CULLEN RESOURCES LIMITED — Annual Report 2005

Sep 27, 2005

CULLEN RESOURCES LIMITED ANNUAL REFORT 2008.

Albanya (Albanya) a Manazarta (Albanya a

1999 - Johann Stoff, Amerikaansk politiker (

Cullen Resources Limited

ABN: 46 006 045 790

Directors	. )
Denis E. Clarke (Chairman)	ᅎ
John Horsburgh	᠊ᠣ
Grahame Hamilton
Wayne John Kernaghan	O
Chris Ringrose	ᅎ
	➢
Secretary	┉┽
Wayne John Kernaghan	۳т
Securities Quoted	⊓
Australian Stock Exchange Limited
Home Exchange - Sydney
ASX Code: CUL	ᅎ
	۳П
Registered Office and Head Office	∩
Level 4, 118 Christie Street	┉┽
St Leonards NSW 2065
Telephone (02) 9437 4588
Facsimile (02) 9437 4599	ᠽ

سم

Perth Office

U4/7 Hardy Street South Perth WA 6151 Telephone (08) 9474 5511 Facsimile (08) 9474 5588

Auditors

Ernst & Young 630 George Street Sydney NSW 2000

Share Registry

Computershare Investor Services Level 3, 60 Carrington Street Sydney NSW 2000 Telephone (02) 8234 5000 www.computershare.com

Solicitors

Gadens Lawyers, Level 32, 44 St Georges Terrace Perth WA 6000

Company Website www.cullenresources.com.au

Bankers

Australia and New Zealand Banking Group Limited St Leonards NSW 2065

Email info@cullenresources.com.au

Chairman's Report
Exploration Review	2
Directors' Report	12
Corporate Governance Statement	18
Independent Audit Report	20
Directors' Declaration	21	гп
Statements of Financial Position	22
Statements of Financial Performance	23
Statements of Cashflows	24
Notes to the Financial Statements	25
Shareholder Information	41

Dear Fellow Shareholder

The exploration scene throughout 2004/2005 has remained very upbeat, with metals such as copper, uranium and iron the subject of strong exploration interest. and other metals such as tungsten and molybdenum being added to the already broad list of commodities in high demand. The competition for around has therefore been very high and the race to participate in more advanced (resource level) projects has been keen.

The Company's "acquire and farm-out" strategy has continued to be our basic business model - a "Discovery in Partnership" motto is a succinct summary of our objective. This strategy has seen a few hurdles during the 2004/2005 year as the separation of rights to different commodities to different companies on the same ground has thrown up some complex questions and possibilities, which needed to be addressed in leaal agreements. A case in point is the Joint Venture with Newmont (for gold) and BHP Billiton (for nickel) on Cullen's Gunbarrel Project area, with the added complication of the takeover of the original partner WMC Resources Ltd in the mix. However, the current happy position for Cullen is that major exploration programmes by both these giant companies are now in progress on the Gunbarrel Project.

Although the level of on-ground exploration and expenditure has been lower than predicted for 2004/2005, it is anticipated that 2005/2006 will see the pace and range of activities and target testing quicken, led by the work on the Gunbarrel Project.

Cullen has also successfully farmed out project areas to Aquila Steel Pty Ltd for iron ore exploration. Aquila is exploring several potentially economic Channel Iron Deposits in the West Pilbara and preliminary results from its exploration of Cullen's around have been very encouraging. Cullen is fortunate to have substantial

exposure to the highly buoyant and exciting iron ore exploration scene.

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To complement the farm-out activity, the Company continues to refill the project pipeline picking up ground where perceived opportunities exist - and this activity has recently included acquisition of ground with both gold and uranium prospectivity in an area south east of Paraburdoo. Cullen has also been continually reviewing opportunities for participation at the more advanced exploration level and has come very close to participating with a few. However, in the end, the market competition and the scarcity of quality projects have deterred the Company from participating at what it judged to be inflated entry level costs.

Cullen is a diversified junior exploration company with the objective of delivering participation in a major ore discovery for its shareholders. Looking forward, the Company aims to apply the full depth of significant Management and Board experience it possesses, to identify and progress project opportunities. The high level of exploration at the Gunbarrel Project should ensure that the coming year is an exciting one for shareholders.

All members of the Board, our staff and contractors are thanked for their contribution and support during the year.

Dr Denis Clarke Chairman

THE COMPANY

The Company exists to create, increase and maximise shareholders' value from its tenement portfolio by discovery of economic mineral deposits.

The Company also analyses and interprets geological and exploration business information in order to win interests in and progress new project areas. The Company seeks projects to which it can add substantial value for low capital risk and will follow a joint venture funded exploration model for discovery where appropriate.

The majority of the Company's projects are in Western Australia, however there is no Company policy which restricts the sphere of exploration activity and indeed Cullen does review project opportunities throughout Australia and from selected locations overseas.

Cullen is led by a team of highly experienced, successful and motivated geologists. The depth of technical, managerial and corporate skills possessed by the Company's Directors collectively covers all aspects of project generation, exploration management, project development and corporate governance.

HIGHLIGHTS - 2004/2005

• · Successful continuation of the Company's farm out strategy with an increase in partner numbers and commodity range;
• The Company raised \$1.315 M by way of placement and \$0.4M by exercise of options during the year;
• ASHBURTON The Aquila Iron Ore Joint Venture reported significant potential for the occurrence of Channel Iron Deposits from first pass field work on the Company's tenements in the West Pilbara Project Area;
• The Company has applied for new exploration licences in the Tunnel Creek area of the Ashburton, which are prospective for uranium mineralization:

• NORTH EASTERN GOLDFIELDS The Independence Group defined numerous EM anomalies with associated surface geochemical anomalies for drill testing in search of nickel sulphide mineralization;
• . The Gunbarrel Gold Joint Venture (managed by Newmont) has identified numerous targets for first pass RAB drill testing (some 500 holes) and the Southern Gold prospect as a target for deeper RC and/or diamond drill testing;
• The Gunbarrel Nickel Joint Venture (managed by BHP Billiton) has identified 16 geochemical targets for further investigation in the search for nickel sulphide mineralization:
• The Newexco Group (consultants) reported high nickel sulphide potential following a review of the Wonganoo project;
  • NORSEMAN Joint Venture partner Placer completed a 5500m RAB drilling program which highlighted bedrock anomalies at the Cashel prospect. Later follow-up by Cullen identified gold bearing quartz veins within the prospect area and enhanced the project's prospectivity;

. CENTRAL LACHLAN FOLD BELT -Finalisation of terms of a Sale Aareement with Mantle Mining Corporation Limited, a prospective IPO, to include the Company's Intrusive Related Gold prospects in the Central Lachlan fold belt of New South Wales.

Page 2

CORPORATE STRATEGY

The Company has a farm out policy as a principle strand of its corporate strategy. Throughout 2003/2004 and 2004/2005, the Company successfully farmed out a number of major projects to suitable, significant Joint Venture partners. The objective of this strategy is to maximise exploration activity levels, spread the risk of exploration, and increase the technical depth and range of techniques brought to bear on exploration situations.

Potential partners targeted by Cullen include:

• those with particular exploration expertise and experience in the regions of the Cullen tenement packages being offered for farm out;
• . those with expertise in the commodity and ore model type being sought; and,
• those with adjoining tenements and/or mining operations close to Cullen tenements.

These farm-out activities are complemented by Cullen's ongoing project generation, including reconnaissance level exploration programmes, over selected areas. The Company's "Pipeline Projects" include tenement applications in Western Australia at: Weebo (Aanew Greenstone Belt); in the Lake Mackay area and in the Tunnel Creek area SE of Paraburdoo.

A 3 5 4 9 5 1 1 3 2 3 0 5 5 1 1 2 2 9 0 5

At this stage Cullen has eight Joint Ventures managed by partners (see Summary Table below)

CULLEN JOINT VENTURES SUMMARY TABLE

Joint Venture	Commodity	JV Partner	Earning	Expenditure required / fime	Cullen's FCI	Cullen's NSR	Partner profile and synergy
Gunburol Geld	ÂЦ	Newmont	70 or 75%	\$3.5M/4 years	$30 \text{ or } 25 \%$		World's biagest gold miner with significant Yandai Belt expertise and operating gold mine 100km to the west of Gunberral of Jundee
Gunbarrel Nickel	M	SHP Billion Utd.	15%		75%	1.5%	Australia's premier nickel explorer and producer making new, around breaking exploration push in northeastern goldfields of Collurabble Project
Killaloe Nickel	M	Nickel Australia Limited	70%	\$1.5M/4 years	20%	$\mathcal{P}^{\text{H}}$	Leading explorer with a strong technical and management profile. Moior ground position in Narseman region complemented by Culten's ground
Mt Tote Nickel	NI	Independence Group NL	70%	STM/4 years	30%	$1 - 596$	Nickel producer and explorer with significant technical credentials
Irwin Bore Mickel	M.	Independence Group NL	60%	SI 5M/4 years	20%	10 0	Nickel producer and explorer with significant technical credentials
Duchess	$Au$ ( $v$	Minotour Operations Ltd	70%	S3M/4 years	20%	1.7%	Discoverer of Prominent Mill deposit and expert in iron oxide. Cuchu systems
Hordey Junction	和	Nuster Mining Corporation Ltd	70%	\$800,000/4 years	30%	1%	Nustar operates the Paulsens underground gold mine located about 15km north of the Hardey Junction Project
West Pilburg	from ore	Aquito/API Ltd	70%	SUM 5 years	None	Мc Jones royalty	Aquila Steel Pty Ltd, through API Management Pty Ltd has interest in a large JV area in the West Pilbara through JV with Collen and Red Hill Iron
$F(1)$ = Free corried interest NSR = Net smelter return			Has carned				* Subject to Penasus Royalty

Cullen Resources Limited

Gunbarrel Project-

Nickel and Gold Joint Ventures

The Company's flagship Gunbarrel Project is located in the North Eastern Goldfields of Western Australia. It comprises 4 tenements covering an area of $-500$ km² of granite greenstone terrane. It includes known prospect areas for gold (Southern) and nickel sulphides (AK47); and its well recognized prospectivity has attracted two of the country's largest and well-credited explorers, in Newmont and BHP Billiton as Cullen's Joint Venture partners.

The 2004/2005 year has seen some difficult circumstances with the development of complex legal agreements and the

takeover of original partner WMC Resources Ltd by BHP Billiton leading to reduced on-ground exploration activity levels. Both partners are now set for increased activity levels in the coming year.

Exploration activity levels in the North Eastern Goldfields have increased in aeneral with the Collurabbie Project (Falcon Minerals Ltd and BHP Billiton) providing significant market interest and attracting an investment by Jubilee Mines Limited in Falcon Minerals Ltd.

Cullen is well positioned in prime exploration ground with significant major players.

