CONNECTED MINERALS LIMITED — Annual Report 2003

Sep 29, 2003

ANNUAL REPORT 2003

ABN 99 009 076 233

COMPANY INFORMATION

Directors

A G Waller	Non Executive Chairman
D F Thomson -	Executive Director
C S Willis	Non Executive Director

Secretary N J Bassett

Registered Office

704 Murray Street West Perth WA 6005 Telephone: (08) 9420 0200 Facsimile: (08) 9420 0222 Email: aex@acclaimexploration.com.au ABN: 99 009 076 233

Auditors

HLB Mann Judd 15 Rheola Street West Perth WA 6005

Bankers

Challenge Bank 109 St George's Terrace Perth WA 6000

Share Registry

Computershare Investor Services Pty Ltd 45 St George's Terrace Perth WA 6000 Telephone: (08) 9323 2059 Facsimile: (08) 9323 2096

Solicitors

Tottle Christensen 181 St George's Terrace Perth WA 6000 Telephone: (08) 9217 6700 Facsimile: (08) 9217 6710

Stock Exchange Listing

Acclaim Exploration N.L. shares are listed on the Australian Stock Exchange (Home Exchange - Perth) ASX Code:Shares AEX Options AEXO

$\overline{1}$

Geological sketch map of the Tomkinson Ranges- Blackstone - Jameson region (After Glickson etal. 1995).

aexPM006 24.9.03

SUMMARY

The company has encountered unexpected delays in gaining the necessary approvals for its exploration works programme, which was submitted to the Anangu Pitiantiatiara Land Council in February. The delay has, however, given the company time to further refine its exploration models and identify specific areas on the Claude Hills tenement where nickel sulphide mineralisation might occur. There have also be advances on the Wingellina nickel laterite project, which has been assessed by a number of companies with the view to undertaking a development and bankable feasibility study. The company is engaged in advanced negotiations with a party on a proposal to carry out a due diligence on the project.

The Geological Survey Branch, Primary Industry and Resources South Australia (PIRSA) has expressed interest in mapping areas identified by Acclaim as having potential to host nickel sulphide deposits. The Company and PIRSA have applied to the Anangu Pitjantjatjara Land Council to carry out joint clearance of work areas.

The Giles Complex, which is prospective for both magmatic nickel-copper sulphide and platinum group metals deposits, comprises over 21 separate layered dunite-pyroxenite ultramafic and gabbroic mafic intrusions. Individual intrusions vary in composition, some spanning the full range from dunite to pyroxenite, norite, anorthosite and troctolite. The presence of charnokites in the Wingellina area indicates extremely high temperature metamorphism at deep crustal levels.

Voisey's Bay, together with Nebo and Babel, provides an exploration model in the search for magmatic nickelcopper sulphides within the Tomkinson Ranges. The model for the formation of these magmatic copper-nickel deposits suggests that massive sulphide mineralisation is just as likely to be associated with mafic dykes in the basement gneiss as on the basal contact of the larger lavered intrusions. Evidence that a suite of mafic dykes and smaller intrusions in the Claude Hills area may in fact be the preserved remnants of the basal zone of a lavered intrusion or even feeder conduits to the lavered complex makes the basement gneiss an ideal exploration target for nickel-copper sulphide mineralisation.

Descriptions of an ultramafic rock suite from Teizi Hills, on the Claude Hills tenement, indicates that the magma was contaminated by the felsic wall rocks prior to crystallisation, a process that may cause sulphur saturation, which is essential for the formation of magmatic sulphides. Evidence for sulphur saturation of the parental magma in the Claude Hills area comes from geochemistry, observations on Acclaim's drilling at Wingellina and from magmatic sulphides in a stratigraphic hole drilled by PIRSA at Kalka.

All available evidence highlights the basal contact and the basement gneiss as providing the best target areas in the search for nickel sulphides. Using the geophysical responses of known nickel sulphide deposits as a template, imaged aeromagnetics were combined in a GIS environment with mapped geology and Landsat imagery to identify discrete "bullseye" dipole magnetic anomalies. These are considered to provide the highest level of confidence from the available data. Anomalies associated with massive sulphide mineralisation could also be linear in form, but these are more difficult to discriminate in the data. Twenty-one (21) discrete magnetic anomalies were identified; one anomaly has a coincident electromagnetic (EM) response.

Exploration programmes to explore the Claude Hill area entail high-resolution airborne and ground based geophysical surveys, together with semi-regional geochemistry and ground checking of the anomalies already identified. Following processing and interpretation of the data, all anomalies identified will be prioritised and ground checked ahead of drill testing.

OPERATIONS REPORT

MUSGRAVE PROJECTS - CLAUDE HILLS & WINGELLINA

Location

The Claude Hills and Wingellina projects are located in the western portion of the Proterozoic Musgrave Block in Central Australia (Figure 1). Claude Hills is situated on the eastern side of the state border in South Australia, while Wingellina is located in Western Australia. The Wingellina and Claude Hills tenements are contiguous, forming a nearly continuous land holding straddling the state border, except that Claude Hills (E2777) is in three separate parts. The total area held under tenure is 1784 square kilometres, with the Western Australian tenements comprising 412 square kilometres and Claude Hills in South Australia making up the balance of 1372 square kilometres.

Background

Geologists from the South Australian Department Mines first discovered nickel at Mt Davies and Claude Hills in 1953. Southwestern Mining, a subsidiary of International Nickel Company (INCO) conducted exploration at Claude Hills from 1955 to 1958, before the focus shifted to the larger more extensive nickeliferous laterite deposits located at Wingellina 25 kilometres to the southwest, in Western Australia.

The nickeliferous laterite at Wingellina was discovered by INCO in 1956. Intensive exploration at Wingellina continued up until 1971, when INCO's application to have the project excised from Aboriginal Reserve 17614 was refused. INCO's work included the sinking of four shafts to extract bulk sampling for metallurgical testing at their facility in Port Colbourne, Ontario. The initial target at Claude Hills was nickel sulphide mineralisation associated with ultramafic rocks. Early studies indicated that the source of the lateritic nickel deposits was the supergene weathering of dunite and peridotite units within the layered complex.

INCO were aware of the possibility of nickel sulphides in the Claude Hills-Wingellina area and as early as 1957 INCO's programmes included aeromagnetics, airborne EM, ground EM, resistivity and gravity surveys aimed at sulphide exploration. It appears that at that time, INCO was not aware of the possibility that nickel sulphides could occurr within the gneisses and also failed to recognise the intact basal contact at Wingellina.

Little exploration was conducted at Wingellina until the current phase of work, which commenced in mid-2001. A Deed of Agreement between the Ngaanyatjarra Land Council, representing traditional owners, and the Company was finalised in April 2001, opening up Wingellina to exploration for the first time in 25 years. Acclaim acquired an initial interest of 60% in Hinckley Range Pty Ltd, the holder of the project, in 2000 and moved to 100% ownership during 2001/02.

The geology of the Claude Hills-Wingellina area is one of the best understood areas in the Musgrave Block, allowing the targeting of specific areas for magmatic sulphides. Between 1987 and 1990 geologists from the Australian Geological Survey Organisation (AGSO), as it was then, mapped and investigated the field relationships of 17 of the 21 lavered ultramafic-mafic sills at the western end of the Tomkinson Ranges (Figure 2). This research resulted in the publication in a series of papers in the AGSO Journal of Geology and Geophysics in 1995. Much of the understanding of the setting of the Wingellina, Claude Hills and Kalka intrusions comes from this work, which built on earlier work by Daniels, Goode, Gray and others in the 1960's and 70's.

This mapping, in conjunction with access to outcrops where field relationships can be observed directly, and information from numerous drill holes, gives Acclaim a distinct advantage in identifying geological settings likely to host massive sulphides. AGSO's whole rock geochemistry showed that the Wingellina and Kalka intrusions formed at the greatest depth and from the most primitive, least evolved magmas of any of the Giles Complex intrusions they studied (Figure 3).

Model for Formation of Magmatic Nickel - Copper Sulphide Deposits.

1. Formation of a nickel sulphide deposit begins with the melting of hot mantle, which rises as a plume from deep in the Earth.

2. The melting produces basaltic magma that is relatively rich in metals. The rising plume intrudes into the crust, forming magma chambers.

3. Sulphide minerals will not form unless the magma contains a significant concentration of sulphur. Sulphur can be present in the magma or can be assimilated from the walls rocks through contamination. The contamination also reduces the ability of the magma to keep the sulphur in solution, and the magma may become sulphur saturated. Sulphur saturation occurs when droplets of sulphide melt form. The sulphide droplets scavenge metals such as nickel, copper, platinum, and palladium from the magma as they form.

4. The sulphide droplets are denser than silicate magma and settle to the base of the magma chamber. The largest concentrations of sulphides form at traps sites in channels or conduits through which molten magma flows into the magma chamber. If the sulphide droplets become sufficiently concentrated, a magmatic sulphide deposit is formed.

5. The residual magma from chambers where sulphide segregation has occurred will be depleted in those elements that went in to the sulphide minerals. Recognition of rocks depleted in these elements can provide important evidence that sulphide separation has occurred at depth.

