DEVEX RESOURCES LIMITED - Annual Report 2007

URANIUM EQUITIES LIMITED

ABN 74 009 799 553

Annual Financial Report 30 June 2007

Uranium Equities Limited and its controlled entities Corporate directory

Directors

T M Clifton - Chairman

M S Chalmers - Managing Director D A Brunt - Executive Director A R Bantock - Executive Director T R B Goyder - Non-Executive Director A W Kiernan - Non-Executive Director

Chief Financial Officer and Company Secretary

L R Curyer

Principal Place of Business & Registered Office

Head & Registered Office:

Level 6 West, 50 Grenfell Street ADELAIDE SA 5000 Tel: (08) 8110 0700 Fax: (08) 8110 0777 Web: www.uel.com.au Email: [email protected]

Perth Office:

Level 2, 1292 Hay Street WEST PERTH WA 6005 Tel: (08) 9322 3990 Fax: (08) 9322 5800

Auditors

KPMG 151 Pirie Street Adelaide SA 5000

Solicitors

Christensen Vaughan Level 1 16 St George's Terrace Perth WA 6000

Share Registry

Computershare Investor Services Pty Limited Level 2 Reserve Bank Building 45 St Georges Terrace PERTH WA 6000 Tel: 1300 557 010

Home Exchange

Australian Securities Exchange Limited Exchange Plaza 2 The Esplanade PERTH WA 6000

ASX Code

Share Code: UEQ

Uranium Equities Limited and its controlled entities Contents

	Page
Directors’ report		3
Lead auditors’ independence declaration		15
Income statements		16
Statements of recognised income and expense		17
Balance sheets		18
Statements of cash flows		19
Notes to the consolidated financial statements		20
Directors’ declaration		55
Independent audit report		56
Corporate governance statement		58
ASX additional information		68

Uranium Equities Limited and its controlled entities Directors’ report

The directors present their report together with the financial report of Uranium Equities Limited (‘Uranium Equities’ or ‘the Company’) and of the consolidated entity, being the Company and its controlled entities, for the financial year ended 30 June 2007 and the auditor’s report thereon.

1. Directors

The directors of the Company at any time during or since the end of the financial year are:

Name, qualifications Experience, special responsibilities and other directorships and independence status T M Clifton Tim is a Geologist with over 35 years experience in the Australian mining BSc (Hons), B. Juris LLB, industry at both a technical and corporate level. FAUSIMM Non-Executive Chairman

M S Chalmers Mark is a Mining Engineer who has extensive uranium development and mining BSc, PE, SME experience in Australia and internationally. Until 2005 Mark was Senior Vice Managing Director President of Heathgate Resources Pty Ltd and was responsible for the Beverley in-situ leach (ISL) uranium project, one of the largest producing ISL uranium mines in the world, in South Australia. He has been involved with over a dozen uranium projects during his 30 year career. Over the past year, Mark has Chaired the Uranium Industry Framework (UIF) Implementation Group, an Australian Federal Government initiative established by The Honourable Ian Macfarlane, the Australian Federal Minister for Industry, Tourism and Resources.

D A Brunt David is a Geologist with over 30 years of Australian and international experience FAusIMM, BSc Hons MBA in the uranium industry. David was formerly Vice President of Exploration and Executive Director Development of Heathgate Resources Pty Ltd. He was actively involved with the Beverley ISL uranium project from 1990 until 2006. David was also codiscoverer of the Honeymoon deposit and leader of the team that discovered the South Australian Beverley Four Mile and Beverley Deep South uranium deposits.

A R Bantock	Andrew has extensive professional, corporate and commercial experience in the
B.Com, ACA	resources, resource contracting and infrastructure sectors. He is currently
Executive Director	Executive Chairman of Chalice Gold Mines Limited, Managing Director of Liontown
	Resources Limited and is a Director of Water Corporation, Western Australia's
	water utility.

T R B Goyder	Tim has over 30 years experience in the resource industry. He has been involved
Non-Executive Director	in the formation and management of a number of publicly-listed companies and
	is currently Chairman of Liontown Resources Limited and a Director of Chalice
	Gold Mines Limited. Until January 2007, Tim was proprietor of Grimwood Davies
	Pty Ltd, a leading Australian drilling contractor.
A W Kiernan	Tony is a Solicitor with considerable experience in the administration and
LLB	operation of listed public companies. He practices extensively in the areas of
Non-Executive Director	media, resources and information technology law. In addition to his legal
(Independent)	practice, Tony provides commercial and corporate advice to various entities. He
	is Chairman of Anglicare (WA), BC Iron Limited and Solbec Pharmaceuticals
	Limited. He ia also a Director of Liontown Resources Limited, Chalice Gold Mines
	Ltd, Hailian International Limited and North Queensland Metals Limited.

Uranium Equities Limited and its controlled entities Directors’ report

2. Chief Financial Officer and Company secretary

L R Curyer

L R Curyer Leigh has 15 years professional and corporate experience in the resources B A (Acc), ACA and finance industry sectors in Australia and internationally. Previous to (Chief Financial Officer joining Uranium Equities Limited he was Chief Financial Officer and Appointed 15 January Company Secretary for Southern Cross Resources Inc (TSX listed) and Vice 2007) President, Corporate Development - Australia & Asia after the merger of (Company Secretary that Company with Aflease Gold & Uranium Resources in 2006. Leigh has Appointed 16 May 2007) extensive finance and administration, international capital raising and corporate development experience.

R K Hacker

B.Com, ACA, ACIS (Company Secretary Resigned 16 May 2007)

3. Directors’ meetings

The number of directors’ meetings and the number of meetings attended by each of the directors of the Company during the financial year are:

		Number of
	Number of	meetings held
Director	board meetings	during the time the director held
	attended	office during the
		year
T M Clifton	7	7
M S Chalmers	7	7
D A Brunt	6	7
A R Bantock	7	7
T R B Goyder	7	7
A W Kiernan	6	7

The company has established an Audit Committee of which Mark Chalmers, Andrew Bantock and Anthony Kiernan are members. Meetings take place periodically to approve financial statement releases.

4. Principal activities

The principal activities of the consolidated entity during the course of the financial year were mineral exploration and evaluation.

Uranium Equities Limited and its controlled entities Directors’ report

5. Review and results of operations

During the financial year:

a capital raising of $23 million to fund the Company’s ongoing exploration and development activities was successfully completed.
a joint venture with Cameco Australia Pty Ltd, the Australian subsidiary of Cameco Corporation, the world’s largest uranium producer, was entered into incorporating two highly prospective land packages surrounding the historic high grade Nabarlek uranium deposit in the Alligator Rivers Region of Northern Territory.
an agreement was entered into to secure up to 90% in Urtek LLC, a company actively engaged in the development of new technologies to extract uranium from phosphoric acid.
a corporate re-organisation, as approved by shareholders on 8 May 2006 was finalised with the successful de-merger of Liontown Resources Limited (formerly Base Resources Limited) in December 2006.
the consolidated entity made a loss of $4,861,974 (2006: $5,105,267).

As at 30 June 2007 the Consolidated Entity held cash and cash equivalents of $23.1 million (2006: $4.4 million)

6. Significant changes in the state of affairs

There have been no significant changes in the state of affairs of the Company other than those detailed in section 5 ‘Review and results of operations’.

7. Remuneration report

This report outlines remuneration arrangements in place for directors and executives of Uranium Equities.

7.1 Principles of compensation – audited

The broad remuneration policy of the Company is to ensure that remuneration levels for executive directors, secretaries and senior managers are set at competitive levels to attract and retain appropriately qualified and experienced personnel. Remuneration packages include a combination of fixed remuneration and long term incentives.

Fixed compensation

Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any FBT charges related to employee benefits, including motor vehicles), as well as employer contributions to superannuation funds.

Remuneration levels are reviewed annually through a process that considers the person’s responsibilities, expertise, duties and personal performance.

Long-term incentives

Options may be issued under the Employee and Consultants Option Plan to directors (subject to shareholder approval), employees and consultants of the Company and must be exercised within 3 months of termination. The ability to exercise the options is usually based on the option holder remaining with the Company for at least one year. Other than the vesting period, typically there is no performance hurdle required to be achieved by the Company to enable the options to be exercised.

Uranium Equities Limited and its controlled entities Directors’ report

The Company, during the year ended 30 June 2006, issued partly paid performance shares to two of its key executives, Mark Chalmers and David Brunt, as part of the acquisition of Uranium Equity Limited (now named Uranium Services Pty Ltd). Whilst the issue of these shares was in consideration for the acquisition of Uranium Equity Limited, Mark Chalmers and David Brunt were part-vendors of the acquired entity and have since been appointed as Directors of Uranium Equities. Interpretation of Australian Equivalents to International Financial Reporting Standards required this type of arrangement to be accounted for as a component of remuneration under AASB 2.

These performance shares were only capable of conversion to ordinary shares on achievement of performance hurdles dependent on the Company’s Australian Stock Exchange (‘ASX’) share price and the employees’ contracts being in full force and effect, thus aligning the interests of shareholders and management. The partly paid performance shares were issued at $0.15, credited as paid to $0.075 with $0.075 to pay on conversion to ordinary shares. All performance hurdles have now been met in respect of these 9,327,500 partly paid performance shares with future conversion of the same now only subject to Messrs Chalmers and Brunt continuing to meet their service commitments of their employment contracts.

Performance Related Compensation

The Company currently has no formal performance related remuneration policy which governs the payment of annual cash bonuses upon meeting pre-determined performance targets. However, the Board may consider performance related remuneration in the form of cash or share options when they consider these to be warranted.

Employment contracts

The employment contracts of the Managing Director, Mark Chalmers and Executive Director, David Brunt were acquired as part of the acquisition of Uranium Equity Limited (now named Uranium Services Pty Ltd), a company controlled by Messrs Chalmers and Brunt.

The following table sets out the contractual provisions of executive directors and senior managers.

Name and Job Title	Contract Duration	Notice Period	Termination Provision
Executive Directors
M S Chalmers	Fixed term contract	No notice period	No termination payment in the
Managing Director	expiring 1 March	provision	event of misconduct.
	2009 subject to
	extension		In the event of a takeover where
			Mark Chalmers is not offered the
			same terms and conditions, 12
			months salary is payable.
			For all other events resulting in
			termination, the balance of the fixed
			term contract is payable.
D A Brunt	Fixed term contract	No notice period	No termination payment in the
Executive Director	expiring 1 March	provision	event of misconduct.
	2009 subject to
	extension		In the event of a takeover where
			David Brunt is not offered the same
			terms and conditions, 12 months
			salary is payable.
			For all other events resulting in
			termination, the balance of the fixed
			term contract is payable.
A R Bantock	Unlimited	3 months by the	Other than for misconduct, the
Executive Director		Company and the	Company must pay Andrew Bantock
		employee	$225,000 to terminate his contract.

Uranium Equities Limited and its controlled entities Directors’ report

L R Curyer Unlimited 1 month by the Other than for misconduct, the Chief Financial Officer Company and the Company must pay Leigh Curyer 6 and Company Secretary employee months salary to terminate his contract.

Non-executive directors

The Board recognises the importance of attracting and retaining talented non-executive directors and aims to remunerate these directors in line with fees paid to directors of companies in the mining and exploration industry of a similar size and complexity.

Total fees for all non-executive directors, last voted upon by shareholders at the 2006 Annual General Meeting (‘AGM’) is not to exceed $200,000 per annum.

Uranium Equities Limited and its controlled entities Directors’ report

7.2 Directors’ and executive officers’ remuneration (Company and Consolidated) – audited

Details of the nature and amount of each major element of remuneration of each director of the Company and each of the named Company executives who receive the highest remuneration and other key management personnel are:

					Post-
					employment				Value	of
		Short-term payments			payments	Share-based payments			options	and
Consolidated and the Company Key Management Personnel		Salary & fees $	Non- monetary benefits $	Total $	Super- annuation benefits $	Options and rights (A) $	Performance shares (B) $	Total $	performance shares as proportion of remuneration %
Directors
T M Clifton	2007	-	2,629	2,629	60,000	-	-	62,629		-
	2006	8,138	803	8,941	732	-	-	9,674		-
M S Chalmers	2007	321,101	2,629	323,730	28,899	-	349,463	702,092		50%
	2006	57,577	803	58,380	4,817	-	50,744	113,940		45%
D A Brunt	2007	194,887	2,629	197,516	105,113	-	349,463	652,092		54%
	2006	26,394	803	27,197	25,734	-	50,744	103,675		49%
A R Bantock	2007	68,808	2,629	71,437	6,192	-	-	77,629		-
	2006	171,066	5,528	176,594	15,997	130,759	-	323,351		40%
T R B Goyder	2007	45,872	2,629	48,501	4,128	-	-	52,629		-
	2006	46,959	5,528	52,487	4,226	-	-	56,713		-
A W Kiernan	2007	12,000	2,629	14,629	13,000			27,629
	2006	12,000	5,528	17,528	13,000	-	-	30,528		-
Executives
R K Hacker (Company Secretary)(1)	2007	-	1,476	1,476	-	4,432	-	5,908		75%
(appointed 29 November 2005 and resigned	2006	59,841	3,226	63,067	5,385	4,944	-	70,396		7%
16 May 2007)
L R Curyer (Chief Financial Officer – appointed	2007	98,044	1,153	99,197	8,824	51,966	-	159,987		32%
15 January 2007 / Company Secretary –
appointed 16 May 2007)
		-	-	-	-	-	-	-		-
Total compensation	2007	740,712	18,403	759,115	226,156	56,398	698,926	1,740,595
	2006	513,314	38,979	552,293	100,742	164,834	101,488	919,357

(1) During 2007, company secretarial services were provided by Chalice Gold Mines Limited as disclosed in Note 28

Uranium Equities Limited and its controlled entities Directors’ report

Notes in relation to the table of directors’ and executive officers’ remuneration

A. The fair value of the options is calculated at the date of grant using a binomial option-pricing model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed is the portion of the fair value of the options allocated to this reporting period. In valuing the options, market conditions have been taken into account. The following factors and assumptions were used in determining the fair value of options granted to key management personnel during the year:

			Fair		Price of
			value		ordinary		Risk free
	Grant		per	Exercise	shares on	Expected	interest	Dividend
	Date	Expiry Date	option	price	grant date	volatility	rate	yield
1	December 2006	1 December 2011	$0.28	$0.55	$0.44	80%	5.8%	Nil
	22 June 2007	22 June 2012	$0.31	$0.60	$0.48	80%	6.06%	Nil

B. The fair value of the partly paid performance shares are calculated at the date of grant using a Monte Carlo Simulation valuation model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed is the portion of the fair value of the partly paid performance shares allocated to this reporting period. In valuing these shares, market conditions have been taken into account. The following factors and assumptions were used in determining the fair value of the partly paid performance shares granted to key management personnel during the year:

			Fair value		Adjusted
			per partly		Price of
			paid	Amount to	ordinary		Risk free
	Grant		performance	be paid up	shares on	Expected	interest
	Date	Expiry Date	share	per share	grant date	volatility	rate	Dividend yield
8	May 2006	17 May 2016	$0.225(1)	$0.075	$0.285(2)	100%	5.61%	Nil

(1) The grant date under AASB 2 ‘Share based Payments’ is deemed to be 8 May 2006, which was the date that shareholder approval was obtained to approve the acquisition of Uranium Equity Limited.
(2) The closing share price on 8 May 2006 was adjusted to take account of actual and estimated values achieved in the distribution of Chalice Gold Mines Limited shares and the directors’ estimate of underlying value for the future distribution of Liontown Resources Limited shares.