North Eastern Goldfields Tenement Location Plan

Results Gunbarrel Project

As indicated, the 2004/2005 year was characterized by review work. Newmont's work led to identification of gravity anomalies interpreted to be intrusive bodies within the greenstone belt (a controlling feature for the location of gold deposits); and the geochemical and geological characteristics of the known nickel sulphide occurrences were reviewed to refine sixteen geochemical anomalies for further nickel exploration drilling.

The Gunbarrel Nickel Joint Venture is following up on its discovery of October 2003, when the Joint Venture's diamond drillhole GBD2 intersected a 0.2m zone of massive nickel bearing sulphide with associated minor disseminated sulphides (0.2m @ 1.93% Ni, 0.42 % Cu and 0.70 g/t Pt+Pd from 139.7m). The intersection of magmatic nickel sulphide at a modest depth was a significant breakthrough for the prospectivity of the project area and the greenstone belts in the Wonganoo/Mt Eureka belts in general.

A review of the geological and geochemical data over interpreted ultramafic belts east, west and north of the Mt Eureka (AK47 prospect) area has been completed to prioritise further regional exploration for the next stage of evaluation.

Irwin Bore and Mt Tate Projects -

Nickel Joint Ventures

The Independence Group NL is the Manager of the Irwin Bore and Mt Tate Joint Ventures, in the search for nickel sulphide deposits. The Irwin Bore tenements contain some 16 strike kilometres of at least three komattiite horizons. some of which show cumulate textures, lying on strike to the south of the nickel sulphide-bearing stratigraphy in the Gunbarrel Project area.

Results Irwin Bore Project

During the year, Independence completed: ground geophysical (EM), geochemical and geological studies. The results identified a number of conductive responses over anomalous, nickel-suite soil geochemical targets (up to 1050ppm Ni) within prospective ultramatic stratigraphy. Once Heritage surveys have been completed and clearances obtained, the Joint Venture will commence drill testing of these targets.

Geological reconnaissance programmes have been completed over some of the Mt Tate tenements with detailed work to follow once the tenements are approved.

Wonganoo Project -Gold and Nickel

This project area covers parts of the Dingo Range and Mt Fisher areenstone belts, and is considered a greenfields area for gold and nickel deposits. The level of previous exploration has been relatively low, with limited drilling in view of the large size of the project area and the significant areas of thick alluvial cover.

Indications from previous drilling and interpretation of aeromagnetics data are that there are numerous strike kilometres of ultramafic horizons which are prospective for nickel sulphides, and several structural settings favourable for the location of gold deposits.

Results Wonganoo Project

A review of the geological databases relating to nickel prospectivity was completed by Newexco, experts in nickel sulphide exploration, and further programmes of geological mapping and RAB drilling were completed to enhance the knowledge of the ultramafic stratigraphy in the northern part (E53/988 Quantum Resources Limited, 20%) of the project area. The consultants reported significant nickel sulphide potential.

Exploration for gold has identified a sheared dolerite also within E53/988 with a number of low level, bottom-of-hole gold anomalies from previous drilling where further exploration for gold is warranted.

Cullen Resources Limited

Killaloe Nickel Project - Joint Venture

The Killaloe Project is situated ~25km northeast of Norseman in the Kambalda-Widgiemooltha nickel and aold province of the Eastern Goldfields of Western Australia. The area is prospective for gold and nickel.

Nickel Australia Limited (NAL) has agreed during 2004/2005 to earn a 70% interest in the nickel rights of this project area. NAL concluded from a review of the Cullen database that there is significant potential to better define the known TEM conductors as well as undertaking further TEM surveys over areas not yet explored. In addition, numerous gossans located in favourable geological locations have yet to be drill tested.

NAL is planning air core, and deeper drill testing by RC and diamond drilling as well as surface electromagnetic (EM) and aeochemical survevina.

Killaloe Gold Project

During the year, Placer Development Asia Pacific (PDAP) completed exploration programmes (RAB drilling, gravity surveying and some geological mapping and bedrock interpretation), during its exploration of the Killaloe tenements as part of the Killaloe Gold Joint Venture. PDAP subsequently withdrew from the Joint Venture in October 2004.

Cullen compiled and integrated the results of PDAP's exploration into its own database and concluded that the Killaloe-Buldania break/shear zone targeted by PDAP's drilling is an extension of the Zuleika Shear, and that analogies to the Kundana, White Foil and Broads Dam gold ore bodies are valid targets types.

The Killaloe/Zuleika Shear extends for over 15km of strike within the Cullen tenements and includes several target areas at Killaloe, Cashel, and Windy Hill prospects.

Cullen completed programmes of follow up RAB hammer drilling at these three prospects. The assay results from this drilling were generally disappointing with a best intersection of 2m @ 5.99 g/t Au from 20m immediately along strike from the gold-bearing quartz vein at Cashel, and 5m @ 0.38 g/t Au at the Windy Hill prospect.

The drilling completed to date at these prospects has not outlined any gold zones of economic significance, however the occurrence of significant amounts of visible gold in a thin auartz vein within the Killaloe Project area (at Cashel a sample of the gold bearing quartz vein assayed 960 g/t Au) is a significant indication of the high prospectivity of the target structural corridor. The Cashel prospect lies close to the contact of basalt and black shales/siltstones along a major shear corridor in a relatively under-explored region lying 20km south of Higginsville and 20km north east of Norseman, and further more detailed exploration in this project area is clearly warranted.

Ashburton Gold Province

Cullen holds a strategic position in the NW sector of the Ashburton Gold Province, including a number of project areas along the Paraburdoo Hinge Zone - a 300km long set of regional structures which host a number of gold deposits and prospects. Cullen's projects are in the vicinity of the Paulsens deposit where production from an underground mine (1.44 Mt @ 11.7 g/t Au) has now commenced. Cullen's properties have: major structures, prospective host rocks, evidence of alteration and significant soil/rock chip gold anomalies.

The Company has in place a Joint Venture with Aquila Steel Pty Ltd (API Management Pty Ltd), to explore for iron ore on a group of Cullen's tenements: and a farm-in agreement with NuStar Mining Corporation Ltd (NuStar) to explore for gold.

NuStar has now commenced exploration. Similarly, Aquila is planning their first drilling programmes for initiation as soon as Heritage Clearance surveys are complete.

West Pilbara Project -

Mt Stuart Iron Ore Joint Venture

The Joint Venture completed a field mapping and sampling program on Cardo Bore (E08/1341), Red Hill West (E08/1135) and Catho Well (E08/1330).

Field inspection and mapping of the Tertiary palaeochannels at Cardo Bore and Catho Well indicated that the Channel Iron Deposits (CID's) are well preserved.

The Tertiary palaeochannels at Cardo Bore and Catho Well occur as semi-contínuous, breakaway mesas, each approximately 6km long. The volumes, and hence the tonnages, of CID that occur within these tenements may be significant.

The iron-rich pisolite found in the CID's at Cardo Bore and Catho Well is directly comparable with published descriptions of CID pisolite at operating mine sites such as Robe River and Yandi. Traverses of surface rock chip sampling at Cardo Bore and Catho Well indicate that the iron content of the CID averages 53% and 55% respectively, with moderate silica and aluming and low trace elements. These results are consistent with rock chip chemistry of CID's currently being mined.

The CID's on the Cullen Joint Venture tenements at Cardo Bore and Catho Well may host significant iron deposits. The geology, chemistry, and the potential size of the occurrences make them priority targets for accelerated exploration.

Cullen Resources Limited

Yanks Bore Project - Gold Joint Venture

The project, which lies 110km east of Onslow comprises a package which is partly a Joint Venture with Udu Resources Ltd (45% and diluting). The Project Area's geology is dominated by the Yanks Bore Fault/thrust structure which is part of a set of regional structures along the 300km long Paraburdoo Hinge Zone, an important control of gold mineralization in the Ashburton. Exploration at Yanks Bore by Cullen has included extensive prospecting/rock chip sampling, grid soil sampling, geological mapping, airborne magnetics, scout RAB/RAB hammer drilling and a programme of 10 shallow RC holes.

The RC programme, which was the first along this extensive anomalous trend, included a best intersection of 10m @ 1.92 g/t Au in RHRC001 (from 5-15m depth, 5m composites), from the northern portion of the Red Hill West tenement (E08/1135). The intersection in RHRC001 is important and indicates that the Yanks Bore Fault - Au/As anomalous trend, which has a strike extent of $\sim$ 8km within E08/1135, is prospective and will be the focus of further exploration.

Ashburton Projects - Simplified Geology & Tenement Location

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The Company holds an extensive package of tenements in the Tin-Tungsten Belt of the Central Lachlan Fold Belt of New South Wales, considered by Cullen to be prospective for the intrusion-related class of gold deposits ("IRG deposits"). IRG deposits are found within or adjacent to granitic intrusions, often along tin-tungsten belts. They exhibit a range of mineralization styles and are usually enriched in bismuth, tellurium and arsenic. The best examples are found in the Tintina Gold Province of the Alaska-Yukon region. The Tintina Province includes both large tonnage gold deposits, for example: Fort Knox (169Mt @ 0.93g/t Au, production - Kinross Gold Corp) and Donlin Creek (122Mt @ 2.91g/t Au, development -NovaGold Resources Inc./Placer Dome Inc.); and high grade vein deposits such as Pogo (9Mt @ 18.9g/t Au, development Teck Cominco Ltd/Sumitomo Metal Mining Co. Ltd). Resource figures are taken from company websites.

Cullen's tenements were selected by applying the class model to regional data sets. The areas contain over fifty recorded gold prospects (mostly gold-bearing, quartzsulphide veins) which are broadly related to granitic intrusions. The majority of previous exploration in the Tin-Tungsten Belt of the Central Lachlan Fold Belt has been for tin and tungsten rather than gold.

During the year, Cullen agreed to the sale of these tenements to Mantle Mining Corporation Ltd (Mantle, initially proposed as Condor Mining Corporation Limited),

a proposed new IPO headed by Mr. Martin Blakeman and Mr. Peter Anderton. Mantle has a portfolio of properties in New South Wales, Victoria and Queensland with a focus on gold exploration and mining.

The Consideration for the sale of Cullen's tenements, which is subject to a number of terms and conditions, is: \$850,000, to be satisfied by the issue of 4,250,000 fully paid ordinary 20c shares in the capital of Mantle.

Mantle is now marketing an Information Memorandum to complete a seed capital raising, and plans to seek a listing on the ASX during the last Quarter of 2005.

Cullen Resources Limited

Duchess Project - Cu-Au Joint Venture

The two "Duchess" tenements (Mayfield and Erle) in the Mt Isa Province were granted to Cullen in early July 2004 for a period of four years. Cullen and a subsidiary of Minotaur Exploration Ltd have formed the Duchess Joint Venture. Minotaur will carry out a gravity survey over the tenements and follow up any anomalies with more detailed surveys including magnetics.

