DATELINE RESOURCES LIMITED — Annual Report 2012

Aug 12, 2012

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ABN 63 149 105 653

ANNUAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Perth Office 108 Outram Street West Perth, WA, 6005

PO Box 1346 West Perth WA 6872

T: +61 (08) 9476 4500 F: +61 (08) 6314 1587

CORPORATE DIRECTORY FOR THE YEAR ENDED 30 JUNE 2012

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Corporate Directory	1
Directors’ Report	2
Lead Auditor’s Independent Declaration	17
Corporate Governance Statement	18
Statement of Comprehensive Income	25
Statement of Financial Position	26
Statement of Changes in Equity	27
Statement of Cash Flows	28
Notes to the Financial Statements	29
Directors’ Declaration	54
Independent Auditor’s Report	55
Shareholder Information	57

CORPORATE DIRECTORY FOR THE YEAR ENDED 30 JUNE 2012

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Directors & Officers

Michael Ralston - Non-Executive Chairman Robert Jewson - Non-Executive Technical Director Francis De Souza - Non-Executive Director

Bankers

National Australia Bank Fremantle Business Banking Centre Level 1, 88 High Street Fremantle WA 6160

Tanya Woolley - Company Secretary

Auditors

Registered Office

C/- Blue Horse Corporate Pty Ltd 108 Outram Street West Perth WA 6005

PO Box 1346 West Perth WA 6872

T: +61 (08) 9476 4500 F: +61 (08) 6134 1587 E-mail: info@contoresources.com Website: www.contoresources.com

Pitcher Partners Corporate & Audit (WA) Pty Ltd Level 1, 914 Hay Street Perth WA 6000 Website: www.pitcher.com.au

Share Registry

Security Transfers Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 Website: www.securitytransfer.com.au

Solicitors

Stock Exchange

Australian Securities Exchange Limited (ASX) Home Exchange – Perth ASX Symbols – CNO (ordinary shares)

Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street Perth WA 6000 Website: www.steinpag.com.au

Australian Company Number

ACN 149 105 653

Domicile and Country of Incorporation

Australia

Australian Business Number

ABN 63 149 105 653

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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The Directors submit their report on Conto Resources Limited (the “Company” or “Conto”) for the financial year ended 30 June 2012.

1. INFORMATION ON DIRECTORS

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 the entire year unless otherwise stated.

Mr Michael Ralston, Non-Executive Chairman (Appointed on 3 February 2011) B.Com (Unisa, SA), ACMA (UK), AICD

Mr Ralston has 15 years international executive management experience both as Managing Director and Chief Financial Officer. He is currently the Managing Director of ASX-listed Balamara Resources Limited (formerly Sultan Corporation Limited) and previously was the Chief Financial Officer of ASX-listed Kangaroo Resources Limited, which he helped to grow from a shell company in 2009 to a market capitalisation of over $600 million in 2011 when that company was sold. He has held a number of executive management and board positions in ASX-listed resources companies over the past 8 years since he moved to Australia. Prior to this he successfully built up his own technology company Paynet Limited (Kenya) and also one of the largest internet service providers in Africa, called Africa Online Limited.

Mr Ralston is a Member of the Australian Institute of Company Directors; he holds a Bachelor of Commerce from the University of South Africa and is a Chartered Management Accountant (UK).

Mr Ralston is currently Managing Director of ASX listed company Balmara Resources Limited. During the past three years Mr Ralston has held no other directorships in ASX listed companies.

Mr Robert Jewson, Non-Executive Technical Director (Appointed on 1 September 2011)

BSc. (Geology)

Mr Jewson holds a Bachelor of Science majoring in Mineral Exploration & Mineral Geology. Mr Jewson has extensive experience across a wide range of commodities including iron ore, gold, uranium, coal and base metals both within Australia and abroad. Mr Jewson has significant commercial and geological knowledge which will allow Conto to rapidly evaluate resource opportunities abroad and aggressively pursue projects which meet the Company’s investment criteria.

During the past three years, Mr Jewson held the following directorships in other ASX listed companies: Non-Executive Technical Director of Epic Resources Limited (current) and Non-Executive Director of Terranova Minerals Limited (current).

Mr Francis De Souza, Non-Executive Director (Appointed on 19 September 2011)

B. Com (Banking and Finance)

Mr De Souza holds a Bachelor of Commerce majoring in Banking and Finance. Mr De Souza has many years experience in financial services, specialising in corporate advisory and equity markets with a specific focus in the resources sector. Mr De Souza has facilitated a number of resource transactions ranging from reverse takeovers, project evaluations through to capital raisings and initial public offerings (IPOs).

Mr De Souza is the co-founder of Otsana Capital, a boutique advisory firm specialising in mergers and acquisitions, capital raisings and IPOs.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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During the past three years, Mr De Souza held the following directorships in other ASX listed companies: Non-Executive Director of Epic Resources Limited (current) and Emergent Resources Limited (current); as well as Kalimantan Gold Corporation Limited (TSX-V/AIM Listed) (current).

Mr John Ciganek, Non-Executive Director (Appointed on 3 February 2011; resigned 19 September 2011)

BA Mining Eng, MBA

Mr Ciganek has over 20 years experience in the mining industry, combining extensive mining engineering and operational experience with more recent experience in resources investment banking.

Mr Ciganek is currently the Senior Resources Analyst with BBY Limited, a boutique investment firm focused on equity capital markets, mergers and acquisitions, and project finance. Mr Ciganek has worked as an associate director with BurnVoir Corporate Finance working on a range of corporate advisory transactions focused on the mining sector including mergers and acquisitions, project finance and equity capital markets. Prior to this role, he worked in project and corporate debt finance roles in institutional banking at Commonwealth Bank and worked on a range of new mine development project financings and corporate level debt transactions. Mr Ciganek has also worked as a mining engineer with various mining companies including ILA Pty Ltd (as part of Hargraves Resources, Danae Resources and Namibian Copper Mines), Byrnecut Mining, Reynolds Yilgarn Gold and Comalco.

During the past three years Mr Ciganek held the following directorships in other ASX listed companies: Non-Executive Director of Minbos Resources Limited (Current).

Mr Simon MacKinnon, Non-Executive Director (Appointed on 3 February 2011; resigned 1 September 2011)

CA

Mr MacKinnon is a Chartered Accountant who has 15 years experience in various banking and corporate roles across Australia and Europe.

After 10 years of mergers and acquisition and corporate finance experience in Australia and United Kingdom he was appointed Manager of Business Development at Lonmin Plc. The role provided significant corporate, strategic and operational exposure and involved identification and acquisition of platinum and gold assets, development of corporate strategy and participation in South African Black Economic Empowerment issues. Mr MacKinnon is currently Director of a private company focused on servicing the mineral refining sectors in Australia, India and Europe.

During the past three years, Mr MacKinnon held the following directorships in other ASX listed companies: Non-Executive Director of View Resources Limited (ceased 1 April 2012).

2. INFORMATION ON COMPANY SECRETARY

Mrs Tanya Woolley

B.Com, MPA, ACSA

Mrs Woolley is a Chartered Secretary and Financial Accountant with substantial experience in the financial reporting and corporate compliance of ASX listed and unlisted companies. Mrs Woolley holds a Bachelor of Commerce degree (Finance & International Business), a Masters of Professional Accounting and a Graduate Diploma in Applied Corporate Governance.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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Mrs Woolley previously held the position of Company Secretary and Financial Accountant for gold producer Kingsrose Mining Limited for three years. Prior to this she worked as an auditor at Pitcher Partners Perth, undertaking various audits of ASX listed and unlisted companies. Mrs Woolley currently holds the position of Company Secretary for Epic Resources Limited and Minbos Resources Limited.

3. DIRECTORS’ SHAREHOLDINGS

The following table sets out each current Director’s relevant interest in shares and rights or options to acquire shares of the Company as at the date of this report.

	Fully Paid	Unlisted
Director	Ordinary Shares	Share Options
Mr Ralston	100,000 (i)	250,000 (iv)
Mr Jewson	300,000 (ii)	-
Mr De Souza	750,000(iii)	500,000(v)
	1,150,000	750,000

(i) Of these shares, 50,000 are escrowed until 23 June 2013, this being 24 months from the Company’s listing date on the ASX.

(ii) Mr Jewson acquired 250,000 shares under the Conto Director Plan with the balance being acquired on market.

(iii) Mr De Souza acquired 250,000 shares under the Conto Director Plan with the balance being acquired on incorporation. Of these shares acquired on incorporation, 475,000 are escrowed until 23 June 2013; this being 24 months from the Company’s listing date on the ASX.

(iv) Mr Ralston received 250,000 Director Options on 1 April 2011. These options are escrowed until 1 April 2013 and are exercisable at $0.20 each, on or before 1 April 2014.

(v) Mr De Souza received 500,000 unlisted Broker Options on 31 May 2011, prior to the Company listing on the ASX and prior to his appointment as Non-Executive Director. These options are escrowed until 23 June 2013 and are exercisable at $0.20 each, on or before 31 May 2014.

4. DIVIDENDS

No dividend has been paid during the financial year and no dividend is recommended for the financial year.

5. DIRECTORS’ MEETINGS

The number of Directors’ meetings held during the financial year and the number of meetings attended by each Director during the time the Director held office are:

Directors	Appointment / Resignation	Number Eligble	Number
		to Attend	Attended
Mr Ralston	(Appointed 3 February 2011)	4	4
Mr Jewson	(Appointed 1 September 2011)	3	3
Mr De Souza	(Appointed 19 September 2011)	3	2
Mr Ciganek	(Resigned 19 September 2011)	1	1
Mr MacKinnon	(Resigned 1 September 2011)	1	1

For details of the function of the Board, Audit Committee and Remuneration Committee, please refer to Corporate Governance Statement.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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6. PRINCIPAL ACTIVITIES

The Company is an Australian-based exploration company that was initially established to acquire, explore, evaluate and exploit gold deposits and explore prospective tenements for other minerals. The Company intends to pursue new projects in the resources sector, both in Australia and overseas, by way of acquisition or investment.

7. REVIEW OF OPERATIONS

During the financial year the Company continued to explore and evaluate the tenements lying within the Cardinia Bore Project at Leonora. It also saw the Company apply for two prospecting licences in September 2011, these were granted in June 2012, which now form the Lone Wolf Project, approximately 8km North West of Leonora. In addition to the exploration of Conto’s Projects, the Company business objectives include the pursuit of new projects in the resources sector, both in Australia and overseas.

Since listing and up to reporting date, the Company has used its funds in accordance with its business objectives, and it is the intention of the Company to continue to use funds on the ongoing development of its current projects and in accordance with its ongoing business objectives.

7a) Lone Wolf Project

Overview

The Lone Wolf Project is located approximately 15km North East of Leonora within the North Eastern Goldfields region of Western Australia. The project, which lies within the Keith-Kilkenny Tectonic Zone, consists of two granted prospecting licences covering a total area of approximately 3.2km² and one prospecting licence that is currently under application. To the North East and East of Leonora the zone is approximately 20km wide and bounded by the Mt George Shear Zone to the West and the Keith-Killkenny Lineament and Pig Well Graben to the East.

Tenure

During the financial year, and whilst in the process of commencing a regional targeting initiative, the Company identified and applied for two prospecting licenses P37/8113 and P37/8114 (Lone Wolf Project) covering a total area of approximately 320 Hectares. In June 2012 both licences were granted.

