COPPERMOLY LIMITED — Governance Information 2008

Jan 24, 2008

COPPERMOLY LIMITED

THE CORPORATE GOVERNANCE PRINCIPLES AND RECOMMENDATIONS

This Corporate Governance Statement sets out the Coppermoly Limited’s (ACN 126 490 855) ( Company ) current compliance with the ASX Corporate Governance Council’s Principles and Recommendations ( Best Practice Recommendations ).

The board of the Company currently has in place a Corporate Governance Policy ( Corporate Governance Policy ) which will be posted in a dedicated section on the Company’s website at www.coppermoly.com.au.

Where the Company’s corporate governance practices do not correlate with the practices recommended in the Best Practice Recommendations, the Company is working towards compliance however it does not consider that all practice are appropriate for the Company due to the size and scale of Company operations.

The board is of the view that with the exception of the departures to the Best Practice Recommendations as stated below, it otherwise complies with all of the Best Practice Recommendations.

BEST PRACTICE RECOMMENDATION	COMMENT
1. Lay solid foundations for management and oversight
1.1. Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions. 1.2. Companies should disclose the process for evaluating the performance of senior executives. 1.3. Provide information indicated in_Guide to Reporting on Principle 1._	The Company’s Corporate Governance Policy includes a Board Charter, which discloses the specific responsibilities of the board and provides that the board shall delegate responsibility for the day-to-day operations and administration of the Company to the Managing Director and senior executives. The Company will develop a comprehensive policy which will be the framework for evaluating the performance of senior executives. The Company will make a summary of the process available on its website once the policy has been approved by the board. The Company will explain any departures from best practice recommendations 1.1, 1.2 and 1.3 (if any) in its future annual reports.
2. Structure the board to add value
2.1. A majority of the board should be independent directors.	The board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the expense of the appointment of a majority of independent non-executive directors. Half of the board (being two directors) are non-executive directors. These

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Coppermoly Ltd

Corporate Governance Principles and Recommendations

BEST PRACTICE RECOMMENDATION

COMMENT

2.2. The chairperson should be an independent director. 2.3. The roles of chairperson and chief executive officer should not be exercised by the same individual. 2.4. The board should establish a nomination committee. 2.5. Companies should disclose the process for evaluating the performance of the board, its committees and individual directors. 2.6. Provide information indicated in_Guide to Reporting on Principle 2._

two non-executive directors are not independent directors in accordance with the Best Practice Recommendations. The board is of the opinion that each director on the board holds sufficient experience to make quality and independent judgments and decisions in their role as director in the best interests of the Company on all relevant issues. Further independent directors may be appointed depending upon the future acquisitions and growth of the Company. The Chairperson, Mr R.D. McNeil, is not considered independent under ASX guidelines but due to his experience and expertise in areas the Company operates in, the board considers he is suitably skilled to perform the role. The Company has not established a position titled “chief executive officer”, however the positions of Managing Director and Chairperson are not exercised by the same individual. The board considers that the Company is not currently of a size to justify the formation of a separate nomination committee, therefore the board as a whole, serves as a nomination committee. The board will identify and review board membership through an informal process, guided and directed by the Chairperson. Where necessary, the nomination committee seeks advice of external advisors in connection with the suitability of applicants for board membership. The Company will develop a comprehensive policy which will be the framework for evaluating the performance of the board, its committees and individual directors. The Company will provide details in its future annual reports. The Company will provide details of each director, such as their skills, experience and expertise relevant to their position, together with an explanation of any departures from best practice recommendations 2.1, 2.2, 2.3, 2.4, 2.5 and 2.6 (if any) in its future annual reports. The Corporate Governance Policy will be posted on the Company’s website.

