DGR GLOBAL LIMITED — Annual Report 2004

Sep 29, 2004

D'AGUILAR GOLD LTD AND CONTROLLED ENTITIES

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2004

CORPORATE INFORMATION

DIRECTORS

Christopher Rawlings (Chairman) Nicholas Mather Ian Levy Brian Moller Damien Reynolds Vincent Mascolo

COMPANY SECRETARY

Duncan Cornish

REGISTERED OFFICE AND PRINCIPAL BUSINESS OFFICE

D'Aguilar Gold Ltd Level 5. 60 Edward Street Brisbane QLD 4000 Phone: $+61$ 7 3303 0680 Fax: +61 7 3303 0681

SOLICITORS

Hopgood Ganim Level 8, Waterfront Place 1 Eagle Street Brisbane QLD 4000

SHARE REGISTER

ASX Perpetual Registrars (previously Pitcher Partners) Level 22, 300 Queen Street Brisbane OLD 4000 Phone: +61 7 3228 4000

AUDITORS

BDO Kendalls Level 18, 300 Queen Street Brisbane QLD 4000 Phone: +61 7 3237 5999

COUNTRY OF INCORPORATION

Australia

STOCK EXCHANGE LISTING

Australian Stock Exchange Ltd ASX Code: DGR

INTERNET ADDRESS

www.daguilar.com.au

AUSTRALIAN BUSINESS NUMBER

ABN 67 052 354 837

CONTENTS

Chairman's Report	4
Review of Operations and Future Developments	5
Director's Report	14
Shareholder Information	20
Interests in Mining and Exploration Tenements	22
Corporate Governance Statement	24
Statements of Financial Performance for the year ended 30 June 2004	27
Statements of Financial Position as at 30 June 2004	28
Statements of Cash Flows for the year ended 30 June 2004	29
Notes to the Financial Statements for the year ended 30 June 2004	30
Directors' Declaration	49
Independent Audit Report	50

CHAIRMAN'S REPORT

Dear Shareholder

During the past year, your Company has established itself as an active exploration vehicle, investigating the mineral potential of exploration and mining tenements in the Kilkivan area, in south east Queensland. The area has been previously explored and mined by many small companies and prospectors, but a regional approach to the highly mineralised geological province has never been attempted before.

The \$4 million capital raising, completed in August 2003, was based on combining many separately owned exploration tenements into one vehicle, your Company D'Aguilar Gold Limited. The Company now controls over 3.000 square kilometres of mineral tenements.

The purpose was to give exploration in the Kilkivan area the best chance of succeeding with a regional understanding of mineral emplacement mechanisms and to give sufficient opportunity to explore a large number of gold exploration targets and previous gold discoveries.

The Company was established with two prime exploration goals:

• 1. To explore for large scale porphyry gold deposits
• 1. To explore for an epithermal gold deposit, the scale of which would encourage reactivation of the gold processing plant at the Shamrock Mine.

Once shareholders funds became available, the Company moved to establish and implement the requirements for active exploration. An exploration team was assembled and a field office was established at the inactive Shamrock minesite.

A large amount of data in disparate locations was collected for compilation and analysis. This data included geological reports, geophysical and geological drillhole logs, minesite geology reports, field reports, maps, student theses etc. The data has largely been compiled in one readily retrievable, computerised database linked to a Geographical Information System ("GIS"). The Database-GIS is a powerful tool, which provides access to all previously gathered information. Additional exploration results are progressively added to the database as they become available.

The Database-GIS has enabled the Company to rank its exploration targets on the basis of previous knowledge, prospectivity and likely success in meeting the two prime exploration goals.

Two priority targets, Elginvale (a large porphyry deposit) and Manumbah (a previously mined epithermal deposit), have been defined and preliminary drilling has been undertaken. Both targets have provided further indications of significant mineral systems being present, including some high grade intersections, but an economic gold orebody has so far eluded our exploration efforts. Further detailed work is planned to better identify local deposit controls.

A further six priority areas from 18 exploration opportunities have been identified for further analysis and exploration. This programme will be progressively undertaken.

Corporately, the Company's major shareholder, Gympie Gold Limited (25%), has had Receivers and Managers and, subsequently. Liquidators appointed to it following a fire at its Southland Colliery in late December 2003. The shares, some of which are held in escrow until August 2005, are presently held by the Gympie Gold Limited Receivers and Managers. Your Company has been investigating ways that this issue could be resolved in the best interests of all D'Aguilar Gold shareholders.

Your company has also instituted all of the Australian Stock Exchange "Principles of Good Corporate Governance and Best Practice Recommendations" to be effective in the 2005 financial year.

D'Aguilar Gold is now established and is exploring its large exploration tenement portfolio. Your Company is soundly placed to maximise its knowledge base and to increase the prospectivity of its identified deposits.

Dr. C.D. Rawlings Chairman

REVIEW OF OPERATIONS AND FUTURE DEVELOPMENTS

Exploration Highlights

• Construction and interpretation of a multidisciplinary regional exploration database over the 3,000 km² $\bullet$ D'Aguilar Gold project area - identified eighteen project areas and six key prospects for follow up.
• Intense exploration program conducted on D'Aguilar tenements south of Kilkivan, at Manumbar epithermal $\bullet$ gold and Elginvale bulk tonnage gold prospects.
• Manumbar gold prospect identified as an epithermal styled gold target, similar to other Queensland multi- $\bullet$ million ounce epithermal gold projects at Cracow and Vera Nancy.
• $\bullet$ Drilling commenced at Manumbar in June 2004 - high-grade calcite-quartz vein intersections - 4.2 metres true width @ 7.65 g/t gold including 1 metre @ 19.65 g/t gold and 1 metre @ 11.2 g/t gold. Also 1.3 m @ 14.5 g/t gold and 1.2 m $@6.6$ g/t gold discovered in historic CRA core from Manumbar.
• 5km vein strike potential, seven future follow up targets at Manumbar. $\bullet$
• Three additional epithermal gold target areas identified in the Neara Volcanics of the Esk Trough, west of $\bullet$ Kilkivan.
• Discovery of a bulk tonnage gold intrusive porphyry related belt on the Esk Trough D'Aguilar Block $\bullet$ margin.
• Drilling commenced at the Elginvale bulk tonnage gold-copper prospect outlining potential for a target in excess of 1 M oz gold at depth.
• Identified a nickel laterite deposit within the Company's tenements that has economic potential. $\bullet$
• Applied for the Andurambah Molybdenum Tungsten Project 20mt @ 0.07% Molybdenum. $\bullet$

CORPORATE

During the year the Company completed a \$4 million raising and listed on the ASX. The listing was achieved with the assistance and backing of Gympie Gold Limited. Unfortunately, Gympie was placed in receivership in January 2004 after a catastrophic fire irretrievably destroved Gympie's coal mine in the Hunter Valley. D'Aguilar has been investigating various strategies to have Gympie's 25% interest in D'Aguilar managed in the best manner for D'Aguilar shareholders. D'Aguilar expended some \$2,000,000 on exploration activities during the year, pursuing the potential of the D'Aguilar Block for bulk mineable and high grade vein styles of mineralisation. Approximately 70% of the expended funds were spent directly on "in ground" exploration activities. This included the completion of three drilling programs for a total of 7.468 metres of drilling.

In December 2003, the Company completed a 1:2 pro-rata issue of options at 1 cent per option raising \$286,560.

D'Aguilar Gold Project Summary

The D'Aguilar Gold Project covers approximately 3,000 $km^2$ of exploration licences and applications, and mining leases (580 ha) in the Kilkivan area west of Gympie in south east Queensland (Figure 1). The area is highly prospective for bulk mineable style disseminated gold ore bodies of the intrusive related class and related high grade gold and base metal sulphide vein systems. The area is 50km west of the highly productive 3.7 million ounce Gympie goldfield.

The project area is centred on D'Aguilar's wholly owned treatment plant, a 150,000 tonne per annum carbon in pulp ("CIP") plant on care and maintenance at the Shamrock Mine site. The plant has previously produced approximately 60,000 ounces of gold.

The D'Aguilar Block is a Palaeozoic aged structural block of metamorphic rocks which has been uplifted between the Esk Trough to the west and the Gympie Block to the east. Late Triassic aged intrusive rocks in the D'Aguilar Block formed porphyry and intrusive related mineralised bodies and related base metal sulphide and precious metal ore zones. The project area is characterised by a set of northwest and northeast fracture zones which D'Aguilar believes have been important structures controlling the emplacement of these ore zones. D'Aguilar believes the entire project area has broad geological similarities to the highly mineralised Lachlan Fold Belt of New South Wales which hosts a number of large mineralised intrusive related porphyry systems. The exploration techniques which the Company is adopting are therefore broadly similar to the techniques employed in the Lachlan Fold Belt.