The Company actively commenced a comprehensive review to acquire all historical exploration information pertaining to the project. Collation and digitising of available historical reports identified a number of significant drill intercepts of gold mineralisation, including drilling intercepts of up to 6m @ 3.35g/t Au ( Figure 1 ). The limited, wide spaced drilling outlines a continuous mineralised strike of 830m. The Information obtained from this project review will form the basis of exploration targeting in order to define the potential extent of mineralisation across the project area.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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Figure 1: Historical drill intercepts at Lone Wolf Project

7b) Cardinia Bore Project

Overview

The Company has an Option and Farm-in Agreement with Sammy Resources Pty Ltd (Sammy Resources), pursuant to which the Company acquired a right to earn an 80% interest in the Cardinia Bore Project by completing 1,000m of RC drilling within 2 years of the Company listing on the ASX. Sammy Resources is the holder and the Company is the sole operator.

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The project is accessed via the Laverton to Leonora Road and then 35 kilometres from Leonora, via gravel station tracks, as well as within the project area which has exploration tracks, station tracks and fence lines ( Figure 2 ).

Tenure

The project consists of nine granted prospecting licences ( Figure 3 ) covering an area of approximately 1,309 hectares (13 km2) and is located approximately 28 km East North East of Leonora in the Goldfields-Esperance region of Western Australia. Part of the Cardinia Bore Project tenements overlies the Minara Pastoral Lease.

During the financial year, the Company conducted a MMI (Mobile Metal Ion) sampling campaign across the whole Cardinia Bore project area to identify mineralised trends and prioritise targets.

Figure 2: Location of Cardinia Bore Project

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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The rock chip sampling confirmed the validity of the MMI method in locating potential targets for gold mineralisation within the project area. Historically the area investigated by rock chip sampling and geological mapping has only received limited exploration in the form of shallow auger drilling.

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Figure 3: Project Licences

Rock Chip Sampling Results

A total of six rock chip samples were taken from the North Eastern extent of P37/7654, part of the Cardinia Bore Gold Project, Leonora, Western Australia. The targets were identified using a combination of the MMI (Mobile Metal Iron) geochemical targeting investigation and interpretation of aerial imagery.

Results of the rock chip sampling campaign ( Figure 4 and Table 1 ) confirm the presence of gold mineralisation within the project area. A subsequent program is planned to define the extent and controls on the gold mineralisation is currently being devised.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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Figure 4: Rock chip samples at Cardinia Bore Project

Sample
	Easting	Northing	**Auppm **	Comments
12CB002	370752	6808385	1	Quartz mullock sample
12CB003	370755	6808391	2.07	Quartz mullock sample rusted, laminated, boxwork texture
				Gossanous mullock sample with boxwork textures and covellite + bornite
12CB004	370758	6808399	6.04
12CB005	370747	6808403	5.05	Quartz mullock sample with some copper staining
12CB006	370767	6808410	0.17	Quartz vein sub cropping
12CB007	370763	6808401	0.93	Quartz vein sub cropping

Table 1: Rock chip sampling results

Coordinates are reported in MGA94-Z51 and were located using a handheld GPS. Samples assayed by Genalysis Perth used fire assay for gold.

7c) Other projects of interest

In addition to the exploration of Conto’s Cardinia Bore and Lone Wolf Projects, the Company intends to pursue new projects in the resources sector, both in Australia and overseas. These projects include but are not limited to; coal, potash, iron ore, copper and gold.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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Competent Person Statements

Technical information in this report has been prepared under the supervision of Mr Jonathan King, a member of the Australian Institute of Geoscientists (AIG). Mr King has sufficient experience which is relevant to the styles of mineralisation under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (the JORC Code). Mr King consents to the inclusion in this report of the information, in the form and context in which it appears.

8. FINANCIAL RESULTS

The financial results of the Company for the year ended 30 June 2012 are:

	30-Jun-12	30-Jun-11
Cash & cash equivalents ($) Net assets ($) Revenue ($) Net loss after tax ($) Loss per share (cents) Dividend($)	3,849,739	4,093,640
	4,020,542	4,205,464
	188,334	2,625
	(208,194)	(458,705)
	(0.69)	(3.02)
	-	-

9. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

There have been no significant changes in the state of affairs of the Company.

10. AFTER BALANCE SHEET DATE EVENTS

The Directors are not aware of any matters or circumstances at the date of the report, other than those referred to in this report or the financial statements or notes thereto, that has significantly affected or may significantly affect the operations, the results of operations or the state of affairs of the Company in subsequent financial years.

11. FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

The Directors are actively evaluating a number of resource opportunities and further information on the likely developments of the Company will be made available to the market in accordance with its continuous disclosure obligations under the ASX Listing Rules.

12. ENVIRONMENTAL ISSUES

The Company is not subject to any significant environmental regulations under either Commonwealth or State legislation. The Board is not aware of any breach of environmental requirements as they apply to the Company. There were no ground disturbing activities conducted during the financial year.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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13. REMUNERATION REPORT (Audited)

The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. There were no company executives and other key management personnel who were not also Directors of the Company for the financial year.

The remuneration arrangements detailed in this report are for the Chairman and Non-Executives who held office during the financial year and are as follows:

Director/Position Duration of appointment	Director/Position Duration of appointment
Michael Ralston - Non-Executive Chairman	Appointed 3 February 2011
Robert Jewson - Non-Executive Technical Director	Appointed 1 September 2011
Francis De Souza - Non-Executive Director	Appointed 19 September 2011
Simon MacKinnon – Non-Executive Director	Appointed 3 February 2011; Resigned 1 September 2011
John Ciganek – Non-Executive Director	Appointed 3 February 2011; Resigned 19 September 2011

The Remuneration Report is set out under the following main headings:

• A Remuneration Philosophy

• B Remuneration Structure and Approvals

• C Remuneration and Performance

• D Details of Remuneration

• E Contractual Arrangements

• F Share-based Compensation

• G Equity Instruments Issued on Exercise of Remuneration Options

• H Value of Options to Directors

• I Adoption of Remuneration Report by Shareholders

A Remuneration Philosophy

Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company. Key management personnel of Conto comprise the Board of Directors only.

The performance of the Company depends upon the quality of its key management personnel. To prosper the Company must attract, motivate and retain appropriately skilled Directors and Executives.

The Company’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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B Remuneration Structure and Approvals

Remuneration of Directors is currently set by the Board of Directors. The Board has not established a separate Remuneration Committee at this point in the Company’s development nor has the Board engaged the services of a remuneration consultant to provide recommendations when setting the remuneration received by Directors. It is considered that the size of the Board along with the level of activity of the Company renders this impractical and the full Board considers in detail all of the matters for which the Directors are responsible.

 Non-Executive Remuneration Structure

The remuneration of Non-Executive Directors consists of Directors’ fees, payable in arrears. The total aggregate fee pool to be paid to Directors (excluding Executive Directors) is set at $350,000 per year (in accordance with the Company’s Constitution) and as approved by the shareholders of the Company.

Remuneration of Non-Executive Directors is based on fees approved by the Board of Directors and is set at levels to reflect market conditions and encourage the continued services of the Directors. Non-Executive Directors do not receive retirement benefits but are able to participate in share-based incentive programmes in accordance with Company policy.

During the financial year Non-Executive Directors have received combined fees totalling $109,833. Mr Ralston, as Non-Executive Chairman, was paid $3,000 per month during the financial year totalling $36,000. Messrs Jewson and De Souza were each paid Director’s fees of $2,500 per month from the commencement of their appointment, and during the year received an incremental increase to $3,500 per month that was commensurate with an increase in responsibilities, this being an annual total of $31,000 and $29,500, respectively. Messrs Ciganek and MacKinnon were each paid $2,500 per month up to their respective resignation dates; during the financial year they were paid $8,333 and $5,000 respectively.

During the financial year Non-Executive Directors, Mr De Souza and Mr Jewson, entered into separate consultancy mandates with the Company for the provision of professional and technical services that fall outside the scope of their Directorship role. Under this mandate they receive a consultancy fee in connection with time spent on Company business, including reasonable expenses incurred by them in carrying out this consultancy role. During the financial year, Mr De Souza and Mr Jewson received combined consulting fees totalling $15,650.

During the financial year, shareholders approved the Director Share Plan (“Director Plan” or “Plan”) whereby shares are allocated to Directors and other eligible participants under the Plan. On 1 December 2011 the Company issued 250,000 fully paid ordinary shares each to Messrs De Souza and Jewson at an issue price of $0.25 per share under this Plan.

Further details relating to remuneration of Non-Executive Directors are contained in the Remuneration Table disclosed as Section D of this Report; and within the Notes to the Financial Statements: Note 15 Reserves, Note 18 Share-Based Payments and Note 20 Key Management Personnel Disclosures.

 Non-Executive Remuneration Approvals

The Board, in accordance with the Company’s Constitution, sets the aggregate remuneration of NonExecutive Directors, subject to shareholder approval. Within this pre-approved aggregate remuneration pool, fees paid to Non-Executive Directors are approved by the Board of Directors in the absence of the Remuneration Committee and is set at levels to reflect market conditions and encourage the continued services of the Directors. Remuneration may also include an invitation to participate in share-based incentive programmes in accordance with Company policy.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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The nature and amount of remuneration is collectively considered by the Board of Directors with reference to relevant employment conditions and fees commensurate to a company of similar size and level of activity, with the overall objective of ensuring maximum stakeholder benefit from the retention of high performing Directors and Executives.

C Remuneration and Performance

Director remuneration is currently not linked to either long term or short term performance conditions. The Board feels that the terms and conditions of options and shares currently on issue to the Directors are a sufficient, long term incentive to align the goals of the Directors with those of the shareholders to maximise shareholder wealth, and as such, has not set any performance conditions for the Directors of the Company. The Board will continue to monitor this policy to ensure that it is appropriate for the Company in future years.

D Details of Remuneration

The key management personnel of the Company are the Board of Directors.

During the financial year ended 30 June 2012 and the financial period from 3 February 2011 (date of incorporation) through to 30 June 2011, the Directors received no long-term benefits or termination benefits. The only remuneration received by the Directors within these periods were short-term employee benefits and share-based payments.

Details of the remuneration of the Directors of the Company up to 30 June 2012 are set out below:

	Short-term employee benefits	Post- employment benefits	Share- based payments	Total $	Percentage of remuneration consisting of options for the year %
30-Jun-12	Salary & fees Cash bonus Non- monetary Other (iv) $ $ $ $	Super- annuation $	Options & rights (v) $
Directors (i) Mr Ralston Mr De Souza (ii) Mr Jewson (ii) Mr MacKinnon (iii) Mr Ciganek (iii) Sub-total None Sub-total Total Other Key Management	36,000 - - - 29,500 - - 4,500 31,000 - - 11,150 5,000 - - - 8,333 - - -	- - - - -	- 11,636 11,636 - -	36,000 45,636 53,786 5,000 8,333	- 25% 22% - - -
	109,833 - - 15,650	-	23,272	148,755
	- - - -	-	-	-
	- - - -	-	-	-
	109,833 - - 15,650	-	23,272	148,755

(i) Directors Fees are paid monthly in arrears from commencement of the Directors’ appointment date.

(ii) Messrs Jewson and De Souza were appointed on 1 September 2011 and 19 September 2011, respectively.

(iii) Messrs MacKinnon and Ciganek resigned 1 September 2011 and 19 September 2011, respectively.

(iv) For more information on Other fees paid to Mr De Souza and Mr Jewson refer to Note 20 Key Management Personnel Disclosures.