Details of performance related remuneration

Details of the consolidated entity’s policy in relation to the proportion of remuneration that is performance related is discussed in section 7.1 of this report.

Uranium Equities Limited and its controlled entities Directors’ report

7.3 Equity instruments

7.3.1 Options and rights over equity instruments granted as compensation - audited

Details on options over ordinary shares and partly paid performance shares in the Company that were granted as compensation to each key management person during the reporting period and details on options and partly paid performance shares that vested during the reporting period are as follows:

				Fair
	Number of			value
	options		Number of	per
	granted		options	option
	during		vested during	at grant	Exercise	Expiry date
	2007	Grant date	2007	date ($)	Price ($)
Executive
L R Curyer	400,000	1 December 2006	-	$0.28	$0.55	1 December 2011
L R Curyer	600,000	22 June 2007	-	$0.31	$0.60	21 June 2012

Vesting periods for the options granted above are 50% on the first and second anniversaries of the grant dates.

				Fair
	Number of			value
	options		Number of	per
	granted		options	option
	during		vested during	at grant	Exercise	Expiry date
	2006	Grant date	2006	date ($)	Price ($)
Directors
T R B Goyder	-	-	500,000	-	$0.20	30 November 2009
A R Bantock	-	-	3,000,000	-	$0.155(1)	21 October 2009
A W Kiernan	-	-	250,000	-	$0.155(1)	30 November 2009
D H Stewart	-	-	250,000	-	$0.20	30 November 2009
Executive
R K Hacker	100,000	19 December 2005	-	$0.09	$0.155(1)	20 December 2010
Former
Executive
J R McIntyre	-	-	400,000		$0.20	30 November 2009

(1) In accordance with Listing Rule 7.22.3, the exercise price of share options in the Company was reduced in proportion to the capital reduction approved by shareholders on 8 May 2006 by way of the distribution of Chalice Gold Mines Limited shares and Liontown Resources Limited shares.

				Fair value
	Number of		Number of	per partly	Amount to
	performance		partly paid	paid	be paid on
	shares		performance	performance	conversion
	granted		shares vested	share at	to ordinary	Expiry date
	during		during	grant date	shares
	2007	Grant date	2007(A)	($)	($)
Directors
M S Chalmers	-	-	2,063,750	$0.225	$0.075	17 May 2016
D A Brunt	-	-	2,063,750	$0.225	$0.075	17 May 2016

(A) The second and third performance hurdles of the Company share price trading above 35 cents and 50 cents for 15 consecutive days on the ASX has been met. Vesting is subject to the service agreements of M S Chalmers and D A Brunt respectively remaining in full force. The performance shares are being expensed over the current service period of the agreements.

Uranium Equities Limited and its controlled entities Directors’ report

				Fair value
	Number of			per partly	Amount to
	performance		Number of	paid	be paid on
	shares		partly paid	performance	conversion
	granted		performance	share at	to ordinary	Expiry date
	during		shares vested	grant date	shares
	2006	Grant date	during 2006	($)	($)
Directors
M C Chalmers	4,663,750	8 May 2006	2,600,000(1)	$0.225	$0.075	17 May 2016
D A Brunt	4,663,750	8 May 2006	2,600,000(1)	$0.225	$0.075	17 May 2016

(1) The first performance hurdle of the Company share price trading above 25 cents for 15 consecutive days on ASX has been met.

7.3.2 Exercise of options granted as compensation – audited

2007:

During the reporting period, no shares were issued on the exercise of options previously granted as compensation.

2006 :

	Number of shares	Amount paid $/share
Directors
T R B Goyder	1,000,000	$0.20
D H Stewart	500,000	$0.20
Former Executive
J R McIntyre	400,000	$0.20
	100,000	$0.30

There are no amounts unpaid on the shares issued as a result of the exercise of the options.

7.3.3 Analysis of options and rights over equity instruments granted as compensation – unaudited

Details of the vesting profile of the options granted as remuneration to each director of the Company and each of the named Company executives are set out below.

					Financial year
	Number			Forfeited in	in which grant
	granted	Date granted	% vested in year	year	vests
Directors
A R Bantock	5,000,000	27 September 2004	Nil	Nil	2006
A W Kiernan	500,000	5 October 2004	Nil	Nil	2006
Executives
L R Curyer	400,000	1 December 2006	Nil	Nil	2009
L R Curyer	600,000	22 June 2007	Nil	Nil	2009
Former Executives
R K Hacker	100,000	19 December 2005	100	Nil	2007

Uranium Equities Limited and its controlled entities Directors’ report

7.3.4 Analysis of movement in options – unaudited

The movement during the reporting period, by value, of options over ordinary shares in the Company held by each Company director and each of the named Company executives is detailed below.

		Value of Options	Value of Options
	Granted	Exercised	Forfeited	Total option
	in year	in year	in year	value in year
	$ (A)	$ (B)	$ (C)	$
Executives
L R Curyer	298,332	-	-	298,332

(A) The value of options granted in the year is the fair value of the options calculated at grant date using a binomial option-pricing model. The total value of the options granted is included in the table above. This amount is allocated to remuneration over the vesting period.

(B) The value of options exercised during the year is calculated as the market price of shares of the Company on the ASX as at close of trading on the date the options were exercised after deducting the price paid to exercise the option.

(C) The value of the options that lapsed during the year represents the benefit foregone and is calculated at the date the option lapsed using a binomial option-pricing model with no adjustments for whether the performance criteria have or have not been achieved.

The movement during the reporting period, by value, of partly paid performance shares in the Company held by each Company Director and each of named Company executives is detailed below.

	Value of	Partly Paid Performance Shares	Partly Paid Performance Shares
	Granted in year	Paid up in the year	Total value in year
	$ (A)	$ (B)	$
M C Chalmers	-	-	-
D A Brunt	-	-	-

(A) The value of partly paid performance shares granted in the year is the fair value of the partly paid performance shares calculated at grant date using a Monte Carlo Simulation valuation model. The total value of the partly paid performance shares granted is included in the table above. This amount is allocated to remuneration over the vesting period.

The grant date under AASB 2 ‘Share based Payments’ is deemed to be 8 May 2006, which was the date that shareholder approval was obtained to approve the acquisition of Uranium Equity Limited.

(B) The value of partly paid performance shares paid up during the year is calculated as the market price of shares of the Company on the ASX as at close of trading on the date the partly paid performance shares were paid up after deducting the price paid.

8. Dividends

No dividends were declared or paid for the previous year and the directors recommend that no dividend be paid for the current year.

9. Events subsequent to reporting date

Subsequent to year end, Urtek LLC, in which the Company holds an equity interest of 16.66%, with the right to increase this interest to 90% through project development funding of up to US$15 million, signed a Uranium Extraction Technology Agreement with a significant phosphoric acid producer to jointly develop process technology to extract uranium from wet phosphoric acid.

Uranium Equities Limited and its controlled entities Directors’ report

10. Likely developments

The Company will continue activities in the exploration, evaluation and acquisition of uranium projects with the objective of establishing a significant uranium production business.

11. Directors’ interests

The relevant interest of each director in the shares, rights or options over such instruments issued by the Company and other related bodies corporate, as notified by the directors to the ASX in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:

	Ordinary shares	Options over ordinary shares	Partly Paid Performance Shares
T M Clifton	3,070,000	-	2,870,000
M S Chalmers	4,013,750	-	4,663,750
D A Brunt	4,013,750	-	4,663,750
A R Bantock	4,418,500	5,000,000	-
T R B Goyder	18,500,000	-	-
A W Kiernan	454,068	500,000	-

12. Share options

Options granted to directors and officers of the Company

During or since the end of the financial year, the Company granted options for no consideration over unissued ordinary shares in the Company to the following directors and to the most highly remunerated officers of the Company as part of their remuneration:

	Number of options	Exercise price	Expiry date
	granted
Officers
L R Curyer	400,000	$0.55	1 December 2011
L R Curyer	600,000	$0.60	21 June 2012

All options were granted during the financial year. No options have been granted since the end of the financial year.

Unissued shares under options

At the date of this report 14,385,000 unissued ordinary shares of the Company are under option on the following terms and conditions:

Expiry date	Exercise price	Number of shares
21 October 2009	$0.155	5,000,000
30 November 2009	$0.155	500,000
20 December 2010	$0.155	100,000
31 May 2011	$0.35	2,400,000
1 September 2011	$0.35	700,000
1 October 2011	$0.35	150,000
1 November 2011	$0.55	225,000
1 December 2011	$0.55	800,000
17 January 2012	$0.55	750,000
28 March 2010	$0.75	3,000,000
21 June 2012	$0.60	760,000

These options do not entitle the holder to participate in any share issue of the Company or any other body corporate.

Uranium Equities Limited and its controlled entities Directors’ report

Shares issued on exercise of options

During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of options as follows (there were no amounts unpaid on the shares issued):

Number of	Amount paid on each
shares	share
10,000,000	$0.35

13. Indemnification and insurance of directors and officers

The Company has agreed to indemnify all the directors and officers who have held office of the Company during this financial year, against all liabilities to another person (other than the Company or a related body corporate) that may arise from their position as directors or officers of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.

The Company has also agreed to indemnify the directors and officers who have held office of the Company’s controlled entities during the financial year against all liabilities to another person (other than the Company or a related body corporate) that may arise from their position as directors or officers, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.

During the financial year the Company has paid insurance premiums of $18,404 in respect of directors and officers’ liability and legal expenses insurance contracts, for current and former directors and officers, including executive officers of the Company and directors, executive officers and secretaries of its controlled entity. The insurance premiums relate to:

costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever their outcome; and
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or improper use of information or position to gain a personal advantage.

The amount of insurance paid is included in directors and executives remuneration.

14. Non-audit services

During the year KPMG, the Company’s auditor, has performed no other services in addition to their statutory audit duties.

15. Lead auditor’s independence declaration

The Lead auditor’s independence declaration is set out on page 15 and forms part of the directors’ report for financial year ended 30 June 2007.

This report is made with a resolution of the directors:

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Timothy M Clifton Chairman

Dated at Perth this the 19th day of September 2007.

ABCD

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of Uranium Equities Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2007 there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

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KPMG

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Ian K Footer Partner

Adelaide 19 September 2007

Uranium Equities Limited and its controlled entities Income statements

For the year ending 30 June 2007

Note Deferred consideration on sale of exploration and evaluation assets 3 Other income 3 Income Write off of exploration and evaluation assets 14 Corporate administrative expenses 4 Profit / (loss) on sale of exploration and evaluation assets Impairment loss on acquired goodwill 16 Profit/(Loss) on sale of available for sale investments Impairment loss on investment in controlled entity Loss before financing costs Financial income 7 Financial expenses 7 Net financing (costs)/income Loss before tax Income tax expense 8 Loss for the year Basic earnings per share (cents) 9 Diluted earnings per share (cents) 9	Consolidated The Company 2007 2006 2007 2006 - 1,250,000 - 1,250,000 660,120 159,832 2,298 54,576
	660,120 1,409,832 2,298 1,304,576
	(1,143,209) (233,005) (33,620) (215,956) (5,536,653) (1,971,493) (4,585,584) (1,842,728) 221,122 - 221,122 - - (4,262,124) - - 315,728 (33,000) 315,728 (33,000) - - (1,143,209) (4,569,750)
	(5,482,892) (5,089,790) (5,223,265) (5,356,858) 507,667 113,053 504,586 97,179 113,251 (128,530) 114,253 (128,530)
	620,918 (15,477) 618,839 (31,351)
	(4,861,974) (5,105,267) (4,604,426) (5,388,209) - - - -
	(4,861,974) (5,105,267) (4,604,426) (5,388,209)
	(0.02) (0.05)
	(0.02) (0.05)

The income statements are to be read in conjunction with the notes of the financial statements set out on pages 20 to 54.

Uranium Equities Limited and its controlled entities Statements of recognised income and expense For the year ending 30 June 2007

Note Change in fair value of financial assets available for sale 20 Net income / (loss) recognised directly in equity 20 Loss for the period Total recognised income and expense for the period	Consolidated The Company 2007 2006 2007 2006 (379,500) 379,500 (379,500) 379,500
	(379,500) 379,500 (379,500) 379,500 (4,861,974) (5,105,267) (4,604,426) (5,388,209)
	(5,241,474) (4,725,767) (4,983,926) (5,008,709)

The statements of recognised income and expense are to be read in conjunction with the notes to the financial statements set out on pages 20 to 54.