Kilkivan, located at the centre of the D'Aguilar Gold Project area was the location of the first discovery of gold in Oueensland, based on coarse, easily accessible, visible gold and quartz reefs. Gold complexed with sulphide minerals was encountered in some reefs at depth and was not treatable by the early miners in the 1890's. The combined effects of lack of capital, water influx, two world wars and small and disjointed tenures discouraged large regional exploration programs. In spite of this, approximately 200,000 ounces of gold has been mined from the area from relatively small outcropping ore bodies and alluvials. Historic occurrences of what is now known to be disseminated gold in porphyry intrusions confounded the early miners and these prospects now form the basis for D'Aguilar's regional exploration effort.

Figure 1 - tenement locations

Exploration Summary

The Company's strategy is to explore the D'Aguilar Block for bulk tonnage intrusive related gold orebodies and the definition of at least 300,000 oz in resources that could be processed by recommissioning D'Aguilar's 150,000 tpa carbon in pulp gold treatment plant.

D'Aguilar has constructed a detailed multilaver data base which combines all historical mining, geology, geochemical and geophysical data which may be accessed and interrogated at any scale. New results and knowledge is added as it becomes available. The work on the database has yielded several high priority targets primarily defined by geology, aeromagnetics and gold geochemistry.

The Company has been able to reprioritise exploration targets. Eighteen project areas were defined and six were selected for priority programs to define drill targets (Figure 1). Several new exploration licences were applied for over those areas. The D'Aguilar project area now totals over $3,000 \text{ km}^2$ of exploration licences and 552 hectares of granted mining leases.

Table 1: Priority Targets in the D'Aguilar Block

Project Area	Teatures	Previous Production	Exploration Status
Manumbar gikaldi	Epithermal calcite vein system in Triassic Andesitic volcanic basin	50,000 ounces	Recent drilling program extended limits of the system and exploring for bonanza grade gold zone
Elginvale	Bulk mineable porphyry system outcropping over $2.5 \text{ km}^2$	S mal	Recent drilling program testing of extensive soil, rock chip and channel sample gold anomalies which are supported by magnetics
Saw Pit - Orlis	Mineralised intrusive aureole and associated vein systems. Epithermal mineralisation in andesite volcanic basin	Minor	4km x 0.5km zone up to 40 ppb gold in streams and 1.5g/t gold rock chip samples. Currently mapping in detail, prior to defining drill targets
Long Tunnel - One Mile	Complex intrusive porphyry system	100,000 ounces in alluvials	Drill targets currently being defined over extensive soil anomaly
Gallangowan. Jimmy's Scrub, Kabunga	Porphyry prospects outcropping over 2.5 km 2	Small	Aeromagnetic & geochemical gold anomalies requiring ground follow-up
Gibralter Rock	Complex porphyry altered over 25 km 2	Minor	Drill targets currently being defined using stream sediment and soils geochemical data
Woolooga	Complex porphyry with widespread gold anomalism	Minor	Numerous targets being refined, some with previous drill intersections
Pecnant, King Creek, Kinbombi	Intrusive related mineralisation in a porphyry host.	Nil	Previous drilling has identified mineralised intrusive systems and epithermal vein occurrences up to 10g/t
Teewoo	Intrusive porphyry related mineralisation	Nil	Geochemical and geophysical anomaly east of Manumbar requiring follow-up mapping prior to drill target selection
Black Stake Plateau	Porphyry and associated mesothermal veins	10,000 ounces	Numerous vein systems peripheral to Black Snake porphyry; prospects currently being defined prior to drill target selection
Cimabar	Epithermal mercury veins over $25 \text{km}^2$ zone in andesitic volcanics	Significant mercury production	Regional interpretation and development of model
Gymne East	Mesothermal vein target with Geophysical anomaly similar to Gympie	Minor	Minor workings requiring follow-up and development of a geological model
Glastonbury - West Mary	Mesothermal vein systems in a Devonian Metamorphic basement with Triassic intrusive complexes	Minor	Follow up mapping of extensive geochemical anomalies to define drill targets

The principle features emerging from D'Aguilar's work to date are:

• $\mathbf{1}$ . A zone of intrusive related prospects supported by strong gold copper and gold chemistry, intrusive porphyries and strong magnetic highs along the edge of the Esk Trough/D'Aguilar Block boundary. The Elginvale Project Area exemplifies this style.
• $\overline{2}$ . Volcanic-filled basins prospective for epithermal gold at Manumbar, Sawpit Creek and north west of Kilkivan. A cresent shaped zone of mercury anomalism over 25km² west of Kilkivan in the Esk Trough is also thought to be prospective for epithermal gold at depth.
• $\overline{3}$ . Porphyry gold copper prospects around intrusive complexes through the D'Aguilar Block at:
• Woolooga, Gibraltar and Glastonbury
• Long Tunnel One Mile
• · Black Snake
• Teewoo
• Kabunga
• $\overline{4}$ . Very strong zones of gold mineralisation in the basement metamorphics of the West Mary zone south of Gympie.

Manumbar Gold Prospect (Figure 2)

The Manumbar Epithermal Gold Prospect is located 30 km south of the operations base at the Shamrock mine site. The geological similarity between Manumbar and the well-known Queensland epithermal gold deposits at Cracow (Newcrest 70%, 1.8 million oz) and Vera Nancy (Newmont, 3.5 million oz) underscores the potential at Manumbar for the discovery of in excess of one million ounces of gold, in a system over five kilometres strike length.

Manumbar is a calcite-rich epithermal gold vein emplaced in Triassic aged andesite volcanic rocks, discovered in the 1990's by stream sediment gold exploration. Manumbar produced approximately 49,000 ounces of gold from three shallow open pits at a mined diluted grade of approximately five grams of gold per tonne. The ore was treated through D'Aguilar's Shannock Treatment Plant. D'Aguilar has developed a model for the emplacement of gold at high grades in the bonanza silica hosted zones which were interpreted to lie at depth in the Manumbar system.

Several key controls for the occurrence of wide veins and high grades in this model were identified:

• $\mathbf{1}$ . A brittle andesite lava host.
• $\overline{2}$ . A flexure in the structure hosting the vein.
• $\overline{3}$ . Presence of adularia, a diagnostic potassium feldspar mineral.
• $\overline{4}$ . Mineralisation with a high gold to silver ratio.

To date, the drilling at Manumbar has confirmed the continuity of the system and identified the top of the prospective silica zone but has not yet identified high grade extensions to the previously mined ore zones. The Company believes that this is due to the absence of favourable brittle host rocks in the majority of the drill tested sections.

In September 2004, D'Aguilar commenced a review to determine the key vectors to economic mineralisation prior to further drilling activities. The exploration work at Manumbar and evidence from the Cracow deposit established that the presence of a brittle host andesite lava is most important for the emplacement of a gold-rich vein.

At Manumbar this favourable host rock (andesite lava) is much more magnetic than the other andesite volcanic rock types. Detailed magnetic data should therefore provide a means of tracking favourable host rocks. A ground magnetic survey covering some 250 line kilometres over a nine square kilometre area around the historic Manumbar mine site is in progress. It is envisaged that this survey will be ultimately modelled in three dimensions and will provide more definitive guidance for future drilling at Manumbar.

During the year D'Aguilar drilled nine holes at Manumbar for 2,624 metres of drilling, returning the following results:

Drill hole ID	Easting (mtrs)	Northing (mus)	Azimuth (hole bearing)	Declination (hole dip) (degrees)	From (int)	I'n. (mts)	Length (mas)	Grade tem Au	Lud of hole (n)(s)
MB43	437060	7083195	015	60	104.0	105.3	1.3	14.5	162.0
MB44	437112	7083188	000	60	84.4	85.6	1.2	6.61	141.0
DP023	436895	7083326	330	57	87.0	88.0	1.0	1.02	374.1
DP024	436862	7083264	010	58	231.0	232.0	1.0	0.1	347.2
IDP025	436988	7083460	225	60	226.0	229.0	3.0	1.46	297.0
DP026	436838	7083578	205	55	135.2	135.8	0.6	3.23	252.2
IDP027	436377	7083676	021	60	no	intercept	over	0.01	399.2
DP028	436724	7083680	317	55	94.0	100.0	6.0	7.65	150.0
Including					94.0	95.0	1.0	19.65
And					99.0	100.0	1.0	11.2
DP037	436962	7083232	018	55	159	160	1.0	0.14	174
IDP038	436782	7083648	325	55	181	181.5	0.5	0.08	279.2
IDP039	437401	7083031	335	60	259.2	259.7	0.5	1.14	351.2

Table 2: 2004 Drilling Results Manumbar Gold Prospect

Previous CRA Limited drillholes MB43 and MB44 were assayed by D'Aguilar in zones not previously analysed by CRA. The analysis discovered additional zones of mineralisation parallel to the main zone.

