 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.

Our audit did not involve an analysis of the prudence of business decisions made by directors or

management.

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

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

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HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

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Auditor’s opinion

In our opinion:

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

• (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and of its performance for the year ended on that date; and

• (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and

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

Report on the Remuneration Report

We have audited the remuneration report included in the directors’ report for the year ended 30 June 2013. 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 Canyon Resources Limited for the year ended 30 June 2013 complies with section 300A of the Corporations Act 2001 .

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HLB Mann Judd Chartered Accountants

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L Di Giallonardo Partner

Perth, Western Australia 27 September 2013

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Canyon Resources Limited

ADDITIONAL SECURITIES EXCHANGE INFORMATION

Additional information required by the ASX Limited and not shown elsewhere in this report is as follows. This information is current as at 24 September 2013.

• (a) Distribution of equity securities and voting rights

• i. Ordinary share capital

• 71,506,962 fully paid ordinary shares are held by 727 shareholders. All issued shares carry one vote per share and carry the rights to dividends.

The number of shareholders by size of holding:

1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Total	Ordinary shares Number of holders Number of shares 10 3,958 48 149,268 110 1,026,098 409 17,701,803 150 52,625,835
	727 71,506,962

• ii. Convertible securities

• 5 Class A held by 4 holders.

• 10 Class B held by 4 holders.

• Convertible securities do not carry the right to vote.

The number of convertible security holders by size of holding:

1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Total	Class A Convertible Securities Class B Convertible Securities Number of holders Number of securities Number of holders Number of securities 4 5 4 10 - - - - - - - - - - - - - - - -
	4 5 4 10

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Canyon Resources Limited

iii. Options

• 14,106,130 listed options are held by 134 option holders. 3,250,000 unlisted options are held by 3 option holders. Options do not carry the right to vote.

The number of option holders by size of holding:

1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Total	Options expiring 29 Feb 2016 Exercisable at $0.16 (Quoted) Options expiring 29 Feb 2016 Exercisable at $0.16 (Unquoted) Options expiring 12 Apr 2014 Exercisable at $0.45 (Unquoted) Number of holders Number of options Number of holders Number of options Number of holders Number of options - - - - - - - - - - - - - - - - - - 86 4,354,295 - - - - 48 9,751,835 3 3,000,000 1 250,000	Options expiring 29 Feb 2016 Exercisable at $0.16 (Quoted) Options expiring 29 Feb 2016 Exercisable at $0.16 (Unquoted) Options expiring 12 Apr 2014 Exercisable at $0.45 (Unquoted) Number of holders Number of options Number of holders Number of options Number of holders Number of options - - - - - - - - - - - - - - - - - - 86 4,354,295 - - - - 48 9,751,835 3 3,000,000 1 250,000
	134 14,106,130 3 3,000,000 1	250,000

(b) Substantial shareholders

The Company has not received any current substantial shareholder notices as at 24 September 2013.

(c) The numbers of unquoted equity securities are:

	Number	Expiry date
Options exercisable at $0.16	3,000,000	29 February 2016
Options exercisable at $0.45	250,000	12 April 2014
Class A convertible securities	5
Class B convertible securities	10

Names of holders of 20% or more of unquoted equities:

	Unquoted equity security	Number	Percentage
Zenix Nominees Pty Ltd	Options expiring 29 February 2016	2,000,000	67
	Exercisable at $0.16
Jean Luc Roy	Options expiring 12 April 2014	250,000	100
	Exercisable at $0.45

• (d) There are 68 holders of an unmarketable parcel of shares at a share price of $0.07. There are 19 holders of an unmarketable parcel of listed options at an option price of $0.015.

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Canyon Resources Limited

(e) Twenty largest holders of quoted equity securities are:

Fully paid ordinary shares Name HSBC Custody Nominees (Australia) Limited Kingslane Pty Ltd Precambrian Pty Ltd Morou Francois Ouedrago Matthew & Nicole Shackleton Goodheart Pty Ltd The Purple Bougainvillea Pty Ltd William Hernstadt Fremantle Enterprises Pty Ltd Patrice Chevalier Jean Luc Roy Michael Parish Technica Pty Ltd Dixtru Pty Limited Joseph & Christine Caudo AWD Consultants Pty Ltd Florin Mining Investment Company Limited Garrick Allen Coremi Sarl BNP Paribas Noms (NZ) Ltd Total Options exercisable at $0.16 expiring 29 February	Number Percentage 4,337,729 6.07 3,186,345 4.46 1,900,000 2.66 1,700,000 2.38 1,655,001 2.31 1,615,384 2.26 1,456,668 2.04 1,235,000 1.73 1,120,001 1.57 1,063,830 1.49 900,000 1.26 800,000 1.12 776,196 1.09 750,000 1.05 650,000 0.91 615,384 0.86 601,714 0.84 600,000 0.84 600,000 0.84 518,215 0.72
	26,081,467 36.50
	2016 Number Percentage 750,000 5.32 750,000 5.32 625,000 4.43 475,000 3.37 400,000 2.84 385,000 2.73 365,384 2.59 300,461 2.13 300,000 2.13 270,000 1.91 250,000 1.77 250,000 1.77 200,000 1.42 200,000 1.42 158,461 1.12 154,000 1.09 153,847 1.09 150,000 1.06 150,000 1.06 150,000 1.06
Name Dixtru Pty Limited William Hernstadt Technica Pty Ltd Florin Mining Investment Company Limited Lomacott Pty Ltd Wesman Nominees Pty Ltd AWD Consultants Pty Ltd Goffacan Pty Ltd Tromso Pty Ltd John, Chuck & Dixie Bartle Cairnglen Investments Pty Ltd Michael Parish Bruce Birnie Pty Ltd M Ivey Pty Ltd Philip & Millie Shurey Gregory & Jennifer Battle CW Associates Pty Limited Barralong Capital Pty Ltd Bond Street Custodians Limited Joseph & Christine Caudo Total
	6,437,153 45.63

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Canyon Resources Limited

• (f) The Company does not have any securities on issue subject to escrow.

• (g) Interest in, situation of and percentage interest in mining permits held are:

Permits	Location	Interest
Taparko North Project
Karga 2	Burkina Faso	Own 100%
Bani	Burkina Faso	Own 100%
Diobou	Burkina Faso	Own 100%
Tigou	Burkina Faso	Rights to 100%
Tyekobo	Burkina Faso	Agreement to acquire 100%
Tao Project
Tao	Burkina Faso	Own 100%
Derosa Project*
Rassouli	Burkina Faso	Agreement to acquire 100%
Gourbala	Burkina Faso	Agreement to acquire 100%
Boussou	Burkina Faso	Agreement to acquire 100%
Souri	Burkina Faso	Agreement to acquire 100%
Bompela	Burkina Faso	Agreement to acquire 100%
Sapala	Burkina Faso	Agreement to acquire 100%
Pinarello Project
Sokrani	Burkina Faso	Agreement to acquire 100%
Niofera	Burkina Faso	Agreement to acquire 100%
Baiera	Burkina Faso	Agreement to acquire 100%
Sokrani 2	Burkina Faso	Agreement to acquire 100%
Soukoura 2	Burkina Faso	Agreement to acquire 100%
Konkolikan Project
Konkolikan	Burkina Faso	Agreement to acquire 100%

*Derosa Project subject to a joint venture agreement with Rumble Resources Limited to earn up to 75%.

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Canyon Resources Limited

CORPORATE GOVERNANCE COMPLIANCE STATEMENT

Canyon Resources Limited (the Company) and the Board are committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to review the framework and practices to ensure they meet the interests of shareholders.

The disclosure of corporate governance practices can be viewed on the Company website at www.canyonresources.com.au

The directors are responsible to the shareholders for the performance of the Company in both the short and the longer term and seek to balance sometimes competing objectives in the best interests of the Company as a whole. Their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Company is properly managed.

Corporate Governance Compliance

A description of the Company's main corporate governance practices are set out below. All these practices, unless otherwise stated, have been in place for the financial year ended 30 June 2013. The Company has considered the ASX Corporate Governance Principles and the corresponding Recommendations to determine an appropriate system of control and accountability to best fit its business and operations commensurate with these guidelines.

Disclosure of Corporate Governance Practices Summary Statement

		ASX Principles and	“If not,
		Recommendations	why not”
Recommendation	1.1	
Recommendation	1.2	
Recommendation	2.1		
Recommendation	2.2		
Recommendation	2.3	
Recommendation	2.4	
Recommendation	2.5	
Recommendation	2.6	
Recommendation	3.1	
Recommendation	3.2	
Recommendation	3.3		
Recommendation	3.4	
Recommendation	4.1	
Recommendation	4.2		
Recommendation	4.3	
Recommendation	4.4	
Recommendation	5.1	
Recommendation	6.1	
Recommendation	7.1	
Recommendation	7.2	
Recommendation	7.3	
Recommendation	8.1	
Recommendation	8.2	
Recommendation	8.3	

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Canyon Resources Limited

Disclosure – Principles & Recommendations

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.