Models for the formation of magmatic nickel sulphide deposits were revised after the discovery of Voisey's Bay to include deposits formed in feeder conduits by sulphur saturation of the mafic magma through wall rock contamination. Up to that time most models suggested that the basal contact zones were the most prospective part of a typical layered intrusion.

Nebo and Babel are hosted in gabbroic plugs within gneiss, but are located in an area of particularly poor outcrop. From the limited data available to the public, it is unclear whether Nebo and Babel formed within feeder conduits, and are therefore analogous to Voisey's Bay, or if they are merely preserved remnants of irregularities of the basal zone of the Cavenagh Range intrusion, a flat sheet like body. Nevertheless, together with Voisey's Bay, they provide a model for the search for nickel sulphide deposits in the basement gneiss at Wingellina and Claude Hills.

Recently, drilling by the Geological Survey Branch of PIRSA intersected magmatic copper sulphides in a stratigraphic diamond hole drilled five kilometres southwest of Kalka. This hole returned 5m @ 0.86% copper, including 1m @ 1.3% copper, from a zone of disseminated copper sulphides with minor bornite veins. PIRSA reported that the elevated copper was associated with veins within a microgabbro dyke cutting magnetite/pyroxene layered intrusions. The hole was drilled to test "an interesting magnetic feature" in an area of no outcrop to provide stratigraphic information to assist the remapping of the Mann 1:250,000 sheet. The hole was collared in a layered intrusion, not in the basement gneiss. Nevertheless, the sulphide intersection provides direct evidence for the formation of sulphide minerals (sulphur saturation) in the parental magma in support of Acclaim's geological model for the area.

The intersection is important as it provides the first direct evidence for magmatic copper sulphide mineralisation in the Claude Hills - Mt Davies area. Nickel sulphides in lavered intrusions are almost invariably associated with copper, and copper is one of the best path finder elements in the search for nickel sulphide deposits in mafic rocks. Wingellina and Claude Hills remain the only nickel deposits in the Musgrave block for which resource estimates have been published. The nickel laterite mineral resource for the "INCO Zone", at Wingellina, is 227 million tonnes at 1% nickel and 0.07% cobalt, for 2.3 million tonnes of contained nickel metal, placing Wingellina in the top 20 nickel laterite resources in the world. The mineral resource includes 86 million tonnes at 1.2% nickel, and potential exists to substantially increase tonnes and grade of the resource. The Geological Survey Branch -- PIRSA have estimated the nickel laterite resources at Claude Hills to be 4.6 million tonnes grading 1.3% nickel.

NICKEL SULPHIDE TARGETS

Before exploration targets can be selected it is necessary to have an understanding of how nickel-copper sulphide deposits are formed. The basic model for the formation of nickel-copper sulphide deposits (also known as magmatic sulphide deposits), as inferred from studies at Noril'sk, Voisev Bay, and other deposits, is outlined in Figure 4.

Anomaly Definition

The search for nickel sulphide targets can be broken into three components:

• 1. the recognition of suitable host lithologies and geological settings, usually the lower most portions of the intrusions:
• 1. identifications of embayments and irregularities along the basal contact and dykes that may have acted as trap site for the concentration of sulphides
• 1. identification of evidence for wall rock contamination and formation of magmatic suphides, particularly copper.

When sulphides separate from a mafic magma the remaining or residual magma becomes depleted in elements, such as copper, platinum, palladium and gold which are enriched in the sulphide phases. By analysing for and mapping the distribution of these elements, called chalcophile elements, it is possible to predict whether suphides have formed from the parental magma.

aexMUS001c 22.9.03

CLAUDE HILLS

Evidence for formation of magmatic sulphides (sulphur-saturation) in the parental magma of the layered intrusions and the formation of magmatic suphides in the area comes from geochemistry and disseminated sulphides in Acclaim's drilling at Wingellina, the magmatic sulphides in the PIRSA diamond hole near Kalka, and finally from work of Goode (1975) and Gray (1967) (Figure 5).

The acquisition of Claude Hills, exploration licence 2777, in November 2002 was driven by concepts developed by the Company's technical team. The Claude Hills tenement covers the easterly extension of the Wingellina lavered intrusion and basement gneiss across the border into South Australia. Bedrock geochemistry at Wingellina suggests that sulphides formed in the melt prior to formation of the lavered intrusion; these sulphides may have accumulated at trap sites in feeder dykes or irregularities in the floor of the lavered intrusion (Figure 6).

If magmatic sulphides have formed in the area, where is the best place to look for traps where sulphides have been concentrated? The recognition of the basal contact at Wingellina and the presence of metamorphosed mafic dykes in the Teizi Hills area, 35 kilometres to the east provides a vector to focus the search. The basal contact is one possible position for concentrations of nickel sulphides and the mafic dykes within the basal gneisses, which may represent feeder structures, are another. The field evidence indicates the region to the north and east of Wingellina as the most prospective in the search for nickel sulphides.

The Ewarara intrusion, in the centre of the Claude Hills area, is a small lavered mafic intrusion related to the Giles complex that was perhaps a feeder conduit (Glickson et al 1995). Gray (1967) mapped and studied the Teizi Anorthosite, on the eastern side of the Claude Hills tenement. Gray describes the lower most unit of the anorthosite as having a hybrid zone of mixed mafic granulite with quartzose xenoliths (fragments of country rock), providing clear evidence for contamination of the parental magma. Grey also describes metamorphosed mafic dykes that contain accessory pyrite (iron sulphide) and chalcopyrite (a copper sulphide).

The possibility that some of the other mafic stocks and dykes in the area might also be preserved feeder conduits must also be considered. At least 16 dykes and small plug like olivine-bearing cumulate bodies have been identified in the Kalka-Mt Davies area (Goode 1975). The mineralogy of intrusions with a picrite composition comprises 50-65% high magnesian olivine, 10-30% plagioclase, and 20-30% clinopyroxene and/or orthopyroxene. Accessory minerals include biotite, hornblende, chrome-magnetite and sulphides. Significantly the sulphides are pyrite, chalcopyrite and pyrrhotite. The chalcopyrite is particularly relevant to the search for magmatic nickel sulphides and the biotite provides direct evidence for contamination of the mafic magma by felsic wall rock; an event that may in itself be the trigger for sulphur saturation. Some stocks are concentrically zoned, with biotite and hornblende in a thin border zone. One small intrusion even has quartzose xenoliths (pieces of wall rock) providing further evidence for contamination by country rock.

In addition to the picrite suite, a suite of mafic granulites within the basement gneiss was mapped by AGSO and may represent a contaminated phase of the Giles Complex. These rocks are not well documented in the literature and only appear on maps. They are potentially contaminated mafic rocks related to the Giles complex. The mafic units are less deformed than the felsic gneisses and it possible that they are related to the larger layered intrusions.

Interpretation of regional Landsat and imaged magnetics was undertaken with specific objective of identifying potential nickel sulphide targets. Discrete "bullseye" anomalies that may represent sulphide (magnetic pyrrhotite) bodies were targeted in the search. In the GIS environment it is possible to identify the discrete bullseye magnetic anomalies that have no apparent surface expression. The regional magnetics were flown at 400m line spacing, which limits the size and type of anomalies that can be discerned with any confidence.

Twenty-one (21) discrete magnetic anomalies were identified on aeromagnetic images combined with mapped geology and Landsat imagery. Two anomalies within the outcropping Giles complex have been retained for ease of field checking. The magnetic responses are similar to those shown by nickel sulphide deposits in similar terrains. One anomaly identified on the Claude Hills tenement is coincident with a strong electromagnetic (EM) response in a helicopter borne survey by Rio Tinto. Each anomaly identified represents a potential sulphide target, but ground or high-resolution airborne geophysical surveys are reguired to pinpoint the target with sufficient accuracy for drill testing.

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aexPM901 22.9.03

WINGELLINA

Acclaim completed a series of drilling programs in 2001 and 2002. By June 2002 82 holes, comprising 81 RC and one diamond hole, had been drilled for a total of 14,963 metres. This drilling confirmed, and extended the grade and extents of the nickel mineralisation defined by INCO with a number of outstanding intersections; including 144 metres at 1.4% nickel in WPRC19 from surface and 64 metres at 2.1% nickel from 2 metres in WPRC3. The drilling demonstrated that the depth of weathering and the nickel mineralisation locally extends to a vertical depth of at least 200 metres. This is almost six times the 35 metre average depth of the holes INCO drilled during the 1950's and early 1970's. The nickel laterite is associated with the deep weathering of dunite and peridotite in the lowest level in the lavered intrusion.

Assessments of the airborne magnetic and EM data over Wingellina have identified some anomalies of the type considered likely to represent nickel sulphide targets. These sub-linear anomalies have had some first pass testing with ground EM and require following up drill testing to confirm the source of the anomalies. This drilling will be carried out in conjunction with the drill testing of anomalies on the Claude Hills tenement.

PROPOSED EXPLORATION

The exploration strategy has the objective of discovering economic concentrations of nickel-copper sulphide. The proposed programme can be divided in to three phases as follows: -

• 1. High-resolution airborne geophysical survey to identify discrete anomalies and structural targets likely to host magmatic sulphides;
• 1. Grid surface geochemical sampling with follow-up ground geophysics to identify additional targets;
• 1. Drilling to test targets identified in phases 1 and 2.