The most encouraging results were returned in drillhole DP028, where the North Lode vein was intersected at approximately 60 metres below surface with highly encouraging grades averaging 7.65 g/t over a true width of 4.2 metres from 94 metres downhole, including 1 metre @ 19.65 g/t gold and 1 metre @ 11.2 g/t gold on the margins of the vein. The vein was a typical Manumbar style calcite dominant vein.

The work to date at Manumbar has provided considerable encouragement for the discovery of a significant resource. Drilling has intersected highgrade mineralisation at similar frequency to early stage exploration activities by other companies at Cracow.

The key conclusion is that the vein is best developed in brittle lava variants of the ubiquitous andesite host. This establishes the importance of the planned ground magnetic survey to determine the coincident location of the fracture system and brittle host. To date, at Manumbar, the vein system shows potential for approximately five km of strike length and if it is all similarly mineralised at the same abundance of gold bearing shoots as was previously mined, it would provide a valid target sufficiently large to offer potential for the discovery of a resource which could justify a development.

Several key targets for follow up at Manumbar are evident and will be investigated further during the September and December 2004 quarters (Figure 2).

Figure 2 - Manumbar drillhole locations and targets

A bulk mineable intrusive model for gold in the D'Aguilar Block - Esk Trough

Elginvale Bulk Tonnage Target

D'Aguilar's new regional database has refined the bulk-mineable intrusive related gold model to explain the occurrence of significant mineralised systems along the east side of the Esk Trough and west side of the D'Aguilar Block.

The discoveries in New South Wales over the last decade of bulk mineable style copper-gold deposits by Newcrest Mining at Cadia – Ridgeway (44 million tonnes @ 2.5 g/t gold and 0.82% copper) and discoveries by North Ltd at North Parkes and Lake Cowal demonstrate the potential of this style of target. Cadia Ridgeway, North Parkes and Lake Cowal occur adjacent to similar geological structures to those occurring in the northern D'Aguilar Block. D'Aguilar believes the broad structural similarities and the suite of granodiorite and porphyry rocks at Elginvale to be the key to the bulk mineable exploration strategy.

Elginvale was originally defined by CRA in 1991 as a north-south trending zone some 2.5 km long and 400 metres wide and strongly anomalous in copper and gold. The mineralised zone is open to the south and coincident with a zone of medium sized and intense aeromagnetic anomalies that arise from porphyries emplaced in a thick volcanic unit.

During the year D'Aguilar drilled five holes for 1,807 metres across the southern part of the anomaly and outlined a zone of gold mineralisation associated with a diagnostic potassic alteration zone at least 80 metres wide. D'Aguilar has identified a broad correlation between enhanced gold grades and potassic alteration styles which indicates significant potential for a bulk mineable orebody at depth.

At the time of writing, many assays are still outstanding, but results to date include highs up to 18 grams per tonne in potassic altered quartz and sulphide veins showing free gold within wide, low grade zones. For example:

• 19 metres from 100 metres @ 1.07 g/t gold including 0.4 metre @ 18 g/t in DP029
• 54 metres @ approximately 0.2 g/t gold from surface and 0.8 m @ 16 g/t from 181 metres and 4 metres @ 1 g/t from 337 metres in DP033
• 5 metres $@$ 1.4 in DP034
• 11 metres @ 0.63 from 1 metre and 21 metres @ 0.69 from 39 metres in DP035

Elginvale and several promising similar prospects in the same zone are developed in Triassic aged highly oxidised diorite intrusive bodies. Triassic aged intrusives are a key element of the rock suite at the Mt Rawdon project operated by Equigold some 100 km to the north. Other prospects in this trend include Ollenburgs, located four kilometres south of Elginvale; Gallangowan ten kilometres to the north east and the King Creek, Kinbombi and Peenam prospects to the north.

Shamrock, Mt Clara and Tablelands

In addition, drilling was conducted at the Shamrock, Mt Clara and Tablelands prospects for a total of 3,038 metres, without exploration success.

Lateritic Nickel Potential Resources

Nickel-cobalt rich laterites have developed in the weathered zones of serpentinite rocks of the D'Aguilar Block. In one deposit located three kilometres east of the Shamrock Gold Plant, a non-JORC resource of 100,000 tonnes @ 1.2% nickel and 0.11% cobalt was outlined by previous workers. Frequent highly anomalous nickel values up to 0.2 % in sheared serpentinite bedrock highlights the nickel potential of the area. D'Aguilar intends to evaluate the known resource area to confirm its size and grade and review the potential of the balance of the project area for additional targets.

Andurambah Molybdenum - Tungsten Project

During investigation of sources of geological information for entry into the regional D'Aguilar Block database, D'Aguilar identified open exploration ground over the Andurambah Molybdenum Project 100 kilometres northnorthwest of Brisbane. D'Aguilar applied for an exploration permit over an area of 308 km² covering the project. Andurambah contains a resource of 20 Mt at a grade of $0.07\%$ molybdenum or 8 Mt at a grade of 0.11% molybdenum. The resource was defined by CRA in 1969 and upgraded by BHP between 1981 and 1983. The resource has a waste to ore ratio of approximately 1.4:1 and occurs in a granite host.

D'Aguilar's interest in Andurambah is based on several geological and market factors:

• Molybdenum prices have recently risen strongly to US \$ 19 per pound (approximately A\$ 59,000 per tonne), driven largely by the increase in specialty steel alloy consumption.
• There is additional exploration upside for the tungsten and silver at Andurambah.
• Other exploration targets are evident in the database.

D'Aguilar is currently assessing the exploration potential identified and is evaluating the potential project economics. and market dynamics for molybdenum and tungsten.

Solomon Islands Gold Project

Australian Resource Management (ARM) Pty Ltd (D'Aguilar's wholly owned subsidiary) holds project areas over highly prospective porphyry targets on the main island of Guadalcanal in Solomon Islands. The project area is located on the Pacific Rim of Fire, south of the world-class Panguna copper deposit on Bougainville in Papua New Guinea and exhibits similar geological features. No work is planned on these project areas until law and order is restored to Solomon Islands

Prior to its acquisition by D'Aguilar, ARM expended in excess of A\$3.5 million and outlined several prospects containing base and precious metal porphyry targets.

Promising exploration targets include:

• World-class porphyry deposits of the Southwest Pacific Copper-Gold style similar to Panguna on Bougainville and Ok Tedi in Papua New Guinea.
• Epithermal gold deposits of the Gold Ridge style, which can contain upwards of two million ounces of gold.

Previous work by ARM has brought one large copper-gold porphyry deposit - the Mbetilonga caldera, located only some 8km from the capital of Honiara, to a stage where evaluation drilling for bulk mineralisation can be planned during the next follow-up exploration program. Results to date from activities conducted by ARM in 1997 include a channel sample result of approximately 100 metres at 2.5% copper in a trench centred in a copper in soils anomaly exceeding 0.1% copper over an area of approximately $6km^2$ .

During the year these tenements were kept on a care and maintenance basis pending an improvement in the operating conditions in Solomon Islands. ARM has renewed the tenements and expects to conduct further field activities on the project in the 2005 financial year.

DIRECTORS' REPORT

Your directors submit their report for the year ended 30 June 2004.

DIRECTORS

The names of the directors of the Company in office during the period and until the date of this report are as follows. Names, qualifications, experience and special responsibilities

Dr Christopher Rawlings BSc (PhD), FAusIMM, FAICD (Non Executive Chairman)

Dr Rawlings was appointed on 21 May 2003 and acts as the Company's Chairman. Dr Rawlings has over 25 years experience in the Australian mining industry, including six years as a Managing Director of South Blackwater Coal Limited and six vears as a Managing Director and chief executive officer of OCT Resources Limited. He is a former President of the Queensland Mining Council.

Dr Rawlings is a fellow of the Australian Institute of Company Directors and the Australasian Institute of Mining and Metallurgy.

Dr Rawlings is Executive Chairman of Australian Magnesium Corporation, director of Uniquest Pty Ltd and JK Tech Pty Ltd and is Chairman of Directors of Renison Consolidated Mines NL.

Nicholas Mather BSc (Hons, Geol) (Univ. QLD) MAusIMM (Managing Director)

Mr Maher was appointed on 26 October 2001. Nick Mather has 22 years' experience in exploration and resource company management. His career has taken him to a variety of countries exploring for precious and base metals and fossil fuels.

Mr Mather has focused his attention on the identification of and investment in large resource exploration projects.

He was managing director of BeMaX Resources NL from 1997 until 2000 and instrumental in the discovery of the world class Gingko mineral sand deposit in the Murray Basin in 1998. As an executive director of Arrow Energy NL, Mr Mather has driven the acquisition and business development of Arrow's large Surat Basin Coal Bed Methane project in South East Queensland. He was managing director of Auralia Resources NL, a junior gold explorer before its \$23 million merger with Ross Mining NL in 1995. He was also a non-executive director of Ballarat Goldfields NL, having assisted that company in its re-emergence as a significant emerging gold producer.