The Mayfield tenement covers a major flexure on the regionally significant Pilgrim Fault Zone. The area is considered prospective for structurally-hosted, Cu-Au and Au-only mineralization. The project area lies just east of the historically significant Trekelano Cu Mine and just north of the high grade Tick Hill Au mine (both mines are inactive).

The Erle tenement has a number of previously-defined targets for follow-up EM and geochemical surveying.

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BIPELINE PROJECTS (Quilen 100%)

Tunnel Creek - ELA's 52/1890-1892

The Company has applied for three new exploration licences in an area approximately 100km SE of the town of Paraburdoo in WA which are considered to be prospective for uranium. These applications cover the faulted and/or unconformable contacts of the Palaeoproterozoic Age, Bresnahan Group congolmerates, sandstones and mudstones, in the vicinity of a number of known uranium prospects and mapped occurrences of uranium mineralization. Cullen considers that the general area of this unconformity and associated local faulting are prospective for uranium mineralization similar in style to that of the world class Ranger and Jabiluka deposits in the Alligator River Region of the Northern Territory.

One of the tenement applications includes mapped residual and supergene occurrences of uranium mineralization near the faulted contact of Bresnahan Group sediments with underlying rocks of the Wyloo Group. The second application is along strike from (and surrounds) "Nobbys Anomaly" with reported drill intersections of 2.2m @ 0.74% $U_2O_8$ . Cullen plans a detailed review and compilation of previous exploration results together with field reconnaissance and prospecting.

Weebo - ELA's 36/522 and 523

These applications cover interpreted fingers of greenstone trending south and south easterly, at the margins of the Aanew areenstone belt. The aeological setting is analogous to gold deposits at Lord Henry and Lord Nelson on the Sandstone greenstone belt (Troy Resources NL) and as such reconnaissance soil sampling and prospecting of magnetic anomalies in aranite are warranted.

Lake Mackay - ELA's 80/3506 and 3507

These applications cover magnetic and aravity anomalies in the vicinity of the Mt Webb Proterozoic granite-alteration system (Wyborn et al., 1998 in Geoscience Australia 2002). which is prospective for Cu-Au deposits. The applications are in the Western Australian side of the Northern Territory's Arunta Region where there are extensive tenement application held by gold explorers. The WA portion of this geological terrane has challenges with logistics and land access and remains truly greenfields.

Vale Dan Bryant - The Company records with sadness the death of Dan Brvant in 2005. Dan was a great contributor to early field work programmes on the Gunbarrel Project (pictured page 5).

Annual Bear Sail and S

PROJECTS	TENEMENTS	REPLACEMENT TENEMENTS	CULLEN INTEREST	JOINT VENTURE INTERESTS
Western Austrolin Guabarrel	E53/535 E53/568 E53/818 E\$3/837	MLA53/868.869 NLA53/952 953 MLAS3/870,954 MLA s 53/1021-1033 MLA s 3/1022 1030. 1034 1047	100% 100% 100% 100%	2.5% NPI Royalty to Pegasus on Cullen's Rights 2.5% NPI Royalty to Pegasus on Culler's Rights 1.5% NSR Royotty to Aurora 1.5% NSR Royalty to Aurora *BHP Billiton has 75% of Nickel rights, Newmont can earn 70-75% in Gold rights
Invit Bore	E53/403 F53/925 153/1137 PLA53/1219 E53/981	MLA53/494,495, MLA53/713 MLA53/878	90% 90% 90% 90% 90% 90%	CO2 Group Ltd 10%, Independence Group NL may earn 65% of the Nickel Rights
All lote Wonganoo	ELA53/1040 PLA53/1154 FLA53/1096 ES3/1046 ELAS3/1069 ELA53/1083 E53/988 ELASS/FIOS ELA53/1111		100% 100% 100% 100% 100% 100% 80% 100% 100%	Independence may earn 70% of the Nickel Rights Quantum Resources Ltd. 20%
Killalae	E63722 E63/765 P63/1131-33 P63/1172-1174 ELA63/815	MLA's 63/573-576.603.604 MLA'S 63/584 585 MLA'S 63/586-591	100%+ $100% +$ 100%+ $100% +$ 100%	+7.5% NPI Royalty to Xplore Pty Ltd and Nickel Australia can earn 70% of Nickel Rights
Ashburton	E47/874 E47/903 E47/1004 E47 1154 E08/1145 E08/1166 E08/1189 F08/1330	MLA08/277.278.279 MLA08/553/554/555 MLA08/323 MLA08/309, 310	100% 100% 100% 100% 100% 100% 100% 100%	Nustar corning upto 80% Nustar carning upto 80% Nustar corning upto 80% API carning 70% in iron ore rights
	E08/1292 E98/1375 F08/1341 ELADS/1393 ELA47/1229 ELA52/1667 ELA08/1423 ELAO8/1365-ELAO8/1367 PLA309 /499 -501	MLA08/324	100% 100% 100% 100% 100% 100% 100% $^{100\%}_{100\%}$	API carning 70% in iron ore rights API carning 70% in iron ore rights API corning 70% in iron ore rights.
Yanks Bore Red Hill West Weebo Junnel Creek Lake Mackey	108/1022 ELA08/1384 E08/1135 ELA 36/522, 523 E52/1890.1891,1892 E08/3506 3507	MLA08/281.282.283.284	51% 100% 100% 100% 100%	Udu Resources Ltd 45% and diluting 2.5% NSR Royalty to Goldfields Exploration Pty Ltd API earning 70% in iron ore rights
Queensland Duchess New South Wales	EPMA 11990 EPMA 12395 EL5891, EL6020 F16168		100% 100% ŅĮ 100%	Minotour con earn 70% equity Option to purchose 100%
Central Lachion	EL6206, EL6207 E16220 F16227 F16235 E16256 E16257		$100\%$ 100% 100% 100% $100\%$

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Your Directors submit their report for the year ended 30 June 2005.

Birectors

The names and details of the company's directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Dr Denis Clarke BSc, BA, PhD, FAIMM (Non-Executive Chairman)

Denis Clarke has more than 30 years experience in exploration and mining operations. Over 15 years with Plutonic Resources ("Plutonic"), he contributed significantly at the General Manager level to its success as it developed from a small explorer in 1983 to one of Australia's largest gold miners prior to its take-over in 1998 in a transaction which valued Plutonic at \$1 billion. Dr. Clarke at various times managed the exploration, finance, administration and corporate divisions. He brings to the Board broad technical, financial, administrative and corporate experience and a wide range of industry contacts. During the past three years Dr Clarke has held the following listed company directorships:

• Frov Resources NL
• Anglo Australian Resources NL
• Beaconsfield Gold NL from 25 November 2004
• BeMax Resources NL during the period 1 June 1999 to 24 November 2003.
• & Grahame Hamilton BSc. MSc. MAIG (Executive Director)

Grahame Hamilton, has extensive experience over 30 years in exploration, corporate and project management. He has wide ranging expertise in project evaluation. Between 1994 and 1996 he managed the Brocks Creek. exploration, environmental impact statement, feasibility study, mine development and construction for Solomon Pacific Resources NL. Before Solomon, Grahame worked with Getty Oil Development Co.- minerals division as Queensland Manager. He is a director of unlisted public company Mariana Resources NL.

& John Horsburgh, BSc, MSc, FAIMM (Executive Director)

John Horsburgh, a graduate of the Royal School of Mines, has over 32 years industry experience including 11 years with Solomon Pacific Resources NL. Prior to this he gained extensive experience in Australia and overseas with Getty Oil Development Co., Billiton and RTZ Group. He is a chairman of unlisted public company Mariana Resources NL.

Wayne John Kernaghan BBus, ACA, FAICD, ACIS (Non-Executive Director and Company Secretary)

Wayne Kernaghan is a member of the Institute of Chartered Accountants in Australia with a number of years experience in various areas of the mining industry. He is also a Fellow of the Australian Institute of Company Directors. During the past three years Mr Kernaghan has held the following listed company directorships:

• Goldlink Incomeplus Limited
• Aim Resources Limited during the period 8 July 2003 to 1 December 2003.

A Dr Chris Ringrose BSc, Phd, MBA, MAIMM (Exploration Director)

Chris Ringrose has been an exploration geologist based mainly in Western Australia since he completed his geology degrees in Scotland in 1982. His career has included experience with EZ, Chevron and Aztec, and prior to joining Cullen, Chris was Exploration Manager with Troy Resources NL, for nine years. Chris has also completed an MBA at Deakin University and brings to the Company significance management, exploration and project evaluation experience gained both in Australia and overseas.

Principal Activities

The principal activity for the consolidated entity during the course of the financial year was mineral exploration. There was no significant change in the nature of the consolidated entity's activities during the year.

Results

The consolidated loss of the consolidated entity for the financial year was \$(756,861) [2004: loss \$1,448,160]. No income tax was attributable to this result (2004; Nil).

Dividends

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The directors do not recommend the payment of a dividend for this financial year. No dividend has been declared or paid by the company since the end of the previous financial year. [1] product the company ta katika kalendar yang dikenali ke terapat ke terapat ke terapat yang dikenali di kelah di kelah di terapat d
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Significant Changes in the State of Affairs

In the opinion of the directors there were no significant changes in the state of affairs of the consolidated entity that occurred during the financial year under review not otherwise disclosed in this report or the consolidated financial statements.

Review of Operations

During the year under review, the Company continued its mineral exploration activities which included field programmes. project generation, and farm out of a number of projects to major company partners. Company activities, including Joint Venture managed projects, were focused in three main centres of Western Australia and in New South Wales as follows:

• A Ashburton Province. WA (Yanks Bore. Red Hill West. De Courcy. Hardey Junction, Mt Stuart, Cardo Bore and Catho Well Projects):
• North Eastern Goldfields, WA (Gunbarrel Gold and Nickel Projects, Irwin Bore and Wonganoo Projects).
• A Eastern Goldfields, WA (Killaloe Gold and Nickel Projects):
• Central Lachlan Fold Belt, NSW (Ardiethan, Mt Solitary, Gibsonvale and Walsh Gold Projects).

A total of \$1,183,654 was spent on exploration during the year.

Cullen's objective in these areas is to discover gold, nickel and/or iron ore deposits by generating drill targets for testing either by Cullen in its own right, or with a joint venture partner.

Drilling by Cullen or its partners during the year to 30 June, 2005 has included:

RAB/aircore drilling of 38 holes for 1461m at Wonganoo: 41 holes for 1502m by Cullen and 214 holes for 5459m by Placer at Killaloe: RC drilling of 15 holes for 967m in New South Wales: and 16 holes for 800m at the Yanks Bore and De Courcy projects in the Ashburton. Other work has included field reconnaissance, geological mapping, geochemical surveys, electro-magnetic surveys and evaluations of new project opportunities.

The Company continued to market projects for Joint Venture, and attracted Aquila Steel Pty Ltd to join in exploration for iron ore in the West Hamersley and Nustar Mining Corporation Ltd for gold in the Ashburton Region.