The order of stages 1 and 2 may be changed depending on availability of contractors for the airborne survey. The drilling is dependant on the results from the first two stages and the exact drill hole locations cannot be determined at this stage.

The anomalies already identified will be ground checked and at the very least confirmed by ground magnetic traverses and surface geochemistry, where the regolith is suitable, prior to the airborne survey. The magnetic traverses will be modelled to determine the depth of the bodies as a check on the survey specifications. If the minimum specifications are adopted, any anomalies identified will be able to be modelled directly from the aeromagnetics with sufficient confidence to target drill holes directly.

Geochemistry and drilling of the lower most gabbro unit at Wingellina in early 2002 demonstrated the potential for platinum group metal (PGM) mineralisation within the layered intrusion. The successful targeting of platinum group metals is greatly assisted by a clear understanding of the stratigraphy of the layered intrusion. Further work will be undertaken to better map the stratigraphy with the aim of identifying additional target areas

References

Daniels JL, 1974. The Geology of the Blackstone Region of Western Australia. GSWA Bulletin 123

Gray CM, 1967. The Geology, Petrology and Geochemistry of the Teizi Metanorthosite. Unpublished Honours Thesis, Department of Geology - University of Adelaide

Glikson AY, Stewart AJ, Ballhaus CG, Clarke GL, Feeken EHJ, Leven JH, Sheraton JW, Sun S-S, 1996. Geology of the western Musgrave Block, central Australia, with particular reference to the mafic-ultramafic Giles Complex. AGSO Bulletin 239, 206 p.

Gole M, 20 December 2001. Wingellina Layered Intrusion - Key Geological Features and Implications for Nickel Saprolitic and Sulphide Mineralization. Internal Company Memorandum

Gole M, 26 July 2002. Reinterpretation of the 'Picrite Suite', Musgrave Block. Internal Company memorandum

Gole M, 10 September 2002. Prospectivity for Massive Ni-Cu-Pge Sulphides of the Wingellina-Claude Hills-Mt Davis Anticline, Musgrave Block. Internal Company Memorandum

Gole M, 4 June 2002. Additional PGE samples from Wingellina. Internal Company Memorandum

Goode ADT, 1975. A transgressive picrite suite from the western Musgrave Block, central Australia. J Geol Soc Aust, 22:187-194.

Goode ADT, 2002. Musgrave Block - Proterozoic and Palaeozoic geology: Part 4 Tomkinson Ranges. Musgrave Block Excursion C2 Guide Book, Geol Soc Australia, Adelaide.

Nesbitt RW, Goode ADT, Moore AC, Hopwood TP, 1970. The Giles Complex, central Australia: a stratified sequence of mafic and ultramafic intrusions. Geological Society of Australia

DIRECTORS' REPORT

Your Directors present their report on the financial statements for the year ended 30 June 2003.

Directors

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

NAME	POSITION	EXPERTISE
A G Waller	Non-Executive	Finance and
(Appointed	Chairman	Company
18/9/03)		Management
C S Willis	Non-Executive	Finance and
(Appointed	Director	Company
30/6/03)		Management
D F Thomson	Non-Executive	Operations and
(Appointed	Director	Geological
27/11/02)
E Eshuys	Non-Executive	Company
(Resigned 26/11/02)	Chairman	Management
BR Matich
	Managing Director	Mining
(Resigned		Company
5/9/03) G Wheeler		Management
(Appointed	Non-Executive Chairman	Company Management and
27/11/02)		Finance
(Resigned 10/06/03
N J Basset	Non-Executive	Operations and
(Resigned	Director	Financial
27/11/02)

Principal Activity

The principal activity of the consolidated entity during the financial year was mineral exploration and investment.

There were no significant changes in the nature of the principal activities of the consolidated entity during the financial year.

Operating Results

The loss of the consolidated entity, after income tax and outside equity interest, amounted to \$528,425.

Dividends Paid or Recommended

No dividends have been paid or recommended by the Directors for the year ended 30 June 2003.

Review of Operations

In the opinion of the Directors, the operations of the consolidated entity for the financial year, likely developments in the operations of the consolidated entity and the expected results of those operations as known at the date of this report have been covered generally herein and in the Operations Report which is contained in this Annual Report.

Significant Changes in State of Affairs

During the year, the directors made a call on the 40 million partly paid shares issued at 10 cents. A call of 2 cents (raising a total of \$800,000) was made on 21 June 2002 and received in July 2002. The company also
made a placement of 27,017,000 ordinary shares and 13,508,500 options at an issue price of 3.5 cents which raised \$945,595. The Company also issued 45,000,000 ordinary shares at 3.5 cents each for the purchase of Austral Nickel Pty Ltd.

After Balance Date Events

No matters or circumstances have arisen, since the end of the financial year, which significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in subsequent financial years other than on the 12 August 2003 the directors made a placement of 43,755,000 ordinary shares at an issue price of 1.5 cents which raised \$656,325.

Likely Developments and Results

Comments on likely developments and expected results have been covered generally herein and in the Operations Report which is contained in this Annual Report.

Further information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.

Environmental Issues

The consolidated entity's operations are subject to various environmental regulations under both Commonwealth and State Government legislation. The directors have complied with these regulations and are not aware of any breaches of the legislation during the current financial year which are material in nature.

INFORMATION ON DIRECTORS

Directors

SPECIAL RESPONSIBILITIES QUALIFICATIONS and EXPERIENCE

Andrew G Waller Non Executive Chairman

Waller's background Mr ÌS in technology development/manufacturing, property development $and$ resources. He was the founder of the telecommunications division of the UDC Group Pty Ltd that formed Cable and Telecoms Limited. Mr Waller was an executive director of Cable and Telecoms Limited and is a director of Baycrest Pty Ltd, the developer of Lakewood Shores in Western Australia.

Mr Waller has extensive public company experience, particularly in the area of capital raising and business development.

Donald F Thomson Executive Director

Mr Thomson holds a Batchelor of Science degree with Honours in geology with 20 years experience and is a member of Australian Institute of Mining and Metallurgy. He worked with Newcrest for 9 years in mining and exploration, and was closely involved in the discovery of the Gilbey's gold deposit at Dalgaranga. He was also involved in drill-outs at New Celebration and Telfer, and regional exploration throughout Western Australia and the Northern Territory. As Exploration Manager of Johnson's Well Mining, he lead the team responsible for the discovery of gold resources totalling 2 million ounces, including the 1.2 million ounce Rosemont gold deposit.

Craia S Willis Non Executive Director

Mr Willis is currently a director of Syntech Group Limited and chief executive officer of Exxen Corporation Pty Ltd. He has experience in dealing with government sionificant instrumentalities pertaining to contract negotiations between private and public entities. He has previously project managed a number of successful operational developments within Australia Post. He has considerable project management and technology development experience, holding a number of public and private company directorships.

Directors' Interest in Shares and Options

The particulars of shares and options in the Company, held by the Directors or an associate of the Directors of the Company as of the date of this report are as follows:

Name of Director	Shares	Options
C. Willis	$\blacksquare$	$\overline{\phantom{a}}$
A Waller	$\blacksquare$	$\mathbf{r}$
D Thomson	1.470.000	700.000

Directors' and Executive Officers' Emoluments

The Company's policy for determining the nature and amount of emoluments of board members and senior executives of the company is as follows:

Remuneration levels are competitively set to attract the most qualified and experienced directors and senior executive officers. Remuneration is not based on company performance.

	Director Fees	Value of Options	Total
	\$	\$	\$
C Willis
B Matich	67.278	$\overline{r}$	67.278
G Wheeler	37,840		37.840
N Bassett
E Eshuys	128,525	12.000	140,525
A Waller

Directors' meetings

During the financial year 13 meetings of the Company's directors were held in respect of which each director of the Company attended the following number of meetings:

Name of Director	Meetings eligible to attend	Number attended
G Wheeler
B Matich	13	13
C Willis
N Bassett	ô	6
D Thomson	7
A Waller	٠	÷.
E Eshuys	ĥ	ĥ

Directors' benefits

Since the end of the previous financial year, no Director of the Company has received, or become entitled to receive, any benefit (other than a benefit included in the accreoate amount of emoluments received or due and receivable by Directors shown in the accounts or the fixed salary of a full-time employee of the Company or of a related corporation) by reason of a contract made by the Company or a related corporation with the Directors or with a firm of which the Director is a member, or with a Company in which the Director has a substantial financial interest.

Share options

During the financial year the company issued 13,508,500 options to subscribe for ordinary fully paid shares exercisable at 20 cents and expiring on 30 April 2004. In addition 8,000,000 options to subscribe for ordinary fully paid shares exercisable at 25 cents and expiring on 8 October 2005 were issued to a related entity of Mr E Eshuys, a former director of the company, pursuant to a services agreement.

At 30 June 2003 the following options were on issue.

Number	Exercise Price	Expiry Date
8,000,000	25 cents	08.10.2005
212,928,535	20 cents	30.04.2004

None of the option holders have any right to participate by virtue of the options in any share issue of any other corporation.