Mr Mather is President of Western Pacific Gold Inc, a listed Canadian exploration company and an Executive Director of ASX listed Arrow Energy NL.

Ian Levy

BSc (Hons) (ANU) MSc (Dist) (London) & Diploma of Imperial College (Royal School of Mines) (Non-Executive Director)

Mr Levy was appointed on 12 February 2003. Mr Levy has had 27 years experience in both mining geology and mineral exploration including 12 years with Western Mining Corporation Limited and 11 years experience in mining business development positions.

Mr Levy commenced his mining career with Western Mining Corporation Limited at the Kambalda Nickel Operation in Western Australia. He worked on the Kalgoorlie Golden Mile and Central Norseman Gold Mines prior to being appointed senior commercial geologist at Western Mining's head office in Melbourne in 1980.

In 1984. Mr Levy was appointed Chief Geologist of the Tavua Basin Joint Venture with Emperor Gold Mines in Fiji. During this time, exploration teams under his management discovered the million-ounce Prince William ore system. From 1987 until present. Mr Levy has worked in development roles for mining-exploration companies including Pancontinental Mining and Gympie Gold Limited.

Mr Levy has been Federal President of the Australian Institute of Geoscientists and was a member of the Joint Ore Reserve Committee (JORC) for 10 years including 4 years as Vice Chairman.

Brian Moller LLB (Hons) (Univ. QLD) (Non-Executive Director)

Mr Moller was appointed on 2 August 2002. Mr Moller is a corporate partner in the Brisbane based law firm Hopgood Ganim. He was admitted as a solicitor in 1981 and has been a partner since 1983. He practices almost exclusively in the corporate area with an emphasis on capital raising, mergers and acquisitions.

He holds an LLB Hons from the University of Queensland and is a member of the Australian Mining and Petroleum Law Association.

Mr Moller acts for many public listed resource and industrial companies and brings a wealth of experience and expertise to the board particularly in the corporate regulatory and governance areas. Until recently, he was currently Chairman of Gold Aura Limited, a Queensland based ASX listed company.

Damien Reynolds (Non-Executive Director)

Mr Reynolds was appointed on 2 August 2002. Mr Reynolds is currently President and CEO of Tournigan Gold Corporation and a director of Lalo Ventures Corporation. Both companies are Canadian listed gold exploration and development companies.

Mr Revnolds has been working in the junior resources sector for more than 18 years and has gained considerable industry knowledge serving on the boards of a number of public exploration companies.

Mr Reynolds was the financial controller of Total Energold Corporation, a mining and resource exploration subsidiary of the Total Group of France and Major General Resources Ltd.

Vincent Mascolo BEng Mining (Univ. Wooloongong) MAusIMM, MEI Aust (Non-Executive Director)

Mr Mascolo was appointed on 30 September 2002. Mr Mascolo is a qualified mining engineer with extensive experience in a variety of fields including, gold and coal mining, quarrying, civil-works, bridge-works, water and sewage treatment and estimating.

Mr Mascolo has completed assignments in the Civil and Construction Industry, including construction and project management, engineering, quality control and environment and safety management.

Mr Mascolo is a member of both the Australian Institute of Mining and Metallurgy and the Institute of Engineers of Australia.

SECRETARY

The name of the secretary of the company in office during the period and until the date of this report is as follows.

Name, qualifications, experience and special responsibilities

Duncan Cornish (Company Secretary) BBus (Acctey), ACA

Mr Cornish has more than ten years experience in the accountancy profession both in England and Australia, mainly with the accountancy firms Ernst and Young and PriceWaterhouseCoopers. He has extensive experience in all aspects of company financial reporting, corporate regulatory and governance areas, business acquisition and disposal due diligence, capital raising and company listings and company secretarial responsibilities.

Mr Cornish is a Chartered Accountant. He holds a Bachelor of Business (Accounting) and is a member of the Australian Institute of Chartered Accountants.

Mr Cornish is also company secretary of another ASX listed company.

Interests in the shares and options of the Company

As at the date of this report, the interests of the directors in the shares and options of D'Aguilar Gold Ltd were:

	Ordinary Shares	Unlisted \$0.20 options exercisable on or before 31 October 2005	\$0.20 options exercisable on or before 31 March 2006
Christopher Rawlings	925.000		694.969
Nicholas Mather	811,100	1,730,770	638,019
Ian Levy	200,000		332,469
Brian Moller	625.000		544.969
Damien Reynolds	462.500	1.384,615	463,719
Vincent Mascolo	1.311.044	1.384.615	655.522

CORPORATE INFORMATION

Corporate structure

D'Aguilar Gold Ltd is a company limited by shares that is incorporated and domiciled in Australia. D'Aguilar Gold Ltd has prepared a consolidated financial report which consolidates its' 100% owned subsidiaries Australian Resource Management (ARM) Pty Ltd and Navaho Mining Pty Ltd.

Nature of operations and principal activities

The principal activities of the Company during the financial year were mineral exploration and development. There where no significant changes in the nature of the Company's principal activities during the financial year.

Employees

As at 30 June 2004, the consolidated entity employed three full-time employees plus a further eight part-time and casual staff (2002: 1 full-time employee).

OPERATING RESULTS

For the year ended 30 June 2004, the consolidated loss from ordinary activities for the economic entity after providing for income tax was \$828,212 (2003: \$2,024,974 profit)

DIVIDENDS PAID OR RECOMMENDED

There were no dividends paid or recommended during the financial year.

REVIEW OF OPERATIONS

Detailed comments on operations and exploration programmes up to the date of this report are included separately in the Annual Report under Review of Operations.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

The following significant changes in the state of affairs of the parent entity occurred in the financial year.

• On 28 May 2003 the Company issued a prospectus for the issue of up to 20,000,000 shares to be offered for subscription at 20 cents each to raise up to \$4,000,000. Having closed the Initial Public Offering fully subscribed (\$4,000,000) on 8 August 2003, the Company was admitted to the Australian Stock Exchange ("ASX") on 19 August 2003, 20,000,000 ordinary shares were allotted and issued on 8 August 2003. Official quotation of the Company's shares on the ASX commenced on 21 August 2003.
• On 27 November 2003 the Company issued 7,500,000 shares to Gympie Gold Ltd in consideration for the transfer of various mining tenements and interests to the Company pursuant to the Sale Agreement described in the Company's prospectus dated 28 May 2003.
• On 21 November 2003 the Company issued a prospectus for a pro rata non-renounceable offer on the basis of 1 option at 1 cent for every 2 ordinary shares held on a record date of 3 December 2003 to raise up to \$286,560. Of the 28,656,000 options offered, 26,331,307 were accepted by shareholders and the directors exercised their right to allocate the shortfall of 2,324,693 options. Having raised the full \$286,560, the 28,656,000 options were issues by 31 December 2003 and commenced trading on the ASX on 5 January 2004.

SIGNIFICANT EVENTS AFTER BALANCE DATE

There have been no events since the end of the financial year that impact upon the financial report as at 30 June 2004.

FUTURE DEVELOPMENTS

Likely developments in the operations of the Company and the expected results of those operations in subsequent financial years have been discussed where appropriate in the Annual Report under Review of Operations.

There are no further developments of which the directors are aware which could be expected to affect the results of the Company's operations in subsequent financial years other than information which the directors believe comment on or disclosure of, would prejudice the interests of the Company.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The consolidated entity is subject to environmental regulation in relation to its exploration activities. Save for the securing for the benefit of the Company of bonds totaling some \$1,300,000 in respect of the future liability for rehabilitation of mining leases, there are no matters that have arisen in relation to environmental issues up to the date of this report. Details of these bonds appear in Note 26 in the Notes to Financial Statements.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

Each of the directors of the Company has entered into a Deed with the Company whereby the Company has provided certain contractual rights of access to books and records of the Company to those directors.

The Company has insured all of the directors of D'Aguilar Gold Ltd. The contract of insurance prohibits the disclosure of the nature of the liabilities covered and amount of the premium paid. The Corporations Act does not require disclosure of the information in these circumstances.

DIRECTORS' AND OTHER OFFICERS' EMOLIMENTS

Remuneration policy

The Remuneration and Nomination Committee of the Board of Directors is responsible for determining the reviewing compensation arrangements for the directors and the executive team. The Remuneration and Nomination Committee assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash and fringe benefits. It is intended that the manner of payments chosen will be optimal for the recipient without creating undue cost for the Company. Further details on the remuneration of directors and executives are also provided in Note 19 to the Financial Statements.