The Gunbarel Nickel Joint Venture (WMC Resources Ltd, Manager, now BHP Billiton) has been exploring for nickel and related base metal and platinum group elements on the Gunbarrel tenements since 2001. Exploration during 2004-2005 was dominated by a review of results to date following the discovery of massive nickel sulphides in diamond drillhole GBD2 in October, 2003. Although the intersection was thin (0.2m @ 1.93% Ni), the confirmation of nickeliferous, magmatic sulphides is a breakthrough and enhances the prospectivity of the underexplored Gunbarrel greenstone belt. Renewed activity and drilling are anticipated by BHP Billiton in the coming year.

At Wonganoo, compilation, geological mapping and reconnaissance drilling were completed. The results confirmed the prospectivity for nickel and gold deposits. Consultant reports also underlined geological features suitable for nickel sulphide deposits within the tenements. Some major structures with low-level gold anomalies detected in transported cover also warrant further investigation for gold mineralization.

At Killaloe, the project's gold prospectivity attracted Placer as a new Joint Venture partner for gold. Although Placer withdrew after completing a major phase of RAB drilling and gravity surveying, Cullen has enhanced the area's gold prospectivity by extending Placer's work in its own campaign of drilling. The company also agreed to a farm in by Nickel Australia Limited to explore for nickel sulphide deposits on the Killaloe project area.

Barrick Gold Australia Ltd (Barrick) withdrew from the Wyloo Joint Venture tenements in late 2003, after approximately \$800,000 of exploration expenditure. The results of its work were reviewed by Cullen, and new joint venture partners. were sought for the major project areas at De Courcy, Hardey Junction, and Yanks Bore. As a result, a Joint Venture has been formed with Nustar Mining Corporation Ltd over Hardey Junction. Nustar has successfully commenced production of gold from the Paulsens deposit (July 2005) which is situated close to a number of Cullen's Ashburton projects.

Also, a number of Cullen's Ashburton tenements attracted interest from Aguila Steel Pty Ltd seeking channel iron ore deposits. A Joint Venture was formed and first stage exploration has been completed over the Catho Well, Cardo Bore, and Red Hill West tenements.

In 2003/2004, Cullen farmed out its two tenements in the Mt Isa province near Duchess, to Minotaur, discoverer of the Prominent Hill gold-copper deposit in SA. Minotaur completed preliminary gravity surveying during the year.

Cullen's project initiative in the Central Lachlan Fold Belt of New South Wales, attracted the interest of Mantle Mining Corporation Limited as an element of a proposed IPO. Cullen and Mantle finalising terms of a Sale and Purchase Agreement for Cullen's NSW tenement package, with a view to listing of the new company towards the end of 2005.

It is estimated that up to \$1million in exploration expenditure could be spent by joint venture partners in the coming 12 months. In the meantime, Cullen will continue to identify and evaluate both advanced and "grass roots" projects in Australia. Cullen's portfolio is under continual evaluation to focus on projects likely to result in an economic mineral deposit. The First Line

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Corporate

At 30 June 2005 available cash and investments at year end totalled approximately \$1.6 million.

Significant Events after Year End

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the parent entity, to 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.

Likely Developments and Future Results

Other than as referred to in this report, further information as to likely developments in the operations of the consolidated entity and the expected results of those operations would, in the opinion of the directors, be speculative and not in the best interests of the consolidated entity.

Environmental Regulation

The exploration activities of the consolidated entity in Australia are subject to environmental regulation under the laws of the Commonwealth and the States in which those exploration activities are conducted. The environmental laws and regulations generally address the potential impact of the consolidated entity's activities in the areas of water and air quality, noise, surface disturbance and the impact upon flora and fauna. The directors are not aware of any environmental matter which would have a materially adverse impact on the overall business of the consolidated entity.

Options

As at 30 June 2005 the company has $13,500,000$ (2004; 15,500,000) options which were outstanding. Refer to note 10 of the financial statements for further detail of the options outstanding.

During the year, 10,000,000 (2004; Nil) fully paid ordinary shares were issued by virtue of the exercise of options. Since the end of the financial year no shares have been issued by virtue of the exercise of options.

Remuneration Report

This report details the nature and amount of remuneration for each director of Cullen Resources Limited.

Remuneration Policy

The remuneration policy of Cullen Resources Limited has been designed to align director objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives. The board of Cullen Rsources Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the company as well as create goal congruence between directors and shareholders.

The board's policy for determining the nature and amount of remuneration for board members is as follows:

The remuneration policy, setting the terms and conditions for the executive directors was developed by the board. All executives receive a base salary on factors such as length of service and experience, superannuation, options and incentives. The board reviews executive packages annually by reference to the company's performance, executive performance and comparable information from industry sectors and other listed companies in similar industries.

The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum appregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. Fees for non-executive directors are not linked to the performance of the company. However, to align directors' interest with shareholder interests, the directors are encouraged to hold shares in the company.

Directors' and Executives Remuneration

Details of remuneration provided to directors who include the most highly remunerated executives for the year ended 30 June 2005 are as follows:

Post employment, Equity Amortised Directors - Primary
Motor Vehicle [ Superannuation ] cost of options Salary/Fee Total
-granted,
D.E. Clarke $-25,000$ 19,080 46,330 -2.250
$[11,267]$ $-19,080$ 155,544. G. Hamilton 125,197.
$-110,119$ 9,870 19,080 J. Horsburgh $-139,069$
W.J. Kernaghan - 33,650. -54,080. 19,080. $-1,350$
C. Ringrose 170.905 10.900 140.004 -40+ 12.600

The consolidated entity does not have specific executives as the executive role is performed by the specified directors.

Options granted as part of remuneration for the year ended 30 June 2005

$\therefore$ Director $\therefore$ the Grant U. Nest 1. Value per the Exercise. Walue per 1. Value 1. Grant	ా% of
No. > Option at like date remuneration. Date Number SEC Date: 1 Option
i Exercise ji .Cents .	- Option
: Date ∴lapsed_
1130/11/04 2.000.000 30/11/04 0.954 NA D. Clarke Time ∵ N/A	$\sim$ N/A sees, 41% .
G. Hamilton 30/11/04 2,000,000 30/11/04 0.954 N/A N/A ≅N/A :	14%
J. Horsburgh $\sim$ N/A	N/A - 12%
W. Kernagban - 30/11/04 + 2.000.000 + 30/11/04 + 0.954 - $\cdots$ N/A $\sim$ N/A $\sim$ 'N7A it

Options granted as a part of director and executive emoluments have been valued using a Black and Scholes pricing model, which takes account of factors including the option exercise price, the share price at time of grant, volatility of the underlying share price, the risk-free interest rate and the expected life of the option.

ENRICHER HIGHER AND

Fair values of options:

The fair value of each option is estimated on the date of grant using Black and Scholes option-pricing model with the following assumptions used for grants during the year ended 30 June 2005:

Risk Free Rate	5. 75%
Volatifity
Timing	vears ٠.

Directors' Interest

At the date of this report, the interest of the directors in the shares and options of the company were:

	Direct	'' Indirect -
	-Fully Paid Options.	"Fully Paid- "Options"
	Shares ,	- Shares
D.E. Clarke	2,000,000.	$-5,754,502$
G. Hamilton.	2,000,000	12,808,004
J. Horsburgh.	$-2,000,000$	13,770,122
W.J. Kemaghan	$-2,000,000$	$-2,000,000$
C. Ringrose	5,000,000

Directors' Meetings

During the year the company held 7 meetings of directors. The attendance of the directors at meetings of the Board were:

	"Board of Directors"	m. Maximum possible is - eligible to attend
D.E. Clarke.
G. Hamilton
J. Horsburgh
W.J. Kernaghan
C. Ringrose

Employees

The consolidated entity employed four employees as at 30 June 2005 (2004:4).

Corporate Governance

In recognising the need for the highest standard of corporate behaviour and accountability, the directors of Cullen-Resources Limited support and have adhered to the principles of good corporate governance. The company's corporate governance statement is on page 18.

Auditor Independence

The directors have received the auditor's independence declaration for the year ended 30 June 2005 and can be found on page $17$ and $\sim$

Signed in accordance with a resolution of the directors.

• U.
  U. Horsburgh (1990–1990)
  Tirector (1990–1990–1990)
• Sydney, 16 September 2005.

A MARINE AND A DESCRIPTION OF A DISTURBANCE.

Auditor's Independence Declaration to the Directors of Cullen Resources Limited

In relation to our audit of the financial report of Cullen Resources Limited for the financial year ended 30 June 2005, to the best of my knowledge and belief, there have been no contraventions of the auditor independence. requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Ernst & Young

Michael Elliott Partner Date: 16 September 2005

EGORE ORA EGORE AZAREN ELEKTRETEKTE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Cullen-Resources Limited ("the Company") have adhered to the principles of corporate governance. A description of the main corporate governance practices, as well as any disclosures required by the Australian Stock Exchange's "Principles of Good Corporate Governance and Best Practice Recommendations", is set out below. Unless otherwise stated, the practices were in place for the entire year.

Board Of Directors

The Board of Directors of the Company is resoonsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

As the Board acts on behalf of shareholders, it seeks to identify the expectations of shareholders, as well as other ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuing arrangements are in place to adequately manage those risks.

The primary responsibility of the Board includes:

• formulation and approval of the strategic direction, objectives and goals of the Company.
• monitoring the financial performance of the Company, including approval of the Company's financial statements:
• a ensuring that adequate internal control systems and procedures exists and that compliance with these systems and procedures is maintained:
• the identification of significant business risks and ensuring that such risks are adequately managed;
• the review of performance and remuneration of Executive Directors; and
• the establishment and maintenance of appropriate ethical standards.

The responsibility for the operation and administration of the Company is carried out by the Directors, who operate in an executive capacity, supported by senior professional staff. The Board ensures that this team is suitably qualified and experienced to discharge their responsibilities, and assesses on an ongoing basis the performance of the management team, to ensure that management's objectives and activities are aligned with the expectations and risks identified by the board.

The Directors of the company are as follows:

Dr Denis Clarke Grahame Hamilton John Horsburgh Wayne Kernaghan Dr Chris Ringrose

For information in respect to each director refer to the directors report.

Independent Directors

Under ASX guidelines two of the current board are considered to be independent directors. Mr Horsburgh, Mr Hamilton and Dr Ringrose are executive directors and the ASX guidelines deem them not to be independent by virtue of their positions. The Board is satisfied that the structure of the Board is appropriate for the size of the company and the nature of its operations and is a cost effective structure for managing the company.

Communication to Market & Shareholders

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

• The Annual Report which is distributed to all shareholders.
• other periodic reports which are lodged with ASX and available for shareholder scrutiny:
• A other announcements made in accordance with ASX Listing Rules:
• special purpose information memoranda issued to shareholders as appropriate; and
• The Annual General Meeting and other meetings called to obtain approval for board action as appropriate.