No shares have been issued by virtue of the exercise of an option during the year or to the date of this report.

Proceedings on behalf of Company

No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in
any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The company was not a party to any such proceedings during the year.

Signed in accordance with a resolution of the directors.

A G Waller Non Executive Chairman Perth, 30 September 2003

CORPORATE GOVERNANCE STATEMENT

This statement outlines the main Corporate Governance practices that were in place throughout the period 1 July 2002 to 30 June 2003. These practices are dealt with as follows:

Board of Directors and Its Committees

The Board is responsible for the overall corporate governance of the Company including the strategic
direction, establishing goals for management and
monitoring the achievement of these goals. Due to the size of the Board, issues of nomination and directors and business remuneration of risk management are considered by the full Board. The Board has established an Audit Committee. The Board has also established a framework for the management of the Company including an overall framework of internal control, a business risk management process and the establishment of appropriate ethical standards.

Composition of The Board

The composition of the Board is determined using the following principles:

• the Board comprises 3 directors and may be increased where it is felt that additional expertise is required in specific areas, or when an outstanding candidate is identified
• the Chairman of the Board should be a nonexecutive director
• the Board should comprise directors with a broad range of expertise

The Board reviews its composition on an annual basis to ensure that the Board has the appropriate mix of expertise and experience. When a vacancy exists or the Board considers it would benefit from the services of a new director with particular skills potential candidates are identified by the Board, with advice from an external consultant if necessary. The Board then appoints the most suitable candidate who must stand for election at the general meeting of shareholders.

The terms and conditions of the appointment and retirement of directors are set out in a letter of appointment which covers remuneration, expectations, terms, the procedures for dealing with conflicts of interest and the availability of independent professional advice.

The performance of all directors is reviewed by the Chairman each year.

Independent Professional Advice

Each director has the right to seek independent professional advice at the Company's expense. However, prior approval of the Chairman is required, which is not unreasonably withheld.

Remuneration

Due to the size of the Company the Remuneration Committee consists of all directors. The role of the Remuneration Committee is to review remuneration packages and policies applicable to the Managing Director, senior executives and directors themselves. Remuneration levels are competitively set to attract the most qualified and experienced directors and senior executives. The Remuneration Committee obtains independent advice if necessary, on the appropriateness of remuneration packages.

directors' Further details of remuneration, superannuation and retirement payments are set out in Note 20 to the Financial Statements.

Audit Committee

The role of the Audit Committee is documented in a Charter which is approved by the Board. In accordance with this Charter, all members of the Committee must be non-executive directors. The role of the Committee is to advise on the establishment and maintenance of the framework of internal control and appropriate ethical standards for the management of the Company.

It also gives the Board additional assurance regarding the quality and reliability of financial information prepared for use by the Board in determining policies or for inclusion in financial statements.

The members of the Audit Committee during the year were the Non-Executive Chairmen Mr E Eshuys and Mr G Wheeler and Non Executive Director Mr N Bassett. The current members are Mr C Willis and Mr A Waller. The external auditors and, the Managing Director and Financial Controller are invited to Audit Committee meetings at the discretion of the Committee.

The responsibilities of the Audit Committee include:

• reviewing internal controls and recommending enhancements;
• monitoring compliance with Corporations Act, Stock Exchange Listing Rules, matters outstanding with auditors, the Australian Taxation Office, the Australian Securities & Investments Commission, Australian Stock Exchange and financial institutions;
• improving the quality of the accounting function;
• reviewing external audit reports to ensure that where major deficiencies or breakdowns in controls or procedures have been identified appropriate and prompt remedial action is taken by management;
• liaising with the external auditors and ensuring that the annual audit and half-year review are conducted in an effective manner.

The Audit Committee reviews the performance of the external auditors on an annual basis and meets with them at least twice during the year. Nomination of auditors is at the discretion of the Committee.

Business Risk

The Board has a risk management policy and determined areas of risk which are regularly considered at Board Meetings include:

• asset protection / development $\ddot{\phantom{0}}$
• performance of activities Ä
• organisational behaviour $\bullet$
• human resources $\bullet$
• the environment $\bullet$
• continuous disclosure obligations

Ethical Standards

The Board subscribes to the Statement of Ethical Standards as published by the Australian Institute of Company Directors.

All directors and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company. Every employee re-affirms their commitment to the Company's ethical standards annually.

Environment

The Company aims to ensure the highest standard of environmental care is achieved.

The Role of Shareholders

The Board of directors aims to ensure that the shareholders are informed of all major developments affecting the Company's state of affairs. Information is communicated to shareholders as follows:

• The annual Report is distributed to all shareholders. $\bullet$
• The half-yearly report is sent to any shareholder who request it.
• The Quarterly Activities Report and Working Capital Statement are lodged with the Australian Stock Exchange and are available to any shareholder who request it.
• The Company maintains an internet corporate web site which comprises each of the above reports. Our^- web site address is: http://www.acclaimexploration.com.au

STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2003

	Notes		Consolidated	Parent
		2003 \$	2002 \$	2003 \$	2002 \$
Revenue from ordinary activities	2	59,144	123,579	44,996	661,015
Profit on deconsolidation of subsidiary	3		79,611
Provision for non-recoverability of loan	3				(669,003)
Depreciation	3	(87, 114)	(42, 317)	(16, 636)	(11, 186)
Carrying value of property, plant & equipment and investments sold		(52,019)	(17, 558)	(36, 334)	(17, 558)
Administration expenditure		(448, 436)	(1, 155, 828)	(520, 451)	(984, 428)
Loss from ordinary activities before income tax expense		(528, 425)	(1,012,513)	(528, 425)	(1,021,160)
Income tax expense relating to ordinary activities	4
Loss from ordinary activities after income tax expense		(528, 425)	(1,012,513)	(528, 425)	(1,021,160)
Net loss attributable to outside equity interest			87,820
Net loss attributable to members of Acclaim Exploration NL	13	(528.425)	(924.693)	(528.425)	(1.021.160)
Basic earnings per share - cents	18	(0.18)	(0.43)
Diluted earnings per share - cents	18	(0.18)	(0.43)

The accompanying notes form part of these financial statements.

STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2003

	Notes		Consolidated		Parent
		2003 \$	2002 \$	2003 \$	2002 \$
CURRENT ASSETS Cash assets Receivables	5 6	26,714 56,975	31,836 79,900	26,714 56,975	91,518 31,269
TOTAL CURRENT ASSETS		83,689	111,736	83,689	122,787
NON-CURRENT ASSETS Receivables Investments Property, plant and equipment Mineral interests	6 7 9 10	15,899 157.274 12,606,508	15,198 296,407 10,184,790	5,184,260 7,445,497 31,972 30,717	3,718,926 6,038,994 84,942 71,811
TOTAL NON-CURRENT ASSETS		12,779,681	10,496,395	12,692,446	9,914,673
TOTAL ASSETS		12,863,370	10,608,131	12,776,135	10,037,460
CURRENT LIABILITIES Payables	11	448,317	952,585	361,082	381,914
TOTAL CURRENT LIABILITIES		448,317	952,585	361,082	381,914
NON-CURRENT LIABILITIES Payables	11	25,665	33,478	25,665	33,478
TOTAL NON-CURRENT LIABILITIES		25,665	33,478	25,665	33,478
TOTAL LIABILITIES		473,982	986,063	386,747	415,392
NET ASSETS		12,389,388	9,622,068	12,389,388	9,622,068
EQUITY
Contributed equity Reserves Accumulated losses	12 13 13	27,754,073 262,809 (15, 627, 494)	24,458,328 262,809 (15,099,069)	27,754,073 262,809 (15, 627, 494)	24,458,328 262,809 (15,099,069)
TOTAL EQUITY		12,389,388	9.622.068	12.389.388	9.622.068
Commitments for Expenditure	17
Contingent Liabilities	16

The accompanying notes form part of these financial statements.

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2003

	Notes		Consolidated		Parent
		2003 Ŝ	2002 \$	2003 \$	2002 \$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees Interest received		(323, 649) 5,333	(1,225,598) 23,579	(464, 017) 5,333	(468, 419) 22,220
NET CASH USED IN OPERATING ACTIVITIES	23(a)	(318, 316)	(1,202,019)	(458, 684)	(446, 199)
CASHFLOWS FROM INVESTING ACTIVITIES
Exploration expenditure/recoup Purchase of plant and equipment Purchase of investments Purchase of controlled entity		(1,454,340) (701)	(2, 171, 936) (250, 460) (3,276)	(72, 820) (701)	236,495 (39, 248) (3,276) (3,882,000)
Purchase of mineral interests Cash on sale of controlled entity Proceeds on sale of investments	23( c)		(3,550,000) (40) 100,000		100,000
Proceeds on sale of fixed assets Loan repaid by former controlled entity Loan to subsidiaries		53,811	736,726	39,663 (1, 286, 686)	736,726 (2,946,397)
NET CASH USED IN INVESTING ACTIVITIES		(1,401,230)	(5, 138, 986)	(1,320,544)	(5,797,700)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share and option issues (net) Repayment of hire purchase		1,720,745 (6, 321)	6,306,750	1,720,745 (6, 321)	6,306,750
NET CASH INFLOW FROM FINANCING ACTIVITIES		1,714,424	6.306.750	1,714,424	6,306,750
NET INCREASE (DECREASE) IN CASH HELD		(5, 122)	(34, 255)	(64, 804)	62,851
CASH AT BEGINNING OF YEAR		31,836	66,091	91,518	28,667
CASH AT END OF YEAR	5	26.714	31.836	26,714	91.518

The accompanying notes form part of these financial statements.