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

• The Constitution of the Company provides that the Non-Executive Directors are entitled to remuneration as determined by the Company in general meeting to be apportioned among them in such manner as the directors agree and, in default of agreement, equally. The aggregate remuneration currently determined by the Company is \$185,000.00 per annum. Additionally, Non-Executive Directors will be entitled to be reimbursed for properly incurred expenses.
• If a Non-Executive Director performs extra services, which in the opinion of the Directors are outside the scope of the ordinary duties of the Director, the Company may remunerate that Director by payment of a fixed sum determined by the Directors in addition to or instead of the remuneration referred to above. However, no payment can be made if the effect would be to exceed the maximum aggregate amount payable to Non-Executive Directors. A Non-Executive Director is entitled to be paid travelling and other expenses properly incurred by them in attending Director's or General Meetings of the Company or otherwise in connection with the business of the Company.
• The remuneration of any Executive Director may from time to time be fixed by the Directors. The remuneration may be by way of salary or commission or participation in profits but may not be by commission on, or a percentage of, operating revenue.

Emoluments' of directors and other officers of D'Aguilar Gold Ltd

		Primary		Post-Employment		Equity	Other	Total
	Salary & Fees	Cash Bonus	Non-cash benefits	Superan- nuation	Retirement benefits	Options
Christopher Rawlings	36,697	٠	$\sim$	3.303	٠		$\sim$	40,000
Nicholas Mather	175,000	$\overline{\phantom{a}}$	٠	$\overline{\phantom{a}}$	-	$\overline{\phantom{a}}$	$\tilde{\phantom{a}}$	175,000
lan Levy	30,000	$\tilde{\phantom{a}}$	٠	٠	$\overline{\phantom{a}}$	٠	$\tilde{\phantom{a}}$	30,000
Brian Moller	30,000	-	$\overline{\phantom{0}}$	$\overline{\phantom{a}}$	$\tilde{\phantom{a}}$	$\overline{\phantom{a}}$	$\tilde{\phantom{a}}$	30,000
Damien Reynolds	30,000	٠	٠	$\sim$	٠	۰	$\sim$	30,000
Vincent Mascolo	30,000	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$\tilde{\phantom{a}}$	$\overline{\phantom{a}}$	$\tilde{\phantom{a}}$	30,000

Emoluments* of directors of D'Aguilar Gold Ltd for the year ended 30 June 2004:

Emoluments* of the five most highly paid executive officers# of the Economic Entity for the year ended 30 June 2004:

		Primary		Post-Employment		Equity	Other	Total
	Salary & Fees.	Cash Bonus	Non-cash benefits	Superan- mation	Retirement benefits	Options
Ron Cunneen	83,804	٠	۰	7,542	٠	۰	$\tilde{\phantom{a}}$	91,346
Duncan Cornish	87,200	٠	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	٠	87,200

Notes:

The terms 'director and 'officer' have been treated as mutually exclusive for the purposes of this disclosure.

* The elements of emoluments have been determined on the basis of the costs to the Company and the Economic Entity.

Officers are those directly accountable and responsible for the operational management and strategic direction of the Company and the Economic Entity.

DIRECTORS' MEETINGS

The number of meetings of directors held during the period and the number of meetings attended by each director were as follows:

	Number of meetings held while in office	Meetings attended
Christopher Rawlings		11
Nicholas Mather	Н	11
Ian Levy	11	9
Brian Moller	11	11
Damien Reynolds	11	5
Vincent Mascolo	11	10

Total number of meetings held during the financial year - 11

AUDIT COMMITTEE MEETINGS

The number of meetings of the Audit Committee held during the period and the number of meetings attended by each member of the Audit Committee were as follows:

	Number of meetings held while in office	Meetings attended
Brian Moller		٦
Damien Reynolds

Total number of meetings held during the financial year $-3$

SHARE OPTIONS

As at the date of this report (and at the balance date) there were 33,156,000 unissued ordinary shares under options as follows:

• 4,500,000 unlisted options to take up one ordinary share in D'Aguilar Gold Ltd at an issue price of 20 cents. The $\bullet$ options expire 31 October 2005.
• 28,656,000 listed options to take up one ordinary share in D'Aguilar Gold Ltd at an issue price of 20 cents. The $\bullet$ options expire 31 March 2006.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purposes of taking responsibility on behalf if the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of D'Aguilar Gold Ltd support and have adhered to the principles of corporate governance. The Company's corporate governance statement is contained in the Shareholder Information section of the Annual Report.

Signed in accordance with a resolution of the directors.

Brian Moller Director

Brisbane 30 September 2004

SHAREHOLDER INFORMATION

Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 24 September 2004.

$(a)$ Distribution of equity securities

The number of holders, by size of holding, in each class of security are:

	Ordinary shares			Unlisted \$0.20 options exercisable on or before 31 October 2005	\$0.20 options exercisable on or before 31 March 2006
	Number of holders	Number of shares	Number of holders	Number of options	Number of holders	Number of options
$1 - 1.000$	4	3,158			4	2,079
$1,001 - 5,000$	29.	111,870			168	783,304
$5,001 - 10,000$	237	2,333,925	$\mathbf{r}$		82	719,388
$10,001 - 100,000$	285	9,647,495	$\mathbf{r}$		130	3,730,910
100,001 and over	51	45.215.591		4,500,000	40	23,420,319
Total	606	57,312,039		4,500,000	424	28,656,000

The number of shareholders holding less than a marketable parcel of shares is 33 (115,028 ordinary shares).

$(b)$ Twenty largest holders

The names of the twenty largest holders, in each class of security are:

Ordinary shares:

1	Gympie Gold Limited	14,500,000	25.3%
2	Western Pacific Gold Inc*	8,000,050	14.0%
3	Westpac Custodian Nominees Limited	3,530,000	6.2%
4	SC Biggs	1,375,000	2.4%
5	Vincent Mascolo	1,311,044	2.3%
6	Abbotsleigh Pty Ltd	1,250,000	2.2%
7	Tenstar Trading Limited	1,000,000	1.7%
8	Bizzell Nominees Pty Ltd	880,000	1.5%
9	Dr Christopher David Rawlings	850,000	1.5%
10	Mr S and Mrs J Chiu-Yueh Hsu	845,250	1.5%
$\mathbf{H}$	Liam Rigney	746,608	1.3%
12	Dr Robert Todd	675,000	1.2%
13	Samuel Capital Limited	650,000	1.1%
14	Sealth Pty Ltd	625,000	1.1%
15	Bow Lane Nominees Pty Ltd	576,000	1.0%
16	Agpro Pty Ltd	500,000	0.9%
17	HSBC Custody Nominees (Australia) Limited	500,000	0.9%
18	Alfredo Marrocco	500,000	0.9%
19	George Lee	500,000	0.9%
20	Damien Reynolds	462,500	$0.8\%$
	Top 20	39,276,452	68.5%
	Total	57,312,039	100.0%

*Note: The Company understands that Western Pacific Gold Inc. ("WPI") still proposes to distribute all of the 8,000,050 ordinary shares it holds in D'Aguilar Gold Ltd on a pro-rata basis to shareholders of WPI. WPI shareholders as at the WPI Record Date will be entitled to participate in this distribution.

Options exercisable at \$0.20 on or before 31 March 2006:

Gympie Gold Limited 7,250,000 25.3% 1 Western Pacific Gold Inc. 4.000.000 2 3 Westpac Custodian Nominees Limited 1,765,000 SC Biggs 687.500 2.4% 4 5 Vincent Mascolo 655,522 625,000 2.2% Abbotsleigh Pty Ltd 6 1.7% 7 Tenstar Trading Limited 500,000 8 463,719 1.6% Damien Reynolds 9 450,794 1.6% Liam Rigney 10 Bizzell Nominees Pty Ltd 440,000 1.5% 425,000 1.5% Ħ Dr Christopher David Rawlings Dr Robert Todd 337,500 1.2% 12 13 Justevian Pty Limited 1.2% 332,469 325,000 14 Samuel Capital Limited 1.1% 15 Samuel Holdings Pty Ltd 313,019 1.1% A Haack Pty Ltd 290,000 1.0% 16 17 1.1% Sealth Pty Ltd 312,500 Catherine Cornish 18 282,469 1.0% 19 Elizabeth Lee Nelson 0.9% 269,969 20 250,000 Agpro Pty Ltd 19,975,461 Top 20 Total 28,656,000 100.0%
		14.0%
		6.2%
		2.3%
		0.9%
		69.7%

$(c)$ Substantial shareholders

The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are:

Number of shares Gympie Gold Ltd 14,500,000 8,000,050 Western Pacific Gold Inc

$(d)$ Voting rights

All ordinary shares carry one vote per share without restriction

$(e)$ Restricted securities

The number of restricted securities (held in escrow) that are on issue, and the date from which they cease to be restricted securities are as follows:

Ordinary shares: Date securities cease to be restricted: 27 November 2004 (ASX restriction) 21 August 2005 (ASX restriction) Total	Number of restricted securities: 7,500,000 16,481,094 23,981,094
Unlisted options exercisable at \$0.20 on or before 31 October 2005: Date securities cease to be restricted: 21 August 2005 (ASX restriction)	Number of restricted securities: 4,500,000

$(f)$ Business objectives

The entity has used its cash and assets that are readily convertible to cash in a way consistent with its business objectives.