Board Composition

When the need for a new director is identified, selection is based on the skills and experience of prospective directors, having regard to the present and future needs of the Company. Any director so appointed must then stand for election at the next Annual General Meeting of the Company.

Terms of Appointment as a Director

The constitution of the Company provides that a Director other than the Managing Director may not retain office for more than three calendar years or beyond the third annual general meeting following his or her election, whichever is longer, without submitting for re-election. One third of the Directors must retire each year and are eligible for re-election. The Directors who retire by rotation at each annual general meeting are those with the longest length of time in office since their appointment or last election.

Board Committees

In view of the size of the Company and the nature of its activities, the Board has considered that establishing formally constituted committees for audit, board nominations and remuneration would contribute little to its effective management. Accordingly audit matters, the nomination of new Directors and the setting, or review, of remuneration levels of Directors and senior executives are reviewed by the Board as a whole and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest). Where the Board considers that particular expertise or information is required, which is not available from within their number, appropriate external advice may be taken and reviewed prior to a final decision being made by the Board.

Remuneration

Remuneration and other terms of employment of executives, including executive directors, are reviewed periodically by the Board having regard to performance, relevant comparative information and, where necessary, independent expert advice. Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the Company's operations.

The terms of engagement and remuneration of executive directors is reviewed periodically by the Board, with recommendations being made by the non-executive director. Where the remuneration of a particular executive director is to be considered, the director concerned does not participate in the discussion or decision-making.

Independent Professional Advice

Directors have the right, in connection with their duties and responsibilities as directors, to seek independent professional advice at the Company's expense. Prior approval of the Chairman is required, which will not be enreasonably withheld.

Share Trading

Dealings are not permitted at any time whilst in the possession of price sensitive information not already available to the market. In addition, the Corporations Act 2001 prohibits the purchase or sale of securities whilst a person is in possession of inside information.

Code of Conduct

In view of the size of the Company and the nature of its activities, the Board has considered that an informal code of conduct is appropriate to guide executives, management and employees in carrying out their duties and responsibilities.

External Auditors Communist Communist

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The external auditor is Ernst and Young.

1. . . . . . . . . . . . . . . . . . .

Full details of the company's corporate governance practices can be viewed at its website - www.cullenresources.

KNDERNDRYPT (UDITREREDRY

TO THE MEMBERS OF CULLEN RESOURCES LIMITED

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for Cullen Resources Limited (the company) and the consolidated entity, for the year ended 30 June 2005. The consolidated entity comprises both the company and the entities it controlled during that year.

The directors of the company are resoonsible for oreparing a financial report that gives a true and fair view of the financial position and performance of the company and the consolidated entity, and that complies with Accounting Standards in Australia, 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 of the financial report 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 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 in Australia, 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:

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

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.

We performed procedures to assess whether the substance of business transactions was accurately reflected in the financial report. These and our other procedures did not include consideration or judgement of the appropriateness or reasonableness of the business plans or strategies adopted by the directors and management of the company.

Independence

We are independent of the company and the consolidated entity and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001. We have given to the directors of the company a written Auditor's Independence Declaration a copy of which is included in the Directors' Report.

Audit opinion

In our opinion the financial report of Cullen Resources Limited is in accordance with:

(b). So ther mandatory financial reporting requirements in Australia.

• $(a)$ the Corporations Act 2001, including:
• giving a true and fair view of the financial position of Cullen Resources Limited and the $\langle$ i) consolidated entity at 30 June 2005 and of their performance for the year ended on that date: and
• $\mathbb{F}(\mathbf{ii})$ . The Superplying with Accounting Standards in Australia and the Corporations Regulations 2001; and

Ernst & Young

Michael Elfiott Partner²⁰20 Sydney - James Link Date: 16 September 2005. In accordance with a resolution of the directors of Cullen Resources Limited. I state that:

• $(1)$ In the opinion of the directors:
• the financial statements and notes of the company and of the consolidated entity are in $(a)$ accordance with the Corporations Act 2001, including:
  • $\langle j \rangle$ giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2005 and of their performance for the year ended on that date; and
  • $\langle$ ii) complying with Accounting Standards and Corporations Regulations 2001; and
• $\Omega$ there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
• $(2)$ This declaration has been made after receiving the declaration required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2005.

On behalf of the Board

J. Horsburgh

Director

Sydney, 16 September 2005

STATEMENTS OF FINANCIAL POSTIONS

Statements of Financial Position at 30 June 2005

			Consolidated	The Company
	Note	2005	2004	-2005
		\$
Current Assets
Cash assets	180	1,668,537	1,066,357	1,591,611	987,828
Total Current Assets		1,668,537	1,066,357	1,591,611	987,828
Non Current Assets
Receivables				4,911,381	4,576,981
Other financial assets		100,000	122,800		12,800
Plant & Equipment		27,708	46,208 1	12,825	$\boxdot 2$ ,930 .
Deferred Exploration Costs		4,864,496	4,442,905
Total Non Current Assets		4,992,204	4,611,913	4,924,206	4,602,711
Total Assets		6,660,741	5,678,270	6,515,817	5,590,539
Current Liabilities
Payables		70,861	- 61,677 -	32,866	28,400
Provisions		72,397	49,640
Total Current Liabilities		143,258	111,317	32,866	28,400
Non Current Liabilities
Provisions		22,205	4,814
Total Non Current Liabilities		22,205	4,814
Total Liabilities		165,463	116,131	32,866	28,400
Net Assets		6,495,278	5,562,139	6,482,951	5,562,139
Equity
Contributed Equity	$10 -$	20,214,506	$-18,524,506$	20,214,506	$\sim$ 18,524,506
Accumulated Losses	918	(13, 719, 228)	(12,962,367)	(13,731,555)	(12,962,367)
Total Equity		6,495,278	5,562,139	6,482,951	5,562,139

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$\begin{split} \mathcal{H}{\text{max}} & \geq \max{\mathcal{M} \in \mathcal{M}} \mathcal{H}{\text{max}}^{(1)} \left( \mathcal{H}{\text{max}}^{(1)} \right) \left( \mathcal{H}{\text{max}}^{(2)} \right) \left( \mathcal{H}{\text{max}}^{(1)} \right) \left( \mathcal{H}{\text{max}}^{(2)} \right) \left( \mathcal{H}{\text{max}}^{(1)} \right) \left( \mathcal{H}{\text{max}}^{(2)} \right) \left( \mathcal{H}{\text{max}}^{(2)} \right) \left( \mathcal{H}_{\text{max}}^{(2)} \right)$

STATINING OF HUNGING HIM NOT

Statements of Financial Performance at 30 June 2005

	Consolidated		The Company
	Note .	2005	2004	2005	2004
Revenues from ordinary activities		635,680	75,041	634,034	72.967
Exploration expenditure written off		(762,063)	(903,756)
Cost of investments sold		(12,800)		(12,800)
Reat		(66, 363)	(80,130)	(45, 224)	(60,040)
Salaries and Consultants		(278, 143)	(222,952)	(74, 474)	(67,200)
Compliance Provision for non-recovery of foan		(103, 889)	(178,053)	(103, 677)	(176, 229)
to controlled entity Other expenses from ordinary				(1,100,000)	(2,530,127)
activities		(169, 293)	(138, 310)	(67,047)	(49, 867)
(Loss) from ordinary activities before income tax		(766, 861)	(1,448,160)	(769, 188)	(2,810,496)
Income tax relating to ordinary activities
Net (Loss) attributable to members of Cullen Resources Limited		(756, 861)	(1,448,160)	(769, 188)	(2,810,496)
Share issue costs		(25,000)		(25,000)
Total revenues, expenses and valuation adjustments attributable to members of Cullen Resources Limited and recognised directly
in equity		(25,000)		(26,000)
Total changes in equity other than those resulting from transactions with owners as owners attributable to members of Cullen Resources Limited		(781, 861)	(1,448,160)	(794, 188)	(2,810,496)
Basic (loss) per share (cents per share)		(0.22)
Difuted (loss) per share (cents per share)		(0.22)	O.47

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Statements of Cash Plows for the year ended 30 June 2006

	The Company. Consolidated
	Note	2006	2004	2005	2004
			Inflows/(Outflows)
Cash flows from operating activities
Cash receipts in the course of operations
Cash payments in the course of operations		(646,079)	(684,351)	(304, 608)	(374, 353)
GST refunded		103,638	128,636	25,648	-29,855
Interest received		51,012	75,041	49,366	72,967
Net operating cash flows	18 (ii).	(491, 429)	(480,674)	(229, 594)	(271, 531)
Cash flows from investing activities
(Payment)/Refund security de- posits		10,000	(110,000)
Lean to controlled entity				(1,434,400)	(1,780,400)
Receipts from sale of investments		584,668		584,668
Payment for plant & equipment		(7,405)		(6,891)
Payments for exploration		(1, 183, 654)	(1.411.239)
Net investing cash flows		(596, 391)	(1,532,991)	(856, 623)	(1,786,61)
Cash flows from financing activities
Proceeds from issue of shares		1,690,000	1,566,867	1,690,000	1,566,867
Net financing cash flows		1,690,000	1,566,867	1,690,000	1,566,867
Net decrease in cash held Cash at the beginning of the		602,180	$(446, 798)$ .	603,783	(491,274)
financial year $_{\sim}$ $\sim$		1,066,357	1,513,155	987,828	1,479,102
Cash at the end of the financial year	$18($ i)	1,668,537	1,066,357	1,591,611	987,828

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for the year ended 30 June 2005

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, including applicable Accounting Standards. Other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) have also been complied with. The financial report has also been prepared in accordance with the historical cost convention using the accounting policies described below and do not take account of changes in either the general purchasing power of the dollar or in prices of specific assets.

Principles of consolidation

The consolidated financial statements include the financial statements of Cullen Resources Limited and the results of all of its controlled entities which are referred to collectively throughout these financial statements as the "Consolidated Entity". The results of controlled entities are prepared for the same reporting period as the parent, using consistent accounting policies. All inter-entity balances and transactions, and unrealised profits arising from intra-economic entity transactions, have been eliminated in full.

Taxes

Incorne Tax

The consolidated entity applies the principles of tax-effect accounting. The income tax expense in the Statement of Financial Performance represents the tax on the pre-tax accounting profit adjusted for income and expenses never to be assessed or allowed for taxation purposes. The provision for deferred income tax liability and the future income tax benefit includes the tax effect (at current tax rates) of differences between income and expense items recognised in different accounting periods for book and tax purposes. The benefit arising from estimated carryforward tax losses has also been recorded as a future income tax benefit only where realisation of such benefit is considered to be virtually certain.

Goods and Services Tax (GST)

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

• where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable: and
• A receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial Position. Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

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

Recoverable Amounts of Non-Current Assets

All non-current assets excluding mining tenements and development costs are reviewed each reporting date to determine whether their carrying amounts require write down to recoverable amount. Recoverable amount is determined using net cash flows discounted to present values.