Uranium Equities Limited and its controlled entities Balance Sheets

For the year ending 30 June 2007

Note Current assets Cash and cash equivalents 10 Trade and other receivables 11 Financial assets 12 Assets held for sale 13 Total current assets Non-current assets Other receivables 11 Financial assets 12 Exploration and evaluation assets 14 Property, plant and equipment 15 Intangible assets 16 Total non-current assets Total assets Current liabilities Trade and other payables 17 Other liabilities 18 Employee benefits 19 Total current liabilities Non-current liabilities Other liabilities 18 Total non-current liabilities Total liabilities Net assets Equity Issued capital 20 Reserves 20 Accumulated losses 20 Total Equity	Consolidated The Company 2007 2006 2007 2006 23,139,569 4,394,915 22,908,332 4,392,915 2,162,568 322,134 2,004,330 238,019 91,907 1,183,827 63,079 1,155,002 - 1,675,320 - 1,675,320
	25,394,044 7,576,196 24,975,741 7,461,256
	- 1,125,000 - 1,125,000 86,160 40,000 5,195,877 678,272 4,787,553 594,111 - - 326,546 203,205 326,546 203,205 206,995 318,595 - -
	5,407,254 2,280,911 5,522,423 2,006,477

	30,801,298 9,857,107 30,498,164 9,467,733
	1,429,505 393,134 1,293,563 285,647 - 7,637 - 7,637 73,236 16,108 73,236 16,108
	1,502,741 416,879 1,366,799 309,392
	- 18,457 - 18,457
	- 18,457 - 18,457

	1,502,741 435,336 1,366,799 327,849

	29,298,557 9,421,771 29,131,365 9,139,884
	42,942,884 20,895,859 42,942,884 20,895,859 2,928,382 379,500 2,928,382 379,500 (16,572,709) (11,853,588) (16,739,901) (12,135,475)
	29,298,557 9,421,771 29,131,365 9,139,884

The balance sheets are to be read in conjunction with the notes to the financial statements set out on pages 20 to 54.

Uranium Equities Limited and its controlled entities Statements of Cashflows

For the year ending 30 June 2007

Note Cash flows from operating activities Cash receipts from operations Cash paid to suppliers and employees Interest paid Interest received Net cash used in operating activities 27 Cash flows from investing activities Proceeds from sale of property, plant and equipment Proceeds from sale of investments Proceeds from sale of tenements Payments for mining exploration and evaluation Payments for investments Acquisition of property, plant and equipment Loans to controlled entities Investment in controlled entities Loans repaid from other entities Net cash used in investing activities Cash flows from financing activities Net proceeds from issue of shares Pre-listing costs of former subsidiary Payment of finance lease liabilities Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 1 July Cash and cash equivalents at 30 June 10	Consolidated The Company 2007 2006 2007 2006 476,276 18,664 125,756 18,664 (3,267,508) (1,499,059) (2,979,384) (1,449,333) (11,749) (1,481) (10,746) (1,481) 439,993 97,088 436,913 81,215
	(2,362,988) (1,384,788) (2,427,461) (1,350,935)
	- 145,028 - 145,028 1,312,349 742,500 1,292,591 742,500 - - (21,380) - (5,324,411) (1,364,868) - (919,104) - (28,827) - - (204,630) (194,405) (204,630) (194,405) - - (5,448,037) (19,622) - - - (490,722) 28,600 617,699 28,600 617,699
	(4,188,092) (82,873) (4,352,856) (118,626)
	25,295,734 4,267,400 25,295,734 4,267,400 - (344,538) - (344,538) - (15,071) - (15,071)
	25,295,734 3,907,791 25,295,734 3,907,791
	18,744,654 2,440,130 18,515,417 2,438,230 4,394,915 1,954,785 4,392,915 1,954,685
	23,139,569 4,394,915 22,908,332 4,392,915

The statements of cash flows are to be read in conjunction with the notes to the financial statements set out on pages 20 to 54.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

1. Significant accounting policies

Uranium Equities Limited is a company domiciled in Australia. The consolidated financial report of the Company for the financial year ended 30 June 2007 comprises the Company and its subsidiaries (together referred to as the ‘consolidated entity’).

The financial report was authorised for issue by the directors on 19 September 2007.

(a) Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (‘AASBs’) adopted by the Australian Accounting Standards Board and the Corporations Act 2001.

(b) Basis of Preparation

The financial report is presented in Australian dollars and is prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: financial instruments classified as available for sale.

The following standard was available for early adoption but has not been applied by the consolidated entity in these financial statements:

AASB 7 ‘Financial Instruments: Disclosure’ (August 2005) replacing the presentation requirements of financial instruments in AASB 132. AASB 7 is applicable for annual reporting periods beginning on or after 1 January 2007. The standard requires additional disclosure with respect to the group’s financial instruments and share capital, however is not expected to impact the financial results of the company or the consolidated entity.

Other standards issued and available for early adoption but not applied by the consolidated entity are not expected to have a significant impact on the financial report of the consolidated entity and the Company.

Use of Estimates and Judgements

The preparation of a financial report in conformity with AASB’s requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. These accounting policies have been consistently applied by each entity in the consolidated entity.

The 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The critical estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are listed below.

(i) Recoverability of exploration expenditure

The carrying amount of exploration and evaluation expenditure is dependent on the future successful outcome from exploration activity or alternatively the sale of the respective areas of interest.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

(ii) Shared-based payment transactions

The consolidated entity measures the cost of equity-settled share-based payments at fair value at the grant date using a binomial formula taking into account the terms and conditions upon which the instruments were granted.

The accounting policies described below have been applied consistently to all periods presented and to all entities in the group.

(c) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial report from the date that control commences until the date that control ceases. Investments in subsidiaries are carried at cost of acquisition in the Company’s financial statements less impairment losses.

(ii) Joint ventures

Joint ventures are those entities over whose activities the consolidated entity has joint control, established by contractual agreement.

The interests of the consolidated entity in unincorporated joint ventures and jointly controlled assets are brought to account by recognising in its financial statements the assets it controls, the liabilities that it incurs, the expenses it incurs and its share of income that it earns from the sale of any goods or services by the joint venture.

(iii) Transactions eliminated on consolidation

Intra-group balances, and any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

(d) Property, plant and equipment

(i) Owned assets

Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see accounting policy (j)). The cost of assets includes the cost of materials, direct labour, and where appropriate, an appropriate proportion of overheads.

(ii) Leased assets

Leases in terms of which the consolidated entity assumes substantially all of the risks and rewards of ownership are classified as finance leases. The plant and equipment acquired by way of a finance lease is stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation (see below) and impairment losses (see accounting policy (j)).

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

(iii) Subsequent costs

The consolidated entity recognises in the carrying amount of an item of property, 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 consolidated entity and the cost of the item can be measured reliably. All other costs are recognised in the income statement as an expense as incurred.

(e) Depreciation

Depreciation is charged to the income statement on a diminishing value basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives in the current and comparative periods are as follows:

plant and equipment 7%-40%
• fixtures and fittings 11%-22% • motor vehicles 22.5%

The residual value, if not insignificant, is reassessed annually.

(f) Exploration, evaluation, development and tenement acquisition costs

Exploration, evaluation, development and tenement acquisition costs in relation to separate areas of interest for which rights of tenure are current, are capitalised in the period in which they are incurred and are carried at cost less accumulated impairment losses. The cost of acquisition of an area of interest and exploration expenditure relating to that area of interest is carried forward as an asset in the Balance Sheet so long as the following conditions are satisfied:

1) the rights to tenure of the area of interest are current; and 2) at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; or
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 expenditure is assessed for impairment when facts and circumstances suggest that their carrying amount exceeds its recoverable amount and where this is the case an impairment loss is recognised. Should a project or an area of interest be abandoned, the expenditure will be written off in the period in which the decision is made. Where a decision is made to proceed with development, accumulated expenditure will be amortised over the life of the reserves associated with the area of interest once mining operations have commenced.

(g) Investments

Financial instruments held by the consolidated entity are classified as being available-for-sale and are stated at fair value, with any resultant gain or loss recognised directly in equity, except for impairment losses. Where these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss. The fair value of financial instruments classified as available-for-sale is their quoted bid price at the balance sheet date.

Financial instruments classified as available-for-sale investments are recognised or derecognised by the consolidated entity on the date it commits to purchase or sell the investments.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in profit or loss even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in profit or loss is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss.

(h) Trade and other receivables

Trade and other receivables are stated at their cost less impairment losses (see accounting policy (j)).

(i) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the consolidated entity’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(j)

Impairment

At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. Value in use is the present value of the future cash flows expected to be derived from the asset or cash generating unit. In estimating value in use, a pre-tax discount rate is used which reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cashflows, the recoverable amount is determined for the cash generating unit to which the asset belongs. Impairment losses are recognised in the income statement unless the asset has previously been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through the income statement. Receivables with a short duration are not discounted.

(k) Reversals of impairment

Impairment losses, other than in respect of goodwill, are reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimate used to determine the recoverable amount.

An impairment loss in respect of goodwill is not reversed.

An impairment loss in respect of a held-to-maturity security or receivable carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.

An impairment loss in respect of an investment in an equity instrument classified as available for sale is not reversed through profit or loss. If the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss shall be reversed, with the amount of the reversal recognised in profit or loss.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

(l) Share capital

(i) Ordinary share capital

Ordinary shares and partly paid shares are classified as equity.

(ii) Transaction costs

Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit.

(m) Leases

Finance leases, which transfer substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of minimum lease payments.

(n) Employee benefits

(i) Superannuation

Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred.

(ii) Share-based payment transactions

The Company provides benefits to employees (including directors) in the form of sharebased payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’).

The Company currently provides benefits under an Employee Share Option Plan.

The cost of these equity-settled transactions with employees and directors is measured by reference to the fair value at the date at which they are granted.

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

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:

(i) the extent to which the vesting period has expired; and
(ii) the number of awards that, in the opinion of the directors, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.

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

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

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

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

(iii) Wages, salaries, annual leave, sick leave and non-monetary benefits

Liabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations resulting from employees' services provided to reporting date, calculated at undiscounted amounts based on remuneration wage and salary rates that the consolidated entity expects to pay as at reporting date including related on-costs, such as, workers compensation insurance and payroll tax.

(o) Provisions

A provision is recognised in the balance sheet when the consolidated entity has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.

No provision has been made in the financial statements for restoration and rehabilitation of areas for which natural resource extraction activities are ongoing on the basis that no significant disturbance has occurred. The policy is subject to annual review.

(p) Trade and other payables

Trade and other payables are stated at amortised cost.

(q) Revenue

(i) Rental Income

Rental income from property is recognised in the income statement on a straight-line basis over the term of the lease.

(ii) Services rendered

Revenue from services rendered is recognised as the service is performed. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due or the costs incurred or to be incurred cannot be measured reliably.

(iii) Sales of assets and investments

Income from the sale of assets and investments is recognised in the income statement when the significant risks and rewards of ownership have been transferred to external parties.

(r) Expenses

(i) Operating lease payments

Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease expense and spread over the lease term.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

(ii) Finance lease payments

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(iii) Net financing costs

Net financing costs comprise interest payable on borrowings calculated using the effective interest method and interest receivable on funds invested.

Interest income is recognised in the income statement as it accrues, using the effective interest method. The interest expense component of finance lease payments is recognised in the income statement using the effective interest method.

(s) Income tax

Income tax in the income statement for the periods presented comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

The Company and its wholly owned Australian resident entities have not formed a tax consolidation group at present and therefore each entity is taxed in its own right.

(t)

Segment reporting

A segment is a distinguishable component of the consolidated entity that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

(u) Non-current assets held for sale and discontinued operations

Immediately before classification as held for sale, the measurement of the assets (and all assets and liabilities in a disposal group) is brought up to date in accordance with applicable AASB’s. Then, on initial classification as held for sale, non-current assets and disposal groups are recognised at the lower of carrying amount and fair value less costs to sell.

Impairment losses on initial classification as held for sale are included in profit or loss, even when there is a revaluation. The same applies to gains and losses on subsequent remeasurement.

A discontinued operation is a component of the consolidated entity’s business that represents a separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. A disposal group that is to be abandoned also may qualify.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

(v) Goods and Services Tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (‘GST’), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position.

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

(w) Goodwill

Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised.

Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination’s synergies.

Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates.

Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation.

Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

(x) Other intangible assets

Acquired both separately and from a business combination

Intangible assets acquired separately are capitalised at cost and from a business combination are capitalised at fair value as at the date of acquisition. Following initial recognition, the cost model is applied to the class of intangible assets.

The useful lives of these intangible assets are assessed to be either finite or indefinite. Where amortisation is charged on assets with finite lives, this expense is taken to the income statement through the corporate ‘administrative expenses’ line item.

Intangible assets created within the business are not capitalised and expenditure is charged against profits in the year in which the expenditure is incurred.

Uranium Equities Limited and its controlled entities Notes to the financial statements

For the year ending 30 June 2007

Intangible assets are tested for impairment where an indicator of impairment exists, and in the case of indefinite life intangibles annually, either individually or at the cash generating unit level. Useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised.