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial report is a general purpose financial report that has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The financial report has also been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets. The accounting policies have been consistently applied, unless otherwise stated.

Acclaim Exploration NL is a listed public company, incorporated and domiciled in Australia.

The following is a summary of the material accounting policies adopted by the consolidated entity in the preparation of the financial statements.

Principles of Consolidation

The consolidated financial statements comprise the financial statements of Acclaim Exploration NL and all of its controlled entities. A controlled entity is any entity controlled by Acclaim Exploration NL. Control exists where Acclaim Exploration NL has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with Acclaim Exploration NL to achieve the objectives of Acclaim Exploration NL. A list of controlled entities is contained in Note 8 to the financial statements.

All inter-company balances and transactions between entities in the consolidated entity, including any unrealised profits or losses, have been eliminated on consolidation.

Where controlled entities have entered or left the consolidated entity during the year, their operating results have been included from the date control was obtained or until the date control ceased.

Outside interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

Property, Plant and Equipment

Property, plant and equipment are carried at cost or at independent or directors' valuation, less, where applicable, any accumulated depreciation or amortisation.

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

The depreciable amount of all fixed assets is depreciated over their useful lives commencing from the time the asset is held ready for use. Depreciation is calculated on the diminishing value basis using rates based upon the estimated useful life of each depreciable asset.

The gain or loss on disposal of all fixed assets, including revalued assets, is determined as the difference between the carrying amount of the asset at the time of disposal and the proceeds of disposal, and is included in operating profit before income tax of the consolidated entity in the year of disposal.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Assets Plant and equipment

Depreciation Rate 20 - 40% diminishing value

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont) 1

Exploration, development and joint venture expenditure

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

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Investments

Investments are brought to account at cost. The carrying amount of investments is reviewed annually by directors to ensure it is not in excess of the recoverable amount of these investments. The recoverable amount is assessed from the shares' current market value or the underlying net assets in the particular entities.

Dividends are brought to account in the statements of financial performance when received.

Income Tax

The consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on the accounting profit adjusted for any permanent differences.

Timing differences which arise due to the different accounting periods in which items of revenue and expense are included in the determination of accounting profit and taxable income are brought to account as either a provision for deferred income tax or as a future income tax benefit at the rate of income tax applicable to the period in which the benefit will be received or the liability will become payable.

Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits in relation to tax losses are not brought to account unless there is virtual certainty of realisation of the benefit.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Cash

Cash, for the purposes of the Statements of Cash Flows includes cash on hand, at bank and on short term deposit, net of bank overdrafts.

Interest in Joint Venture

The Consolidated Entity's share of the assets, liabilities, revenue and expenses of joint ventures are included in the appropriate items of the statements of financial positions and statements of financial performance. Details of the consolidated entity's interests are shown in Note 15.

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 been discounted to their present value using a market determined risk adjustment discount rate.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont) 1

Trade and other pavables

Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity.

Payables to related parties are carried at the principal amount. Interest, when charged, by the lender, is recognised as an expense on an accrual basis.

Share Capital

Ordinary share capital is recognised at the fair value of the consideration received by the company.

Revenue recognition

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

Sale of goods

Control of the goods has passed to the buyer.

Interest

Control of a right to receive consideration for the provision of, or investment in, assets has been attained.

Dividends

Control of a right to receive consideration for the investment in assets is attained, usually evidenced by approval of the dividend at a meeting of shareholders.

Earnings per Share

Basic earnings per share is determined by dividing the net profit or loss from ordinary activities after income tax expense by the weighted average number of ordinary shares outstanding during the financial year.

Diluted earnings per share is determined by dividing the net profit or loss from ordinary activities after income tax expense adjusted for the effect on earnings of potential ordinary shares, by the weighted average number of ordinary shares (both issued and potentially dilutive) outstanding during the financial year.

Going Concern

These financial statements have been prepared on a going concern basis notwithstanding the deficiency in working capital of \$364,628. The directors believe that the going concern basis is appropriate for the following reasons:

• 1. On the 12 August 2003 the directors made a placement of 43,755,000 ordinary shares at an issue price of 1.5 cents which raised \$656,325.
• A further call of 2 cents per share or \$800,000 may be called at the discretion of the directors on the partly paid $2^{\circ}$ shares.

Goods and Services Tax (GST)

Revenue, expenses and assets are recognised net of the amount of GST except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and Payables in the Statements of Financial Position are shown inclusive of GST.

Comparative figures

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

				Consolidated	Parent
			2003	2002	2003	2002
			\$	\$	\$	\$
2		REVENUE
		Revenue from operating activities Interest received - other corporations	5,333	23,579	5,333	22,220
		Interest received - subsidiary				219,670
		Management fee received - subsidiary				268,800
		Hire of Motor Vehicle - subsidiary				50,325
			5,333	23,579	5,333	561,015
		Revenue from non-operating activities
		Sale of investments		100,000		100,000
		Sale of property, plant & equipment	53,811		39,663
		Total revenue from ordinary activities	59.144	123.579	44.996	661.015
3		EXPENSES AND LOSSES/(GAINS)
	(a)	Expenses
		Depreciation of plant and equipment	87,114	42,317	16,636	11,186
	(b)	Losses/(Gains)
		Profit on deconsolidation of subsidiary		(79, 611)
		Loss on sale of fixed assets Profit on sale of investments	(1,792)	(82, 442)	(3, 328)	(82, 442)
		Provision for non-recoverability of loan				669,003
4		INCOME TAX
		The prima facie tax on loss from ordinary activities differs from the income tax provided in the financial statements as follows:
		Loss from ordinary activities	(528.425)	(1.012.513)	(528.425)	(1.021.160)
		The prima facie income tax payable (benefit)
		on loss from ordinary activities at 30%	(158, 527)	(303, 754)	(158, 527)	(306, 348)
		Tax effect of permanent differences
		Other non-allowable items	37,552	28,614	16,409	16,774
		Future income tax benefits not brought to account
		Timing differences of a revenue nature	(352, 224)	(786, 028)	(22, 398)	154,966
		Tax losses carried forward	473,199	1,061,168	164,516	134,608
		Income tax expense attributable to ordinary activities

			Consolidated	Parent
		2003	2002	2003	2002
		\$	\$	\$	\$
4	INCOME TAX (cont)
	Future income tax benefits relating to tax losses have not been brought to account as their realisation is not virtually certain. The estimate of future income tax benefits not brought to account at 30% is:
	Division 36 Losses	2,959,864	2,486,665	1,156,289	991,773
	Capital losses	254,647	258.186	254,647	258,186
	The income tax benefit of carried forward tax losses will only be available if the consolidated entity complies with deductibility conditions imposed by law.
	Balance of Franking account at year end - Class C			214,784	214.784
5	CASH
	Cash at bank	26.714	31.836	26,714	91.518
6	RECEIVABLES
	Current
	Other debtors	56.975	79.900	56.975	31.269
	Non Current
	Loan to subsidiaries			5,853,263	4,387,929
	Provision for non-recoverability			(669, 003)	(669,003)
				5.184.260	3.718.926

Terms and conditions relating to the above financial instruments:

Other debtors are non-interest bearing and generally repayable within 30 days. $(i)$

(ii) Details of the terms and conditions of related party receivables are set out in note 21.

$\overline{\mathbf{7}}$ INVESTMENTS

Non Current

Shares
- in subsidiaries (Note 8)		-	7.429.598	6.023.796
- in other corporations	10,000	10.000	10.000	10.000
- in other listed corporations - at cost	5,899	5,198	5.899	5.198
	15.899	15.198	7.445.497	6.038.994

Listed shares are readily saleable with no fixed terms. There would be no material capital gains tax payable if these assets were sold at the reporting date.

8 INVESTMENT IN SUBSIDIARIES

Name of Entity	Percentage Owned		Class of share		Cost of Company's Investments		Contribution to Consolidated Profit/(Loss) From Ordinary Activities After Income Tax Expense
	2003 ℅	2002 ₩		2003 \$	2002 \$	2003 \$	2002 S
Parent Acclaim Exploration NL						(528, 425)	(352.157)
Controlled Entities
Austral Nickel Pty Ltd	100	0	Ordinary	1,575,000		٠
Hinckley Range Pty Ltd	100	100	Ordinary	6,023,796	6.023.796	٠	(660, 356)
				7.429.598	6.023.796	(528.425)	(1.012.513)

Acclaim Exploration NL, Hinckley Range Pty Ltd and Austral Nickel Pty Ltd are all companies incorporated in Australia.

Acquisition of Subsidiary

9

During the year Acclaim Exploration NL acquired 100% of the issued capital in Austral Nickel Pty Ltd by the issue
of 45,000,000 fully paid shares at 3.5 cents per share being \$1,575,000. Note 23(b).