Provision for Employee Benefits

Provision has been made in the financial statements for benefits accruing to employees in relation to annual leave and long service leave. Annual leave and long service leave provisions expected to be settled within twelve months are measured at their nominal amounts. All other employee entitlement liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. a
Arthur anns

Investments in Controlled Entities

Threstments in controlled entities are carried in the company's financial statements at the lower of cost and recoverable amount. Dividends and distributions are brought to account when they are proposed by the controlled entities.

ACTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2005

Investments in Other Companies

Investments in other companies are carried at the lower of cost, or recoverable amount, being a directors' valuation based on market values at the time of the valuation. Dividends are brought to account as they are received.

Deferred Exploration Costs

Deferred exploration and evaluation costs are accumulated in respect of each separate area of interest. These costs are carried forward where they are expected to be recouped through sale or successful development and exoloitation of the area of interest, or, where activities in the area of interest have not vet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in respect of that area are written off to the extent that they will not be recoverable in the future.

Amortisation is not charged on costs carried forward in respect of areas of interest until production commences.

When production commences, carried forward exploration, evaluation and development costs are amortised on a units of production basis over the life of the economically recoverable reserves.

Foreign Currency

Foreign currency transactions are translated to Australian currency at the rate of exchange ruling at the date of the transactions. Monetary items in foreign currencies at balance date are translated at the rates of exchange ruling on that date.

Exchange differences relating to amounts payable and receivable in foreign currencies are brought to account in the Statement of Financial Performance in the financial year in which the exchange rates change, as exchange gains or losses.

Plant and Equipment

Plant and equipment are depreciated over their useful economic lives as follows:

	Life	Methad
Plant & Equipment	3-8 years	Straight Line

Operating revenue

Other revenue includes interest income on short term deposit received from other persons. It is brought to account as it accrues.

Joint Venture

An interest in a joint venture operation is brought to account by including in the respective financial statement. categories:

• the consolidated entity's share in each of the individual assets employed in the ioint venture.
• A liabilities incurred by the consolidated entity in relation to the joint venture including the economic entity's share of any liabilities for which the consolidated entity is jointly and/or severally liable; and
• the consolidated entity's share of expenses of the joint venture.

Financial Instruments

Included in Assets:

A Receivables are initially recorded at the amount of contracted sales proceeds.

resultant and

• A Investments, including equity interests in non-subsidiary, non-associated corporations, are included in investments at the lower of cost or recoverable amount. Dividend income is brought to account when declared.
• A Security deposits are stated at nominal value.

Payables

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.³

Norsk obering Ningh Western in Fred

for the year ended 30 June 2006

Cash and cash equivalents

Cash on hand and in banks and short-term deposits are stated at nominal value.

For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments readily convertible to cash within 2 working days.

Operating leases

The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense on a straight line basis.

Comparatives

Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.

Contributed Equity

Issued and paid up capital is recognised at the fair value of the consideration received by the company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

Earnings Per Share (EPS)

Basic EPS is calculated as net profit/(loss) attributable to members, adjusted to exclude costs of servicing equity, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted EPS is calculated as net profit/(loss) attributable to members, adjusted for:

• & costs of servicing equity;
• the after tax effect of interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

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

Change in accounting policies

The accounting policies adopted are consistent with those of the previous year.

NOTES TO THE HNANGIAL STATEMENTS

for the year ended 30 June 2006

	hnsninkt		The Company
			2005
2. PROFIT AND LOSS ITEMS
(Loss) from ordinary activities after crediting the following revertues:
Other Revenues
Interest received from other persons	51.012	75,041		72,967
Proceeds from sale of investments (a)	584,668		584.668
	635,680	75,041	634.034	72,967
(Loss) from ordinary activities is after charging the following expenses: Auditors remuneration in respect of the
audit of the financial statements	33,031	32,500		32,500
Exploration expenditure written off	762,063	903,756
Depreciation	25,905	25,877		7.095
Provision for employee benefits Provision for non-recovery of loan to	40.149	24,096
controlled entity			100.000	2,530,127
(a) Net gain on sale of investments	571,868		571,868

3. INCOME TAX

Operating (loss) before income tax.	.756.861)	.448.160)		(2.810.496)
Prima facie income tax (benefit). calculated at 30% (2004: 30%).		(434.448)		(843.148)
Less income tax benefits not brought to account at balance date.	. -058		30 75S	843.148.
Total income tax expense.	.		$\cdots$	---------------------------------------

As at 30 June 2005 future income tax benefits were available to the company and to the consolidated entity in respect of operating losses and prospecting and exploration expenditure incurred. The directors estimate the potential income tax benefit at 30 June 2005 in respect of tax losses not brought to account is \$2,779,437 (2004: \$2,552,379). The benefit of these losses has not been brought to account as realisation is not virtually certain. The benefit will only be obtained if:

(a) the relevant company derives future assessable income of a nature and of sufficient amount to enable the na.
Serika $\frac{1}{2}$ benefit to be realised. $\frac{1}{2}$ benefit to be realised.

(b) the relevant company and/or the consolidated entity continue to comply with the conditions for deductibility Imposed by the law: and m New Street (1999)
School (1999)

<(c) no changes in tax legislation adversely affect the company and/or the consolidated entity in realising the benefit.

Cullen Resources Limited and its 100% owned subsidiaries have entered the tax consolidation regime from 1 July 2002. The head entity of the tax consolidation group is Cullen Resources Limited.

	for the year ended 30 June 2005
RECEIVABLES 4.
Non current
Loan to controlled entities	7,107,108
Provision for non-recovery	(2,530,127) .630 5.
	4,576,981 4.911.381

The loans to controlled entities are non-interest bearing and have no fixed term for repayment.

5. OTHER FINANCIAL ASSETS

Non current			and the second party
Security deposits		110.000
Shares quoted on stock exchanges		12,800		12,800
Shares in controlled entity Cullen Minerals NL				2,643,131
Provision for diminution in value	$\overline{\phantom{a}}$		(2,643,131) .	(2,643,131)
				12.800

and speaker

Report Follows

The market value of the listed shares at 30 June 2005 was \$Nil (2004:\$437,895). The listed investment comprised shares in a mining corporation.

6. PLANT & EQUIPMENT

Plant & Equipment at cost		114,238		40,946
Accumulated depreciation	(73, 586)	(68,030)	(27, 322)	(28,016)
Total written down amount	27.708	202	12.825	12.930
(a) Reconciliation
Plant & Equipment
. Carrying amount at beginning				13,815
Arkistinne		750		6,210
	(25,905)	(25.877	(6.996)	(7,095)
				12.930

INGLES TO THE HANDLE STATEMENTS

for the year ended 30 June 2006

	าธรณยศตรณ		f he Company
7. DEFERRED EXPLORATION COSTS
Costs carried forward in respect of areas of interest in the exploration and evaluation phase
Opening balance		3,935,422
Expenditure incurred during the year	1,183,654	1,411,239
	626.559	5,346,661
Less expenditure written off during the year	(762,063)	(903, 756)
Closing balance	4,864,496	4,442,905

Mining tenements are carried forward in accordance with the accounting policy set out in Note 1.

The uttimate recoupment of the book value of deferred costs relating to areas of interest in the exploration and evaluation phase is dependent upon the successful development and commercial exploitation or, alternatively, sale of the respective areas of interest and the consolidated entity's ability to continue to meet its financial obligations to maintain the areas of interest.

8. PAYABLES

Current		그는 대학 가능성 대통령 대통령
Trade creditors - unsecured.	. ---------------------------------------	— 61,677 ∴ ్…… '' లం ల ్ ି ଓଠା ଭିଲିଲି ---------------------------------------	and the ---------------------------------------

Trade creditors are non-interest bearing and are normally settled on 30 day terms.

9. PROVISIONS

Current			an Provincia Contrario. Altre in the Charles and a control Capacity Ro tju saaraanaanaanaanuu $\begin{array}{cccccccccccccc} \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \$
Employee benefits	Carlo Alexandro --------------------------------------	--------------------------------------- ----------------------------------	Conservation and an artist $\overline{\phantom{a}}$ ਬਿੰਦਰ ਦੇ ਸ਼ਾਮਲ ਦਾ ਸਾਹਿਬ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਹਵਾਲੇ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ ਦਾ ਸ਼ਾਮਲ	---------------------------------------
Non Current			100 a.C.
Employee benefits	an Madalahan SALE		and the series 77. $\sim$

si i i i i i i i i

in 1972
Andrews (1974), compositor (1975)
Andrews (1976), compositor (1976) $\bar{\mathcal{A}}$ $\epsilon_{\rm g}$ is $\zeta_{\rm eff}$ , the

																												En esternatument mana re

for the year ended 30 June 2006

		The Compar
20,214,506	18,524,506	20,214,506	18,524,506

10. CONTRIBUTED EQUITY

Issued capital

363.856.282 (2004:320.981.282)

Movement in issued shares for the year: المتحدث والمتناوب

	Number o Shares		umber of
Beginning of the financial year	90.981.282	18,624,606	268,752,376.	16,957,639
Issued at 4.0 cents conversion of options	000.000	400,000
Issued at 4.0 cents each	.875.000	1,315,000
Issued at 3.0 cents each			.228.906.	1,566,867
Less share issue expense.		(25.000)
End of the financial year	363,856,282	20,214,506	320,981,282	18,524,506

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 upon shares held.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.

Options

As at 30 June 2006 there are 13,500,000 (2004: 15,500,000) unissued shares in respect of which options were outstanding and the details of these are as follows:

The Number New Collection Date (New Yesting Date Collective Price Collectivity Date Institution
$-77 - 30/11/04$ >30/11/04	30/11/07
A, 3,500,000 Apple (2, 2, 2, 2, 2, 2, 2, 2, 2, 2, 2, 2, 2, 2 provided that the children re-	- 17701.06
فالجلو والمواطن والمتواطن والمراد totala artistikoa palaktea 00 - Sandara dan 17701703 - Harrison H. 17701704 - Harrison Harrison O.O.R. .

The options have no rights until they are exercised and become ordinary shares.

11. ACCUMULATED LOSSES Acoumplated lease of the hectication

wrethelpette appeblar nie naßhemiß
of the year.	$\sim$ (12,962,367) $\sim$ (11,514,207) $\sim$ (12,962,367) (10,151,871)
- Net (loss) Deminus Reconcernation them		$(756.861)$ $(1.448.160)$ $(769.188)$ $(2.810.496)$
Accumulated losses at the end of the year.	$(13.719.228)$ $(12.962.367)$ $(13.731.555)$ $(12.962.367)$

MOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2006

$12.$ PARTICULARS IN RELATION TO CONTROLLED ENTITIES

The consolidated financial statements at 30 June 2005 include the following controlled entities. The financial years of all controlled entities are the same as that of the parent entity.