2. Segment reporting

The Company currently only operates in one business segment and one geographical segment being the mining and exploration industry in Australia.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

3. Income

Income
Note Deferred consideration on the sale of exploration and evaluation assets Profit on deconsolidation of a former subsidiary 20 Advisory fees Other income Office rent	Consolidated The Company 2007 2006 2007 2006 - 1,250,000 - 1,250,000
	- 84,388 - - 657,822 56,781 - 35,913 2,298 9,662 2,298 9,662 - 9,001 - 9,001
	660,120 159,832 2,298 54,576

4. Corporate administrative expenses

Note Accounting fees Annual report costs ASX fees Audit fees Corporate and administration service fees Depreciation and amortisation Insurance Legal fees(1) Marketing Rent and Outgoings Personnel expenses 5 Printing and stationery Share registry Stamp duty Travel and accommodation Recruitment Impairment of property, plant and equipment Other	Consolidated The Company 2007 2006 2007 2006 254,330 100,832 254,330 98,673 21,109 15,790 21,109 15,790 124,358 68,826 84,059 33,227 71,767 30,245 64,467 30,245 157,500 48,871 157,500 48,871 192,889 59,325 81,289 43,120 144,616 46,159 105,559 37,750 599,801 89,168 586,804 74,710 25,315 36,565 14,808 22,604 32,427 62,539 32,427 53,588 3,213,469 1,118,008 2,512,209 1,109,888 23,249 18,335 23,249 16,850 35,421 25,444 35,421 25,444 410 (449) 410 (449) 332,148 82,999 320,767 81,812 21,734 26,433 21,734 26,433 - 1,520 - 1,520 286,110 140,883 269,442 122,652
	5,536,653 1,971,493 4,585,584 1,842,728

Note
Accounting fees
Annual report costs
ASX fees
Audit fees
Corporate and administration
service fees
Depreciation and amortisation
Insurance
Legal fees(1)
Marketing
Rent and Outgoings
Personnel expenses
5
Printing and stationery
Share registry
Stamp duty
Travel and accommodation
Recruitment
Impairment of property, plant
and equipment
Other

Consolidated
The Company
2007
2006
2007
2006
254,330
100,832
254,330
98,673
21,109
15,790
21,109
15,790
124,358
68,826
84,059
33,227
71,767
30,245
64,467
30,245
157,500
48,871
157,500
48,871
192,889
59,325
81,289
43,120
144,616
46,159
105,559
37,750
599,801
89,168
586,804
74,710
25,315
36,565
14,808
22,604
32,427
62,539
32,427
53,588
3,213,469
1,118,008
2,512,209
1,109,888
23,249
18,335
23,249
16,850
35,421
25,444
35,421
25,444
410
(449)
410
(449)
332,148
82,999
320,767
81,812
21,734
26,433
21,734
26,433
-
1,520
-
1,520
286,110
140,883
269,442
122,652

5,536,653
1,971,493
4,585,584
1,842,728

(1) $477,061 of the total $599,801 relates to litigation costs incurred during the period of 1 January to 30 June 2007, written off as a result of an unfavourable judgement received. Notes 14 and 24 discuss the judgment and associated accounting treatment in further detail.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

5. Personnel expenses

Note Wages and salaries Directors’ fees Consulting fees Other associated personnel expenses Defined contribution superannuation fund contributions Increase in liability for annual leave Equity-settled transactions 20	Consolidated The Company 2007 2006 2007 2006 786,016 301,195 526,016 297,658 143,965 69,426 138,056 67,677 499,174 209,457 87,223 209,457 139,981 27,278 139,981 27,386 239,435 135,400 216,035 132,827 57,127 27,310 57,127 26,941 1,347,771 347,942 1,347,771 347,942
	3,213,469 1,118,008 2,512,209 1,109,888

6. Auditors’ remuneration

Audit services Auditors of the Company KPMG Australia: Audit and review of financial reports	Consolidated The Company 2007 2006 2007 2006 48,000 32,000 48,000 32,000

7. Net financing income

Interest income Non current receivable discount(1) Interest expense Net interest expense Net financing (costs) income	Consolidated The Company 2007 2006 2007 2006 507,667 113,053 504,586 97,179 125,000 (125,000) 125,000 (125,000) (11,749) (3,530) (10,747) (3,530)
	113,251 (128,530) 114,253 (128,530)
	620,918 (15,477) 618,839 (31,351)

(1) Relates to discount recorded in 2006 on deferred consideration receivable, which was reversed in 2007.

8. Income Tax

Current tax expense Deferred tax Total income tax expense reported in the income statement	Consolidated The Company 2007 2006 2007 2006 - - - - - - - -
	- - - -

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

Numerical reconciliation between tax expense and pre-tax net loss

Loss before tax Income tax using the domestic corporation tax rate of 30% (2006: 30%) Increase in income tax expense due to: Non-deductible expenses Current year tax benefit not recognised Income tax expense on loss before tax	Consolidated The Company 2007 2006 2007 2006 (4,861,974) (5,105,267) (4,604,426) (5,388,209) (1,458,592) (1,531,580) (1,381,328) (1,616,462) 1,360,574 1,405,411 1,360,574 1,482,936
	98,018 126,169 20,754 133,526
	- - - -

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

Tax losses Potential tax benefit at 30%	Consolidated The Company 2007 2006 2007 2006 9,102,420 8,022,556 4,088,536 8,620,755
	2,730,726 2,406,767 1,226,561 2,586,227

As disclosed in Note 26, the Company de-merged its wholly owned subsidiary Liontown Resources Limited in December 2006. This is accounted for above, by recording a reduced unrecognised deferred tax asset to the extent of the de-merger value. However, the Company continues to receive specialist advice as to the treatment of the tax losses.

Deferred tax assets have not been recognised in relation to taxable or deductible temporary difference (net $1,442,826 deferred tax liability) on a similar basis to the non-recognition of tax losses. Tax losses do not expire under current tax regulation.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

9. Earnings per share

Basic and diluted earnings per share

The calculation of basic and diluted earnings per share at 30 June 2007 was based on the loss attributable to ordinary shareholders of $4,861,974 (2006: $5,105,267) and a weighted average number of ordinary shares outstanding during the financial year ended 30 June 2007 of 156,192,993 (2006: 100,606,417).

10. Cash and cash equivalents

Cash and cash equivalents
Bank balances Term deposits Cash and cash equivalents in the statement of cash flows	Consolidated The Company 2007 2006 2007 2006 3,139,569 1,394,915 2,908,332 1,392,915 20,000,000 3,000,000 20,000,000 3,000,000
	23,139,569 4,394,915 22,908,332 4,392,915

The effective interest rate earned on deposit is 6.3%.

11. Trade and other receivables

Trade and other receivables
Current Other trade receivables Prepayments Other receivables Receivables due from controlled entities Non-current Other receivables	Consolidated The Company 2007 2006 2006 2006 869,840 278,891 711,602 175,154 42,728 43,243 42,728 43,243 1,250,000 - 1,250,000 - - - - 19,622
	2,162,568 322,134 2,004,330 238,019
	- 1,125,000 - 1,125,000
	- 1,125,000 - 1,125,000

Non-current “Other receivables” as at 30 June 2006 of $1,125,000 have been re-classified and re-valued to Current as at 30 June 2007. An amount of $1,250,000 was received subsequent to year end.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

12.	Financial Assets
		Note	Consolidated			The Company
	Current		2007	2006		2007	2006
	Unlisted securities available-
	for-sale		28,828		-	-	-
	Listed equity securities
	available-for-sale		63,079	1,183,827		63,079	1,155,002
			91,907	1,183,827		63,079	1,155,002
	Non-current investments
	Investments in associated
	companies		74,760		-	74,761	-
	Investments in controlled
	entities - at cost	25	-		-	6,252,925	5,208,022
	Less impairment losses		-		-	(1,143,209)	(4,569,750)
			74,760		-	5,184,477	638,272
	Bond in relation to office
	premises		11,400	40,000		11,400	40,000
			86,160	40,000		5,195,877	678,272
13.	Assets held for sale
			Consolidated			The Company
			2007	2006		2007	2006
	Exploration and evaluation expenditure		-	1,675,320		-	1,675,320
			-	1,675,320		-	1,675,320
14.	Exploration and evaluation	expenditure
			Consolidated			The Company
		Note	2007	2006		2007	2006
	Cost brought forward		594,111	4,221,241		-	4,074,845
	Expenditure incurred during
	the year		5,336,651	1,088,308		33,620	623,544
	Transferred as assets held for
	sale	13	-	(1,675,320)		-	(1,675,320)
	Impairment of exploration
	and evaluation expenditure(1)		(832,852)	(233,005)		(33,620)	(215,956)
	Interest in tenements
	disposed of(2)		(310,357)	(2,807,113)		-	(2,807,113)
			4,787,553	594,111		-	-

(1) Includes $644,717 for litigation costs written off as at 31 December 2006 as a result of an unfavourable judgment received. Notes 4 and 24 discuss the judgment and associated accounting treatment in further detail.

(2) Relates to tenements in Western Australia relinquished subsequent to year end.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

15. Property, plant and equipment At cost Less: accumulated depreciation Plant and equipment Carrying amount at beginning of financial year Additions Disposals/written-off Depreciation Carrying amount at end of financial year Leased plant and equipment Carrying amount at beginning of financial year Disposals Amortisation Carrying amount at end of financial year Total Property, Plant and Equipment	Consolidated The Company 2007 2006 2007 2006 413,638 209,007 413,638 209,007 (87,092) (5,802) (87,092) (5,802)
	326,546 203,205 326,546 203,205
	203,205 156,853 203,205 156,853 204,630 226,182 204,630 226,182 - (146,558) - (146,558) (81,289) (33,272) (81,289) (33,272)
	326,546 203,205 326,546 203,205
	- 45,456 - 45,456 - (35,608) - (35,608) - (9,848) - (9,848)
	- - - -
	326,546 203,205 326,546 203,205

16. Intangible assets Goodwill Carrying amount at 1 July Acquisition of subsidiary Impairment loss Carrying amount at 30 June Advisory contracts Carrying amount at 1 July Acquisition of subsidiary Less: amortisation Total carrying amount of intangible asset at 30 June	Consolidated The Company 2007 2006 2007 2006 - - - - - 4,262,124 - - - (4,262,124) - -
	- - - -
	318,595 - - - - 334,800 - - (111,600) (16,205) - -
	206,995 318,595 - -

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

Goodwill

Goodwill was acquired as part of the acquisition of Uranium Equity Limited (now named Uranium Services Pty Ltd) (see note 26). The impairment loss recorded in the prior year represented the write down of goodwill following the prescriptive requirements within Australian Accounting Standards for “recoverable amount” testing. The write down primarily reflected that the Company, at that time, did not have cash-generating units, nor was there a readily ascertainable external market value to support the carrying value of goodwill acquired.

Advisory Contracts

The acquisition of Uranium Equity Limited (now named Uranium Services Pty Ltd) resulted in an Advisory Agreement being recorded as an intangible asset. This intangible asset has been assessed as having a finite life of 3 years and is amortised on a straight line basis.

17. Trade and other payables

Trade and other payables
Trade payables Other creditors and accrued expenses(1)	Consolidated The Company 2007 2006 2007 2006 660,893 141,622 660,893 141,622 768,612 251,512 632,670 144,025
	1,429,505 393,134 1,293,563 285,647

(1) Included in the total is $270,000 of legal fees. Note 24 provides further detail on this item.

18. Other Liabilities

19.

Current Lease incentive Non-current Lease incentive Employee benefits Current Liability for annual leave		Consolidated The Company 2007 2006 2007 2006 - 7,637 - 7,637
		- 7,637 - 7,637
		- 18,457 - 18,457
		- 18,457 - 18,457
	73,236 16,108 73,236 16,108

Share based payments

(a) Employee and Consultant Share Option Plan

The Company has an Employee and Consultant Share Option Plan (ESOP) in place which was approved at the general meeting held on 29 July 2002 and amended pursuant to a resolution of the Board of Directors dated 22 June 2005.

Under the terms of the Employees and Consultants Option Plan, the Board may offer free options to full-time or part-time employees (including persons engaged under a consultancy agreement) and executive and non-executive directors.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

Each option entitles the holder, on exercise, to one ordinary fully paid share in the Company. There is no issue price for the options. The exercise price for the options is such price as determined by the Board.

An option may only be exercised after that option has vested and any other conditions imposed by the Board on exercise are satisfied. The Board may determine the vesting period, if any.

There are no voting or dividend rights attached to the options. There are no voting rights attached to the unissued ordinary shares. Voting rights will be attached to the unissued ordinary shares when the options have been exercised.

Share options were granted to employees and consultants on the following terms and conditions during the year:

		Contractual life
Grant date	Number of instruments	of options
1 September 2006	700,000	5 years
1 October 2006	150,000	5 years
1 November 2006	225,000	5 years
1 December 2006	800,000	5 years
17 January 2007	750,000	5 years
28 March 2007	3,000,000	3 years
21 June 2007	760,000	5years

Vesting conditions are 50% on the first anniversary of the grant date and the balance on the second anniversary of the grant date with the exception of 3,000,000 options granted on 28 March 2007 to the Company’s broking syndicate in part consideration of services rendered during the capital raising activities which vested immediately on grant date.

The number and weighted average exercise prices of share options is as follows:

	Weighted		Weighted
	average		average
	exercise price	Number	exercise	Number
		of options	price	of options
	2007	2007	2006	2006
Outstanding at the beginning of
the period	$0.21	8,000,000	$0.17	8,200,000
Forfeited during the period	-	-	$0.20	250,000
Exercised during the period	-	-	$0.21	2,450,000
Granted during the period	$0.62	6,385,000	$0.34	2,500,000
Outstanding at the end of the
period	$0.40	14,385,000	$0.21	8,000,000
Exercisable at the end of the
period	$0.24	9,800,000	$0.16	5,500,000

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

The options outstanding at 30 June 2007 have an exercise price in the range of $0.155 to $0.75 and a weighted average contractual life of 5 years.

The fair value of the options is estimated at the date of grant using the binomial model. The following table gives the assumptions made in determining the fair value of the options granted in the year to 30 June 2007.

Fair value of				2007				2006
share options
and assumptions
Date Granted	1	1	1	1	17	28	21
	September	October	November	December	January	March	June
	2006	2006	2006	2006	2007	2007	2007
Amount Granted	700,000	150,000	225,000	800,000	750,000	3,000,000	760,000	2,500,000
Share price at
grant date	$0.30	$0.31	$0.47	$0.50	$0.44	$0.50	$0.48	$0.32
Exercise price	$0.35	$0.35	$0.55	$0.55	$0.55	$0.75	$0.60	$0.34
Expected volatility
(expressed as
weighted average	80%	80%	80%	80%	80%	80%	80%	80%
volatility used in
the modelling
under binominal
option-pricing
model)
Option life
(expressed as	5 years	5 years	5 years	5 years	5 years	5 years	5 years	5 years
weighted average
life used in the
modelling under
binominal option-
pricing model)
Expected dividends								-
Risk-free interest	5.8%	5.8%	5.8%	5.8%	6.1%	5.8%	6.1%	5.4%
rate

The expected volatility is based on the historic volatility, adjusted for any expected changes to future volatility due to publicly available information.

Share options are granted under a service condition. Non-market performance conditions are not taken into account in the grant date fair value measurement of the services received.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

(b) Partly Paid Performance Shares

No performance shares were issued during the year ended 30 June 2007. Of the 9,327,500 granted on 8 May 2006, 4,127,500 vested subject to service conditions during the year ended 30 June 2007.

2006 :

Partly paid performance shares were issued to executives during 2006 on the following terms and conditions.

					Contractual life
					of partly paid
	Grant	date	Number of instruments	Vesting conditions(1)	performance shares
8	May	2006	9,327,500	3 year continued	10 years
				service and
				achievement of ASX
				share price
				performance hurdles

(1) 9,327,500 partly paid performance shares were issued on 8 May 2006 as a sharebased payment. The vesting of these partly paid performance shares incorporated the following performance hurdles. 5,200,000 are able to be paid up if the share price trades above $0.25 for 15 consecutive ASX business days, within 5 years of issue. A further 3,250,000 and 877,500 may be paid up if the Company’s share price exceeds $0.35 and $0.50 respectively for 15 consecutive ASX business days, within 5 years of issue. All these conditions have been met during the year ended 30 June 2007 subject to ongoing service provisions.