Disclosure:

The Directors are responsible to the shareholders for the performance of the Company in both the short and the longer term and seek to balance sometimes competing objectives in the best interests of the Company as a whole. Their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Company is properly managed.

The Board has sole responsibility for the following:

• Appointing and removing the Managing Director and any other executives and approving their remuneration;

• Appointing and removing the Company Secretary and Chief Financial Officer and approving their remuneration;

• Determining the strategic direction of the Company and measuring performance of management against approved strategies;

• Review of the adequacy of resources for management to properly carry out approved strategies and business plans;

• Adopting operating and capital expenditure budgets at the commencement of each financial year and monitoring the progress by both financial and non-financial key performance indicators;

• Monitoring the Company’s medium term capital and cash flow requirements;

• Approving and monitoring financial and other reporting to regulatory bodies, shareholders and other organisations;

• Determining that satisfactory arrangements are in place for auditing the Company’s financial affairs;

• Review and ratify systems of risk management and internal compliance and control, codes of conduct and compliance with legislative requirements; and

• Ensuring that policies and compliance systems consistent with the Company’s objectives and best practice are in place and that the Company and its officers act legally, ethically and responsibly on all matters.

Day to day management of the Company’s affairs and the implementation of the corporate strategy and policy initiatives are undertaken by the Managing Director who acts in the capacity as CEO and his performance is monitored and evaluated by the Board.

Some Board functions may be handled through Board Committees. These committees are appointed when the size and scale of operations requires. However, the Board as a whole is responsible for determining the extent of powers residing in each Committee and is ultimately responsible for accepting, modifying or rejecting Committee recommendations.

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Canyon Resources Limited

Recommendation 1.2:

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

Disclosure:

The Board is responsible for evaluating the senior executives. The performance of senior executives is reviewed at least annually with reference to the terms of their employment contracts. Performance evaluations of senior executives were undertaken during the period in accordance with the disclosed procedure.

Principle 2 – Structure the board to add value

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

Recommendation 2.1:

A majority of the Board should be independent directors.

Disclosure:

The Company did not have a majority of independent directors for the entire year. From February 2013, the Chairman, Mr Rhod Grivas, provided geological and management services to the Company.

Mr Shackleton (Non-Executive Director) is an independent director.

Recommendation 2.2:

The Chair should be an independent director.

Disclosure:

Mr Grivas is Chair of the Board and was an independent director until February 2013. As noted above, Mr Grivas has provided geological and management services from that date.

Recommendation 2.3:

The roles of the Chair and CEO should not be exercised by the same individual.

Disclosure:

The role of the Chairman and the CEO are not exercised by the same person.

The division of responsibilities between the Chairman and the CEO is set out in the Board Charter.

Recommendation 2.4:

The Board should establish a Nomination Committee.

Disclosure:

A Nomination Committee has been established.

Recommendation 2.5:

Companies should disclose the process for evaluating the performance of the Board, its committees and individual directors.

Disclosure:

The Chairman is responsible for evaluation of the CEO, the Board and the committees.

The review is currently informal but is based on a review of goals for the Board and individual Directors. The goals are based on corporate requirements and any areas for improvement that may be identified. The Chairman will provide each Director with confidential feedback on his or her performance.

Induction procedures are in place for all directors and senior executives report to the Board as to their area of responsibility at each Board meeting, if required.

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Recommendation 2.6:

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

Disclosure:

Skills, Experience, Expertise and term of office of each Director and re-election procedure

A profile of each director containing their skills, experience and expertise is set out in the Directors' Report.

In accordance with the Constitution, one third of the directors retires by rotation each year and may offer themselves for re-election.

The membership of the Board, its activities and composition is subject to periodic review. The criteria for determining the identification and appointment of a suitable candidate for the Board shall include quality of the individual, background of experience and achievement, compatibility with other Board members, credibility within the Company’s scope of activities, intellectual ability to contribute to the Board duties and physical ability to undertake the Board duties and responsibilities.

Identification of Independent Directors

Mr Shackleton (Non-Executive Director) is independent in terms of the ASX Corporate Governance Council's discussion of independent status.

Statement concerning availability of Independent Professional Advice

To assist directors with independent judgement, it is the Board's policy that if a director considers it necessary to obtain independent professional advice to properly discharge the responsibility of their office as a director then, provided the director first obtains approval for incurring such expense from the Chairman, the Company will pay the reasonable expenses associated with obtaining such advice.

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 disclose the code or a summary of the code.

Disclosure:

The Company has a Code of Conduct that applies to all directors, senior executives, employees and contractors. The Code is disclosed on the Company’s web site.