		Consolidated		Parent
	2003 \$	2002 \$	2003 \$	2002 \$
PROPERTY, PLANT AND EQUIPMENT
Plant and equipment - at cost Less: Accumulated depreciation	269,696 (112, 422)	353.376 (56,969)	45.520 (13,548)	104.799 (19, 857)
	157.274	296.407	31,972	84.942
Reconciliation
Carrying amount at beginning	296.407	45.864	84,942	14,480
Additions	u,	292.860		81.648
Disposals	(52.019)		(36, 334)
Depreciation expense	(87.114)	(42, 317)	(16, 636)	(11, 186)
	イベア ウアム	296.407	34.972	84.942.

			Consolidated		Parent
		2003	2002	2003	2002.
		\$	\$	\$	\$
10	MINERAL INTERESTS
	Costs carried forward in respect of:
	Exploration and evaluation phase - at cost
	- Balance at beginning of year	10,184,790	4,491,300	71.811	65,351
	- Transfer on deconsolidation		(657,085)
	- Goodwill on consolidation	1,575,000
	- On Acquisition of Subsidiary	178,648
	- Expenditure incurred (recouped)	668,070	6,350,575	(41,094)	6,460
		12,606,508	10.184.790	30,717	71,811
	- Expenditure written off
		12.606.508	10.184.790	30.717	71.811

The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective areas.

PAYABLES 11

Current Trade creditors Other creditors and accruals Hire Purchase Liability (a)	214,854 225.650 7,813 448.317	738.316 207,948 6,321 952.585	127.619 225.650 7,813 361.082	167.645 207.948 6,321 381.914
Non-Current Hire Purchase Liability (a)	25.665	33,478	25.665	33,478
Hire Purchase Liability (a) Hire purchase repayments Unexpired terms charges	35,248 (1,770) 33.478	44,613 (4, 814) 39,799	35,248 (1,770) 33.478	44.613 (4, 814) 39.799

Terms and conditions relating to the above financial instruments:

Trade creditors are non-interest bearing and are normally settled on 30 day terms.
Other creditors are non-interest bearing and are normally settled within 30 days. $\binom{i}{i}$

$12₁₂$ CONTRIBUTED EQUITY

	Consolidated			Parent
	2003	2002 \$	2003 \$	2002 \$
Issued and paid up capital (a)
Ordinary shares fully paid	24.554.073	22.058.328	24,554,073	22.058.328
Ordinary shares of 10 cents paid to 8 cents	3.200.000		3,200,000
Ordinary shares of 10 cents paid to 6 cents		2,400,000		2,400,000
	27.754.073	24.458.328	27.754.073	24.458.328

(b) Movement in shares on issue

				2003	2002
(i)	Ordinary shares fully paid	Note	Shares		Shares	\$
	Balance at beginning of year Shares of 7 cents fully paid Shares of 5 cents fully paid Issue at 3.5 cents Issue at 3.5 cents Issue at 12 cents	(b)(ii) (b)(ii) 12(e)(v) 12(e)(vi) 12(e)(iii)	219,685,699 27,017,000 45,000,000	22,058,328 945,595 1,575,000	176,305,699 3,000,000 750,000 39,630,000	17.277,828 210,000 37,500 4,755,600
	Less transaction costs			(24, 850)		(222, 600)
	Balance at end of year		291.702.699	24,554,073	219,685,699	22,058,328
(ii)	Ordinary shares partly paid Balance at beginning of year
	Shares of 5 cents paid to 0.1 cent				750,000	750
	Shares of 7 cents paid to 0.1 cent				3,000,000	3,000
	Shares of 10 cents paid to 2 cent				33,000,000	660,000
	Shares of 10 cents paid to 3 cent				7,000,000	210,000
	Shares of 10 cents paid to 6 cents		40,000,000 40.000.000	2,400,000 2.400.000	43.750,000	873,750
	Call of 2 cent per share	12(e)(i)		800,000
	Call of 1 cent per share	12(e)(i)				330,000
	Call of 1 cent per share	12(e)(i)				400,000
	Call of 1 cent per share	12(e)(i)				400,000
	Call of 1 cent per share	12(e)(i)				400,000
	Call of 4.9 cents per share	12(e)(ii)				36,750
	Call of 6.9 cents per share	12(e)(ii)				207,000
	Shares fully paid up	(b)(i)			(750,000)	(37,500)
	Shares fully paid up	(b)(i)			(3,000,000)	(210,000)
				800,000	(3.750,000)	1,526,250
	Balance at end of year Shares of 10 cents paid to 8 cents		40,000,000	3,200,000
	Shares of 10 cents paid to 6 cents				40,000,000	2,400,000
			40,000,000	3,200,000	40,000,000	2,400,000
	Total issued and paid up shares		331.702.699	27,754,073	259.685.699	24.458.328

				2003			2002
12		CONTRIBUTED EQUITY (Cont)	Note	Shares	s	Shares		\$
		(c) Uncalled Capital
		Shares of 10 cents paid to 8 cents Shares of 10 cents paid to 6 cents		40,000,000 40.000.000	800,000 800,000	40,000,000 40.000.000		1,600,000 1,600,000
	(d).	Share Options Options to subscribe for ordinary shares at 20 cents each exercisable on or before 30 April 2004			2003 Options		2002 Options
		Balance at beginning of year Issue Issue Issue Balance at end of year	Note 12(e)(v) 12(e)(iii) 12(e)(iv)		199,420,035 13,508,500 212,928,535		171,605,035 199,420,035	19,815,000 8.000.000
		Options to subscribe for ordinary shares at 25 cents each exercisable on or before 8 October 2005
		Balance at beginning of year Issue Balance at end of year Total Options on Issue	12(e)(vii)		8.000.000 8,000,000 220.928.535		199.420.035

(e) Detail of share and option issues

• $(i)$ On 6 December 2000, 40,000,000 partly paid shares were issued at an issue price of \$0.10 each paid to \$0.01 each on application. Subsequently a further payment of \$0.01 per share was made on 6 March 2001. A call of \$0.01 per share was made on 26 June 2001. At 30 June 2001 \$70.000 had been received and the balance of \$330,000 was received prior to 16 July 2001. Further calls of \$0.01 were made on 10 August 2001, 7 November 2001, 10 April 2002 and \$0.02 in July 2002. The funds raised from the issue and calls are to be utilised to fund future exploration programmes in relation to the company's existing projects and in particular exploration on the Wingellina Nickel Project.
• On 22 May 2002 a call of \$0.049 was made on the 750,000 shares of 5 cents paid to \$0.001 and a call of $(ii)$ \$0.069 was made on the 3,000,000 shares of 7 cents paid to \$0.001. The funds raised from the calls are to be utilised to fund future exploration programmes in relation to the company's existing projects and in particular exploration on the Wingellina Nickel Project
• $(iii)$ On 7 January 2002, 39,630,000 ordinary shares and 19,815,000 options were issued at an issue price of 12 cents per share, thereby raising \$4,755,600. The funds raised from the issue are to be utilised to fund future exploration programmes in relation to the company's existing projects and in particular exploration on the Wingellina Nickel Project.
• $(iv)$ On 7 January 2002, 8,000,000 options were issued for no consideration to Resource Surveys Pty Ltd a company associated with Mr E Eshuys, then a director of the company, pursuant to a services agreement approved by shareholders on 30 November 2001.
• On 21 December 2002, 27,017,000 ordinary shares and 13,508,500 options were issued at an issue $(v)$ price of 3.5 cents per share, thereby raising \$945,595. The funds raised from the issue are to be utilised to fund future exploration programmes in relation to the company's existing projects and in particular exploration on the Wingellina Nickel Project.

12 CONTRIBUTED EQUITY (Cont)

• On 26 February 2003 45,000,000 ordinary shares were issued as consideration for the acquisition of $(v)$ Austral Nickel Ptv Ltd. The shares were issued at 3.5 cents, representing a total issue price of \$1,575,000.
• $(vii)$ On 11 October 2002, 8,000,000 options were issued for no consideration to Resource Surveys Pty Ltd a company associated with Mr E Eshuys, a former director of the company, pursuant to a services agreement approved by shareholders on 30 November 2001.

(f) Terms and conditions of contributed equity

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.

Contract Contract Contract

13 RESERVES AND ACCUMULATED LOSSES

		Consolidated		Parent
	2003	2002	2003 s	2002 S
Share option reserve (a)	262.809	262,809	262.809	262,809
Accumulated losses (b)	(15.627.494)	(15.099.069)	(15.627.494)	(15.099.069)

(a) Share option reserve

Nature and purpose of reserve (i)

The share option reserve contains amounts received on the issue of options over unissued capital of the company.

(b) Accumulated losses

Balance at beginning of year	(15,099,069)	(14.174.376)	(15,099,069)	(14.077,909)
Net loss from ordinary activities	(528,425)	(924, 693)	(528.425)	(1,021,160)
Balance at end of year	(15.627.494)	(15.099.069)	$(15.627.494)$ $(15.099.069)$

SEGMENT REPORTING 14

The consolidated entity is involved in the mineral exploration industry solely within Australia.