The number and weighted average exercise prices of partly paid performance shares is as follows:

	Weighted average amount to be paid up Number of partly paid performance shares Weighted average amount to be paid up Number of partly paid performance shares 2007 2007 2006 2006
Outstanding at the beginning of the period Amounts credited as paid during the period Granted during the period Outstanding at the end of the period Number able to be converted to ordinary shares at the end of the period	$0.075 9,327,500 - - - - - - - - $0.075 9,327,500 $0.075 9,327,500 $0.075 9,327,500 $0.075 9,327,500 $0.075 2,600,000

==> picture [78 x 90] intentionally omitted <==

The partly paid performance shares outstanding at 30 June 2007 have an amount to be paid on conversion to ordinary shares of $0.075 and a weighted average contractual life of 10 years.

The fair value of the partly paid performance shares are estimated at the date of grant using a Monte Carlo Simulation valuation model. The following table gives the assumptions made in determining the fair value of the partly paid performance shares granted in the year to 30 June 2006.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

Fair value of partly paid performance shares and	2007	2006
assumptions
Adjusted share price at grant date	-	$0.285
Amount to be paid on conversion to ordinary shares	-	$0.075
Expected volatility (expressed as weighted average volatility)	-	100%
Life of performance share (expressed as weighted average
life)	-	0.5 years
Expected dividends	-	-
Risk-free interest rate	-	5.61%

For the year ended 30 June 2006, the closing share price on 8 May 2006 has been adjusted to take account of actual and estimated values achieved in the distribution of Chalice Gold Mines Limited and a directors’ estimate of value for the future distribution of Base Resources Limited shares.

The expected volatility is based on the historic volatility, adjusted for any expected changes to future volatility due to publicly available information.

Partly paid performance shares are granted under a service condition. Non-market performance conditions are not taken into account in the grant date fair value measurement of the services received.

	Consolidated The Company	Consolidated The Company
	2007 2006 2007	2006
Share options granted in 2005 - equity settled Share options granted in 2006 - equity settled Share options granted in 2007 - equity settled Partly paid performance shares granted in 2006 – equity settled	$ $ $ $ - 198,125 - 198,125 329,964 48,329 329,964 48,329 318,883 - 318,883 - 698,924 101,488 698,924 101,488
Total expense recognised as employee costs (Note 5)	1,347,771 347,942 1,347,771 347,942

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

20. Capital and reserves

Reconciliation of movement in capital and reserves attributable to equity holders of the parent

Consolidated 2007 Note Balance at 1 July 2006 Share options exercised Issue of fully paid ordinary shares Transfer to share option reserve Share issue costs – cash settled Share issue costs – equity settled(1) Changes in value of available- for-sale investments Capital reduction(2) Share-based payments Deconsolidation of Liontown.Resources Limited(3) Loss for the period Balance at 30 June 2007 2006 Balance at 1 July 2005 Employee share options exercised Issue of fully paid ordinary shares Issue of partly paid performance shares Changes in value of available- for-sale investments Capital reduction(4) Share-based payments Loss for the period Balance at 30 June 2006	Share capital (a) $ Investment Revaluation Reserve (b) $ Share Option Reserve (c) Accumulated Losses $ Total Equity $
	20,895,859 379,500 - (11,853,588) 9,421,771
	3,500,000 - - - 3,500,000
	23,000,000 - - - 23,000,000
	(895,181) - 895,181 - -
	(1,327,365) - - - (1,327,365)
	(685,430) - 685,430 - -
	- (379,500) - - (379,500)
	(1,599,999) - - - (1,599,999)
	55,000 - 1,347,771 - 1,402,771
	- - - 142,853 142,853
	- - - (4,861,974) (4,861,974)
	42,942,884 - 2,928,382 (16,572,709) 29,298,557
	14,516,185 - - (6,748,321) 7,767,864 1,267,500 - - - 1,267,500 6,519,750 - - - 6,519,750 1,050,000 - - - 1,050,000 - 379,500 - - 379,500 (2,805,518) - - - (2,805,518) 347,942 - - - 347,942 - - - (5,105,267) (5,105,267)
	20,895,859 379,500 -(11,853,588) 9,421,771

(1) Fair value of the 3,000,000 fully vested options granted to consultants for the services rendered in raising $23 million in equity completed in March 2007 has been treated as a capital raising cost.
(2) The capital reduction relates to the distribution of Liontown Resources Limited (formerly Base Resources Limited) shares as approved by shareholders on 8 May 2006. Note 26 provides further detail.

(3) Represents the accumulated losses of Liontown Resources Limited as at 15 December 2006.

(4) The capital reduction relates to the distribution of Chalice Gold Mines Limited shares as approved by shareholders on 8 May 2006.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

The Company 2007 Balance at 1 July 2006 Share options Issue of fully paid ordinary shares Transfer to share option reserve Share issue costs – cash settled Share issue costs – equity settled Issue of partly paid performance shares Changes in value of available for sale investments Capital reduction Share-based payments Loss for the period Balance at 30 June 2007 2006 Balance at 1 July 2005 Employee share options Issue of fully paid ordinary shares Issue of partly paid performance shares Changes in value of available for sale investments Capital reduction Share-based payments Loss for the period Balance at 30 June 2006	Share capital (a) $ Investment Revaluation Reserve $ Share Option Reserve Accumulated Losses $ Total Equity $
	20,895,859 379,500 - (12,135,475) 9,139,884
	3,500,000 - - - 3,500,000
	23,000,000 - - - 23,000,000
	(895,181) - 895,181 - -
	(1,327,365) - - - (1,327,365)
	(685,430) - 685,430 - -
	- - - - -
	- (379,500) - - (379,500)
	(1,599,999) - - - (1,599,999)
	55,000 - 1,347,771 - 1,402,771
	- - - (4,604,426) (4,604,426)
	42,942,884 - 2,928,382 (16,739,901) 29,131,365
	14,516,185 - - (6,747,266) 7,768,919 1,267,500 - - - 1,267,500 6,519,750 - - - 6,519,750 1,050,000 - - - 1,050,000 - 379,500 - - 379,500 (2,805,518) - - - (2,805,518) 347,942 - - - 347,942 - - - (5,388,209) (5,388,209)
	20,895,859 379,500 -(12,135,475) 9,139,884

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

(a) Share capital On issue at 1 July Exercise of share options Placement of shares Share based payments Issued as consideration for the acquisition of subsidiary On issue at 30 June	Consolidated and the Company Ordinary Shares Partly paid performance shares 2007 2006 2007 2006 133,310,801 96,010,801 14,350,000 - 10,000,000 4,950,000 - - 46,000,000 20,000,000 - 100,000 - - 9,327,500 - 12,350,000 - 5,022,500
	189,410,801 133,310,801 14,350,000 14,350,000

Ordinary shares

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the Company, the ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any proceeds on liquidation.

Partly paid performance shares

Each partly paid performance share was issued at $0.15 of which $0.075 is credited as paid with $0.075 remaining to be paid to convert the same into ordinary shares in the Company.

The unpaid amount on each partly paid performance share may be paid prior to 17 May 2016 but subject to:

(i) the service agreements with Mark Chalmers and David Brunt remaining in full force and effect;
(ii) as to 8,000,000 partly paid performance shares, the ordinary shares of the Company trading on the ASX at no less than $0.25 per share for 15 consecutive business days;
(iii) as to 5,000,000 partly paid performance shares, the ordinary shares of the Company trading on the ASX at no less than $0.35 per share for 15 consecutive business days; and
(iv) as to 1,350,000 Performance shares, the ordinary shares of the Company trading on the ASX at no less than $0.50 per share for 15 consecutive business days.

All the above ASX share price hurdles have been met from date of issue. The share must be converted to ordinary shares within 10 years from date of issue.

The partly paid performance shares are not transferable and carry no voting rights at a meeting of the Company. There are also no participating rights to dividend by return of capital and holders will not be entitled to participate in new issues of capital offered to shareholders.

In the event that the holder of the partly paid performance shares wishes to accept a takeover offer or scheme of arrangement or merger, any vesting conditions not at that time met shall be deemed to be met upon payment of the unpaid amounts on the shares.

(b) Investment revaluation reserve

The fair value reserve includes the cumulative net change in the fair value of available for sale investments until the investment is derecognised.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

(c) Share Options

Share Options
On issue at beginning of year Options issued during the year Options forfeited during the year Options exercised during the year(1) On issue at end of year	Consolidated and the Company Unlisted Share Options 2007 2006 18,000,000 10,700,000 6,385,000 12,500,000 - (250,000) (10,000,000) (4,950,000)
	14,385,000 18,000,000

(1) Exercised by Laramide Resources Ltd. The options were granted on 15 May 2006.

At 30 June 2007, the Company had 14,385,000 unlisted options on issue under the following terms and conditions.

Number	Expiry Date	Exercise Price
760,000	21 June 2012	$0.60
3,000,000	28 March 2010	$0.75
750,000	17 January 2012	$0.55
800,000	1 December 2011	$0.55
225,000	1 November 2011	$0.55
150,000	1 October 2011	$0.35
700,000	1 September 2011	$0.35
2,400,000	31 May 2011	$0.35
100,000	20 December 2010	$0.155
500,000	30 November 2009	$0.155
5,000,000	21 October 2009	$0.155

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

21. Financial instruments

(a) Interest rate risk exposures

The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and financial liabilities is set out below:

					Fixed interest maturing in:	Fixed interest maturing in:
						Non-
		1 year	Over 1		Floating	interest		Weighted
		or less	to 5		interest	bearing	Total	average
30 June 2007	Note	$	years $		$	$	$	int. rate
Financial assets
Bank balances	10	3,139,568		-	-	-	3,139,568	5.8%
Term deposits	10	20,000,000		-	-	-	20,000,000	6.4%
Trade and other
receivables	11	-		-	-	2,162,568	2,162,568	-
Investments	12	-		-	-	86,160	86,160	-
Financial liabilities		-		-	-	-	-	-
Trade payables and
accrued expenses	17	-		-	-	1,429,505	1,429,505	-

			Fixed interest maturing in:	Fixed interest maturing in:	Fixed interest maturing in:
					Non-
		1 year	Over 1 to	Floating	interest		Weighted
		or less	5 years	interest	bearing	Total	average
30 June 2006	Note	$	$	$	$	$	int. rate
Financial assets
Bank balances	10	-	-	1,394,915	-	1,394,915	1.61%
Term deposits	10	3,000,000	-	-	-	3,000,000	5.81%
Trade and other
receivables	11	-	-	-	1,403,891	1,403,891	-
Investments	12	40,000	-	-	1,183,827	1,223,827	5.10%
Financial liabilities
Trade payables and
accrued expenses	17	-	-	-	393,134	393,134	-

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

(b) Credit risk exposure

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount, net of any provision for doubtful debts, as disclosed in the notes to the financial statements.

(c) Net fair values of financial assets and liabilities

The carrying amounts of all financial assets and liabilities approximate the net fair values.

22. Operating leases

Leases as lessee

Non-cancellable operating lease rentals are payable as follows:

Less than one year Between one and five years More than five years	Consolidated The Company 2007 2006 2007 2006 69,437 123,367 69,437 123,367 84,359 266,576 84,359 266,576 - - - -
	153,796 389,943 153,796 389,943

The consolidated entity leases offices under operating leases in Perth and Adelaide. The leases each run for a further period of approximately 3 years, with the Adelaide lease having an option to renew the lease after that date. Lease payments are increased every year to reflect market rentals. None of the leases include contingent rentals.

During the financial year ended 30 June 2007, $42,209 was recognised in the income statement in respect of operating leases (2006: $38,604).

23. Capital and other commitments

Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the consolidated entity is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various State governments. These obligations are subject to renegotiation when application for a mining lease is made and at other times. These obligations are not provided for in the financial report and are payable:

Within one year One year or later and no later than five years Later than five years Employee compensation commitments Key management personnel (consolidated and the Company) Commitments under non-cancellable employment contracts not provided for in the financial statements and payable: Within one year One year or later and no later than five years	Consolidated The Company 2007 2006 2007 2006 3,770,214 1,271,000 - 1,271,000 7,069,151 2,383,125 - 2,383,125 - - - -
	10,839,365 3,654,125 - 3,654,125
	650,000 650,000 650,000 650,000 487,500 1,137,500 487,500 1,137,500
	1,137,500 1,787,500 1,137,500 1,787,500

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

24. Contingent assets

As per the notes to the financial statements for the year ended 30 June 2006, the Company has a contingent asset with regard to its claim of an agreement with Mr Michael Fewster and related entities for the acquisition by the Company of a 50% interest in all minerals rights (other than scandium) in the Mulga Rock Uranium-Polymetallic Project ('Acquisition Agreement').

Mr Fewster contended that the Acquisition Agreement was not binding. However, the Company received written legal advice that based on the subject discussions, conduct and dealings, a binding agreement was made.

On 4 May 2007, His Honour Justice Le Miere in the Supreme Court of Western Australia dismissed the Company’s claim. In essence the judgement concluded there was no enforceable contract between the Company and the defendants because although holding on the evidence that there had in fact been extensive negotiations between the company and Mr Fewster concluding with the effect that “a deal had been done”;

1.1 Significant commercial issues had not been finally agreed between the parties;
1.2 The nature of these issues indicated that the parties did not intend (on the judgement of Justice Le Miere) to conclude a binding contract;
1.3 In any event, as a matter of legal construction, for these reasons any agreement was uncertain.

On 8 June 2007 the Company lodged a Notice with the Supreme Court of Western Australia advising of its intention to appeal the decision of Justice Le Miere. The appeal is expected to be heard before the Full Court of the Supreme Court of Western Australia during October 2007.

The Court awarded the defendant’s costs against the Company. An amount of $270,000, was accrued in respect of these costs as at 30 June 2007 and was paid by the Company subsequent to year end. In addition to these costs, the Company incurred a total of $851,777 in running the litigation during the financial year ended 30 June 2007. Consisting of $644,717 written off as at 31 December 2006 and $207,060 expensed during the period 1 January 2007 to 30 June 2007.