Recommendation 3.2:

Companies should establish a policy concerning diversity and disclose the policy or a summary of the policy. The policy should include requirements for the Board to establish measurable objectives for achieving gender diversity for the Board to assess annually both the objectives and progress in achieving them.

Disclosure:

The Board adopted a Diversity Policy during the year. The Board recognises the benefits of having an appropriate blend of diversity on the Board and in all areas of the Group’s business. The employees and officers of the Group currently represent a diverse range of ethnicity, cultural background, age, gender and experience.

Recommendation 3.3:

Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the Board in accordance with the diversity policy and progress towards achieving them.

Disclosure:

The Board has not established formal measurable objectives for achieving gender diversity as they are not considered to be warranted given the size and stage of development of the organization.

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Recommendation 3.4:

Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.

Disclosure:

losure:
	Proportion
Women employees in the Group:	3 of 11
Women in senior executive positions:	0 of 3
Women on the Board:	0 of 3

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

The Board should establish an Audit Committee.

Disclosure:

An Audit and Risk Committee has been established.

Recommendation 4.2:

The Audit Committee should be structured so that it:

• consists only of non-executive directors;

• consists of a majority of independent directors;

• is chaired by an independent Chair, who is not Chair of the Board; and

• has at least three members.

Disclosure:

The Audit and Risk Committee does not currently meet the compositional requirements set out in Recommendation 4.2 as the Board only has three members, of which only two are non-executive and independent.

Recommendation 4.3:

The Audit Committee should have a formal charter.

Disclosure:

The Audit and Risk Committee has adopted a formal Charter.

Recommendation 4.4:

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

Disclosure:

The Audit and Risk Committee did not meet formally during the year. The full Board undertakes the role of the Committee until such time as the composition of the Board allows for the fulfilment of the compositional requirements of the Committee.

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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.

Disclosure:

In order to ensure that the Company meets its obligations with regard to the continuous disclosure requirements, the Company has adopted a Continuous Disclosure Policy.

The Continuous Disclosure Policy sets out the Company’s obligations and its policies and procedures to ensure timely and accurate disclosure of price sensitive information to the market.

Principle 6 – Respect the rights of shareholders

“Companies should respect the rights of shareholders and facilitate the effective exercise 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.

Disclosure:

The Company has a Shareholder Communications Policy and a website for making information available to shareholders. Shareholders are encouraged to attend and participate in general meetings.

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.

Disclosure:

The Board has adopted a Risk Management Policy. Risk management is overseen by the Audit and Risk Committee. The overall basis for risk management is to provide recommendations about:

1. Assessing the internal processes for determining and managing key risk areas, particularly:

2. non-compliance with laws, regulations, standards and best practice guidelines, including environmental and industrial relations laws;

3. litigation and claims; and

4. relevant business risks other than those that are dealt with by other specific Board Committees.

5. Ensuring that the Company has an effective risk management system and that major risks to the Company are reported at least annually to the Board.

6. Receiving from management reports on all suspected and actual frauds, thefts and breaches of laws.

7. Evaluating the process the Company has in place for assessing and continuously improving internal controls, particularly those related to areas of significant risk.

8. Assessing whether management has controls in place for unusual types of transactions and/or any potential transactions that may carry more than an acceptable degree of risk.

9. Meeting periodically with key management, internal and external auditors and compliance staff to understand and discuss the Company’s control environment.

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

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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.

Disclosure:

Management designs, implements and maintains risk management and internal control systems to manage the Company's material business risks. As part of regular reporting procedure, management report to the Board confirming that those risks are being managed effectively.

The Company policies are designed to ensure strategic, operational, legal, reputation and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the Company’s business objectives.

An Audit and Risk Management Committee has been formed but due to the current composition of the Board the role of the Committee is undertaken by the full Board. No internal audit function exists. All functions, roles and responsibilities with regard to risk oversight and management and internal control are undertaken by Management and overseen by the Board as at the date of this report.

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.

Disclosure:

The Board has received the declaration from the Chief Executive Officer and person assuming the role of Chief Financial Officer.

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.”

Recommendation 8.1:

The Board should establish a Remuneration Committee.

Disclosure:

A Remuneration Committee has been established.

Recommendation 8.2:

The Remuneration Committee should be structure so that it:

• consists of a majority of independent directors;

• is chaired by an independent director; and

• has at least three members.

Disclosure:

The Remuneration Committee did not meet formally during the year. The full Board undertakes the role of the Committee until such time as the composition of the Board allows for the fulfilment of the compositional requirements of the Committee.

Recommendation 8.3:

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

Disclosure:

Details of remuneration, including the Company’s policy on remuneration, are contained in the “Remuneration Report” which forms of part of the Directors’ Report.

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