15 JOINT VENTURES

The consolidated entity has interests in the following unincorporated joint ventures.

Gold Exploration Joint Venture

	% Interest	Carrying Value
Bowriver Joint Venture	70	13.971

The carrying value of the consolidated entity's interest in these joint ventures is included in Note 10. The contribution of these exploration joint ventures to the loss of the consolidated entity for the year was \$ NIL.

		Consolidated		Parent
	2003	2002	2003	2002
		\$		\$
AAMITICATION AT LIAMITITIC.

16 CONTINGENT LIABILITIES

Native Title

The consolidated entity has been notified by the Native Title Tribunal of native title claims covering a number of mineral tenements held by Acclaim Exploration NL and issued by the Western Australian Department of Mineral & Petroleum Resources. Until further information arises in relation to the claims and their likelihood of success, the consolidated entity is unable to assess the likely effect, if any, of the claims.

17 COMMITMENTS FOR EXPENDITURE

(a) Facilities Agreement Expenditure

Outstanding commitments for premises
at 30 June 2002 were:
Not later than one year	75.000	75.000
Later than 1 year but not later than 2 years
Later than 2 years but not later than 5 years
	75.000	75.000

(b) Mineral Tenement Expenditure

In accordance with the Department of Mineral and Petroleum Resources the consolidated entity has obligations to pay tenement rentals and to perform minimum work on mineral tenements held. These obligations vary from time to time in accordance with the tenements held and are expected to be fulfilled in the normal course of operations of the consolidated entity so as to avoid forfeiture of any tenement.

Minimum expenditure requirements

	Not later than one year Later than 1 year but not later than 2 years Later than 2 years but not later than 5 years	283,069 283,069 849,207	126.400 126.400 379,200
		1.415.345	632.000
	EARNINGS PER SHARE
(a)	Reconciliation of Earnings to Net Loss Net loss Net loss attributable to outside	(528, 425)	(1,012,513)
	equity interests Earnings used in calculation of basic		87,820
	and diluted earnings per share	(528.425)	(924.693)
(b)	The weighted average number of shares outstanding during the year used in the calculation of basic earnings per share	286.851.362	214,760,306

There are no potential ordinary shares on issue that are considered to be dilutive, therefore basic earnings per share also represents diluted earnings per share.

19 REMUNERATION OF AUDITORS

18

Amount received or due and receivable by the auditors of the consolidated entity for:
Auditing or reviewing the financial statements Other services	6.024	11.800	6.024	11.800
	the control of the control of the 6.024	11,800	6.024	11.800

$20$ REMUNERATION OF DIRECTORS AND EXECUTIVES

(a) Directors' Remuneration

\$140,000 - \$149,999

\$470,000 - \$479,999 (1)

The following were directors of the parent entity during the financial year: BR Matich (Resigned 5 September 2003) D F Thomson (Appointed 27 November 2002) C S Willis (appointed 30 June 2003) E Eshuys (Resigned 11 November 2002) N J Bassett (Resigned 27 November 2002) G Wheeler (Appointed 27 November 02 Resigned 10 June 2003) A G Waller (Appointed 18 September 2003) Consolidated Parent 2003 2002 2003 2002 \$ \$ Ś. \$ Income paid or payable, or otherwise made available, in respect of the financial year, to all directors of each entity in the consolidated entity, directly or indirectly, by the entities of which they are directors or any related party: 245,643 715,820 Income paid or payable, or otherwise made available, in respect of the financial year, to all directors of the parent entity, directly or indirectly, from the entity or any related party: 245,643 686.020 Number of directors of the parent entity whose income falls within the following bands is: Remuneration Bands Number Number Number Number $0 - $9.999$ \$ 3 1 3 1 $$10,000 - $19,999$ 1 1 $\overline{a}$ ä, $$30,000 - $39,999$ 1 1 $$40,000 - $49,999(2)$ 1 J. $$60,000 - $69,999$ 1 1 $$70,000 - $79,999(2)$ 1

(1) Includes consultancy fees paid to a company (Resource Surveys Pfy Ltd) associated with Mr E Eshuys.

1

$\overline{\phantom{a}}$

1

1

1

1

Includes consultancy fees paid to a company (Mandevilla Pty Ltd) associated with Mr N Bassett. $(2)$

		Consolidated		Parent
	2003	2002	2003	2002
	\$	\$	\$	\$
(b) Executive Officers' Remuneration
Remuneration received or due and receivable by executive officers, including directors, of the consolidated entity whose remuneration is \$100,000 or more, from entities in the consolidated entity or a related party, in connection with the management of the affairs of the entities in the consolidated entity whether as an executive officer or otherwise:	140,525	620.139	140,525	620.139
Remuneration Bands	Number	Number	Number	Number
\$140,000 - \$149,999
\$470,000 - \$479,999

$21$ RELATED PARTY TRANSACTION

(a) Director Related Entities

The parent entity had entered into an agreement with Resource Surveys Pty Ltd, in terms of which that company agreed to provide the services of the former director Mr E Eshuys, to the Company for \$272,724 in total for a twelve month period. The agreement was terminated on 19 December 2002.

The parent entity had also entered into a Capital Consultancy Agreement with Mr E Eshuys, in terms of which Mr Eshuys agreed to use all reasonable endeavours to seek and obtain capital raising opportunities for and on behalf of the Company. Mr E Eshuys was not paid pursuant to this agreement during the financial year.

The parent entity paid a placement fee of \$11,880 during the financial year to a company associated with Mr N Bassett in respect of capital raised during the year. The payment was made on normal commercial terms and conditions.

The fees as outlined above have all been included in Note 20 Remuneration of Directors and Executives.

(c) Share and Option transactions of Directors	2003 Number	2002 Number
Directors and director related entities held directly, indirectly or beneficially, as at the balance date, the following equity interests in the Company:
Ordinary Shares	6.315.120	5.245.120
Options	700,000	12,400,000

SUBSEQUENT EVENTS $22$

Subsequent to financial year end:

On the 12 August 2003 the directors made a placement of 43,755,000 ordinary shares at an issue price of 1.5 cents which raised \$656,325. The financial effect of this transaction has not been brought to account at 30 June 2003.

		Consolidated		Parent
		2003 \$	2002 \$	2003 \$	2002 \$
23	CASH FLOW INFORMATION
	(a) Reconciliation of loss from ordinary activities after tax to the net cash flows from operations
	Loss from ordinary activities after tax		$(528, 425)$ $(1, 012, 513)$	(528, 425)	(1,021,160)
	Non-Cash Items
	Profit on share investment		(82, 442)		(82, 442)
	Profit on de-consolidation of controlled entity		(79, 611)
	Depreciation Profit on sale of fixed assets	87.114	42,317	16,636	11,186
	Provision for non-recoverability of loan	(1,792)		(3,328)	669,003
	Changes in Assets and Liabilities
	(Increase)/Decrease in accounts receivable	22,924	(60, 644)	(25, 707)	(23, 321)
	Increase/(Decrease) in accounts payable	101,863	(9, 126)	82,140	535
	Net cash flows (used in) operating activities	(318.316)	(1.202.019)	(458.684)	(446.199)
	(b) Acquisition of Subsidiary
	During the year 100% of the controlled entity, Austral Nickel Pty Ltd (2002 Barrambie Pty Ltd) was acquired. Details of this transaction are as follows:
	Purchase consideration			1,575,000	10
	Cash consideration			0	10
	Cash outflow/inflow			0	10
	Assets and liabilities held at acquisition date:
	Mineral interests			178,648
	Shareholder Ioan			(178, 648)
	12 Goodwill on consolidation			1.575.000

	Parent
2003	2002
s	S

CASH FLOW INFORMATION (Cont) 23

(c) Disposal of Subsidiaries

During the 2002 year control of the previously controlled entities, Fox Resources Limited, Fox Radio Hill Pty Ltd, Newcity Corporation Pty Ltd and Barrambie Pty Ltd ceased. Details of this transaction is as follows:

Disposal Price		Мi
Cash consideration		ΜЩ
Assets and liabilities held at date control ceased
Cash		40
Mineral Interests	٠	657,085
Loan from Company	٠	(736, 726)
Prior Year Losses Carried forward	٠	3.123
Current Year Losses		76,488
Investment

(d) Non Cash Financing and Investing Activities

During the year, the Company purchased 100% of Austral Nickel Pty Ltd for \$1,575,000. The consideration for the purchase was satisfied by the issue of 45,000,000 shares.

24 FINANCIAL INSTRUMENTS

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

.			Fixed interest rate maturing
	Weighted Average Effective Interest Rate	Floating Interest Rate	1 Year or less	1 to 5 vears	Non- interest Bearing	Total
	%	\$	\$	\$	\$	\$
Financial Assets Cash Receivables Total Financial Assets	1.2	26,714 26.714			56,975 56.975	26,714 56,975 83,689
Financial Liabilities Accounts Payable Hire purchase liability Total Financial Liabilities	7.2		7,813 7,813	$\mathbf{r}$ 25,665 25.665	440.504 440.504	440,504 33,478 473,982

$24$ FINANCIAL INSTRUMENTS (Cont)

2002

	Fixed interest rate maturing
	Weighted Average Effective Interest Rate	Floating Interest Rate	1 Year or less	1 to 5 vears	Non- interest Bearing	Total
	%	\$	\$	\$	\$	\$
Financial Assets
Cash	4.1	31.836				31.836
Receivables					79,900	79,900
Total Financial Assets		31.836			79.900	111.736
Financial Liabilities
Accounts Payable					946.264	946,264
Hire purchase liability	7.2		6,321	33,478		39,799
Total Financial Liabilities			6.321	33.478	946.264	986,063

$(a)$ Net Fair Values

The net fair values of other loans and amounts due are determined by discounting the cash flows, at market interest rates of similar borrowings, to their present value.