• (v) Messrs Jewson and De Souza participated in the Director Plan and were each issued 250,000 shares at $0.25 each. For further details refer to Note 18 Share Based Payments.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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Details of the remuneration of the Directors of the Company up to 30 June 2011 are set out below:

	Short-term employee benefits	Post- employment benefits	Share- based payments	Total $	Percentage of remuneration consisting of options for the year %
30-Jun-11	Salary & fees Cash bonus Non- monetary Other $ $ $ $	Super- annuation $	Options & rights $
None Sub-total Total Other Key Management Directors Mr Ralston (i) Mr MacKinnon (ii) Mr Ciganek (iii) Sub-total	1,000 - - - 833 - - - 833 - - -	- - -	22,046 22,046 22,046	23,046 22,879 22,879	96% 96% 96% -
	2,666 - - -	-	66,138	68,804
	- - - -	-	-	-
	- - - -	-	-	-
	2,666 - - -	-	66,138	68,804

(i) Mike Ralston (Non-Executive Chairman) (appointed on 3 February 2011).

• (ii) Simon MacKinnon (Non-Executive Director) (appointed on 3 February 2011; resigned 1 September 2011).

• (iii) John Ciganek (Non-Executive Director) (appointed on 3 February 2011; resigned on 19 September 2011).

E Contractual Arrangements

• Mr Mike Ralston – Non-Executive Chairman

• Contract commencement date: 3 February 2011

• Remuneration is payable from 23 June 2011 following official listing on the Australian Securities Exchange (ASX).

• Director Fee is set at $36,000 per annum.

• Remuneration is subject to annual review by the Board of the Company and approval by the shareholders of the Company (if required).

• Term: Open although subject to retirement by rotation under the Company’s Constitution. There are no entitlements to termination or notice periods.

• Mr Robert Jewson – Non-Executive Technical Director

• Contract commencement date: 1 September 2011.

• Remuneration payable from 1 September 2011.

• Director Fee was set at $30,000 per annum, however, in January 2012, Mr Jewson received an incremental increase in fees which is now set at $42,000 per annum.

• Remuneration is subject to annual review by the Board of the Company and approval by the shareholders of the Company (if required).

• Term: Open although subject to retirement by rotation under the Company’s Constitution. There are no entitlements to termination or notice periods.

• Mr Francis De Souza – Non-Executive Director

• Contract commencement date: 19 September 2011.

• Remuneration payable from 19 September 2011.

• Director Fee was set at $30,000 per annum, however, in January 2012, Mr De Souza received an incremental increase in fees which is now set at $42,000 per annum.

• Remuneration is subject to annual review by the Board of the Company and approval by the shareholders of the Company (if required).

• Term: Open although subject to retirement by rotation under the Company’s Constitution. There are no entitlements to termination or notice periods.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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F Share-based Compensation

The Company rewards Directors for their performance and aligns their remuneration with the creation of shareholder wealth by issuing share options and or shares. Share-based compensation is at the discretion of the Board and no individual has a contractual right to participate in any share-based plan or to receive any guaranteed benefits.

 Options

There were no options granted to key management personnel during the financial year, nor were shares issued upon exercise of options. As at the date of this report no options have been exercised nor did any options lapse.

At the date of this report, the unissued ordinary shares of Conto under option carry no dividend or voting rights. The grant date equals the vesting date for all options. When exercisable, each option is convertible into one ordinary share of the Company.

 Shares

During the financial year, shareholders approved the Director Share Plan (“Director Plan” or “Plan”) whereby shares are allocated to Directors and other eligible participants under the Plan. Under this Director Plan, eligible Directors are provided with a non-recourse loan from the Company to fund the subscription price of issued shares in accordance with the terms and conditions of the Director Plan. Eligible participants of the Plan may not deal with the shares while the loan remains outstanding. A full summary of the Plan was set out in the Notice of Meeting dated 17 October 2011.

Although these are shares for legal and taxation purposes, Accounting Standards require they be treated as options for accounting purposes.

On 1 December 2011 the Company issued 250,000 fully paid ordinary shares each to Messrs De Souza and Jewson at an issue price of $0.25 per share under the Plan. Refer to Note 15 Reserves and Note 18 ShareBased Payments for more information.

 Link to Performance

For options, and shares issued under the Director Plan that are treated as options for accounting purposes, there are no performance requirements to be met before exercise can take place largely because by setting the option price or share price at a level above the current share price at the time the options or shares are granted, the Board considers this to be a sufficient, long-term incentive to align the goals of the Directors and management with those of the shareholders to improve the Company’s performance. The Board will continue to monitor this policy to ensure that it is appropriate for the Company in future years.

G Equity Instruments Issued on Exercise of Remuneration Options

No shares were issued during the financial year to Directors or key management as a result of exercising remuneration options.

H Value of Options to Directors

The Company has a Director Share Plan (“Director Plan”) under which it allocates shares to Directors and other eligible participants as per the terms and conditions of the Plan. While these are shares for legal and taxation purposes, Accounting Standards require they be treated as options for accounting purposes.

During the financial year, the value of these shares (otherwise, “options” granted) issued under this Plan during the year is set out below. Their value is the estimated fair value using the Black-Scholes option pricing

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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model. There were no options granted from a previous year that were exercised or lapsed in relation to Key Management Personnel during the financial year end 30 June 2012.

The value of the shares, accounted for as options, to Directors, either granted, exercised or lapsed, during the financial year ended 30 June 2012 under the Director Share Plan are set out below:

Directors	Granted options / shares	Issue date	Expiry date	Fair value of options / shares at grant date($)	Fair value of options / shares exercised($)	Fair value of options / shares lapsed($)	Remuneration consisting of options / shares for year ended 30/6/2012(%)
Mr De Souza	250,000	1/12/2011	**1/12/2015 **	$ 11,636	-	-	25%
Mr Jewson	250,000	1/12/2011	**1/12/2015 **	$ 11,636	-	-	22%
Total 500,000 $ 23,272

The 500,000 shares issued during the year under the Director Plan have no vesting conditions attached however, in accordance with the terms and conditions of the Director Plan, the shares are under a Companyimposed trading lock until such time as each Director has repaid the loan provided by the Company to fund the subscription price for shares issued to them. The amount payable by Mr Jewson and Mr De Souza is $0.25 per share. For further information refer to note 18 Share-Based Payments and note 20 Key Management Personnel Disclosures.

The value of options to Directors, either granted, exercised or lapsed, during the period from 3 February 2011 (date of incorporation) to 30 June 2011 are set out below:

Directors	Granted options	Issue date	Expirydate	Fair value of options at grant date($)	Fair value of options exercised($)	Fair value of options lapsed($)	Remuneration consisting of options for year ended 30/6/2011(%)
Mr Ralston	250,000	1/04/2011	1/04/2014	$22,046	-	-	96%
Mr MacKinnon	250,000	1/04/2011	1/04/2014	$22,046	-	-	96%
Mr Ciganek	250,000	1/04/2011	1/04/2014	$22,046	-	-	96%
Total 750,000 $66,138

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

I Adoption of Remuneration Report by Shareholders

The adoption of the Remuneration Report for the financial period from 3 February 2011 (date of incorporation) through to 30 June 2011 was put to the shareholders of the Company at the Annual General Meeting of held 18 November 2011. All proxies received were in favour of the resolution and the resolution was passed without amendment on a show of hands. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.

End of Remuneration Report

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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2012

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14. OPTIONS

At the date of this report, the unissued ordinary shares of Conto under option are as follows:

		Number Under
Date of Expiry	Exercise Price	Option
31/05/2014	$0.20	4,000,000
1/04/2014	$0.20	750,000

No person entitled to exercise these options had or has any right by virtue of the option to participate in any share issue of any other body corporate.

15. PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purposes of taking responsibility on behalf of the Company for all or part of those proceedings.

16. INDEMNIFYING OFFICERS

During the financial year, the Company paid a premium in respect of a contract insuring all its Directors and current Executive Officers against a liability incurred as such a director or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company against a liability incurred as such an officer or auditor.

17. NON-AUDIT SERVICES

There were no non-audit services provided by the Company’s auditors during the financial year.

18. LEAD AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration for the financial year ended 30 June 2012 has been received and can be found on page 17.

Signed in accordance with a resolution of the Board of Directors.

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Mr Mike Ralston Non-Executive Chairman Perth, Western Australia Monday, 13 August 2012

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AUDITOR'S INDEPENDENCE DECLARATION

To the Directors of Conto Resources Limited

In relation to the independent audit for the year ended 30 June 2012, to the best of my knowledge and belief there have been:

• (i) No contraventions of the auditor independence requirements of the Corporations Act 2001 .

• (ii) No contraventions of any applicable code of professional conduct.

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PITCHER PARTNERS CORPORATE & AUDIT (WA) PTY LTD

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MARK ENGLISH

Executive Director

13 August 2012

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17

CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2012

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CORPORATE GOVERNANCE

The Board of Directors of Conto Resources Limited (the “Company” or “Conto”) is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of Conto on behalf of the shareholders by whom they are elected and to whom they are accountable.

This Corporate Governance Statement sets out the Company’s current compliance with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (Principles and Recommendations). The Principles and Recommendations are not mandatory. The Statement below discloses the extent to which the Company has followed the Principles and Recommendations, furthermore, the Board of the Company currently has in place a Corporate Governance Plan which is located on the Company’s website.

	PRINCIPLES AND RECOMMENDATIONS	COMMENT
1.	Lay solid foundations for management and oversight
1.1	Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.	The Directors guide and monitor the business affairs of the Company on behalf of Shareholders and have formally adopted a corporate governance policy which is designed to encourage Directors to focus their attention on accountability, risk management and ethical conduct. This is available on the Company’s website.
1.2	Companies should disclose the process for evaluating the performance of senior executives.	At present the only senior executive of the Company, who is not a director, is the Company Secretary. The evaluation of the performance of the Company Secretary is assessed annually (or on an as needed basis) and in accordance with the terms and conditions of the consulting agreement entered into by the Company with Blue Horse Corporate Pty Ltd for the provision of company secretarial and financial reporting services.
1.3	Companies should provide the information indicated in the Guide to reporting on Principle 1.	There have been no departures from the ASX’s Principles and Recommendations 1.1 and 1.2. Information has been provided above and further referenced within this annual report and/or to the Company’s Corporate Governance Policy (which is available on the Company’s website).
2.	Structure the board to add value
2.1	A majority of the board should be independent directors.	Mr Ralston is the only current independent Director. Please refer to section 2.1a below this table for further explanation.
2.2	The chair should be an independent director.	The Chairman is independent.
2.3	The roles of chair and chief executive officer should not be exercised by the same individual.	The Company does not have a chief executive officer. Due to the current size of the Company’s operation, the Company does not deem it necessary to appoint a chief executive officer at this time.

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CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2012

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2.4	The board should establish a nomination committee.	The Company is currently not of a relevant size that justifies the formation of a separate Nomination Committee. Matters typically dealt with by such a committee are dealt with by the Board of Directors.
2.5	Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.	With the Company listing on 23 June 2011, since this time and during the financial year ended 30 June 2012, there have been changes to the Company Board. It was in September 2011 that two new directors were appointed to the Board, these being Messrs Jewson and De Souza, replacing outgoing directors Messrs Ciganek & MacKinnon. Subsequently, the Board has not yet developed a formal process for performance evaluation at this time. However, to ensure that the responsibilities of the Board are discharged in an appropriate manner, the performance of the Board will be reviewed annually by the independent, non-executive Chair; and the performance of the Chair will be reviewed annually by the rest of the Board. Directors whose performance is consistently unsatisfactory may be asked to retire.
2.6	Companies should provide the information indicated in the Guide to reporting on Principle 2.	The Company has provided details of each director, their skills, and experience in Section One of the Directors’ Report. Explanations of the Company’s compliance with; and departures from, the ASX’s Principles and Recommendations 2.1 through to 2.5 have been detailed in the sections above.

2.1 a) Comment pertaining to “Principle 2.1 – A majority of the Board should be independent directors”

The Company recognises that independent Directors are important in verifying to shareholders that the Board is properly fulfilling its role and is diligent in holding senior management accountable for its performance.