			15116956951
	-Incorporation
Name		$\sim$ June 2005 $-$	https://June.2004.html juliune.2005.html June 2004.jp
Cullen Minerals NL				1.11111111111111111111111111111111111
Cullen Exploration Pty Ltd	≅ Australia		A.A.A.A.A.A.

13. DIRECTORS' AND EXECUTIVE REMUNERATION

(a) Details of Specified Directors and Specified Executives

Specified Directors

D E Clarke.	Chairman (Non-executive)
J Horsburgh	Joint Managing Director
G Hamilton	Joint Managing Director
W Kernaghan	Non-executive Director
C Ringrose	Executive Director

Specified Executives

The consolidated entity does not have specific executives as the executive role is performed by the specified directors.

(b) Remuneration Practices

The company's policy for determining the nature and amount of emolument of board members and senior executives of the company is:

The remuneration for executive officers, including executive directors is based on a number of factors, including length of service, particular experience of the individual concerned, and overall performance of the company. The contracts for service between the company and specified directors and executives are on a continuing basis, the terms of which are not expected to change in the immediate future. Upon retirement, specified directors and executives are paid employee benefit entitlements accrued to the date of retirement. Any options not exercised before or on the date of termination lapse.

(c) Remuneration of specified directors

Details of remuneration provided to specified directors are as follows:

Specified Directors	Primary Salary/Fee	- Motor - Vehicle	Post Employment [1.Equity Amortise cost] Superannuation	of options granted:	∴∴ Totall
D E Clarke 2005. 2004	25,000 :25,000.		2,260 -2,250	19.080.	46,330 27,250
G Hamilton 2005. 2004 -	126,197 140.004.		11.267 12,600	19.080	156,544 152.604.
J Morsburgh. 2005. 2004	110.119 139.466		9,870 -12.562	19,080	139,069 152,018.
.W Kernaghan ·2005- :2004.	33,650 29,650		1,350 1,350	19.080	-54,080 31,000.
C Ringrose :2005 2004	140,004 140.004.	- 7,401 -7,401	12,600 -12,600	10,900 10,900.	170,905 :170.905.
Total Remuneration for Specified Directors $2005$ $\rightarrow$ $\rightarrow$ $\rightarrow$ $\rightarrow$ $\rightarrow$ $\rightarrow$ $\rightarrow$ $\rightarrow$ 2004	. i. 474,124 . i. i. i. i. 7,401		37,337 -41.352	87,220 10.900	565,928 533.777 -

Notes to Help Nine Assessed to S

for the year ended 30 June 2005

• Options were granted and vested on 13 November 2001 as a result no amount has been included as emolument for the year ended 30 June 2004. These 2001 options had an exercise price of \$0.04 and expiry date of 30 November 2004 and were exercised during the year.
• (d) Remuneration options granted and vested during the year

During the financial year 8,000,000 (2004: Nil) options were granted as equity compensation to specified directors and executives. These options were granted and vested on 30 November 2004 and are valued at 0.954 cents each. These options have an exercise price of \$0.04 and expiry date of 30 November 2007.

(e) Shares issued on exercise of remunerated options.

During the financial year 10,000,000 (2004: Nil) remunerated options were exercised at \$0.04.

The directors exercised 8,000,000 options and consultants 2,000,000 options.

(f) Option holdings of specified directors

		Nested at 30 June 2005.
2 Balance at 200 Options 2007	mi Options - In Balance at Court	Totall	i im Notikki Exercisable
[beginning [1] sissued [1] [Exercised [1] lend of year			Exercisable
let year	130 June 2005
July 2004
No	. No		NG

Specified Directors	and the contract of the	.		.	and the company of the second	1 X W
D Clarke	2,000,000	2,000,000	(2,000,000)	2,000,000	$\pm 2{,}000{,}000$ .	2,000,000
G Hamilton	$-2,000,000$	2,000,000	000,000)	2,000,000	$-2,000,000.$	2,000,000
J Horsburgh.	$-2,000,000$	2,000,000	(2,000,000)	2,000,000	$-2,000,000$	2,000,000
W Kernaghan	2,000,000	2,000,000	(2,000,000).	2,000,000	-2,000,000	2,000,000
C Ringrose	5,000,000		$\mathbf{r}$	5,000,000	5,000,000	5.000.000
Total	$-13,000,000$	8.000.000	(8,000,000)	13,000,000	13,000,000	13,000,000

(g) Shareholdings of Specified Directors

Specified Directors	Balance 'uiv 20	Dpfions Exercised		Balancel 30 June 2005
	NO	No	NO
D Clarke	5,064,382	.OOO.C	(1,309,880)	:5,754,502
G Hamilton	11,508,004		(700,000)	12.808.004
J Horsburgh	12,470,124	2.000.000	(700,000)	-3 .770.124
W Kernaghan	662,000		(662,000)
C Ringrose		Sep 14
Total	29,704,510	8,000,000	(3,371,880)	34,332,630

for the year ended 30 June 2005

(h) Employee and Consultant Options

(i) Options held at the beginning of the reporting period.

Mumber Links	Constitution Carant Date	Vest Date [19] Expiry Date 1		Exercise Price
	17/1/03	$-17/1/03$ . $-$	17/1/06	e e ma $\begin{picture}(10,10) \put(0,0){\line(1,0){10}} \put(10,0){\line(1,0){10}} \put(10,0){\line(1,0){10}} \put(10,0){\line(1,0){10}} \put(10,0){\line(1,0){10}} \put(10,0){\line(1,0){10}} \put(10,0){\line(1,0){10}} \put(10,0){\line(1,0){10}} \put(10,0){\line(1,0){10}} \put(10,0){\line(1,0){10}} \put(10,0){\line(1,0){10}} \put(10,0){\line(1$
The Story 2,000,000	30/11/01	$ -$ 30/11/01 $-$	30/11/04	in the BOLOG internet

(ii) Options exercised during the year.

			(Number 100) Grant 2000 [Exercise 2004 Exercise 2009 Proceeds (120) No of 2004 Issue 1009 Fair Value
			NET Date: Fig. - Date: UNIT Price: UNIT from PRO Shares PRO Date: UNIT Shares: P
			The Ishares (ITCI Issued In the UNIC) on Issued (ITC
			Muissued University
2.000.000 30/11/01 30/11/04		30.04	- 80,000 = 2,000,000 = 30/11/04 = =		SO 06.

(iii) Options held at the end of the reporting period.

			and a series of the Manber New York Crant Date (1999) West Date (1998) Next Determine Exercise Price (19	$\cdots$ .		and the following com-	Sandara
്ന ജന്മ നമ്പ	. .	771.7AR	ミニー キグパ 80名 ミ	.	L771.706	THEFT ROLOS INTERN

NG ESTORET ZINNE NGA 1957. ILIHA 1

for the year ended 30 June 2005

14. JOINT VENTURE

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

	Principal Activity	Other Participant
(a) Gunbarrel Nickel	Exploration	BHP Billiton Ltd
(b) Gunnbarrel Gold	Exploration	Newmont Australia Pty Ltd.
(c), Irwin Bore N	Exploration	CO2 Group Limited (formerly Revesco Group Limited).) Independence Group NL [1, 1]
$(d)$ . Mt Tate $\sim$	Exploration	Independence Group Limited
(e). Wanganoo	Exploration	Quantum Resources Ltd
(f) -Kißaloe-Gold -	Exploration	Placer Dome Asia Pacific
(g) Killalde Nickel -	Exploration	Nickel Australia Ltd
(h) Yanks Bore	Exploration	Udu Resources Ltd (in Administration) ~
(i) : Hardey Junction	Exploration	NuStar Mining Corporation.
(i) West Hamersley	Exploration	Aquila Steel Pty Ltd
(k) Duchess	Exploration	Minotaur Operation Ltd

(a) BHP Billiton has earned 75% interest, Cullen's 25% is free carried to Decision to Mine.

(b) Newmont is earning 70 or 75% in the gold rights by spending \$3.5 million over 4 years.

(c) Cullen Exploration Ptv Ltd has earned a 90% interest. CO2 Group retains a 10% interest.

Independence Group Ltd is earning 60% interest in the nickel rights, by spending \$1.5 million over 4 years.

(d) Independence Group can earn 70% by spending \$1 million over 4 years.

(e) Cullen Exploration Pty Ltd has earned an 80% interest. Quantum retains a 20% interest.

(f) Placer was earning 70% interest, withdrew December quarter 2004.

(g) Nickel Australia earning 70% by spending \$1.5million over 4 years.

(b) Udu Resources Ltd (in Administration) has a 49% interest.

(i) NuStar is earning 70% by spending \$800,000 in 4 years.

(i) Acquila Steel Pty Ltd/API can earn 70% interest by spending \$1 million.

(k) Minotaur can earn 70% by spending \$1.5 million over 4 years.

The joint ventures are not separate legal entities. They are contractual arrangements between the participants for the sharing of costs and any outputs and do not, in themselves, generate revenue and profit. The net contribution of any joint venture activities to the operating profit before income tax is \$Nil (2004;Nil). The consolidated entity's assets employed in the joint ventures, are included in the balance sheet of the consolidated entity as follows:

$\sim$ .	The company of the .	. . . . .	Tallet Allen .
. ---------------------------------------	$1 - 1 - 1$	۰. . -4 ---------------------------------------	$\ddot{\phantom{a}}$

Exploration expenditure

NOTES TO THE FIVANCIAL STATEMENTS

for the year ended 30 June 2005

15. COMMITMENTS

(a) Minimum exploration work

The consolidated entity has certain obligations to perform minimum exploration work and expend minimum amounts of money on mineral exploration tenements. The consolidated entity has committed to expend a minimum of \$1,610,000 (2004;\$600,480) over the next year to keep its current tenements in good standing. Part of this expenditure will be met by our Joint Venture partners.

(b) Lease expenditure commitments

Lease expenditure commitment
Operating leases (non-cancellable) for premises
Minimum lease payments
- not later than one year		12.792	5.218
- later than one year and not later than five years	9.317
Aggregate lease expenditure contracted for at
reporting date but not provided for			5.218

n to has been a started by the started of the started of the started of the started of the started of the star

for the year ended 30 June 2006

16. RELATED PARTIES

Employees

The economic entity has four full-time employees (2004:4).

Wholly owned group transaction

Loans made from Cullen Resources Limited to wholly owned subsidiaries are non-interest bearing and have no fixed term for repayment.

17. SEGMENT INFORMATION

The consolidated entity operated during the year in one geographical segments, being Australia.

The consolidated entity operated in one business segment being mineral exploration.