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Coppermoly Ltd

Corporate Governance Principles and Recommendations

BEST PRACTICE RECOMMENDATION	COMMENT
3. Promote ethical and responsible decision-making
3.1. Establish a code of conduct to guide the directors, the CEO (or equivalent), the CFO (or equivalent) and any other key executives as to: (a) the practices necessary to maintain confidence in the company’s integrity; (b) the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders; and (c) the responsibility and accountability of individuals for reporting and investigating reports of unethical practices. 3.2. Disclose the policy concerning trading in company securities by directors, officers and employees and disclose the policy or a summary of that policy. 3.3. Provide the information indicated in_Guide to Reporting on Principle 3._	The Company’s Corporate Governance Policy includes a Corporate Code of Conduct, (which contains the Directors’ Code of Conduct and Company Code of Conduct). This policy, which provides a framework for decisions and actions in relation to ethical conduct in employment, compliance by the Company with its legal obligations, addressing the expectation of stakeholders and reporting accountabilities. The Corporate Governance Policy will be posted on the Company’s website. The Company’s Corporate Governance Policy includes guidelines for buying and selling securities in the Company (see specifically policy titled Dealing in Company Securities Policy available on the Company website). The Corporate Governance Policy will be posted on the Company’s website. The Company will explain any departures from best practice recommendations 3.1, 3.2 and 3.3 (if any) in its future annual reports.
4.Safeguard integrity in financial reporting
4.1. The board should establish an Audit Committee. 4.2. Structure the Audit Committee so that it consists of: (a) only non-executive directors; (b) a majority of independent directors; (c) an independent chairperson, who is not chairperson of the board; and (d) at least three members. 4.3. The Audit Committee should have a formal charter. 4.4. Provide the information indicated in_Guide to Reporting on Principle 4._	The board has established an Audit Committee, initially comprising Mr D. Brynelsen, Mr G. Edwards and Mr P. McNeil, who acts as chairperson of the committee. The Audit Committee does not currently consist of only non-executive directors and it does not have a majority of directors who are independent. The board considers this to be acceptable due to the size of both the Company and the board. The Company’s Corporate Governance Policy includes a formal charter for the Audit Committee. The Company will provide details of the members of the Audit Committee,

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Coppermoly Ltd

Corporate Governance Principles and Recommendations

BEST PRACTICE RECOMMENDATION	COMMENT
	the number of meetings of the Audit Committee and the names of the attendees, together with an explanation of any departures from best practice recommendations 4.1, 4.2, 4.3 and 4.4 (if any) in its future annual reports. The Corporate Governance Policy will be posted on the Company’s website.
5. Make timely and balanced disclosure
5.1. Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance. 5.2._Provide the information indicated in_Guide to Reporting on Principle 5.	The Company has a continuous disclosure program in place designed to ensure the factual presentation of the Company’s financial position. The Company will provide an explanation of any departures from best practice recommendations 5.1 and 5.2 (if any) in its future annual reports. The Corporate Governance Policy (which includes a summary of the continuous disclosure program of the Company) will be posted on the Company’s website.
6. Respect the rights of shareholders
6.1. Design a communications policy to promote effective communication with shareholders and encourage effective participation at general meetings and disclose their policy or a summary of that policy. 6.2. Provide the Information indicated in_Guide to Reporting on Principle 6_.	The Company has not developed a shareholders communications policy, however the Company’s Corporate Governance Policy aims to ensure that the shareholders are informed of all major developments affecting the Company’s state of affairs. The Company will explain any departures from best practice recommendations 6.1 and 6.2 (if any) in its future annual reports.
7. Recognise and manage risk
7.1. Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.	The board determines the Company’s “risk profile” and is responsible for overseeing and approving risk management strategy and policies, internal compliance and internal control.

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Coppermoly Ltd

Corporate Governance Principles and Recommendations

BEST PRACTICE RECOMMENDATION	COMMENT
7.2. The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks. 7.3. The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks. 7.4. Provide the information indicated in_Guide to Reporting on Principle 7._	The Company will develop a comprehensive risk management policy which will be the framework for identifying and managing risk of the Company. The board will ensure that it makes the disclosures required in accordance with this recommendation. The board will ensure that the Managing Director and CFO provide such a statement at the relevant time. The Company will explain any departures from best practice recommendations 7.1, 7.2, 7.3 and 7.4 (if any) in its future annual reports.
8.Remunerate fairly and responsibly
8.1. The board should establish a remuneration committee. 8.2. Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.	The board considers that the Company is not currently of a size to justify the formation of a separate remuneration committee, therefore the board as a whole, serves as a remuneration committee. The board will identify and review remuneration practices through an informal process guided and directed by the Chairperson The board is responsible for the remuneration arrangements for directors, the Managing Director and executives of the Company. Non-executive directors are paid a set fee of $20,000 per annum (exclusive of superannuation) and $40,000 per annum in the case of the Chairperson. Non-executive directors do not receive performance based bonuses nor are they entitled to retirement allowances. The Company’s constitution provides that the remuneration of non-

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Coppermoly Ltd

Corporate Governance Principles and Recommendations

BEST PRACTICE RECOMMENDATION

COMMENT

8.3. Provide the information indicated in_Guide to Reporting on Principle 8_

executive directors will not be more than the aggregate fixed sum determined by a general meeting. The Company’s Corporate Governance Policy includes principles regarding remuneration which deal with these matters. The Corporate Governance Policy will be posted on the Company’s website. The Company will explain any departures from best practice recommendations 8.1, 8.2 and 8.3 (if any) in its future annual reports.

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