25. Consolidated entities

Country of Incorporation Parent entity Uranium Equities Limited Australia Subsidiaries GE Resources Pty Ltd Australia Uranium Services Pty Ltd (Previously Uranium Equity Limited and Uranium Services Ltd)(1) Australia Bullion Minerals Pty Ltd (Previously Bullion Minerals (No.1) Pty Ltd)(2) Australia Liontown Resources Limited (previously Base Resources Limited)(3) Australia	Ownership interest 2007 2006 100% 100% 100% 100% 100% 100% 0 100%

(1) Uranium Services Pty Ltd was acquired under an agreement dated 4 March 2006.

(2) Bullion Minerals Pty Ltd was incorporated on 5 May 2006.

(3) Liontown Resources Limited was incorporated on 2 February 2006 and deconsolidated on 15 December 2006.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

26. Acquisitions and disposals of subsidiaries

2007:

Deconsolidation of subsidiary

Liontown Resources Limited (“Liontown”) (formerly Base Resources Limited) was incorporated on 2 February 2006 and was 100% wholly owned by the Company until 15 December 2006. During this time, and as approved by shareholders on 8 May 2006, the Company disposed of a number of tenements to Liontown. Also pursuant to shareholder approval, Liontown was subsequently demerged on 15 December 2006 following a pro-rata in-specie distribution to Uranium Equities shareholders registered on 15 May 2006. The de-merger was accounted in the Company by reducing its investment in Liontown to nil with a corresponding capital reduction of $1.6 million.

2006:

Acquisition of subsidiary

On 8 May 2006, the Company acquired 100% of the shares of Uranium Equity Limited (now named Uranium Services Pty Ltd), an unlisted public company focused on the exploration, development and production of uranium resources. As consideration for the acquisition, the Company issued 12,350,000 fully paid ordinary shares and 5,022,500 partly paid performance shares.

The fair value of the fully paid ordinary shares was $0.285 each share, based on an adjusted exdistribution share price of the Company at commencement of trading on the ASX on 9 May 2006.

The fair value of the partly paid performance shares was $0.209 each share, as valued by an independent expert using a Monte Carlo Simulation valuation model.

From 8 May 2006 to 30 June 2006 the subsidiary contributed a net loss of $28,173 to the consolidated net loss for the year. If the acquisition had occurred on 1 July 2005, consolidated entity revenue would have been $1,458,661 and net loss would have been $5,133,440 for the year ended 30 June 2006. The acquisition had the following effect on the consolidated entity’s assets and liabilities:

Acquiree’s net assets at the acquisition date

Note Intangible assets 16 Trade and other receivables Accruals Net identifiable assets and liabilities Goodwill on acquisition 16 Consideration paid, satisfied by the issue of 12,350,000 fully paid ordinary shares and 5,022,500 partly paid performance shares in the Company Net cash outflow	Carrying amounts $ Fair value adjustment $ - 334,800 61,312 - (88,486) -	Recognised values $
		334,800
		61,312
		(88,486)
	(27,174) 334,800	307,626

		4,262,124
		(4,569,750)
		-

Deconsolidation of subsidiary

Chalice God Mines Limited (“Chalice”) was incorporated on 13 October 2006 and was 100% wholly owned by the Company until it listed on ASX in March 2006. Chalice was subsequently de-merged on 8 May 2006 following shareholder approval for a pro-rata in-specie distribution to Uranium Equities shareholders registered on 15 May 2006. The de-merger was accounted in the Company by reducing its investment in Chalice to nil with a corresponding capital reduction of $2.8 million.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

27. Reconciliation of cash flows from operating activities

Loss for the period
Cash flows from operating
activities
Adjustments for:
Depreciation and amortisation
Deferred consideration of sale of
exploration and evaluation assets
(Profit)/loss on disposal of listed
shares/ exploration and evaluation
assets
Loss on sale of plant and equipment
Write-off of exploration and evaluation
expenditure
Interest on finance leases
Interest charge / (unwind) on fair
value of monetary asset receivable
Impairment write-down of goodwill
Impairment write-down of investment
in controlled entity
Impairment in carrying value of fixed
assets
Equity-settled share-based payment
expenses
Operating loss before changes in
working capital and provisions
(Increase) in trade and other
receivables
Increase in trade creditors and
accruals
Increase/(decrease) in provisions
Increase/(decrease) in lease incentive
Net cash used in operating
activities

Consolidated
The Company
2007
2006
2007
2006
(4,861,974)
(5,105,267)
(4,604,426)
(5,388,209)
192,889
59,325
81,289
43,120
-
(1,250,000)
-
(1,250,000)
(536,850)
33,000
(536,850)
33,000
-
17,388
-
17,388
1,143,209
233,005
33,620
215,956
-
2,049
-
2,049
(125,000)
125,000
(125,000)
125,000
-
4,262,124
-
-
-
-
1,143,209
4,569,750
-
1,520
-
1,520
1,347,771
347,942
1,347,771
347,942

(2,839,955) (1,273,914)
(2,660,387) (1,282,484)
(600,452)
(129,424)
(682,926)
(84,530)
1,046,386
30,171
884,819
27,700
57,128
(3,984)
57,128
(3,984)
(26,095)
(7,637)
(26,095)
(7,637)

(2,362,988) (1,384,788)
(2,427,461) (1,350,935)

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

28. Related Parties Disclosures

(a) Key management personnel

The following were key management personnel of the consolidated entity at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period:

Non-executive directors T M Clifton (Chairperson) T R B Goyder A W Kiernan Executive directors M S Chalmers (Managing Director) D A Brunt (Executive Director) A R Bantock (Executive Director) Executives L R Curyer (Chief Financial Officer/Company Secretary) (appointed 15 January 2007) R K Hacker (Company Secretary) (resigned 16 May 2007)

The key management personnel compensation included in ‘personnel expenses’ (see note 5) are as follows:

Short-term employee benefits Post-employment benefits Equity compensation benefits	Consolidated The Company 2007 2006 2007 2006 759,115 552,293 759,115 542,323 226,156 100,743 226,156 99,805 755,324 266,321 755,324 266,322
	1,740,595 919,357 1,740,595 908,450

Individual directors and executives compensation disclosures

Information regarding individual directors and executives compensation is provided in the Remuneration Report section of the Directors’ report.

Loans to key management personnel and their related parties (consolidated)

No loans were made to key management personnel and their related parties.

Other key management personnel transactions with the Company or its controlled entities

A number of key management persons, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities.

A number of these entities transacted with the Company or its subsidiaries in the reporting period. The terms and conditions of the transactions with management persons and their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-director related entities on an arm’s length basis.

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

The aggregate amounts recognised during the year relating to key management personnel and their related parties were as follows:

Note Key management persons Transaction A W Kiernan Legal Fees (i) A R Bantock T R B Goyder R K Hacker A W Kiernan Corporate and administration service fees (ii) A R Bantock T R B Goyder R K Hacker Pre IPO and tenement related costs (iii) M S Chalmers Urtek LLC (iv) T R B Goyder Rental income (v)	Consolidated The Company 2007 2006 2007 2006 (36,061) (100,664) (36,061) (100,664) (157,500) (48,871) (157,500) (48,871) - (617,699) - (617,699) - - - - - 9,000 - 9,000

(i) The Company used the legal services of Anthony Kiernan and Christensen Vaughan (a company of which Anthony Kiernan is a consultant) during the course of the financial year.
(ii) The Company procured corporate services such as accounting and company secretarial services under a Corporate Services Agreement with Chalice Gold Mines Limited. This services agreement ended in May 2007. Andrew Bantock, Timothy Goyder and Anthony Kiernan are directors of Chalice Gold Mines Limited and Richard Hacker is the company secretary.
(iii) Prior to Chalice Gold Mines Limited listing on the ASX on 24 March 2006, the Company paid for all costs in relation to the IPO and certain tenement costs. This was fully repaid by Chalice Gold Mines Limited subsequent to listing on the ASX.
(iv) Mark Chalmers, the Company’s Chief Executive Officer, owns 22.58% of Urtek LLC, a company established to develop technology to extract uranium from phosphoric acid. The Company acquired a 16.6% equity interest in Urtek LLC on 6 February 2007 for consideration comprising 100,000 ordinary shares in the Company. In addition, on 14 June 2007 the Company entered into an agreement with Urtek LLC to increase its shareholding to 90% through funding of up to US$15M of project development costs.
(v) In the year ended 30 June 2006, Grimwood Davies Pty Ltd sub-leased part of the Company’s office premises in West Perth. Timothy Goyder was previously proprietor of Grimwood Davies Pty Ltd until January 2007.

Amounts payable to key management personnel at reporting date arising from these transactions were as follows:

Assets and liabilities arising from the above transactions Trade creditors	Consolidated The Company 2007 2006 2007 2006 3,055 24,027 3,055 24,027
	3,055 24,027 3,055 24,027

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

Options and rights over equity instruments granted as compensation

Movement in Options

The movement during the reporting period in the number of options over ordinary shares in the Company held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

									Vested and
	Held at	Granted as					Held at	Vested during	exercisable at
	1July 2006	compensation	Exercised		Forfeited		30 June 2007	the year	30 June 2007
Directors
T M Clifton	-	-		-		-	-	-	-
M S Chalmers	-	-		-		-	-	-	-
D A Brunt	-	-		-		-	-	-	-
A R Bantock	5,000,000	-		-		-	5,000,000	-	5,000,000
T R B Goyder	-	-		-		-	-	-	-
A W Kiernan	500,000	-		-		-	500,000	-	500,000
Executive
L R Curyer	-	1,000,000		-		-	1,000,000	-	-
Former
Executives
R K Hacker	100,000	-		-		-	100,000	100,000	100,000

							Vested and
	Held at	Granted as			Held at	Vested during	exercisable at
	1July 2005	compensation	Exercised	Forfeited	30 June 2006	the year	30 June 2006
Directors
T M Clifton	-	-	-	-	-	-	-
M S Chalmers	-	-	-	-	-	-	-
D A Brunt	-	-	-	-	-	-	-
T R B Goyder	1,000,000	-	(1,000,000)	-	-	500,000	-
A R Bantock	5,000,000	-	-	-	5,000,000	3,000,000	5,000,000
A W Kiernan	500,000	-	-	-	500,000	250,000	500,000
D H Stewart	500,000	-	(500,000)	-	-	250,000
Former
Executives
R K Hacker	-	100,000	-	-	100,000	-	-
J R McIntyre	500,000	-
S Apostolou	250,000	-	-	(250,000)	-	-	-

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

Movements in ordinary shares

The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

				Received on
	Held at			exercise of			Held at
	1 July 2006	Additions		options		Sales	30 June 2007
Directors
T M Clifton	3,070,000		-		-	-	3,070,000
M S Chalmers	4,013,750		-		-	-	4,013,750
D A Brunt	4,013,750		-		-	-	4,013,750
A R Bantock	4,418,500		-		-	-	4,418,500
T R B Goyder	18,221,294		-		-	-	18,221,294
A W Kiernan	404,068		-		-	-	404,068
Former Executive
R K Hacker	192,910		-		-	192,910	-

No ordinary shares were granted to key management personnel during the reporting period as compensation.

			Received on
	Held at		exercise of		Held at
	1 July 2005	Additions	options	Sales	30 June 2006
Directors
T M Clifton	600,000	2,470,000	-	-	3,070,000
M S Chalmers	-	4,013,750	-	-	4,013,750
D A Brunt	-	4,013,750	-	-	4,013,750
A R Bantock	4,418,500	-	-	-	4,418,500
T R B Goyder	14,892,250	2,329,044	1,000,000	-	18,221,294
A W Kiernan	404,068	-	-	-	404,068
D H Stewart	-	-	500,000	500,000	-
Former
Executives
R K Hacker	-	343,000	-	150,090	192,910
J R McIntyre	115,500	-	400,000	-	515,500
S Apostolou	-	-	-	-	-

Uranium Equities Limited and its controlled entities Notes to the financial statements For the year ending 30 June 2007

Movements in partly paid performance shares

The movement during the reporting period in the number of partly paid performance shares in Uranium Equities held, directly, indirectly or beneficially, by key management persons, including their related parties, is as follows:

						Vested and
						convertible
						to ordinary
	Held at			Held at 30	Vested during	shares upon
	1 July 2006	Additions		June 2007	the year	payment
Directors
T Clifton	2,870,000		-	2,870,000	-	2,870,000
M S Chalmers	4,663,750		-	4,663,750	2,063,750(1)	4,663,750
D A Brunt	4,663,750		-	4,663,750	2,063,750(1)	4,663,000

(1) The second and third performance hurdles of the Company share price trading above $0.35 and $0.50 for 15 consecutive ASX business days have been met. Vesting is subject to the service agreements of M S Chalmers and D A Brunt respectively remaining in full force. The performance shares are being expensed over the current service period of the agreements.

						Vested and
						convertible
						to ordinary
	Held at			Held at 30	Vested during	shares upon
	1 July 2005		Additions	June 2006	the year	payment
Directors
T M Clifton		-	2,870,000	2,870,000	2,870,000	2,870,000
M S Chalmers		-	4,663,750	4,663,750	2,600,000(1)	2,600,000
D A Brunt		-	4,663,750	4,663,750	2,600,000(1)	2,600,000

(1) The first performance hurdle of the Company share price trading above $0.25 for 15 consecutive ASX business days has been met subject to service provisions. Vesting is subject to the service agreement of M S Chalmers and D A Brunt remaining in full force. The performance shares are being expensed over the current service period of the agreements.

(b) Non-key management personnel disclosures

Identity of related parties

The consolidated entity has a related party relationship with its subsidiaries (see note 25) and with its key management personnel (see note 28a).

Other related party transactions Subsidiaries

Loans are made by the Company to wholly owned subsidiaries. With the exception of the specific transactions noted below, loans outstanding between the Company and its controlled entities have no fixed date of repayment and are non-interest bearing. During the financial year ended 30 June 2007, such loans to subsidiaries totalled $4,825,139 (2006: $638,272). These loans have been recognised as an additional investment in subsidiaries.

During the financial year the Company entered into an agreement to loan up to $300,000 to Liontown Resources Limited to facilitate the de-merger from the Company. The loan was interest bearing at 8% and personally guaranteed by A R Bantock, T R B Goyder and A W Kiernan, and was repaid in full on 5 February 2007.