Directors of Conto Resources Limited are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement.

In making this assessment, the Board considers all relevant facts and circumstances. Relationships that the Board will take into consideration when evaluating independence are whether a Director:

• is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;

• is employed, or has previously been employed in an executive capacity by the Company or another Company member, and there has not been a period of at least three years between ceasing such employment and serving on the Board;

• has within the last three years been a principal of a material professional advisor or a material consultant to the Company or another Company member, or an employee materially associated with the service provided;

• is a material supplier or customer of the Company or other Company member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; or

• has a material contractual relationship with the Company or another Company member other than as a Director.

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CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2012

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After considering all facts mentioned above in regards to evaluating the independent status of a director, the Company deems Mr Ralston to be independent.

At the date of signing of this report, Mr Jewson is not deemed to be independent. Mr Jewson has a material contractual relationship with the Company other than as a Director. On the 5 September 2011, Mr Jewson, through his private company Geological Resource Solutions Pty Ltd, entered into a consultancy mandate with the Company. Under this contract Mr Jewson provides ongoing geological consultancy services and assists the Company with exploration planning and technical advice on an ‘as needed’ basis. Since entering into this contract and up to 30 June 2012, Mr Jewson has received consulting fees totalling $11,150 in addition to his director fees.

At the date of signing of this report, Mr De Souza is not deemed to be independent. Mr De Souza has a material contractual relationship with the Company other than as a Director. On 1 January 2012, Mr De Souza, through his private company Baga River Pty Ltd, entered into a consultancy mandate with the Company. Under this contract Mr De Souza provides business development and project assessment services on an ‘as needed’ basis. Since entering into this contract and up to 30 June 2012, Mr De Souza has received consulting fees totalling $4,500 in addition to his director fees.

The Company intends to seek out and appoint additional independent directors to the Board however, the Board believes that the Company is not of sufficient size to warrant the inclusion of more independent non-executive Directors in order to meet the ASX recommendation of maintaining a majority of independent non-executive Directors. The Company maintains a mix of Directors from different backgrounds with complementary skills and experience.

	PRINCIPLES AND RECOMMENDATIONS	COMMENT
3.	Promote ethical and responsible decision-making
3.1	Companies should establish a code of conduct and disclose the code or a summary of the code as to:  the practices necessary to maintain confidence in the company’s integrity  the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders  the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.	The Board is bound by the Company’s Board Charter and Code of Conduct (as disclosed in the Company’s Corporate Governance Plan). The Board understands the obligations for ethical and responsible decision making. All Directors and Officers are expected to: a) comply with the law; b) act in the best interests of the Company; c) be responsible and accountable for their actions; and d) observe the ethical principles of honesty and fairness, including prompt disclosure of potential conflicts.
3.2	Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measureable	The Company adopted a diversity policy on the 1 July 2011 as part of their Corporate Governance Plan. The Company recognises the benefits arising from board diversity, and is committed to providing a diverse workplace that embraces and promotes diversity.

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CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2012

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	objectives for achieving gender diversity and for the board to assess annually both the objectives and progress in achieving them.	Conto Resources Limited is an equal opportunity employer and welcomes people from different backgrounds. Full details of the Company’s diversity policy can be found on the Company website –www.contoresources.com
3.3	Companies should disclose in each annual report the measureable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress in achieving them.	The Company is currently not of a size that justifies the formal establishment of measurable diversity objectives.
3.4	Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.	The position of Company Secretary and Financial Accountant is currently fulfilled by Mrs Tanya Woolley. Mrs Woolley is the only senior executive and only officer below Board level that is engaged by the Board through consultancy company, Blue Horse Corporate Pty Ltd.
3.5	Companies should provide the information indicated in the Guide to reporting on Principle 3.	Explanations of the Company’s compliance with, and departures from, the ASX’s Principles and Recommendations 3.1 through to 3.4 have been detailed in the sections above.
4.	Safeguard integrity in financial reporting
4.1	The board should establish an audit committee.	The Company is not of a size at the moment that justifies having a separate audit committee. However, matters typically dealt with by such a committee are dealt with by the Board of Directors.
4.2	The audit committee should be structured so that it:  consists only of non- executive directors  consists of a majority of independent directors  is chaired by an independent chair, who is not chair of the board  has at least three members.	Matters typically dealt with by an audit committee are currently dealt with by the Board of Directors which comprises one independent Non-Executive Chair, and two Non-Executive Directors. ASX Principle 4.2 is satisfied to the extent that all Directors are non-executive and is chaired by an independent director, however, due to the size of the Company at the moment the Company cannot viably justify an additional chair who is not also the chair of the Board; nor that a majority of the Board is independent. Though the Company intends to seek out and appoint additional independent directors to the Board when size and scale of the Company justify and warrant their inclusion, for the time being the Company maintains a mix of Directors from different backgrounds with complementary skills and experience.
4.3	The audit committee should have a formal charter.	No charter has been developed, as there is no audit committee due to the role currently being fulfilled by the Board. The Board however, has a formal charter and code of conduct in place, as disclosed in the Corporate Governance Plan available on the Company’s website.

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CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2012

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4.4	Companies should provide the information indicated in the Guide to reporting on Principle 4.	Explanations of the Company’s compliance with, and departures from, the ASX’s Principles and Recommendations 4.1 through to 4.3 have been detailed in the sections above.
5.	Make timely and balanced disclosure
5.1	Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.	The Company is committed to ensuring that shareholders and the market are provided with full and timely information. The Company has a continuous disclosure program in place designed to ensure the compliance with ASX Listing Rule disclosure and to ensure accountability at a senior executive level for compliance and factual presentation of the Company’s financial position. The Company Secretary has been nominated as the person responsible for communicating with ASX on behalf of the Company. This role includes ensuring all necessary compliance with disclosure requirements has been met.
5.2	Companies should provide the information indicated in_Guide to_ Reporting on Principle 5.	Explanations of the Company’s compliance with, and departures from, the ASX’s Principle and Recommendation 5.1 have been detailed in the section above.
6.	Respect the rights of shareholders
6.1	Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.	Pursuant to Principle 6, the Company’s objective is to ensure effective communication with its shareholders at all time. Given the size of the Company, all communication with shareholders is currently reverted to the Board and its Company Secretary. The Company’s website has a dedicated News & Media section which publishes all important Company information and relevant announcements made to the market.
6.2	Companies should provide the information indicated in the Guide to reporting on Principle 6.	Explanations of the Company’s compliance with, and departures from, the ASX’s Principle and Recommendation 6.1 have been detailed in the section above.
7.	Recognise and manage risk
7.1	Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.	The Company has adequate policies in relation to risk management, compliance and internal control systems. The Company’s policies are designed to ensure strategic, operational, legal, reputational and financial risks are identified, assessed effectively and efficiently managed and monitored to enable achievement of the Company’s business objectives.
7.2	The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board	The Company has a documented risk management policy. The Board is responsible for driving risk management in the Company. The Board’s collective experience will enable accurate identification of the principal risks that may affect the Company’s business. Key operational risks and their management are recurring items for deliberation at Board Meetings.

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CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2012

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	should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.
7.3	The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.	At this point in the Company’s development the Board does not deem it necessary that assurance other than from the Board be provided in regards to the preparation of financial reports.
7.4	Companies should provide the information indicated in_Guide to_ Reporting on Principle 7.	Explanations of the Company’s compliance with, and departures from, the ASX’s Principles and Recommendations 7.1 through to 7.3 have been detailed in the sections above. Full details of the Company’s risk management policy can be found on the Company’s website.
8.	Remunerate fairly and responsibly
8.1	The board should establish a remuneration committee.	The Board has not established a remuneration committee at this point in the Company’s development. It is considered that the size of the Board along with the level of activity of the Company renders this impractical as the full Board considers in detail all of the matters for which the directors are responsible. The remuneration philosophy, structure and approvals process is explained in detail in Section 13 of the audited Remuneration Report contained within the Directors’ Report.
8.2	The remuneration committee should be structured so that it:  consists of a majority of independent directors  is chaired by an independent director  has at least three members	The Company is not currently of a size to justify the existence of a separate Remuneration Committee. However, matters typically dealt with by such a committee are dealt with by the Board which comprises one independent Non-Executive Chair, and two Non-Executive Directors. ASX Principle 8.2 is satisfied to the extent that all Directors are non-executive and is chaired by an independent director, however, due to the size of the Company at the moment the Company cannot viably justify an additional chair who is not also the chair of the Board; nor that the majority of Board be independent.

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CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2012

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		Though the Company intends to seek out and appoint additional independent directors to the Board when size and scale of the Company justify and warrant their inclusion, for the time being the Company maintains a mix of Directors from different backgrounds with complementaryskills and experience.
8.3	Companies should clearly distinguish the structure of non- executive directors’ remuneration from that of executive directors and senior executives.	The Board is currently made up of non-executive Directors only. The remuneration structure specific to non-executive Directors has been explained in detail in Section 13 of the audited Remuneration Report contained within the Directors’ Report.
8.4	Companies should provide the information indicated in the Guide to reporting on Principle 8.	Explanations of the Company’s compliance with, and departures from, the ASX’s Principles and Recommendations 8.1 through to 8.3 have been detailed in the sections above.

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STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012

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Notes Continuing operations Revenue 6 Directors fees and other benefits Share-based payments 18 Administration expenses 7 Loss from continuing operations before income tax Income tax expense Loss from continuing operations after income tax Other comprehensive loss Other comprehensive loss for the period, net of tax Total comprehensive loss for the period Loss for the period is attributable to: Owners of the Company Total comprehensive loss for the period attributable to: Owners of the Company Loss per share from continuing operations attributable to the ordinary equity holders of the Company: Basic loss per share – cents per share 16 Diluted loss per share – cents per share 16 Loss per share attributable to the ordinary equity holders of the Company: Basic loss per share – cents per share 16 Diluted loss per share – cents per share 16	30-Jun-12 30-Jun-11	30-Jun-12 30-Jun-11	30-Jun-12 30-Jun-11
		$ 188,334 (113,384) (23,272) (259,872)	$ 2,625 (2,667) (427,955) (30,708)
		(208,194) -	(458,705) -
		(208,194) -	(458,705) -
		(208,194)	(458,705)
		(208,194)	(458,705)
		(208,194)	(458,705)
		(208,194)	(458,705)
		(208,194)	(458,705)
		Cents (0.69) (0.69) (0.69) (0.69)	Cents (3.02) (3.02) (3.02) (3.02)

The Statement of Comprehensive Income is to be read in conjunction with the notes to the financial statements set out on pages 29 to 53.

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STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

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Notes Current Assets Cash & cash equivalents 9 Trade & other receivables 10 Total Current Assets Non-Current Assets Plant & equipment 11 Exploration & evaluation expenditure 12 Total Non-Current Assets TOTAL ASSETS Current Liabilities Trade & other payables 13 Total Current Liabilities TOTAL LIABILITIES NET ASSETS Equity attributable to the equity holders of the Company Contributed equity 14 Reserves 15 Accumulated losses TOTAL EQUITY	30-Jun-12 30-Jun-11
	$ $
	3,849,739 4,093,640 9,181 35,212
	3,858,920 4,128,852
	3,218 - 168,780 114,091
	171,998 114,091
	4,030,918 4,242,943
	10,376 37,479
	10,376 37,479
	10,376 37,479
	4,020,542 4,205,464
	4,236,214 4,236,214 451,227 427,955 (666,899) (458,705)
	4,020,542 4,205,464

The Statement of Financial Position is to be read in conjunction with the notes to the financial statements set out on pages 29 to 53.