INTERESTS IN MINING AND EXPLORATION TENEMENTS

D'Aguilar Gold Ltd held the following interests in mining and exploration tenements as at 30 September 2004:

Australia

Tenure Type, Name and	Current Holder	Registered %	Date of Expiry
Number		Interest of Holder
EPM 5187 Manumbar	D'Aguilar Gold Ltd	100%	24/01/05 See Note 3
Portion of EPM 6031	See Note 6	See Note 6	06/09/04 See Note 6
EPM 6939 Mt Coora	D'Aguilar Gold Ltd	100%	12/06/05 See Note 3
EPM 7682 Elginvale No. 1	D'Aguilar Gold Ltd	100%	6/08/05 See Note 3
EPM 9759 Kilkivan	D'Aguilar Gold Ltd	100%	3/01/05 See Note 3
EPM 9978 Monsildale	D'Aguilar Gold Ltd	100%	24/03/02 See Note 2
EPM 10135 Golden Spur	D'Aguilar Gold Ltd	100%	09/06/02 See Notes 2 and 3
EPM 10903 Elginvale No. 2	D'Aguilar Gold Ltd	100%	31/12/05 See Note 3
EPM 11122 Beenham Range	D'Aguilar Gold Ltd	100%	19/06/05
EPM 11192 Tableland	D'Aguilar Gold Ltd	100%	23/09/03 See Notes 2 and 3
EPM 11673 Kilkivan Project	Navaho Mining Pty Ltd	100%	12/05/05
EPM 12712 Court-Le-Roi	D'Aguilar Gold Ltd	100%	24/01/05 See Note 3
EPM 13833 Gympie	D'Aguilar Gold Ltd	100%	5/08/06
EPM 13359 Kilkivan North	Australian Resource Management (ARM) Pty Ltd	100%	03/01/05
EPM 13360 Kilkivan East	Australian Resource Management (ARM) Pty Ltd	100%	05/02/05
EPM 13361 Kilkivan West	Australian Resource Management (ARM) Pty Ltd	100%	05/02/05
EPM 14034 Girbraltar Rock	Navaho Mining Pty Ltd	100%	20/10/08
EPMA 13730 Rossmore	D'Aguilar Gold Ltd	100%	Under application
EPMA 14372 Tableland	D'Aguilar Gold Ltd	100%	Under application See Note 4
EPMA 14373 Elginvale No 1	D'Aguilar Gold Ltd	100%	Under application See Note 4
EPMA 14375 Elginvale No 2	D'Aguilar Gold Ltd	100%	Under application See Note 4
EPMA 14376 Manumbar	D'Aguilar Gold Ltd	100%	Under application See Note 4
EPMA 14489 Aura	D'Aguilar Gold Ltd	100%	Under application
EPMA 14316 Mooroorerai	Navaho Mining Pty Ltd	100%	Under application
EPMA 14553 Woolooga	Navaho Mining Pty Ltd	100%	Under application
EPMA 14560 Mount Kandanga	Navaho Mining Pty Ltd	100%	Under application
EPMA 14561 Borumba	Navaho Mining Pty Ltd	100%	Under application
Mountain
EPMA 14563 North	Navaho Mining Pty Ltd	100%	Under application
Monsildale
EPMA 14666 Anduramba	D'Aguilar Gold Ltd	100%	Under application
EPMA 14670 Cattle Creek	D'Aguilar Gold Ltd	100%	Under application
ML 3678 United Reefs Gold	D'Aguilar Gold Ltd	100%	31/05/22
Mine (Shamrock)
ML 3732 Jimmy Serub	D'Aguilar Gold Ltd	100%	31/01/10
ML 3741 Shamrock Extended	D'Aguilar Gold Ltd	100%	30/09/09
ML 3748 Black Shamrock	D'Aguilar Gold Ltd	100%	28/02/13
ML 3749 North Chinaman	D'Aguilar Gold Ltd	100%	31/07/07
ML 3752 Shamrock Tailings	D'Aguilar Gold Ltd	100%	31/01/10
ML 3753 Shamrock Tailings	D'Aguilar Gold Ltd	100%	31/08/05
Extended ML 6622 Golden Spur	D'Aguilar Gold Ltd	100%	31/07/09
ML 50059 Manumbar	D'Aguilar Gold Ltd	100%	31/12/03 Note 1
ML 50099 Manumbar	D'Aguilar Gold Ltd	100%	31/08/05
Extended
ML 50148 Tableland	D'Aguilar Gold Ltd	$100\%$	30/04/14
ML 50137 Long Tunnel	Navaho Mining Pty Ltd	100%	31/08/09

Solomon Islands

Tenure Type, Name and Number	Current Holder	Registered % Interest of Holder	Date of Expiry
SPL 189 Koloula	Australian Resource Management (ARM) Pty Ltd	100%	24/09/03 See Note 1
SPL 190 Central Guadalcanal	Australian Resource Management (ARM) Pty Ltd	100%	24/09/03 See Note 1
SPL 191 Mbetilonga	Australian Resource Management (ARM) Pty Ltd	100%	24/09/03 See Note 1
SPL 195 Sutakiki	Australian Resource Management (ARM) Pty Ltd	100%	Note

A Renewal Application has been lodged in respect of this Tenement. Note 1

• Note 2 A Renewal Application has been lodged in respect of this Tenement. The Application was lodged outside of the 28-day period but still prior to expiry.
• Note 3 These Tenements have been conditionally surrendered upon the successful granting of the EPM Applications referred to in Note 4.
• These Tenements have been applied for over the conditionally surrendered EPM's referred to in Note 3. Note 4

Due to civil unrest in the country at the present time this Tenement has been suspended. Note 5

Note 6 D'Aguilar Gold Ltd registered an agreement, dealing or other interest over six sub-blocks of EPM 6031, held by Gympie Eldorado Gold Mines Pty Ltd ("GEGM"). A Renewal Application has been lodged in respect of EPM 6031 by GEGM.

CORPORATE GOVERNANCE STATEMENT

The board of directors of D'Aguilar Gold Ltd is responsible for the corporate governance of the consolidated entity. The Board guides and monitors the business and affairs of D'Aguilar Gold Ltd on behalf of the shareholders by whom they are elected and to whom they are accountable.

D'Aguilar Gold Ltd's Corporate Governance Statement is now structured with reference to the Australian Stock Exchange ("ASX") Corporate Governance Council's (the "Council") "Principles of Good Corporate Governance and Best Practice Recommendations". which are as follows:

Principle 1	Lay solid foundations for management and oversight
Principle 2	Structure the board to add value
Principle 3	Promote ethical and responsible decision making
Principle 4	Safeguard integrity in financial reporting
Principle 5	Make timely and balanced disclosure
Principle 6	Respect the rights of shareholders
Principle 7	Recognise and manage risk
Principle 8	Encourage enhanced performance
Principle 9	Remunerate fairly and responsibly
Principle 10	Recognise the legitimate interests of stakeholders

A copy of the Ten Essential Corporate Governance Principles and the Best Practice Recommendations can be found on the ASX's website at www.asx.com.au.

D'Aguilar Gold Ltd's corporate governance practices were varied subsequent to 30 June 2004. Any departures to the Council's best practice recommendations as at the date of this report, or throughout the year ended 30 June 2004, are set out below.

Structure of the Board

The skills, experience and expertise relevant to the position of director held by each director on office at the date of the annual report is included in the Director's Report. Corporate Governance Council Recommendation 2.1 requires a majority of the board to be independent directors. The Corporate Governance Council defines independence as being free from any business or other relationship that could materially interfere with – or could reasonably be perceived to materially interfere with – the exercise of their unfettered and independent judgement.

In the context of director independence, "materiality" is considered from both the company and the individual director perspective, The determination of materiality requires consideration of both quantitative and qualitative elements. An item is presumed to be quantitatively immaterial if it is equal or less than 10% of the appropriate base amount. It is presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to or greater than 10% of the appropriate base amount. Qualitative factors considered included whether a relationship is strategically important, the competitive landscape, the nature of the relationship and the contractual or other arrangements governing it and other factors which point to the actual ability of the director in question to shape the direction of the Company's loyalty.