Uranium Equities Limited and its controlled entities Notes to the financial statements

For the year ending 30 June 2007

29. Subsequent events

Subsequent to year end, Urtek LLC, in which the Company holds a 16.66% equity interest, with the right to increase this interest to 90% through funding of up to US$15 million of project development expenditure work, signed a Uranium Extraction Technology Agreement with a significant phosphoric acid producer to jointly develop process technology to extract uranium from wet phosphoric acid.

Uranium Equities Limited and its controlled entities Directors’ Declaration

1 In the opinion of the directors of Uranium Equities Limited (‘the Company’):
(a) the financial statements and notes including the remuneration disclosures that are contained in sections 7.1, 7.2, 7.3.1 and 7.3.2 of the Remuneration report in the Directors' report, set out on pages 16 to 54, are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the financial position of the Company and the consolidated entity as at 30 June 2007 and of their performance, as represented by the results of their operations and their cash flows, for the financial year ended on that date; and
- (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
(b) the remuneration disclosures that are contained in sections 7.1, 7.2 and 7.3.1 and 7.3.2 of the Remuneration report in the Directors’ report comply with Australian Accounting Standard AASB 124 Related Party Disclosures; and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
2 The directors have been given the declarations by the Chief Executive Officer (or equivalent) and Chief Financial Officer (or equivalent) for the financial year ended 30 June 2007 pursuant to Section 295A of the Corporations Act 2001.

Dated at Perth the 19[th] day of September 2007.

Signed in accordance with a resolution of the directors:

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Timothy M Clifton Chairman

ABCD

Independent auditor’s report to the members of Uranium Equities Limited

Report on the financial report and AASB124 remuneration disclosures contained in the Directors’ report

We have audited the accompanying financial report of Uranium Equities Limited (the Company), which comprises the balance sheets as at 30 June 2007, and the income statements, statements of recognised income and expense and cash flow statements for the year ended on that date, a description of significant accounting policies and other explanatory notes and the directors’ declaration set out on pages 16 to 55 of the Group comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

As permitted by the Corporations Regulations 2001, the Company has disclosed information about the remuneration of directors and executives (“remuneration disclosures”), required by Australian Accounting Standard AASB 124 Related Party Disclosures, under the heading “Remuneration report” in sections 7.1, 7.2, 7.3.1 and 7.3.2 of the directors’ report and not in the financial report. We have audited these remuneration disclosures.

Directors’ responsibility for the financial report and the AASB 124 remuneration disclosures contained in the Directors’ report

The directors of the Company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The directors of the Company are also responsible for the remuneration disclosures contained in the Directors’ report.

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. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. Our responsibility is also to express an opinion on the remuneration disclosures contained in the Directors’ report based on our audit.

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 entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’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 and the remuneration disclosures contained in the Directors’ report.

ABCD

We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards (including the Australian Accounting Interpretations), a view which is consistent with our understanding of the Company’s and the Group’s financial position, and of their performance and whether the remuneration disclosures are in accordance with Australian Accounting Standard AASB124.

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

Auditor’s opinion on the financial report

In our opinion:

the financial report of Uranium Equities Limited is in accordance with the Corporations Act 2001 , including:

(i) giving a true and fair view of the Company’s and the Group’s financial position as at 30 June 2007 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.

Auditor’s opinion on AASB 124 remuneration disclosures contained in the directors’ report

In our opinion the remuneration disclosures that are contained in sections 7.1, 7.2, 7.3.1 and 7.3.2 of the Remuneration report in the directors’ report comply with Australian Accounting Standard AASB 124 Related Party Disclosures.

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KPMG

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Ian K Footer Partner

Adelaide 19 September 2007

Uranium Equities Limited and its controlled entities Corporate Governance

Corporate Governance is a matter of high importance in the Company and is undertaken with due regard to all of the Company’s stakeholders and its role in the community. The key corporate governance practices of the Company are summarised below.

1. Board of directors

1.1 Role of the Board and management

The Board represents shareholders’ interests in continuing a successful business, which seeks to optimise medium to long-term financial gains for shareholders. The Board believes that this focus will ultimately result in the interests of all stakeholders being appropriately addressed when making business decisions.

The Board is responsible for ensuring that the Company is managed in such a way to best achieve this desired result. Given the current size and operations of the business, the Board currently undertakes an active, not passive, role.

The Board is responsible for evaluating and setting the strategic directions for the Company, establishing goals for management and monitoring the achievement of these goals. The Managing Director and Executive Directors are responsible to the Board for the day-to-day management of the Company.

The Board has sole responsibility for the following:

Appointing and removing the Managing Director and approving senior executive remuneration;
Determining the strategic direction of the Company and measuring performance of management against approved strategies;
Reviewing the adequacy of resources for management to properly carry out approved strategies and business plans;
Adopting operating and capital expenditure budgets at the commencement of each financial year and monitoring progress against them;
Monitoring capital and cash flow requirements;
Approving and monitoring financial and other reporting to regulatory bodies, shareholders and other organisations;
Determining that satisfactory arrangements are in place for auditing the Company’s financial affairs; and
Ensuring that policies and compliance systems consistent with the Company’s objectives, external best practice and the Company’s size and scope of operations are in place and that the Company and its officers act legally, ethically and responsibly on all matters.

The Board’s role and the Company’s corporate governance practices are being continually reviewed and amended as required.

1.2 Composition of the Board and new appointments

The Company’s Constitution provides that the number of directors shall not be less than three and not more than ten. There is no requirement for any share holding qualification.

The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the appointment and further expense of an independent Non-executive chairman and additional independent Non-executive directors. The Board believes that the individuals on the Board can make, and do make, quality and independent judgments in the best interests of the Company on all relevant issues.

The composition of the Board is reviewed periodically in view of the underlying scale, scope and complexity of the Company’s operations. Changes are made where appropriate.

Uranium Equities Limited and its controlled entities Corporate Governance

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

Directors are initially appointed by the full Board subject to election by shareholders at the next annual general meeting. Under the Company’s Constitution the tenure of directors (other than the Managing Director, and only one Managing Director where the position is jointly held) is subject to reappointment by shareholders not later than the third anniversary following his last appointment. Subject to the requirements of the Corporations Act 2001, the Board does not subscribe to the principle of retirement age and there is no maximum period of service as a director. A Managing Director may be appointed for any period and on any terms the directors think fit and, subject to the terms of any agreement entered into, the Board may revoke any appointment.

1.3 Committees of the Board

The Board has established an Audit Committee which assists in the discharge of the Board’s responsibilities.

The Audit Committee assists the Board in discharging its responsibilities to ensure that the Company complies with appropriate and effective accounting, auditing, internal control, business risk management, compliance and reporting practices.

The role of the Audit Committee is to:

Monitor the integrity of the financial statements of the Company, reviewing significant financial reporting judgements;
Review the Company’s internal financial control system and risk management systems;
Monitor and review the effectiveness of the Company’s external audit function including matters concerning appointment and remuneration, independence and non-audit services; and
Perform such other functions as assigned by law, the Company’s constitution, or the Board.

The Audit Committee comprises three members; Anthony Kiernan, Mark Chalmers and Andrew Bantock.

The Audit Committee meets as required and at any other time requested by a Board member, Company Secretary or external auditor. The external auditors attend as required and on other occasions where circumstance warrant.

With the exception of the Audit Committee, the Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation of any other separate or special committees at this time. The Board as a whole is able to address the governance aspects of the full scope of the Company’s activities and to ensure that it adheres to appropriate ethical standards.

The full Board currently holds meetings at such times as may be necessary to address any general or specific matters as required.

If the Company’s activities increase in size, scope and nature, the appointment of separate or special committees will be reviewed by the Board and implemented if appropriate.

1.4 Conflicts of interest

In accordance with the Corporations Act and the Company’s Constitution, directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes that a significant conflict exists, the director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered.

Uranium Equities Limited and its controlled entities Corporate Governance

1.5 Independent professional advice

The Board has determined that individual directors have the right in connection with their duties and responsibilities as directors, to seek independent professional advice at the Company’s expense. The engagement of an outside adviser is subject to prior approval of the Chairman and this will not be withheld unreasonably. If appropriate, any advice so received will be made available to all Board members.

2. Ethical standards

The Board acknowledges the need for continued maintenance of a professional standard of corporate governance practice and ethical conduct by all directors and employees of the Company.

2.1 Code of Conduct for directors

The Board has adopted a Code of Conduct for directors to promote ethical and responsible decision-making by the directors. The code is based on a code of conduct for directors prepared by the Australian Institute of Company Directors.

The principles of the code are:

A director must act honestly, in good faith and in the best interests of the Company as a whole.
A director has a duty to use due care and diligence in fulfilling the functions of office and exercising the powers attached to that office.
A director must use the powers of office for a proper purpose, in the best interests of the Company as a whole.
A director must recognise that the primary responsibility is to the Company’s shareholders as a whole but should, where appropriate, have regard for the interest of all stakeholders of the Company.
A director must not make improper use of information acquired as a director.
A director must not take improper advantage of the position of director.
A director must not allow personal interests, or the interests of any associated person, to conflict with the interests of the Company.
A director has an obligation to be independent in judgment and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken as a Board.
Confidential information received by a director in the course of the exercise of directorial duties remains the property of the Company and it is improper to disclose it, or allow it to be disclosed, unless that disclosure has been authorised by the Company, or the person from whom the information is provided, or is required by law.
A director should not engage in conduct likely to bring discredit upon the Company.
A director has an obligation at all times, to comply with the spirit, as well as the letter of the law and with the principles of the Code.

The principles are supported by guidelines as set out by the Australian Institute of Company Directors for their interpretation. Directors are also obliged to comply with the Company’s Code of Ethics and Conduct, as outlined below.

2.2 Code of Ethics and Conduct

The Company has implemented a Code of Ethics and Conduct, which provides guidelines aimed at maintaining high ethical standards, corporate behaviour and accountability within the Company.

Uranium Equities Limited and its controlled entities Corporate Governance

All employees and directors are expected to:

respect the law and act in accordance with it;
respect confidentiality and not misuse company information, assets or facilities;
value and maintain professionalism;
avoid real or perceived conflicts of interest;
act in the best interests of shareholders;
by their actions contribute to the company’s reputation as a good corporate citizen which seeks the respect of the community and environment in which it operates;
perform their duties in ways that minimise environmental impacts and maximise workplace safety;
exercise fairness, courtesy, respect, consideration and sensitivity in all dealings within their workplace and with customers, suppliers and the public generally; and
act with honesty, integrity decency and responsibility at all times.

An employee that breaches the Code of Ethics and Conduct may face disciplinary action. If an employee suspects that a breach of the Code of Ethics and Conduct has occurred or will occur, he or she must notify that breach to management. No employee will be disadvantaged or prejudiced if he or she reports in good faith a suspected breach. All reports will be acted upon and kept confidential.

2.3 Dealings in company securities

The Company’s share trading policy imposes basic trading restrictions on all employees of the Company with ‘inside information’, and additional trading restrictions on the directors of the Company.

‘Inside information’ is information that:

is not generally available; and
if it were generally available, it would, or would be likely to influence investors in deciding whether to buy or sell the Company’s securities.
If an employee possesses inside information, the person must not:
trade in the Company’s securities;
advise others or procure others to trade in the Company’s securities; or
pass on the inside information to others – including colleagues, family or friends – knowing (or where the employee or director should have reasonably known) that the other persons will use that information to trade in, or procure someone else to trade in, the Company’s securities.

This prohibition applies regardless of how the employee or director learns the information.

In addition to the above, directors must notify the Company Secretary as soon as practicable, but not later than 2 business days, after they have bought or sold the Company’s securities or exercised options. In accordance with the provisions of the Corporations Act and the Listing rules of the ASX, the Company on behalf of the directors must advise the ASX of any transactions conducted by them in the securities of the Company. Employees must also give notice to the Chairman prior to trading in the Company’s securities.

Breaches of this policy will be subject to disciplinary action, which may include termination of employment.

Uranium Equities Limited and its controlled entities Corporate Governance

2.4 Interests of other stakeholders

The Company’s objective is to maximise returns to shareholders through the continued exploration and development of current projects and the identification and acquisition of quality mining and/or exploration projects.

To assist in meeting its objective, the Company conducts its business within the Code of Ethics and Conduct, as outlined in 2.2 above.

3. Disclosure of information

3.1 Continuous disclosure to ASX

The continuous disclosure policy requires all executives and directors to inform the Managing Director or in his absence the Company Secretary of any potentially material information as soon as practicable after they become aware of that information.

Information is material if it is considered likely that the information would influence investors who commonly acquire securities on ASX in deciding whether to buy, sell or hold the Company’s securities.

Information is not material and need not be disclosed if:

a) a reasonable person would not expect the information to be disclosed or is material but due to a specific valid commercial reason is not to be disclosed; and
b) the information is confidential; or
c) one of the following applies:
i. It would breach a law or regulation to disclose the information;
ii. The information concerns an incomplete proposal or negotiation;
iii. The information comprises matters of supposition or is insufficiently definite to warrant disclosure;
iv. The information is generated for internal management purposes;
v. The information is a trade secret;
vi. It would breach a material term of an agreement, to which the company is a party, to disclose the information;
vii. It would harm the company’s potential application or possible patent application; or
viii. The information is scientific data that release of which may benefit the company’s potential competitors.

The Managing Director is responsible for interpreting and monitoring the Company’s disclosure policy and where necessary informing the Board. The Company Secretary is responsible for all communications with ASX.

3.2 Communication with shareholders

The Company places considerable importance on effective communications with shareholders.

The Company’s communication strategy requires communication with shareholders and other stakeholders in an open, regular and timely manner so that the market has sufficient information to make informed investment decisions on the operations and results of the Company. The strategy provides for the use of systems that ensure a regular and timely release of information about the Company is provided to shareholders. Mechanisms employed include:

Announcements lodged with ASX;
ASX Quarterly Activity and Cash Flow Reports;
Half Yearly Report;

Uranium Equities Limited and its controlled entities Corporate Governance

Presentations at the Annual General Meeting/General Meeting’s; and
Annual Report.

The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and understanding of the Company’s strategy and goals.

The Company also posts reports, ASX and media releases and copies of significant business presentations on the Company’s website.

4. Risk management

4.1 Identification of risk

The Board and Audit Committee are responsible for overseeing the Company’s risk management and control framework. Responsibility for control and risk management is delegated to the appropriate level of management within the Company with the Managing Director having ultimate responsibility to the Board for the risk management and control framework.

Arrangements put in place by the Board to monitor risk management include monthly reporting to the Board in respect of operations and the financial position of the Company.