18. STATEMENT OF CASH FLOWS

(i) Reconcillation of cash

For the purposes of the Statement of Cash Flows, cash includes cash at bank and short term deposits at call. Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:

				The Company
	2005		2005
Cash on hand	,668,537	1,066,357	1,591,611	987.828
(ii) Reconciliation of operating (loss) after income tax to net cash used in operating activities
Operating (loss) after income tax		(1,448,160)	(769.188)	(2,810,496)
Add/(less) non cash items
Exploration expenditure written off	762,063	903,756
Depreciation	25,905	25,877		7.096
Provisions for employee benefits		24,096
Provision for non-recovery of loan to controlled entity			$-1,100,000$	2,530,127
(Profit) on sale of investments	(571,868)		(571,868)
Net cash used in operating activities before change in assets and liabilities	(500,613)	(494,431)	(234.060)
Increase in creditors	9,184	13,757	4,466	1.743
Net operating cash	(491, 429)	(480.674).	229.594)

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2005

19. EARNINGS/(LOSS) PER SHARE

Basic (loss) per share (cents per share).		(O 47)
Difuted (loss) per share (cents per share).	IG 221	(N 47)
The following reflects the income and share data used in the calculations of basic and diluted (loss) per share. Net (loss)	(756, 861)	(1.448.160)
Weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share.	Support Filters 342 916 261	310.706.743
Options on issue at year end not dilutive and hence not used in the calculation of diluted EPS.	13,500,000	15.500.000

$\sim$ Consolidated $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$

No ordinary shares have been issued since the reporting date and up to completion of this financial report.

20. FINANCIAL INSTRUMENTS

(a) Interest Rate Risk

The consolidated entity's exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and financial fiabilities is set out below.

Financial Instruments	Floating intereșt rate	Fixed interest rate maturing in one year or less.	Non-interest bearing	Total carrying amount as per the balance. sheet	Weighted average effective interest rate-
	2005	2005	2005	2005	2005
Financial Assets		參	Š.	\$	-96
Cash	1,668,537.			1,668,537	5,0
Security deposits			100,000	100,000	NIA
Total Financial Assets	1,668,537		100,000	1,768,537
Financial Liabilities
Trade creditors			70,861	70,861	N/A
Total Financial Liabilities			70,861	70,861
Financial Instruments	Floating interest rate	Fixed interest trate maturing in one year or less	. Non-interest bearing	Total carrying amount as per the balance. sheet.	Weighted, average effective ipterest rate
	2004	2004	2004	2004	2004
	签			S	%
Financial Assets
Cash,	1,066,357			1,066,357	3.3 1
Security deposits			110,000	110,000	N/A
Investments - listed			12,800	12,800	-N/A
Total Financial Assets	1,066,357		122,800	1,189,157
Financial Liabilities
Trade creditors.			61,677	61,677	N/A
Total Financial Liabilities			61,677	61,677

MODSTORIE EN MONTSONALING

(b) Net Fair Values

The aggregate net fair values of financial assets and financial liabilities of the consolidated entity, both recognised and unrecognised, at the balance date, are as follows:

	Total carrying - amount as per the balance sheet	'Aggregate net - fair value	$\cdots$ $\cdots$ Total carrying amount as per the balance sheet	Aggregate net fair valuel
		4HU.
Financial Assets
Cash.	.668,537 .	1,668,537	1,066,357-	1,066,357
Security deposits	100.000	100,000	$-110,000$	110,000
Investments ~ listed			12,800	437,896
Total Pinancial Assets	1,768,537	1,768,537	1,189,157	1,614,252
Financial Liabilities
Trade creditors	70.861	70,861	61,677	61,677
Total Pinancial Liabilities	70,861	70,861	61,677	61,677

(i) The following methods and assumptions are used to determine the net fair values of financial assets and liabilities

Recognised financial instruments

Cash, cash equivalents and short-term investments. The carrying amount approximates fair value because of their short-term to maturity.

Trade debtors and creditors. The carrying amount approximates fair value.

Non-current investments: For financial instruments traded in organised financial markets, fair value is the market bid price at 30 June for an asset or offer price for a liability, adjusted for transaction costs necessary to realise the asset or settle the liability.

$21.$ AUDITORS REMUNERATION

Amounts received or due and receivable by Ernst and Young

an audit or review of the financial report of the entity $\mathbb{R}^2$ and any other entity in the consolidated entity

EN STANDARD HALL VAN DIE NATURE STANDARD

for the year ended 30 June 2004

22. IMPACT OF ADOPTING AASB EQUIVALENTS TO INTERNATIONAL FINANACIAL REPORTING STANDARDS

The Company has continued to determine the impact its accounting policies and financial reporting from current Australian standards to Australian equivalents of International Financial Reporting Standards (AIFRS). The Company has allocated internal resources and has performed initial impact assessments to isolate key areas that will be impacted by the transition to AIFRS. As a result of these procedures, the Company has assessed the underlying areas which may impact the Company's financial accounts. The Board of Directors will oversee the progress of the implementation of AIFRS and make necessary decisions. As the Company has a 30 June year end, priority will been given to considering the preparation of an opening balance sheet in accordance with AASB equivalents to AIFRS as at 1 July 2004. This will form the basis of accounting for Australian equivalents of IFRS in the future, and is required when the Company prepare its first fully IFRS compliant financial report for the year ended 30 June 2006.

Set out below are the key areas where accounting policies are expected to change on adoption of AIFRS and our best estimate of the quantitative impact of the changes on total equity as at the date of transition and 30 June 2005. and on net profit for the year ended 30 June 2006.

The figures disclosed are management's best estimates of the quantitative impact of the changes as at the date of preparing the 30 June 2005 financial report. The actual effects of transition to AIFRS may differ from the estimates disclosed due to (a) ongoing work being undertaken by the AIFRS project teams; (b) potential amendments to AIFRSs and interpretations thereof being issued by the stand-settlers and IFRIC; and (c) emerging accepted practice in the interpretation and application of AIFRS and UIG interpretations.

Exploration and Evaluation Costs (AASB 6)

The AASB has issued a standard dealing with exploration and evaluation costs. AASB 6 states that entities can elect to continue to recognise and measure exploration and evaluation assets in accordance with the accounting policies applied in their most recent annual financial statements. Therefore, the Company could continue to capitalise exploration and evaluation costs. However, the capitalised costs would be subject to annual impairment testing. Impairment is then tested in accordance with AASB 136 which provides more detailed guidance than current Australian Accounting Standards. The adoption of this standard is not expected to result in impairment on transition to AIFRS.

Income Taxes (AASB 112)

Under the AASB 112, the Company will be required to use the balance sheet liability method which focuses on the tax effects of transactions and other events that effect amounts recognised in either the Balance Sheet or a tax based balance sheet. It is not expected that there will be any material impact as a result of the adoption of this standard.

Share Based Payments (AASB 2)

$\label{eq:1} \omega_{\sigma}^{(1)}(t) = \frac{1}{\sigma_{\sigma}} \sum_{\sigma \in \mathcal{L}_{\sigma}}$

ana.
Rođenja

Under AASB 2, the company would recognise the fair value of options granted to employees as remuneration as an expense on a pro-rata basis over the vesting period in the income statement with a corresponding adjustment to equity. Share-based payment costs are not recognised under AGAAP.

The Company has elected to adopt the exemption given by AASB 1 and will not apply AASB 2 in respect to the options issued which vested prior to 1 January 2005.

Financial Instruments (AASB 132 and AASB 139)

Management has decided to apply the exemption provided in AASB 1 which permits entities not to apply the requirements of AASB 132 and AASB 139 for the financial year ended 30 June 2005. The standards will be applied from 1 July 2005.

$\begin{split} \mathcal{L}{\mathcal{G}{\mathcal{G}{\mathcal{G}}},\mathcal{G}{\mathcal{G}{\mathcal{G}}}} \mathcal{L}{\mathcal{G}{\mathcal{G}{\mathcal{G}}}} \mathcal{L}{\mathcal{G}{\mathcal{G}{\mathcal{G}}}} \mathcal{L}{\mathcal{G}{\mathcal{G}{\mathcal{G}}}} \mathcal{L}{\mathcal{G}{\mathcal{G}{\mathcal{G}}}} \mathcal{L}{\mathcal{G}{\mathcal{G}{\mathcal{G}}}} \mathcal{L}{\mathcal{G}{\mathcal{G}{\mathcal{G}}}} \mathcal{L}{\mathcal{G}{\mathcal{G}{\mathcal$

......................................

at 6 September 2005

	Fully paid Shares		: Options expiring $\sim$ : Options expiring $\sim$ 30 November 2007 [17] January 2006, D
Issued Capital	364.056,282	8,000,000	5.500,000
Top 20 Shareholders
Total holding of the twenty largest shareholders	73.970.647	8,000,000
% of total shares on issue		100%
Distribution of shareholders
$1 - 1,000$ shares
$1,001 - 5,000$ shares	5
$5,001 - 10,000$ shares
$10,001 - 100,000$ shares
100,001 shares and over	-693
	2,749
Shareholders holding less than a marketable parcel	667

Substantial Shareholders

The company has no substantial shareholders as at 6 September 2006.

Twenty largest shareholders

The names of the twenty holders of the fully paid shares are listed below:

Name	No. of Shares	% Held
Dunslair Pty Ltd	11,243,000	3.09
Kitchsmith Pty Ltd	11,180,002	3.07
Chiatta Pty Ltd	6,260,000	1.72
Lindglade Enterprises Pty Ltd	6,400,002	1.48
Anthony Poli & Mrs Milvia Poli	5,000,000	1.37
Wythenshawe Pty Ltd	4,250,000	1.17
Ronald Joseph Griffin	4,083,000	1.12
Kyleast Pty Limited	2,530,112	0.69
Farrington Corporate Services Pty Ltd	2,511,943	0.69
J Williams & Co Pty Ltd	2,500,000	0.69
Innerleithen Pty Ltd	2,362,120	0.66
Dennis Robert Wyllie	2,243,000	0.62
Merrill Lynch (Australia) Nominees Pty Etd	2,082,788	0.57
Nasch Pty Ltd	2,000,000	0.55
WJK Investments Pty Ltd	2,000,000	0.56
ANZ Nominees Limited	1,984,680	0.56
Leonie Anne Trumbull	1,800,000	0.49
Robert Philip Lees & Mrs Janice Maree Lees	1,650,000	0.45
"Con Kendonis	1,470.000	0.40
David John Berden & Mrs Suzanne Elizabeth Borden	1,430,000	0.39
	73,970,647	20.31

VOTING RIGHTS

$\alpha = \beta \gamma_1 \beta_2 \gamma_3 \gamma_4 \gamma_5$ , and $\beta \beta = \gamma_1 \beta_1 \beta_2 \gamma_5 \gamma_5$

Every member present in person or by representative shall on a show of hands have one vote, and on a poll every member present in person or by representative, proxy or attorney shall in respect of each fully paid share held by him.

a na mara a ta 1975. An san an t-ainm

a sa salah sahiji désa di kacamatan Sidong Barat di Barat di Barat di Barat di Barat di Barat di Barat di Bar