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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012

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At 1 July 2011 Comprehensive income: Loss for the period Total comprehensive loss for the period Transactions with owners in their capacity as owners: Share-based payments At 30 June 2012 At 3 February 2011 (Date of Incorporation) Comprehensive income: Loss for the period Total comprehensive loss for the period Transactions with owners in their capacity as owners: Issue of share capital Capital raising costs Share-based payments At 30 June 2011	Issued Capital Share-based Payment Reserve Accumulated Losses Total Equity
	$ $ $ $ 4,236,214 427,955 (458,705) 4,205,464
	- - (208,194) (208,194)
	- - (208,194) (208,194) - 23,272 - 23,272
	4,236,214 451,227 (666,899) 4,020,542
	Issued Capital Share-based Payment Reserve Accumulated Losses Total Equity
	$ $ $ $ - - - -
	- - (458,705) (458,705)
	- - (458,705) (458,705) 4,580,000 - - 4,580,000 (343,786) - - (343,786) - 427,955 - 427,955
	4,236,214 427,955 (458,705) 4,205,464

The Statement of Changes in Equity is to be read in conjunction with the notes to the financial statements set out on pages 29 to 53.

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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012

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Notes Cash flows used in operating activities Payment to suppliers and employees Interest received Net cash flows used in operating activities 9 Cash flows used in investing activities Payment for plant & equipment Payment for exploration & evaluation expenditure Net cash flows used in investing activities Cash flows from financing activities Proceeds from issue of share, net of share issue costs Net cash flows from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 9	30-Jun-12 30-Jun-11
	$ $ (373,639) (31,108) 188,334 2,625
	(185,305) (28,483)
	(3,907) - (54,689) (114,091)
	(58,596) (114,091)
	- 4,236,214
	- 4,236,214
	(243,901) 4,093,640 4,093,640 -
	3,849,739 4,093,640

The Statement of Cash Flows is to be read in conjunction with the notes to the financial statements set out on pages 29 to 53.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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1. REPORTING ENTITY

Conto Resources Limited (the “Company”) is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange Limited (“ASX”). The Company is a for profit entity. The address of its registered office and principal place of business is disclosed in the Corporate Directory of the annual report. The financial statements of the Company are for the financial year ended 30 June 2012.

The nature of the operations and principal activities of the Company are described in the Directors’ Report.

2. BASIS OF PREPARATION

(a) Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The financial report of the Company also complies with International Financial Reporting Standards (IFRSs) and interpretations adopted by the International Accounting Standards Board.

The financial statements were approved by the Board of Directors on 13 August 2012.

(b) Basis of measurement The financial statements have been prepared on the historical cost basis. Cost is based on the fair values of the consideration given in exchange for assets.

(c) Functional and presentation currency

These financial statements are presented in Australian dollars, which is the Company’s functional currency.

(d) Comparatives

Prior period comparatives are for the period from incorporation being 3 February 2011 to 30 June 2011.

(e) New and amended standards adopted by the Company None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2011 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future periods.

(f) Early adoption of standards

The Company has not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2011.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently in these financial statements.

(a) Revenue recognition

Interest Revenue

Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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(b) Income tax

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

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

• Except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit; and in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

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

Deferred tax assets and deferred tax liabilities shall be offset only if:

• (a) there is a legally enforceable right to set-off current tax assets against current tax liabilities; and

• (b) the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• (i) the same taxable entity; or

• (ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

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

Income taxes relating to items recognised directly in equity are recognised in equity and not in the Statement of Comprehensive Income.

(c) Other taxes

Revenues, expenses, assets and liabilities 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 receivables and payables are stated with amounts 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.

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

(d) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the Statement of Financial Position.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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(e) Plant and equipment

(i) Owned assets

Items of plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of selfconstructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a work condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (major components).

(ii) Subsequent costs

The Company recognises in the carrying amount of an item of plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the Company and the cost of the item can be measured reliably. All other costs are recognised in the Statement of Comprehensive Income as an expense as incurred.

(iii) Depreciation

Depreciation is charged to the Statement of Comprehensive Income using a straight line method over the estimated useful lives of each part of an item of plant and equipment.

The estimated useful lives in the current financial year are as follows:

• Plant and equipment 3 years

The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually.

(f) Exploration and evaluation

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

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

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

• (a) The exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or

• (b) Exploration and evaluation activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (or the cash-generating unit(s) to which it has been allocated, being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision is made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then classified to development.

(g) Trade and other payables

Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.

(h) Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(i) Earnings per share

(i) Basic earnings per share

Basic earnings per share is determined by dividing net profit or loss after income tax attributable to members of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(j) Investments and other financial assets

Classification

The Company classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at the end of each reporting date.

(i) Financial assets at fair value through profit or loss

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

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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(ii) Loans and receivables

Loans and receivable are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non-current assets. Loans and receivables are included in trade and other receivables (Note 10 Trade & Other Receivables) in the Statement of Financial Position.

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company’s management has the positive intention and ability to hold to maturity. If the Company were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category wold be tainted and reclassified as available-for-sale. Held-to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months from the end of the reporting period, which are classified as current assets.

(iv) Available-for-sale financial assets

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

Financial Assets – reclassification

The Company may choose to reclassify a non-derivative trading financial asset out of the held for trading category if the financial asset is no longer held for the purpose of selling it in the near term. Financial assets other than loans and receivables are permitted to be reclassified out of the held for trading category only in rare circumstances arising from a single event that is unusual and highly unlikely to recur in the near term. In addition, the Company may choose to reclassify financial assets that would meet the definition of loans and receivables out of the held for trading or available-for-sale categories if the Company has the intention and ability to hold these financial assets for the foreseeable future or until maturity at the date of reclassification.

Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortised cost as applicable, and no reversals of fair value gains or losses recorded before reclassification date are subsequently made. Effective interest rates for financial assets reclassified to loans and receivables and held-to-maturity categories are determined at the reclassification date. Further increases in estimates of cash flows adjust effective interest rates prospectively.

Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Company commits to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to profit or loss as gains and losses from investment securities.

Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Loans and receivable are subsequently carried at amortised cost using the effective interest method.

Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in profit or loss within other income or other expense in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in profit or loss as part of revenue from continuing operations when the Company’s right to receive payments is established. Interest income from these financial assets is included in the net gains/(losses).

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

Details on how the fair value of financial instruments is determined is disclosed in Note 17 Financial Risk Management.

Impairment

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

(i) Assets carried at amortised cost

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

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

(ii) Assets classified as available-for-sale

If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss.

Impairment losses on equity instruments that were recognised in profit or loss are not reversed through profit or loss in a subsequent period.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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If the fair value of a debt instrument classified as available-for-sale increases in subsequent period and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through profit or loss.

(k) Share-based payments

The Company provides benefits to employees (including Directors) of the Company and external parties to the Company in the form of share-based payment transactions, whereby employees and external parties render services in exchange for shares or options over shares ("equity-settled transactions").

The fair value of options is recognised as an expense with a corresponding increase in equity (share option reserve). The fair value is measured at grant date and recognised over the period during which the holder become unconditionally entitled to the options. Fair value is determined using a Black-Scholes option pricing model. In determining fair value, no account is taken of any performance conditions other than those related to the share price of the Company ("market conditions"). The cumulative expense recognised between grant date and vesting date is adjusted to reflect the directors’ best estimate of the number of options that will ultimately vest because of internal conditions of the options, such as the employees having to remain with the company until vesting date, or such that employees are required to meet internal sales targets.

No expense is recognised for options that do not ultimately vest because internal conditions were not met. An expense is still recognised for options that do not ultimately vest because a market condition was not met.

Where the terms of options are modified, the expense continues to be recognised from grant date to vesting date as if the terms had never been changed. In addition, at the date of the modification, a further expense is recognised for any increase in fair value of the transaction as a result of the change.

Where options are cancelled, they are treated as if vesting occurred on cancellation and any unrecognised expenses are taken immediately to the Statement of Comprehensive Income. However, if new options are substituted for the cancelled options and designated as a replacement on grant date, the combined impact of the cancellation and replacement options are treated as if they were a modification.

Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the Company obtains the goods or the counterparty renders the service.

(l) Critical accounting estimates and judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes:

(i) Note 12 – Exploration & Evaluation Expenditure The Company’s accounting policy for exploration and evaluation is set out in Note 3(f) above. If, after having capitalised expenditure under this policy, the Directors conclude that the Company is unlikely to

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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recover the expenditure by future exploration or sale, then the relevant capitalised amount will be written off to the Statement of Comprehensive Income.

(ii) Note 18 – Share-Based Payments

The Company measures the cost of equity settled share based payments at fair value at the grant date using the Black-Scholes model taking into account the exercise price, the term of the option, the impact of dilution, the share price at grant date, the expected volatility of the underlying share, the expected dividend yield and risk free interest rate for the term of the option.

4. STANDARDS ISSUED BUT NOT YET EFFECTIVE

The AASB has issued new standards, amendments and interpretations to existing standards which have been published but are not yet effective, and have not been adopted early by the Company. The new standards, amendments and interpretations that are expected to be relevant to the Company’s financial statements are provided below:

AASB	REF	DESCRIPTION
AASB 9	(i)	Financial Instruments*
AASB 10	(i)	Consolidated Financial Statements
AASB 11	(i)	Joint Arrangements
AASB 13	(i)	Fair Value Measurement
AASB 119	(i)	Employee Benefits
AASB 1053	(ii)	Application of Tiers of Australian Accounting Standards
AASB 2010-7	(i)	Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127]
AASB 2010-8	(iv)	Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets [AASB 112]
AASB 2011-4	(ii)	Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements [AASB 124]
AASB 2011-8	(iv)	Amendments to Australian Accounting Standards arising from AASB 13 [AASB 1, 2, 3, 4, 5, 7, 9, 2009-11, 2010-7, 101, 102, 108, 110, 116, 117, 118, 119, 120, 121, 128, 131, 132, 133, 134, 136, 138, 139, 140, 141, 1004, 1023 & 1038 and Interpretations 2, 4, 12, 13, 14, 17, 19, 131 & 132]
AASB 2011-9	(iii)	Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049]
AASB 2011-10	(i)	Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) [AASB 1, AASB 8, AASB 101, AASB 124, AASB 134, AASB 1049 & AASB 2011-8 and Interpretation 14

(i) Applies to annual reporting periods beginning on or after 1 January 2013.

(ii) Annual reporting periods beginning on or after 1 July 2013

(iii) Annual reporting periods beginning on or after 1 July 2012.

(iv) Annual reporting periods beginning on or after 1 January 2012.

*In December 2011, the IASB delayed the application date of IFRS 9 to 1 January 2015. The AASB is expected to make an equivalent amendment to AASB 9 shortly.

The abovementioned new standards and interpretations are not expected to have a material impact on the Company’s financial statements.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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5. SEGMENT INFORMATION

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Company that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

The segments are consistent with the internal management reporting information that is regularly reviewed by the chief operating decision maker.

The Company engages in one business in Australia from which it earns revenues, and its results are analysed as a whole by the Board of Directors. Consequently revenue, profit and net assets for the operating segment and geographical segment are reflected in this annual report.

6. REVENUE

	30-Jun-12 30-Jun-11
Revenue Interest income Total revenue	$ $ 188,334 2,625
	188,334 2,625

7. EXPENSES

	30-Jun-12 30-Jun-11
Adminstration expenses Consulting expenses Depreciation expenses Administration costs Compliance and regulatory expenses Total administration expenses	$ $ 128,097 - 689 - 65,016 15,106 66,070 15,602
	259,872 30,708

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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8. INCOME TAX EXPENSES

Numerical reconciliation of income tax expense to prima facie tax payable Accounting loss before income tax Prima facie tax payable on loss at 30% Add/(less) tax effect of: Permanent differences - Share based payments - Adjustment to carried forward losses Temporary differences - Exploration expenditure - Provision for accrued expenses - Provision for accrued interest - Other temporary differences Unused tax losses not recognised as deferred tax assets Income tax expense Tax losses not brought to account	30-Jun-12 30-Jun-11
	$ $ (208,194) (458,705) (62,458) (137,612) 6,982 128,387 2,713 - (16,407) (34,227) (1,650) 4,500 (10,184) - (20,627) (20,627) (101,631) (59,579)
	- -
	(101,631) (59,579)

The Directors have considered the probability of taxable profits arising in the near future is remote and have therefore determined not to recognise any deferred tax assets relating to unused tax losses.