4.2 Integrity of financial reporting

The Company's Managing Director and Chief Financial Officer (or equivalent) will report in writing to the Board that:

the consolidated financial statements of the Company and its controlled entities for each half and full year present a true and fair view, in all material aspects, of the Company's financial condition and operational results and are in accordance with accounting standards;
the above statement is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and
the Company's risk management and internal compliance and control framework is operating efficiently and effectively in all material respects.

4.3 Role of Auditor

The Company’s practice is to invite the auditor to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report.

5. Performance review

The Board has adopted a self-evaluation process to measure its own performance during each financial year. Also, an annual review is undertaken in relation to the composition and skills mix of the directors of the Company.

Arrangements put in place by the Board to monitor the performance of the Company’s executives include annual performance appraisal meetings with each individual to ensure that the level of reward is aligned with respective responsibilities and individual contributions made to the success of the Company.

6. Remuneration arrangements

The broad remuneration policy is to ensure that remuneration properly reflects the relevant person's duties and responsibilities, and that the remuneration is competitive in attracting, retaining and motivating people of the highest quality. The Board believes that the best way to achieve this objective is to provide executive directors and executives with a remuneration package consisting of components that reflect the person’s responsibilities, duties, personal and corporate performance.

Uranium Equities Limited and its controlled entities Corporate Governance

The remuneration of non-executive directors is determined by the Board as a whole having regard to the level of fees paid to non-executive directors by other companies of similar size in the industry.

The aggregate amount payable to the Company’s non-executive directors must not exceed the maximum annual amount approved by the Company’s shareholders.

ASX Corporate Governance Council: Principles of Good Corporate Governance and Best Practice Recommendations

Council Principle 1:

Lay solid foundations for management and oversight

Council Recommendation 1.1:

Formalise and disclose the functions reserved to the board and those delegated to management.

The Company complies with this recommendation. Refer Section 1.1 of Corporate Governance Statement.

Council Principle 2

Structure the board to add value

Council Recommendation 2.1:

A majority of the board should be independent directors.

The Board considers that Tony Kiernan is an independent director in accordance with Recommendation 2.1. Whilst the remainder of the Board are not independent, the Board believes that all the individuals on the Board can make, and do make, quality and independent judgments in the best interests of the Company on all relevant issues. Directors having a conflict of interest in relation to a particular item of business must absent themselves from the Board Meeting before commencement of discussion on the topic.

Refer Section 1.2 of Corporate Governance Statement.

Council Recommendation 2.2:

The chairperson should be an independent director.

The Company’s Chairman, Timothy Clifton, is considered by the Board not to be independent in terms of the ASX Corporate Governance Council’s definition of independent director. However the Board believes that the Chairman is able and does bring quality and independent judgment to all relevant issues falling within the scope of the role of a Chairman.

The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the expense of the appointment of an independent Non-executive Chairman.

Refer Section 1.2 of Corporate Governance Statement.

Council Recommendation 2.3:

The roles of the Chairperson and Chief Executive Officer should not be exercised by the same individual.

The Company complies with this recommendation.

Council Recommendation 2.4:

The board should establish a nomination committee.

Uranium Equities Limited and its controlled entities Corporate Governance

The Board considers that the Company is not currently of a size to justify the formation of a nomination committee. The Board as a whole undertakes the process of reviewing the skill base and experience of existing directors to enable identification or attributes required in new directors. Where appropriate independent consultants are engaged to identify possible new candidates for the Board.

The Board acknowledges this does not comply with recommendation 2.4 of the ASX Corporate Governance Guidelines. If the Company’s activities increase in size, scope and nature, the appointment of a nomination committee will be reviewed by the Board and implemented if appropriate.

Refer Section 1.3 of Corporate Governance Statement.

Council Principle 3:

Promote ethical and responsible decision-making

Council Recommendation 3.1:

Establish a code of conduct to guide the directors, the Chief Executive Officer (or equivalent), the Chief Financial Officer (or equivalent) and any other key executives as to:

3.1.1 the practices necessary to maintain confidence in the company’s integrity;
3.1.2 the responsibility and accountability of individuals for reporting and investigating reports of unethical practice.

The Company complies with this recommendation. Refer Sections 2.1 and 2.2 of Corporate Governance Statement.

Council Recommendation 3.2:

Disclose the policy concerning trading in company securities by directors, officers and employees.

The Company complies with this recommendation. Refer Section 2.3 of Corporate Governance Statement.

Council Principle 4:

Safeguard integrity in financial reporting

Council Recommendation 4.1:

Require the Chief Executive Officer (or equivalent) and the Chief Financial Officer (or equivalent) to state in writing to the board that the company’s financial reports present a true and fair view, in all material respects, of the company’s financial condition and operational results and are in accordance with relevant accounting standards.

The Company complies with this recommendation.

Council Recommendation 4.2:

The board should establish an audit committee.

The Board complies with this recommendation.

Council Recommendation 4.3:

Structure the audit committee so that it consists of:

only non-executive directors;
a majority of independent directors;
- an independent chairperson, who is not chairperson of the board;
at least three members.

Uranium Equities Limited and its controlled entities Corporate Governance

Refer Recommendation 4.2.

Council Recommendation 4.4

The audit committee should have a formal operating charter.

Refer Recommendation 4.2.

Council Principle 5:

Make a timely and balanced disclosure

Council Recommendation 5.1:

Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance.

The Company complies with this recommendation. Refer Section 3.1 of Corporate Governance Statement.

Council Principle 6:

Respect the rights of shareholders

Council Recommendation 6.1:

Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings.

The Company complies with this recommendation. Refer Section 3.2 of Corporate Governance Statement.

Council Recommendation 6.2:

Request the external auditor to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report.

The Company complies with this recommendation. Refer Section 4.3 of Corporate Governance Statement.

Council Principle 7:

Recognise and manage risk

Council Recommendation 7.1:

The Board or appropriate board committee should establish policies on risk oversight and management.

The Company complies with this recommendation. Refer Section 4.1 of Corporate Governance Statement.

Council Recommendation 7.2

The Chief Executive Officer and the Chief Financial Officer (or equivalent) should state in writing that:

7.2.1 the statement given in accordance with best practice recommendation 4.1 is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board;
7.2.2 the company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

The Company complies with this recommendation. Refer Section 4.1 of Corporate Governance Statement.

Uranium Equities Limited and its controlled entities Corporate Governance

Council Principle 8:

Encourage enhanced performance

Council Recommendation 8.1:

Disclose the process for performance evaluation of the board, its committees and individual directors, and key executives.

The Company complies with this recommendation. Refer Section 5 of Corporate Governance Statement.

Council Principle 9:

Remunerate fairly and responsibly

Council Recommendation 9.1:

Provide disclosure in relation to the company’s remuneration policies to enable investors to understand (i) the costs and benefits of those policies and (ii) the link between remuneration paid to directors and key executives and corporate performance.

The Company complies with this recommendation. Refer Section 6 of Corporate Governance Statement.

Council Recommendation 9.2

The board should establish a remuneration committee.

The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation of a remuneration committee. The Board as a whole is responsible for the remuneration arrangements for directors and executives of the Company.

The Board acknowledges this does not comply with recommendation 9.2 of the ASX Corporate Governance Guidelines. If the Company’s activities increase in size, scope and nature, the appointment of a remuneration committee will be reviewed by the Board and implemented if appropriate.

Refer Section 1.3 of Corporate Governance Statement.

Council Recommendation 9.3

Clearly distinguish the structure of Non-executive directors’ remuneration from that of executives.

The Company complies with this recommendation. Refer Section 6 of Corporate Governance Statement.

Council Recommendation 9.4

Ensure that payment of equity-based executive remuneration is made in accordance with thresholds set in plans approved by shareholders.

The Company complies with this recommendation. The Company currently has in place an Employee and Consultant option plan. Any issue of options made to eligible participants is made in accordance with that plan.

Council Principle 10:

Recognise the legitimate interests of stakeholders

Council Recommendation 10.1:

Establish and disclose a code of conduct to guide compliance with legal and other obligations to legitimate stakeholders.

The Company complies with this recommendation. Refer Section 2.4 of Corporate Governance Statement.

Uranium Equities Limited and its controlled entities ASX additional information As at 19 September 2007

Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below.

Shareholdings

Substantial shareholders

The number of shares held by substantial shareholders and their associated interests as at 19 September 2007 were:

Shareholder	Number of ordinary	Percentage of
	shares held	capital held
		%
Lagoon Creek Resources Pty Ltd	24,000,000	12.7
Timothy R B Goyder	18,500,000	9.8
Resolute Limited	17,666,667	9.3

Class of Shares and Voting Rights

At 19 September 2007 there were 1,925 holders of the ordinary shares of the Company.

The voting rights to the ordinary shares set out in the Company’s Constitution are:

“Subject to any rights or restrictions for the time being attached to any class or Classes of shares -

a) at meetings of members or classes of members each member entitled to vote in person or by proxy or attorney: and
b) on a show of hands every person who is a member has one vote and on a poll every person in person or by proxy or attorney has one vote for each ordinary share held.”

Holders of options and performance shares do not have voting rights.

Distribution of equity security holders as at 19 September 2007:

		Number of equity security	holders
	Ordinary	Unlisted Share	Partly paid
Category	Shares	Options	performance shares
1 – 1,000	112	-	-
1,001 – 5,000	528	-	-
5,001 – 10,000	435	-	-
10,000 – 100,000	749	5	-
100,001 and over	101	17	4
Total	1,925	22	4

The number of shareholders holding less than a marketable parcel at 19 September 2007 was 154.

Uranium Equities Limited and its controlled entities ASX additional information As at 19 September 2007

Twenty largest Ordinary Fully Paid Shareholders as at 19 September 2006

Name	Number of ordinary shares held	Percentage of capital held %
Lagoon Creek Resources Pty Ltd	24,000,000	12.67
Resolute Limited	17,666,667	9.33
Plato Prospecting Pty Ltd	17,150,000	9.05
National Nominees Limited	11,042,104	5.83
ANZ Nominees Limited (Cash Income A/C)	10,938,756	5.78
HSBC Custody Nominees (Australia) Limited – A/C 2	8,302,509	4.38
Citicorp Nominees Pty Limited	8,197,676	4.33
J P Morgan Nominees Australia Limited	6,530,400	3.45
HSBC Custody Nominees (Australia) Limited	5,126,000	2.71
NLM Capital Partners II LP	5,000,000	2.64
Define Consulting Pty Ltd (The Define Consulting A/C)	4,418,500	2.33
Mr Mark Stephen Chalmers + M/S Robi Diane Chalmers
(M & R Chalmers Family A/C)	4,013,750	2.12
Mr David Andrew Brunt (Brentwood Super Fund A/C)	2,500,000	1.32
Calm Holdings Pty Ltd (Tide A/C)	2,470,000	1.30
Mrs Angela Mary McDonald + Mr Michael Walsh McDonald
(M & A McDonald S/F A/C)	1,852,500	0.98
Merrill Lynch (Australia) Nominees Pty Limited (Berndale
A/C)	1,535,000	0.81
Brunt Investments Pty Ltd (Brunt Investments A/C)	1,513,750	0.80
Plato Prospecting Pty Ltd (TRB Goyder Super Fund A/C)	1,350,000	0.71
Penally Management Limited	1,100,000	0.58
Balfes (Qld) Pty Ltd (Balfes Super Fund A/C)	1,000,000	0.53
Total	135,707,612	71.65

AI assistant

DEVEX RESOURCES LIMITED — Annual Report 2007

64768_rns_2007-09-23_8c2e8011-0f21-4174-80a6-cde978f53ea8.pdf

URANIUM EQUITIES LIMITED

ABN 74 009 799 553

Directors

Chief Financial Officer and Company Secretary

Perth Office:

Auditors

Solicitors

Share Registry

Home Exchange

ASX Code

Uranium Equities Limited and its controlled entities Directors’ report

1. Directors

Uranium Equities Limited and its controlled entities Directors’ report

2. Chief Financial Officer and Company secretary

L R Curyer

R K Hacker

3. Directors’ meetings

4. Principal activities

Uranium Equities Limited and its controlled entities Directors’ report

5. Review and results of operations

6. Significant changes in the state of affairs

7. Remuneration report

7.1 Principles of compensation – audited

Fixed compensation

Long-term incentives

Uranium Equities Limited and its controlled entities Directors’ report

Performance Related Compensation

Employment contracts

Non-executive directors

Uranium Equities Limited and its controlled entities Directors’ report

7.2 Directors’ and executive officers’ remuneration (Company and Consolidated) – audited

Uranium Equities Limited and its controlled entities Directors’ report

Notes in relation to the table of directors’ and executive officers’ remuneration

Details of performance related remuneration

Uranium Equities Limited and its controlled entities Directors’ report

7.3 Equity instruments

7.3.1 Options and rights over equity instruments granted as compensation - audited

Uranium Equities Limited and its controlled entities Directors’ report

7.3.2 Exercise of options granted as compensation – audited

2007:

2006 :

7.3.3 Analysis of options and rights over equity instruments granted as compensation – unaudited

7.3.4 Analysis of movement in options – unaudited

8. Dividends

9. Events subsequent to reporting date

Uranium Equities Limited and its controlled entities Directors’ report

10. Likely developments

11. Directors’ interests

12. Share options

Options granted to directors and officers of the Company

Unissued shares under options

Shares issued on exercise of options

13. Indemnification and insurance of directors and officers

14. Non-audit services

15. Lead auditor’s independence declaration

ABCD

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

Uranium Equities Limited and its controlled entities Income statements

For the year ending 30 June 2007

Uranium Equities Limited and its controlled entities Statements of recognised income and expense For the year ending 30 June 2007

Uranium Equities Limited and its controlled entities Balance Sheets

For the year ending 30 June 2007

Uranium Equities Limited and its controlled entities Statements of Cashflows

For the year ending 30 June 2007

1. Significant accounting policies

(a) Statement of compliance

(b) Basis of Preparation

Use of Estimates and Judgements

(i) Recoverability of exploration expenditure

(ii) Shared-based payment transactions

(c) Basis of consolidation

(i) Subsidiaries

(ii) Joint ventures

(iii) Transactions eliminated on consolidation

(d) Property, plant and equipment

(i) Owned assets

(ii) Leased assets

DEVEX RESOURCES LIMITED Annual Report 2007