At the date of this report:

In accordance with the Council's definition of independence above, and the materiality thresholds set, the following directors are considered to be independent at the date of this report:

Name	Position
Christopher Rawlings	Chairman, Non-Executive Director
Ian Levy	Non-Executive Director
Damien Reynolds	Non-Executive Director
Vince Mascolo	Non-Executive Director

In accordance with the Council's definition of independence above, and the materiality thresholds set, the following directors are not considered to be independent:

Name	Position	Reason for non-compliance
Nicholas Mather	Executive Director	Mr Mather is employed by the Company in an executive
		capacity
Brian Moller	Non-Executive Director	Mr Moller is a principle of a material professional
		advisor to the Company

During the reporting period:

In accordance with the Council's definition of independence above, and the materiality thresholds set. Messrs Reynolds and Mascolo were considered to be independent throughout the reporting period. However, in addition to Messrs Mather and Moller noted above, the following directors were not considered to be independent throughout the reporting period:

Name Christopher Rawlings	Position Chairman, Non-Executive Director	Reason for non-compliance Dr Rawlings was, until his resignation on 30 June 2004,
Ian Levy	Non-Executive Director	a non-executive director of Gympie Gold Ltd, a substantial shareholder of D'Aguilar Gold Ltd Mr Levy was, until his resignation on 30 June 2004, an executive officer of Gympie Gold Ltd, a substantial
		shareholder of D'Aguilar Gold Ltd

Of the six board members in total, Messrs Rawlings, Mather, Levy and Moller were not considered to be independent throughout the period when applying the Council's definition in independence. Therefore the majority of the board were not independent during the year ended 30 June 2004. D'Aguilar Gold Ltd considers industry experience and specific expertise, as well as general corporate experience, to be important attributes of its board members. The directors noted above have been appointed to the board of D'Aguilar Gold Ltd due to their considerable industry and corporate experience.

There are procedures in place, agreed by the board, to enable directors, in furtherance of their duties, to seek independent professional advice at the company's expense.

The term in office held by each director in office at the date of this report is as follows:

Term in office
I year, 4 months
3 years, 11 months
1 year, 7 months
2 years, 1 month
2 years, 1 month
1 year, 7 months

Remuneration and Nomination Committee

Recommendations 9.2 and 2.4 require listed entities to establish remuneration and nomination committees. During the year ended 30 June 2004, D'Aguilar Gold Ltd did not have separately established remuneration or nomination committees. The full Board carried out the functions of remuneration and nomination committees during the reporting period. Subsequent to 30 June 2004, the board has established a Remuneration and Nomination Committee, which will meet at least annually to:

• Discharge the Board's responsibilities in relation to remuneration of the Company's executives: and
• Determine the state of director nominees for election to the Board, to identify and recommend candidates to fill casual vacancies

The Remuneration and Nomination Committee comprises all five non-executive directors.

Audit and Risk Management Committee

The Board has established an Audit and Risk Management Committee, which operates under a charter approved by the Board. It is the Board's responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non-financial considerations such as the benchmarking of operational key performance indicators. The Board has delegated the responsibility for the establishment and maintenance of a framework of internal control and ethical standards for the management of the consolidated entity to the Audit and Risk Management Committee.

The Committee also provides the board with additional assurance regarding the reliability of financial information for inclusion in the financial reports. All members of the audit committee are non-executive directors.

The members of the Audit and Risk Management Committee at the date of this report are:

• Vincent Mascolo $\bullet$
• Brian Moller
• Damien Revnolds $\mathbf{r}$

While Messrs Moller and Reynolds where members of the committee during the reporting period, Mr Mascolo was appointed since 30 June 2004. Recommendation 4.3 requires that the composition of audit committees comprise a majority of independent directors and that the committee have at least three members. During the year ended 30 June 2004, D'Aguilar Gold Ltd did not satisfy these requirements, due to having only two members and one of those members, Mr Moller, was not considered to be independent when applying the Council's definition in independence.

For additional details of directors' attendance at Audit and Risk Management Committee meetings and to review the qualifications of the members of the Audit and Risk Management Committee, please refer to the Directors' Report.

Performance

The Remuneration and Nominations Committee considers remuneration and nomination issues annually and otherwise as required in conjunction with the regular meetings of the Board.

The performance of the board is reviewed annually and otherwise as required in conjunction with the regular meetings of the Board by the Chairman against both measurable and qualitative indicators. The performance criteria against which directors and executives are assessed is aligned with the financial and non-financial objectives of D'Aguilar Gold Limited.

Remuneration

It is the Company's objective to provide maximum stakeholder benefit from the retention of a high quality board and executive team by remunerating director and key executives fairly and appropriately with reference to relevant and employment market conditions. To assist in achieving this objective, the Board links the nature and amount of executive director's and officer's emoluments to the company's financial and operations performance. The expected outcomes of the remuneration structure are:

• Retention and Motivation of key executives
• Attraction of quality management to the Company
• Performance incentives which allow executives to share the rewards of the success of D'Aguilar Gold Limited $\bullet$

For details on the amount of remuneration and all monetary and non-monetary components for each of the five highest paid (nondirector) executives during the year, and for all directors, please refer to the Directors' Report and also to Note 19 to the Financial Statements. In relation to the payment of bonuses, options and other incentive payments, discretion is exercised by the board, having regard to the overall performance of D'Aguilar Gold Limited and the performance of the individual during the period.

There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive directors.

The Board is responsible for determining and reviewing compensation arrangements for the directors themselves, subject to the Company's constitution and prior shareholder approvals, and the executive team. As noted above, the Board has established a Remuneration and Nomination Committee.

Statements of Financial Performance for the year ended 30 June 2004

	Note	Economic Entity			Parent Entity
		2004 S	2003 \$	2004 \$	2003 \$
Revenue from Ordinary Activities
Operating revenue			1,850		1,850
Interest received	$\overline{2}$	115,545	13,641	115,507	13,586
Proceeds from sale of non-current assets		2,500		2,500
Gain on debt forgiveness			3,860,273		3,860,273
Total Revenue from Ordinary Activities		118,045	3,875,764	118,007	3,875,709
Expenses from Ordinary Activities
Borrowing cost expenses	2	(113,319)	(8,298)	(113,319)	(8,088)
Employee benefits expenses		(247,764)	(229,671)	(247,764)	(229,671)
Depreciation and amortisation expenses	$\overline{2}$	(142, 775)	(417,881)	(142, 775)	(417,881)
Site Restoration expenses	$\overline{2}$		(600,000)		(600,000)
Legal expenses		(21, 335)	(126, 414)	(21, 181)	(111, 490)
Administration and consulting expenses		(405, 571)	(232, 232)	(402, 793)	(203,019)
Other expenses from ordinary activities		(15, 493)	(236, 294)	(26, 525)	(240, 688)
Total Expenses from Ordinary Activities		(946, 257)	(1,850,790)	(955, 357)	(1,810,837)
Profit/(loss) from ordinary activities before income tax expense Income tax expense relating to ordinary activities	3	(828, 212)	2,024,974	(837,350)	2,064,872
Net profit/(loss) attributable to members of D'Aguilar Gold Ltd		(828, 212)	2,024,974	(837,350)	2,064,872
Total change in equity other than those resulting from transaction with owners as owners	18	(828, 212)	2,024,974	(837,350)	2,064,872
		Cents	Cents
Basic Earnings Per Share	23	(0.0161)	12.51

The above statements of financial performance should be read in conjunction with the accompanying notes.

Statements of Financial Position as at 30 June 2004

	Note	Economic Entity		Parent Entity
		2004	2003	2004	2003
		\$	\$	\$	S
CURRENT ASSETS
Cash assets	4	2,116,209	8,812	2,116,209	5,371
Receivables	5	71,769	37,620	53,569	16,515
Other assets	6	36,882	226,116	36,882	226,116
Total Current Assets		2,224,860	272,548	2,206,660	248,002
NON-CURRENT ASSETS
Other financial assets	7	453,312	451,187	453,312	451,187
Receivables	8			244,383	32,949
Investments in subsidiaries	9			79,467	79,467
Property, plant and equipment	10	191,495	220,953	191,495	220,953
Exploration Expenditure	11	2,513,849	64,298	2,238,251
Other		6,464		6,464
Total Non-Current Assets		3,165,120	736,438	3,213,372	784,556
TOTAL ASSETS		5,389,980	1,008,986	5,420,032	1,032,558
CURRENT LIABILITIES
Payables	12	292,173	289,726	291,465	282,106
Borrowings	13	14,606	19,817	14,606	18,133
Provisions	14	12,688		12,688
Total Current Liabilities		319,467	309,543	318,759	300,239
NON-CURRENT LIABILITIES
Borrowings	15	52,649	7,022	52,649
Provisions	16	1,300,000	1,300,000	1,300,000	1,300,000
Total Non-Current Liabilities		1,352,649	1,307,022	1,352,649	1,300,000
TOTAL LIABILITIES		1,672,116	1,616,565	1,671,408	1,600,239
NET ASSETS		3,717,864	(607, 579)	3,748,624	(567, 681)
EQUITY
Contributed equity	$17\,$	6,225,586	1,071,931	6,225,586	1,071,931
Accumulated losses	18	(2, 507, 722)	(1,679,510)	(2,476,962)	(1,639,612)
TOTAL EQUITY		3,717,864	(607,579)	3,748,624	(567, 681)

The above statements of financial position should be read in conjunction with the accompanying notes.