For other assets and other liabilities the net fair value approximates their carrying value.

No financial assets and financial liabilities are readily traded on organised markets in standardised form other than listed investments.

Credit Risk $(b)$

The company does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the company and Consolidated Entity.

DIRECTORS' DECLARATION

In accordance with a resolution of the directors of Acclaim Exploration NL;

The directors of the company declare that:

• $\ddagger$ the financial statements and notes are in accordance with the Corporations Act 2001; and
• $(a)$
• comply with Accounting Standards and the Corporations Regulations 2001; and
  give a true and fair view of the financial position as at 30 June 2003 and of the performance for the year $(b)$ ended on that date of the company and consolidated entity;
• $\bar{z}$ in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

A G Waller DIRECTOR

Perth, 30 September 2003

INDEPENDENT AUDIT REPORT

To the members of ACCLAIM EXPLORATION N.L.

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position as at 30 June 2003, statement of financial performance, statement of cash flows and accompanying notes to the financial statements for the year then ended, and the directors' declaration of Acclaim Exploration N.L. ("the company"). The financial report includes the consolidated financial statements of the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year.

The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach

We conducted an independent audit in order to express an opinion to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether or not the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

• examining, on a test basis, information to provide evidence supporting the amounts and $\bullet$ . disclosures in the financial report, and
• assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

HLB Mann Judd (WA Partnership)
15 Rheola Street West Perth 6005. PO Box 263 West Perth 6872 Western Australia. DX 238 (Perth) Telephone +61 (08) 9481 1977. Fax +61 (08) 9481 3886. Email: hlb@miwa.com.au. Website: http://www.hlb.com.au

Partners: Jan H Barsden, Yerry M Blenkinsop, Litsa Christudulou, Wayne M Clark, Euclo Di Giallussrde, Colin D Emnott, Peter M Forbes, Trevor G Hoddy, Norman G Neill, Peter J Speechley

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Audit opinion

In our opinion, the financial report of Acclaim Exploration N.L. is in accordance with:

• $(a)$ the Corporations Act 2001, including:
• $(i)$ giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2003 and of their performance for the year then ended; and
• $(ii)$ complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
• $(b)$ other mandatory financial reporting requirements in Australia.

HLB MANN JUDD Chartered Accountants

Perth, Western Australia 30 September 2003

N G NEILL Partner

Information Relating to Shareholders and Optionholders at 12 September 2003

		Ordinary Shares Fully Paid Listed	Partly Paid Shares	Options
1	Number of shareholders and option holders	2147	64	717
2	Distribution of shareholders/option holders
	$1 -$ 1,000 Category 5,000 $1.001 -$ $5,001 - 10,000$ 10,001 - 100,000 100,001 and over	370 346 1016 351	$\overline{a}$ 1 36 27	4 6 19 384 304
	Total number of holders	2147	-64	717
	Total on Issue	335,457,699	40,000,000	212,928,535
	Shareholders with unmarketable parcel
3	Percentage of total holdings held by or on behalf of twenty largest shareholders/option holders	48.23	91.29	36.58
4	Substantial shareholders Fair Ever Inc.	45,000,000
5	Twenty Largest Ordinary Fully Paid Shareholders
		Number of Fully Paid Shares		$%$ of Total
	1 Fair Ever Inc. 2 Corridor Nominees Pty Ltd 3 Tolhurst Noall Nominees Proprietary Limited 4 Mousaler Investments Limited 5 Yandal Investments Pty Ltd 6 ANZ Nominees Limited 7 Preferences Enterprises Ltd 8 Mammoth Nominees Pty Ltd 9. Mungala Investments Pty Ltd 10 Summerset Investments Pty Ltd 11 Goldfields Bearing Supplies Pty Ltd 12. Jade Asset Pty Ltd 13 Saxon Holdings Pty Ltd 14 Geb Capital Ltd 15 Eveete Pty Ltd 16. Bow Lane Nominees Pty Ltd 17 Gallin Consulting Pty Ltd 18. Mr Lionel Henry Evans 19 Alianda Oaks Pty Ltd 20 Ginga Pty Ltd	45,000,000 33,807,017 9,300,000 9,000,000 8,000,000 6,440,000 5,500,000 5,000,000 5,000,000 4,600,000 4,134,056 3,616,792 3,417,000 3,319,150 3,200,000 2,925,078 2,750,000 2,600,000 2,200,000 2,000,000		13.41 10.07 2.77 2.68 2.38 1.92 1.64 1.49 1.49 1.37 1.23 1.08 1.02 0.99 0.95 0.87 0.82 0.78 0.66 0.60
	TOTAL	161,809,093		48.23

Information Relating to Shareholders and Option holders at 12 September 2003

6 Twenty Largest Partly Paid Shareholders

	, __	Number of Optionholders	% of Total
	Eevo Pty Ltd	13,000,000	32.50
2	Corrider Nominees Pty Ltd	5,609,900	14.02
3	Geb Capital Limited	5,000,000	12.50
4	Ms Tina Bazzo	3.510.000	8.78
5	Watershore Holdings Pty Ltd	1,480,000	3.70
6	Ruby Net Pty Ltd	1,400,000	3.50
7	Ms Melissa Anne Vorlicek	1,200,000	3.00
8	Mrs Dagmar Blochlova	900.000	2.25
9	Mr Johannes Petrus Jozef De Vetten & Mrs Jacqueline De Vetten	750,100	1.88
10	Jade Asset Pty Ltd	660.000	1.65
11	Mrs Margaret Downes	590,000	1.48
12	Kelanco Pty Ltd	500,000	1.25
13	Mr Adam James Lienart	490.000	1.23
14	Mr Jeremy Robert Pockley	460,000	1.15
15	Mr Donald George Martin	400.000	1.00
16	Summerset Investments Pty Ltd	400,000	1.00
17	Mr Chris Wells & Mrs Josephine Wells	400.000	1.00
18	Mr John Charles Geary	350,000	0.88
19	Redclaw Enterprises Pty Ltd	350,000	0.88
20	Dacin Nominees Pty Ltd	255,0000	0.64
	TOTAL	37.705.000	94.29

$\overline{\mathbf{7}}$ Twenty Largest Option holders

	menty cargest option noiders	Number of Optionholders	% of Total
1	Mungala Investments Pty Ltd	14,000,000	6.57
2	Tolhurst Noall Nominees Pty Ltd	10.450.000	4.91
3	Resource Surveys Pty Ltd	8,000,000	3.76
4	Mr Simon Michael Perkovich	6,600,000	3.10
5	Mandevilla Pty Ltd	4,000,000	1.88
6	Yandal Investments Pty Ltd	4.000.000	1.88
7	Mr Ross Anthony Keys & Mrs Kylee Lynne Keys	3,550,000	1.67
8	Little Breakaway Pty Ltd	3,000,000	1.41
9	TDH No. 3 Investments Pty Ltd	3,000,000	1.41
10	Calex Nominees Pty Ltd	2.763.805	1.30
11	Mr David Cumming	2,750,000	1.29
12	Im Lisa Pty Ltd	2.400.000	1.13
13	Kelanco Pty Ltd	2,050,000	0.96
14	ANZ Nominees Ltd	2,000,000	0.94
15	Mrs Jeannette Mary Evans	2,000,000	0.94
16	Mountain Services Ltd	2,000,000	0.94
17	Westpac Custodian Nominees Ltd	2,000,000	0.94
18	Berne No. 132 Nominees Pty Ltd	1,905,715	0.90
19	Mr Dennis Graham Hulse	1,700,000	0.80
20	Mr Andrew Brian Gladigau	1,688,128	0.79
	TOTAL	79,857,648	37.52

Voting rights 8

• $\star$ Ordinary fully paid shares - upon show of hands one vote for every registered shareholder and upon a poll, one vote for each share held.
• $\star$ Contributing shares - upon a poll proportional to the called up capital.

9 Quotation

The Company is listed on the Australian Stock Exchange Limited ("ASX") and the home exchange is Perth. The ASX code is AEX for the listed fully paid shares and AEXO for options.

Summary of Mining Tenements as at 30 June 2003

WINGELLINA

Hinckley Range Pty Ltd 100% E69/535 E69/1090 E69/1091 MLA69/71

CLAUDE HILLS
Austral Nickel Pty Ltd 100%

E2777

NORSEMAN

Acclaim Exploration NL 100% ELA63/839 ELA63/840 ELA63/841

MANOOCHYDORE

Acclaim Exploration NL 100% ELA45/2475