The Company estimates it has accumulated income tax losses of $161,210 (2011: $59,579). The benefit of these losses and timing difference will only be obtained if:

• The Company derives future assessable income of a nature and an amount sufficient to enable the benefit from the deductions for the loss to be realised;

• The Company continues to comply with the conditions for deductibility imposed by law; and

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

9. CASH & CASH EQUIVALENTS

Cash at bank and in hand Short-term deposit	30-Jun-12 30-Jun-11
	$ $
	600,793 4,088,640 3,248,946 5,000
	3,849,739 4,093,640

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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Reconciliation of net loss after income tax to net cash flows used in operating activities

Net loss after income tax Adjustments for: Share-based payments (Refer Note 15) Change in assets and liabilities (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables Net cash flows used in operating activities	30-Jun-12 30-Jun-11
	$ $
	(208,194) (458,705) 23,272 427,955 26,031 (35,212) (27,103) 37,479
	(185,305) (28,483)

10. TRADE & OTHER RECEIVABLES

Other receivables	30-Jun-12 30-Jun-11
	$ $
	9,181 35,212
	9,181 35,212

(a) Trade receivables past due but not impaired

There were no trade receivables past due but not impaired.

(b) Fair value and credit risk

Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value.

The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above. Refer to note 17 for more information on the risk management policy of the Company and the credit quality of the Company’s trade receivables.

11. PLANT & EQUIPMENT

	30-Jun-12 30-Jun-11
	$ $
Office Equipment
At Cost Accumulated Depreciation Total office equipment	3,907 - (689) -
	3,218 -

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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	Office Equipment Total
	$ $
Movement during the year
Additions Depreciation expense Carrying amount at the end of the year	3,907 3,907 (689) (689)
	3,218 3,218

12. EXPLORATION & EVALUATION EXPENDITURE

Carrying amount of exploration & evaluation expenditure Movement during the year	30-Jun-12 30-Jun-11
	$ $
	168,780 114,091
	30-Jun-12 30-Jun-11
	$ $
	114,091 - 54,689 114,091
Balance at the beginning of the year
Additions
Carrying amount at the end of the year	168,780 114,091

The ultimate recoupment of costs carried forward for exploration expenditure phases is dependent on the successful development and commercial exploitation, or alternatively, the sale of the respective area of interest.

13. TRADE & OTHER PAYABLES

Trade and sundry creditors (a) Accruals (b)	30-Jun-12 30-Jun-11
	$ $ 876 13,152 9,500 24,327
	10,376 37,479

(a) Trade and sundry creditors are non-interest bearing and are predominantly settled on 30-day terms.

(b) Accruals are non-interest bearing and are predominantly settled on 30-day terms.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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14. CONTRIBUTED EQUITY

Share Capital

Fully paid ordinary shares	30-Jun-12 30-Jun-11
	$ No. $ No.
	4,236,214 30,400,000 4,236,214 29,900,000

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

At shareholders meetings, each ordinary share is entitled to one vote per share when a poll is called, otherwise each shareholder has one vote on a show of hands.

At 30 June 2012 there were 30,400,000 fully paid ordinary shares on issue with 24,454,812 shares freely tradeable and the balance of 5,945,188 under escrow. There are no preference shares on issue.

Movement in ordinary shares on issue

nt in ordinary shares on issue
			Issue price per
	$	No.	ordinary share
On incorporation(3 February 2011)	50,000	5,000,000	$0.01
Shares issued to seed investors	450,000	4,500,000	$0.10
Shares issued to vendor	80,000	400,000	$0.20
Initial public offering	4,000,000	20,000,000	$0.20
Share raisingcosts	(343,786)	-
Balance at 30 June 2011	4,236,214	29,900,000
Shares issued to Directors(a)	-	500,000
Balance at 30 June 2012	4,236,214	30,400,000

• (a) Shares issued to Directors under the Director Share Plan are recognised as shares issued at nil value. While these are issued shares for legal and taxation purposes, Accounting Standards require they be treated as options for accounting purposes. The value of the “options” granted, is the fair value calculated at the grant date using the Black- Scholes option pricing model (refer to note 18).

The 500,000 fully paid ordinary shares are currently under a Company-imposed trading lock, in accordance with the terms and conditions of the Director Plan. Refer to note 18 Share-Based Payments for further information. A full summary of the Director Plan was set out in the Notice of Meeting dated 17 October 2011.

Options

As at 30 June 2012, the following options over unissued ordinary shares were on issue:

Unlisted Options Directors Options Brokers Options (i)	Grant Issued Expiry Exercise No. Date Date Date Price$
	750,000 1/04/2011 1/04/2011 1/04/2014 $0.20 4,000,000 1/04/2011 31/05/2011 31/05/2014 $0.20 4,750,000

• (i) Mr De Souza received 500,000 unlisted Broker Options on 31 May 2011, prior to the Company listing on the ASX and prior to his appointment as Non-Executive Director. These options are escrowed until 23 June 2013 and are exercisable at $0.20 each, on or before 31 May 2014.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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15. RESERVES

Share-based Payment Reserve Balance at the beginning of the year Equity-settled share based payment transactions (i) Balance at 30 June 2012	30-Jun-12 30-Jun-11
	$ $ 427,955- 23,272 427,955
	451,227427,955

(i) For further detail on share-based payments refer to Note 18 Share-based Payments.

16. EARNINGS PER SHARE

The calculation of basic loss per share at 30 June 2012 was based on the loss attributable to ordinary shareholders of ($208,194) (2011: $458,705) and a weighted average number of ordinary shares outstanding during the financial year ended 30 June 2012 of 30,190,411 (2011: 15,207,945) calculated as follows:

a) Basic loss per share

Net loss attributable to ordinary equity holders of the Company ($) Weighted average number of ordinary shares for basis per share (No.) Continuing operations - Basic loss per share (cents)	30-Jun-12 30-Jun-11
	(208,194) (458,705) 30,190,41115,207,945
	(0.69) (3.02)

b) Diluted loss per share

Potential ordinary shares are not considered dilutive, thus diluted loss per share is the same as basic loss per share.

17. FINANCIAL RISK MANAGEMENT

The Company’s principal financial instruments consist of deposits with banks, receivables and payables. At the reporting date, the Company had the following mix of financial assets and liabilities.

Financial assets Cash & cash equivalents Trade & other receivables Financial Liabilities Trade & other payables	30-Jun-12 30-Jun-11
	$ $ 3,849,739 4,093,640 9,181 35,212
	3,858,920 4,128,852
	10,376 37,479
	10,376 37,479

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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Financial risk management

The main risks arising from the Company’s financial instruments are market risk (including equity price risk and interest rate risk), credit risk and liquidity risk. The Company uses different methods to measure and manage different types of risks to which it is exposed. Primary responsibility for identification and control of financial risks rests with the Board of Directors.

(a) Capital management

The Company’s capital includes share capital, reserves and accumulated losses. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to achieve this, the Company may issue new shares in order to meet its financial obligations. There are no externally imposed capital requirements.

(b) Equity price risk

Equity price risk represents the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all instruments in the market. Equity price risk is minimised through ensuring that investment activities are undertaken in accordance with the Board established mandate limits and investment strategies.

Equity securities price risk arises on the financial assets at fair value through profit or loss or held for trading. During the year the Company did not encounter any equity price risk exposure.

(c) Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Company is exposed to interest rate risk as it invests funds at both fixed and floating interest rates. The risk is managed by maintaining an appropriate mix between fixed and floating rate deposits. The Company has no borrowings.

Financial assets Cash & cash equivalents Net exposure	30-Jun-12 30-Jun-11 $ $ Weighted Average Interest Rate Weighted Average Interest Rate
	4.5% 3,849,739 5.0% 4,093,640
	3,849,739 4,093,640

(d) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financing loss from defaults. The Company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

The carrying amount of financial assets recorded in the financial statements, net of any provision for losses, represents the Company’s maximum exposure to credit risk. All receivables are due within 30 days and none are past due.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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(i) Cash

The Company’s primary banker is National Australia Bank. The Board considers the use of this financial institution, which has a short term rating of A- from Standards and Poors to be sufficient in the management of credit risk with regards to these funds.

(ii) Trade & other receivables

While the Company has policies in place to ensure that transactions with third parties have an appropriate credit history, the management of current and potential credit risk exposures is limited as far as is considered commercially appropriate. Up to the date of this report, the Board has placed no requirement for collateral on existing debtors.

Standard & Poors rating A-	30-Jun-12 30-Jun-11
	$ $
	3,849,739 4,093,640

(e) Liquidity risk management

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company has no borrowings.

Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements.

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The financial receivables and payables of the Company in the table below are due or payable within 30 days.

30-Jun-12	<6 months >6 - 12 months > 12 months Total Contractual Cash Flows Carrying Amount
Financial assets Cash & cash equivalents Non-interest bearing assets Financial liabilities Non-Interest bearing liabilities Net exposure	$ $ $ $ $
	3,849,739 - - 3,849,739 3,849,739 9,181 - - 9,181 9,181
	3,858,920 - - 3,858,920 3,858,920
	(10,376) - - (10,376) (10,376)
	(10,376) - - (10,376) (10,376)
	3,848,544 - - 3,848,544 3,848,544

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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30-Jun-11	<6 months >6 - 12 months > 12 months Total Contractual Cash Flows Carrying Amount
Financial assets Cash & cash equivalents Non-interest bearing assets Financial liabilities Non-Interest bearing liabilities Net exposure	$ $ $ $ $ 4,093,600 - - 4,093,600 4,093,600 35,212 - - 35,212 35,212
	4,128,812 - - 4,128,812 4,128,812
	(37,479) - - (37,479) (37,479)
	(37,479) - - (37,479) (37,479)
	4,091,333 - - 4,091,333 4,091,333

(f) Fair value measurements

The financial assets and liabilities of the Company are carried at fair value and are shown in the statement of financial position. At 30 June 2012 the Company has no tradeable financial instruments and therefore no valuation method for fair value measurement is required.

18. SHARE-BASED PAYMENTS

At the Annual General Meeting of shareholders, held 18 November 2011, shareholders approved the Conto Director Plan (“Director Plan”).

Under the Director Plan, on 1 December 2011, Robert Jewson and Francis De Souza were each issued 250,000 shares at $0.25 each and received a loan from the Company to fund the subscription price for those shares in accordance with the terms and conditions of the Director Plan. The Director loan will be non-recourse and the repayment term of each loan to the participating Directors is four (4) years. The loans are interest free. The shares are currently under a Company-imposed trading lock until such time as each Director has repaid the loan. A full summary of the Director Plan was set out in the Notice of Meeting dated 17 October 2011.

Accounting Standards require that shares issued under employee incentive share plans in conjunction with non-recourse loans are to be accounted for as options. As a result, the amounts receivable from Directors in relation to these loans have not been recognised in the financial statement. Shares issued under this Director Plan are recognised as shares issued at nil value (Refer to Note 14 Contributed Equity) with a share based payment expense recognised in the Statement of Comprehensive Income based on an estimated fair value using the Black-Scholes option pricing model (see below).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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The following table lists the inputs to the model used:

Number of shares granted Issue date Dividend yield Share price at date of grant Issue price Volatility Risk free interest rate Expiration period Expiry date Black & Scholes valuation	Director Shares
	500,000 01-Dec-11 0% $0.13 $0.25 66% 3.365% 4 years 01-Dec-15
	$0.047

Volatility was determined based on the volatility of the share price of the Company since it listed on the ASX.

a) Recognised share-based payment expense

The expense recognised under the Director Plan during the financial year was $23,272.

Set out below is a summary of the terms and conditions of the shares issued under the Director Plan:

• a. Each share entitles the holder to one share in the Company;

• b. Shares have been issued at $0.25 each on 1 December 2011;

• c. Each Eligible Participant has received a loan from the Company to fund the subscription price for those shares;

• d. The Loan Term and the manner for making such payments shall be determined by the Board and set out in the invitation;

• e. The Loan Term expires on 1 December 2015;

• f. An Eligible Participant may not sell or otherwise deal with a plan Share until the Loan Amount in respect of that plan Share has been repaid;

• g. An Eligible Participant must repay the Loan in full prior to expiry of the Loan Term;

• h. The Company shall have a lien over the Plan Shares in respect of which the Loan Amount is outstanding and the Company shall be entitled to sell those Plan Shares in accordance with the terms of the Plan;

• i. Loans must be made solely to the Eligible Participant and in the name of the Eligible Participant;

• j. Loans will be non-recourse and interest free;

• k. The Company will not meet any costs in relation to the sale of Plan Shares; and

• l. Any plan Shares issued under the Plan will rank equally in all respects (other than with respect to any restrictions on transfer specified in the plan or otherwise imposed by the Board).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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b) Summary of options granted during the year

The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options issued.

Outstanding at the beginning of the year Granted during the year Exercised during the year Lapsed/cancelled during the year Outstanding at year end Exercisable at year end	30-Jun-11 30-Jun-12
	Number WAEP Number WAEP
	4,750,000 $0.20 - - - - 4,750,000 $0.20 - - - - - - - -
	4,750,000 $0.20 4,750,000 $0.20 4,750,000 $0.20 4,750,000 $0.20

The outstanding balance as at 30 June 2012 is as follows:

Options Grant Issue Vesting Expiry Lapsed / date date date date cancelled Exercise price Options granted Options exercised	Options Grant Issue Vesting Expiry Lapsed / date date date date cancelled Exercise price Options granted Options exercised	Options Grant Issue Vesting Expiry Lapsed / date date date date cancelled Exercise price Options granted Options exercised	Options Grant Issue Vesting Expiry Lapsed / date date date date cancelled Exercise price Options granted Options exercised	Options Grant Issue Vesting Expiry Lapsed / date date date date cancelled Exercise price Options granted Options exercised	Options Grant Issue Vesting Expiry Lapsed / date date date date cancelled Exercise price Options granted Options exercised	Options Grant Issue Vesting Expiry Lapsed / date date date date cancelled Exercise price Options granted Options exercised	Options Grant Issue Vesting Expiry Lapsed / date date date date cancelled Exercise price Options granted Options exercised	Number of options at end ofperiod	Number of options at end ofperiod
								On issue Vested
Directors
1-Apr-11	1-Apr-11	-	1-Apr-14	$0.20	**750,000 **	-	-	750,000	750,000
Brokers
1-Apr-11	31-May-11	-	31-May-14	$0.20	**4,000,000 **	-	-	4,000,000	4,000,000

19. RELATED PARTY DISCLOSURE

(a) Key management personnel

Disclosures relating to directors and executives are set out in note 20 Key Management Personnel Disclosures.

(b) Transactions and balances with related parties

Disclosures relating to transactions and balances with related parties are set out in note 20 Key Management Personnel Disclosures.

(c) Equity Interests in related parties

There are no ordinary shares held in related entities.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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20. KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Key management personnel

The following persons were key management personnel of the Company during the financial year:

Directors:

• Mike Ralston (Non-Executive Chairman) (appointed 3 February 2011)

• Robert Jewson (Non-Executive Technical Director) (appointed 1 September 2011)

• Francis De Souza (Non-Executive Director) (appointed 19 September 2011)

• Simon MacKinnon (Non-Executive Director) (appointed 3 February 2011; resigned 1 September 2011)

• John Ciganek (Non-Executive Director) (appointed 3 February 2011; resigned 19 September 2011)

No other key management personnel were noted for the financial year ended 30 June 2012.

Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company. Key management personnel comprise the Directors of the Company and Executives of the Company. The performance of the Company depends upon the quality of its key management personnel. To prosper the Company must attract, motivate and retain appropriately skilled directors and executives.

The Company’s remuneration policy is structured so to ensure the remuneration package properly reflects the person’s duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality.

Details of the remuneration of the Directors of the Company up to 30 June 2012 are set out in the table below. There are no amounts outstanding at year end.

	Short-term employee benefits	Post- employment benefits	Share- based payments	Total $	Percentage of remuneration consisting of options for the year %
30-Jun-12	Salary & fees Cash bonus Non- monetary Other (iv) $ $ $ $	Super- annuation $	Options & rights (v) $
Directors (i) Mr Ralston Mr De Souza (ii) Mr Jewson (ii) Mr MacKinnon (iii) Mr Ciganek (iii) Sub-total None Sub-total Total Other Key Management	36,000 - - - 29,500 - - 4,500 31,000 - - 11,150 5,000 - - - 8,333 - - -	- - - - -	- 11,636 11,636 - -	36,000 45,636 53,786 5,000 8,333	- 25% 22% - - -
	109,833 - - 15,650	-	23,272	148,755
	- - - -	-	-	-
	- - - -	-	-	-
	109,833 - - 15,650	-	23,272	148,755

(i) Directors Fees are paid monthly in arrears from commencement of the Directors’ appointment date.

(ii) Messrs Jewson and De Souza were appointed on 1 September 2011 and 19 September 2011, respectively.

(iii) Messrs MacKinnon and Ciganek resigned 1 September 2011 and 19 September 2011, respectively.

(iv) For more information on Other fees paid to Messrs De Souza and Jewson refer to section (c) below: Material contracts with related parties.

• (v) Messrs Jewson and De Souza participated in the Director Plan and were each issued 250,000 shares at $0.25 each. For further details refer to Note 18 Share Based Payments.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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Details of the remuneration of the Directors of the Company up to 30 June 2011 are set out below:

	Short-term employee benefits	Post- employment benefits	Share- based payments	Total $	Percentage of remuneration consisting of options for the year %
30-Jun-11	Salary & fees Cash bonus Non- monetary Other $ $ $ $	Super- annuation $	Options & rights $
None Sub-total Total Other Key Management Directors Mr Ralston (i) Mr MacKinnon (ii) Mr Ciganek (iii) Sub-total	1,000 - - - 833 - - - 833 - - -	- - -	22,046 22,046 22,046	23,046 22,879 22,879	96% 96% 96% -
	2,666 - - -	-	66,138	68,804
	- - - -	-	-	-
	- - - -	-	-	-
	2,666 - - -	-	66,138	68,804

(i) Mike Ralston (Non-Executive Chairman) (appointed on 3 February 2011).

(ii) Simon MacKinnon (Non-Executive Director) (appointed on 3 February 2011; resigned 1 September 2011).

(iii) John Ciganek (Non-Executive Director) (appointed on 3 February 2011).

Compensation by category Short-term employee benefits Share-based paymnents (note 18)	30-Jun-12 30-Jun-11
	$ $ 125,483 2,666 23,272 66,138
	148,755 68,804

(b) Equity instruments disclosures relating to key management personnel

(i) Options provided as remuneration and shares issued on exercise of such options

In the 2012 financial year no options were provided to key management personnel as remuneration.

In the 2011 financial year 750,000 options were provided to key management personnel as remuneration.

(ii) Shares issued on exercise of compensation options

There are no shares issued on exercise of compensation options.

(iii) Option holdings

Details of options held directly, indirectly or beneficially by key management personnel and their related parties at any time during the financial year ended 30 June 2012 are set out below:

Company Directors and Related Parties	Opening Balance Received as Remuneration Net Change Other(i) Closing Balance Not vested and not exercisable Vested and exercisable
Mr Ralston Mr De Souza Mr Jewson Mr MacKinnon Mr Ciganek	250,000 - - 250,000 250,000 - 500,000 - - 500,000 500,000 - - - - - - - 250,000 - (250,000) - - - 250,000 -(250,000) - - -
	1,250,000 -(500,000) 750,000 750,000 -

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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(i) Messrs MacKinnon and Ciganek resigned on 1 September 2011 and 19 September 2011, respectively. Details of options held directly, indirectly or beneficially by key management personnel and their related parties at any time during the financial year ended 30 June 2011 are set out below:

Company Directors and Related Parties	Opening Balance Received as Remuneration Net Change Other Closing Balance Not vested and not exercisable Vested and exercisable
Mr Ralston (i) Mr MacKinnon (ii) Mr Ciganek (iii) Mr De Souza (iv)	- 250,000 - 250,000 250,000 - - 250,000 - 250,000 250,000 - - 250,000 - 250,000 250,000 - - - 500,000 500,000 500,000 -
	- 750,000 500,000 1,250,000 1,250,000 -

(i) Mike Ralston (Non-Executive Chairman) (appointed on 3 February 2011).

(ii) Simon MacKinnon (Non-Executive Director) (appointed on 3 February 2011; resigned 1 September 2011).

(iii) John Ciganek (Non-Executive Director) (appointed on 3 February 2011).

(iv) Mr De Souza was not a Director of the Company during the financial year ended 30 June 2011. However, Mr De Souza did acquire 500,000 unlisted Broker Options on 31 May 2011, prior to the Company listing on the ASX and prior to his appointment as Non-Executive Director. These options are escrowed until 23 June 2013 and are exercisable at $0.20 each, on or before 31 May 2014.

(iv) Shareholdings

Details of shares held directly, indirectly or beneficially by key management personnel and their related parties at any time during the financial year ended 30 June 2012 are set out below:

Company Directors and Related Parties	Opening Balance Received as Remuneration Received During Year on Exercise of Options Net Change Other Closing Balance
Mr Ralston Mr Jewson (i) Mr De Souza (ii) Mr MacKinnon (iii) Mr Ciganek (iii)	100,000 - - - 100,000 - 250,000 - 50,000 300,000 - 250,000 - 500,000 750,000 100,000 - - (100,000) -
	- - - - -
	200,000 500,000 - 450,000 1,150,000

(i) Mr Jewson acquired 250,000 shares under the Conto Director Plan with the balance being acquired on market.

(ii) Mr De Souza acquired 250,000 shares under the Conto Director Plan with the balance being received on incorporation.

(iii) Messrs MacKinnon and Ciganek resigned as Non-Executive Directors on 1 September 2011 and 19 September 2011, respectively.

Details of shares held directly, indirectly or beneficially by key management personnel and their related parties at any time during the financial year ended 30 June 2011 are set out below:

Company Directors and Related Parties	Opening Balance Received as Remuneration Received During Year on Exercise of Options Net Change Other Closing Balance
Mr Ralston (i) Mr MacKinnon (ii) Mr Ciganek (iii)	- - - 100,000 100,000 - - - 100,000 100,000 - - - - -
	- - - 200,000 200,000

(i) Mike Ralston (Non-Executive Chairman) (appointed on 3 February 2011).

(ii) Simon MacKinnon (Non-Executive Director) (appointed on 3 February 2011; resigned 1 September 2011).

• (iii) John Ciganek (Non-Executive Director) (appointed on 3 February 2011; resigned 19 September 2011).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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(c) Material contracts

(i) Directors’ Deeds of Indemnity

With every Director appointment, the Company enters into a deed of indemnity, insurance and access with each of its Directors. During the 2012 financial year the Company entered into of Deed of Indemnity with Mr Jewson and Mr De Souza, with effect from their appointment dates. Under these deeds, the Company agrees to indemnify each Director to the extent permitted by the Corporations Act (2001) against any liability arising as a result of the Director acting in the capacity as a Director of the Company. The Company is also required to maintain insurance policies for the benefit of the Directors and must also allow the Directors to inspect Company documents in certain circumstances.

(ii) Loans to Directors

On 18 November 2011, Shareholders approved the implementation of the “Conto Director Share Plan” (Director Plan). An Eligible Participant who is invited to subscribe for Director Plan shares may also be invited to apply for a loan up to the amount payable in respect of the Director Plan shares accepted by the Eligible Participant (Director Loan).

On 1 December 2011, Robert Jewson and Francis De Souza were issued 250,000 Director Shares each and received a Director Loan from the Company to fund the subscription price for those Director Shares of $62,500 each in accordance with the terms and conditions of the Director Plan. The amounts receivable from Directors in relation to these loans have not been recognised in the financial statements as the Director loan is non-recourse and therefore, accounted for as a share-based payment expense (refer to Note 15 Reserves) and shares issued at nil value (refer to Note 14 Contributed Equity).

The Director Loans are non-recourse and the repayment term of each loan to the participating Directors is four (4) years. The loans are interest free. A full summary of the Director Plan was set out in the Notice of Meeting dated 17 October 2011.

(iii) Other Fees Paid to Directors

– Consultancy agreement Geological Resources Solutions Pty Ltd

On 5 September 2011, the Company entered into a consultancy agreement (“Geological Agreement”) with Geological Resources Solutions Pty Ltd (“Geological Resources”) to provide geological consultancy services to the Company. Geological Resources was founded by Mr Robert Jewson, a company in which he is the sole director and has a financial interest.

The Company agreed to pay Geological Resources according to the following arrangement:

• Consultancy Services at an hourly rate of $100 per hour plus disbursements; and

• Field work services at a daily rate of $1,500 plus disbursements.

During the financial year Mr Jewson received consultancy fees totalling $11,150, this was recognised as an expense to the Company. There are no further amounts outstanding at year end.

Services provided are invoiced to the Company and paid monthly in arrears. The minimum term of the Geological Agreement is 12 months unless otherwise agreed. The Geological Agreement may be terminated by either party giving one month’s written notice or immediately upon a material breach, gross negligence or wilful recklessness by either party.

The Company is required to take out and maintain public liability for the contractor provided by Geological Resources.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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– Consultancy agreement Baga River Pty Ltd

On 12 January 2012, the Company entered into a consultancy agreement (“Agreement”) with Baga River Pty Ltd (“Baga River”) to provide business development and project assessment services to the Company. Baga River was founded by Mr Francis De Souza, a company in which he is the sole director and has a financial interest.

The Company agreed to pay Baga River according to the following arrangement:

• Consultancy Services at an hourly rate of $100 per hour plus disbursements; and

• Field work services at a daily rate of $1,500 plus disbursements.

During the financial year Mr De Souza received consultancy fees totalling $4,500, this was recognised as an expense to the Company. There are no further amounts outstanding at year end.

Services provided are invoiced to the Company and paid monthly in arrears. The minimum term of the Agreement is 12 months unless otherwise agreed. The Agreement may be terminated by either party giving one month’s written notice or immediately upon a material breach, gross negligence or wilful recklessness by either party.

The Company is required to take out and maintain public liability for the contractor provided by Baga River.

(iv) Other transactions with key management personnel including their related parties

There were no other transactions made to key management personnel, including their related parties during the financial year ended 30 June 2012.

21. COMMITMENTS

Leasing Agreements

The Company has a commitment to the following expenditure:

Within one year After one year but not more than five years After more than five years Total minimum commitment	30-Jun-12 30-Jun-11
	$ $
	31,500 - - - - -
	31,500 -

The commitment above relates to the following leasing agreements:

Adamantium Holdings Pty Ltd as Trustee for the Wolf Property Unit Trust

On the 30 April 2012, the Company entered into a rental and administration agreement (“Rental Agreement”) with Adamantium Holdings Pty Ltd as Trustee for the Wolf Property Unit Trust (“Adamantium”) to provide premises and administrative services to the Company.

The Company has agreed to pay Adamantium in accordance with the following arrangement, commencing from 1 April 2012:

• rental and administration services are charged at $3,500 per month; and

• services are payable three months in advance in quarterly instalments.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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The minimum term of the Rental Agreement is 12 months with semi-annual rolls and extensions, and a minimum cancellation notification period of three months.

Exploration & Evaluation Commitments

Within one year After one year but not more than five years After more than five years Total minimum commitment	30-Jun-12 30-Jun-11
	$ $
	64,171 - 1,001 - - -
	65,172 -

The commitments above are discretionary and subject to mining expenditure, they relate to the exploration tenements granted to, and under application by, the Company.

22. SUBSEQUENT EVENTS

The Directors are not aware of any matters or circumstances at the date of the report, other than those referred to in this report or the financial statements or notes thereto, that has significantly affected or may significantly affect the operations, the results of operations or the state of affairs of the Company in subsequent financial years.

23. CONTINGENT LIABILITIES

On 16 February 2011, the Company entered into an Option and Farm-in Agreement with Sammy Resources Pty Ltd (“Sammy Resources”), pursuant to which the Company has a right to earn an 80% interest in the Cardinia Bore Project subject to 1,000m of RC drilling being complete within 2 years of the Company listing on the ASX, this being 23 June 2013. An amount of $120,000 has been budgeted to complete this drilling expenditure.

No other contingent liabilities were noted for the Company for the financial year ended 30 June 2012.

24. DIVIDEND

No dividend has been paid during the financial year and no dividend is recommended for the financial year.

25. REMUNERATION OF AUDITORS

25. REMUNERATION OF AUDITORS
Amounts received or due and receivable by Pitcher Partners Corporate & Audit (WA) Pty Ltd for: (i) An audit or review of the financial report of the entity (ii) Other services in relation to the entity - Independent Accountant's Report (iii) Tax services Total auditor remuneration	30-Jun-12 30-Jun-11
	$ $
	25,885 15,000 - 7,003 - -
	25,885 22,003

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DIRECTORS’ DECLARATION FOR THE YEAR ENDED 30 JUNE 2012

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In the Directors’ opinion:

• a) the financial statements and notes set out on pages 25 to 53 are in accordance with the Corporations Act 2001, including:

• (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and

• (ii) giving a true and fair view of the Company’s financial position as at 30 June 2012 and of its performance for the financial year ended on that date, and

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

Note 2(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

This declaration is made in accordance with a resolution of the directors.

On behalf of the Board of Directors

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Mike Ralston Non-Executive Chairman Perth, Western Australia Monday, 13 August 2012

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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONTO RESOURCES LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Conto Resources Limited (the “Company”), which comprises the statement of financial position as at 30 June 2012, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration.

Directors' Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards .

Auditor's Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Independence

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

• 55 -

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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONTO RESOURCES LIMITED

Opinion

In our opinion:

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

• (i) giving a true and fair view of the company's financial position as at 30 June 2012 and of its performance for the year ended on that date; and

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

• (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 2 to 16 of the directors' report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

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

PITCHER PARTNERS CORPORATE & AUDIT (WA) PTY LTD

MARK ENGLISH Executive Director 13 August 2012

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SHAREHOLDER INFORMATION

The following additional information was applicable as at 2 August 2012.

1. Fully paid ordinary shares

• There are a total of 30,400,000 ordinary fully paid shares on issue, 24,454,812 of which are listed on the ASX, with the balance of 5,945,188 being restricted securities.

• The number of holders of fully paid ordinary shares is 387.

• Holders of fully paid ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Company.

• There are no shares subject to voluntary escrow.

• There are no preference shares on issue.

• Distribution of fully paid ordinary shareholders is as follows:

Distribution of Holders	Number of Fully Paid Ordinary Shareholders
1 - 1,000	51
1,001 - 5,000	1
5,001 - 10,000	68
10,001 - 100,000	206
100,001 and above	61

2. Holders of non-marketable parcels

Holders of non-marketable parcels are deemed to be those who shareholding is valued at less than $500.

• There are 52 shareholders who hold less than a marketable parcel of shares.

• The number of fully paid ordinary shareholdings held in less than marketable parcels is 4,675.

3. Substantial shareholders

As at report date there are no substantial shareholders.

4. Share buy-backs

There is no current on-market buy-back scheme.

5. Epic Director Share Plan

On 18 November 2011, Shareholders approved the implementation of the “Conto Director Share Plan” (Director Plan). An Eligible Participant who is invited to subscribe for Director Plan shares may also be invited to apply for a non-recourse loan up to the amount payable in respect of the shares accepted by the Eligible Participant.

There are currently 500,000 shares that have been issued under this Director Plan with the subscription price having been funded by the Company for these shares in accordance with the terms and conditions of the Director Plan. These shares are currently under a Company-imposed trading lock until such a time as the loan has been repaid.

While these are issued shares for legal and taxation purposes, Accounting Standards require they be recognised as shares issued at nil value and accounted for as options with a share-based payment expense to the Company. The repayment term of each loan to the Eligible Participant is four (4) years. The loans are interest free. A full summary of the Director Plan was set out in the Notice of Meeting dated 17 October 2011.

6. Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes (at present there are none) at general meetings of shareholders or classes of shareholders:

(a) each shareholder is entitled to vote and may vote in person or by proxy, attorney or representative;

(b) on a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a shareholder has one vote; and

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SHAREHOLDER INFORMATION

(c) on a poll, every person present who is a shareholder or a proxy, attorney or representative of a shareholder shall, in respect of each fully paid share held, or in respect of which he/she has appointed a proxy, attorney or representative, is entitled to one vote per share held.

7. Top 20 Shareholders

The top 20 largest fully paid ordinary shareholders together held 41.55% of the securities in this class and are listed below:

#	Holder Name	Quantity	% Holding
1	HAWTHORN CAPITAL PL	1,500,000	4.93%
2	BUZZ CAPITAL PL	1,125,000	3.70%
3	CROSSROADS AUST PL	1,000,000	3.29%
4	BENEFICO PL	1,000,000	3.29%
5	AH SUPER PL	941,750	3.10%
6	BRIJOHN NOM PL	861,875	2.84%
7	DIAS EMANUEL JOSE F	859,610	2.83%
8	SOLEQUEST PL	610,620	2.01%
9	BRIJOHN NOM PL	531,875	1.75%
10	BAGA RIVER PL	500,000	1.64%
11	PADMORE GARY	462,750	1.52%
12	PHEAKES PL	405,000	1.33%
13	SAMMY RES PL	400,000	1.32%
14	WESTORIA RESOURCE INV	396,750	1.31%
15	CENTAURUS LTD	396,750	1.31%
16	TT NICHOLLS PL	350,000	1.15%
17	JAYVEE INV PL	342,190	1.13%
18	SUBURBAN HLDGS PL	340,630	1.12%
19	GURNEY CAP NOM PL	300,000	0.99%
20	CHANCERY HLDGS PL	300,000	0.99%
12,624,800 41.55%

8. Options

The following options over unissued ordinary shares are on issue:

Unlisted Options Directors Options Brokers Options	Issued Expiry Exercise No. Date Date Price$
	750,000 1/04/2011 1/04/2014 $0.20 4,000,000 31/05/2011 31/05/2014 $0.20 4,750,000

The unissued ordinary shares of Epic under option carry no dividend or voting rights. The grant date equals the vesting date for all options. When exercisable, each option is convertible into one ordinary share of the Company.

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