Statements of Cash Flows for the year ended 30 June 2004

	Note	Economic Entity		Parent Entity
		2004	2003	2004	2003
		\$ Inflows/	S Inflows/	\$ Inflows/	\$ Inflows/
		(Outflows)	(Outflows)	(Outflows)	(Outflows)
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers Payments to suppliers and employees			1,850		1,850
(inclusive of goods and services tax)		(812, 280)	(859, 522)	(809,970)	(822, 673)
Interest received GST Refunds		115,545 130,542	13,641 56,208	115,507 130,161	13,586 51,402
Interest and other costs of finance paid		(121, 466)	(8,298)	(121, 466)	(8,088)
Net cash outflow from operating activities	24(d)	(687, 659)	(796, 121)	(685,768)	(763, 923)
CASH FLOWS FROM INVESTING
ACTIVITIES
Security deposit (payments) / refunds		(2,125)	93,674	(2,125)	93,674
Proceeds from sale of property, plant and equipment	24(a)	2,500		2.500
Payments for property, plant and equipment		(52, 873)	(4, 535)	(52, 873)	(4, 535)
Exploration and evaluation expenditure		(1,086,863)		(875, 563)
Loans to subsidiaries Loans to associated entities			(7,261)	(211, 434)	(32,949) (1, 137)
Net cash outflow from investing activities		(1,139,361)	81,878	(1, 139, 495)	55,053
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of securities Capital raising expenses		4,286,560 (332, 326)	783,024	4,286,560 (332, 326)	783,024
Proceeds from borrowings	24(a)
Repayment of borrowings			(79, 024)		(86, 154)
Net cash inflow/(outflow) from financing activities		3,954,234	704,000	3,954,234	696,870
Net increase/(decrease) in cash held		2,127,214	(10, 243)	2,128,971	(12,000)
Cash at the beginning of the financial year		(11,005)	(762)	(12, 762)	(762)
Cash at the end of the financial year	24 (c)	2,116,209	(11,005)	2,116,209	(12, 762)

The above statements of cash flows should be read in conjunction with the accompanying notes.

Notes to the Financial Statements for the year ended 30 June 2004

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial report is a general purpose financial report that has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report has been prepared on an accruals basis and is based on the historical cost convention of accounting and does not purport to show current values or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets. The accounting policies have been consistently applied, unless otherwise stated.

The financial report covers the Economic Entity of D'Aguilar Gold Ltd and controlled entities, and D'Aguilar Gold Ltd as an individual Parent Entity. D'Aguilar Gold Ltd is a public company, incorporated and domiciled in Australia.

The financial statements have been prepared on a going concern basis which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of business. The ability of the Economic Entity to continue to adopt the going concern assumption will depend on a number of issues including, the successful raising, in the future, of necessary funding, sales of product and the support of creditors.

No adjustments have been made to the carrying value of assets or recorded amount of liabilities should the Company's plans not eventuate.

$(a)$ Principles of Consolidation

A controlled entity is any entity controlled by the Company. Control exists where the Company has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with the Company to achieve the objectives of the Company. A list of controlled entities is contained in Note 21 to the financial statements. All inter-company balances and transactions between entities in the Economic Entity, including any unrealised profits or losses, have been eliminated on consolidation. Where controlled entities have entered or left the Economic Entity during the year, their operating results have been included from the date control was obtained or until the date control ceased.

$(b)$ Exploration and Evaluation Expenditure

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

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

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

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

Notes to the Financial Statements for the vear ended 30 June 2004

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Employees Benefits $(c)$

Salaries, Wages, Annual Leave and Long Service Leave $(i)$

Liabilities for salaries, wages and annual leave are recognised, and are measured as the amount unpaid at the reporting date at amounts expected to be paid when the liability is settled plus on-costs. Other employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

Superannuation AD.

The Company contributes to employee superannuation funds which are charged as expenses when incurred. The Company's contributions to the funds are in accordance with employees' contracts of employment and relevant legislation.

Property, Plant and Equipment $(d)$

Property, plant and equipment are brought to account on the cost basis, less, where applicable, any accumulated depreciation or amortisation. The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the assets employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in determining recoverable amounts.

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated over their useful life to the Company commencing from the time the asset is held ready for use. Properties held for investment purposes are not subject to depreciation. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful life of the improvements.

The depreciation rates used for each class of assets are: Class of Fixed Assets Depreciation Rate Freehold building 2.5% Prime Cost 10% - 35% Diminishing Value Plant and Equipment $10% - 25%$ Prime Cost Site Infrastructure Leased Plant and Equipment 20% - 33% Prime Cost Computers and Office Equipment 33% Prime Cost 20% Prime Cost Furniture and Fittings

The gain or loss on disposal of all fixed assets, including revalued assets, is determining as the difference between the carrying amount of the asset at the time of disposal and the proceeds of disposal, and is included in the profit from ordinary activities before income tax of the Company in the year of disposal. Any realised revaluation increment relating to the disposed asset which is included in the asset revaluation reserve is transferred to retained earnings at the time of disposal.

$(e)$ Income Tax

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

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

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

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

Notes to the Financial Statements for the vear ended 30 June 2004

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

$(f)$ Investments

Investments are brought to account on the costs basis. The carrying amount of investments is reviewed annually by directors to ensure it is not in excess of the recoverable amount of these investments. The recoverable amount is assessed from the shares' current market value or the underlying net assets in the particular entities. The expected net cash flow from investments have not been discounted to their present value in determining the recoverable amounts, except where stated.

${\sigma}$ Comparative Figures

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

$(h)$ Goods & Services Tax

All receivables and payables in the Statement of Financial Position are stated inclusive of applicable GST. The net amount of GST receivable from or payable to the Australian Taxation Office at balance date is included in either current assets or current liabilities, as appropriate, in the Statement of Financial Position. All other items in the Statement of Financial Position are stated exclusive of GST. All elements in the Statement of Financial Performance are stated exclusive of GST.

$(i)$ Restoration, Rehabilitation and Environmental Expenditure

Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structure, waste removal, and rehabilitation of the site in accordance with clauses of mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.

Estimates of future costs are reassessed at least annually. Changes in estimates relating to areas of interest in the exploration and evaluation phase are dealt with retrospectively, with any amounts that would have been written off or provided against under the accounting policy for exploration and evaluation immediately written off.

6 Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs. The cost of mining stocks includes direct material, direct labour, transportation costs and variable and fixed overhead costs relating to mining activities.

$(x)$ Revenue

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting.

All revenue is stated net of the amount of goods and services tax (GST).

$(1)$ Leases

A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of the leased property, without transferring the legal ownership, and operating leases under which the lessor effectively retains substantially all the risks and benefits.

Where assets are acquired by means of finance leases, the present value of minimum lease payments is established as an asset at the beginning of the lease term and amortised on a straight line basis over the expected economic life. A corresponding liability is also established and each lease payment is allocated between such liability and interest expense. Operating lease payments are charged to expense on a basis which is representative of the pattern of benefits derived from the leased property.

Notes to the Financial Statements for the year ended 30 June 2004

	Economic Entity		Parent Entity
	2004	2003	2004	2003
	\$	Ś.	Ś.	S.
NOTE 2 PROFIT/(LOSS) FROM ORDINARY ACTIVITIES
Profit/(loss) from ordinary activities before income tax expense has been determined after:
Revenue
Interest Received	115,545	13,641	115,507	13,586
Expenses
Movements in Provisions:
Depreciation of Property, Plant & Equipment	142,775	417,881	142,775	417.881
Site Restoration		600,000		600.000
Borrowing cost expense - other corporations	1,483	8,298	1.483	8,298
Borrowing cost expense - directors	68,696		68,696
Borrowing cost expense - director related entities Remuneration to Auditors:	43,140		43,140
Audit/review	15,500	31,305	15,500	31,305
Other services	2,440	6,000	2,440	6,000
NOTE 3 INCOME TAX
The prima facie income tax on the loss from ordinary activities is reconciled to the income tax provided in the financial statements as follows:
The prima facie income tax benefit (30%)
(2003:30%) on loss from ordinary activities before income tax	(248, 463)	607,492	(251, 205)	619,462
Tax effect of permanent differences	7,267	(1.136.741)	7,221	(1,136,741)
Other non-allowable items		180,000		180,000
Future income tax benefit not brought to account	241,196	349,249	243,984	337,279
Income Tax Expense

No provision for income tax is required by the Economic Entity for the year.

The future income tax benefit arising from the preceding items will only be obtained if:

the Economic Entity continues to comply with the relevant provisions of the income tax legislation; $(a)$

it earns sufficient assessable income to enable benefits to be realised; and $(b)$

there are no changes in tax legislation adversely affecting the Economic Entity in realising the benefits. $\left( \mathrm{c}\right)$

Accordingly, the Directors believe it is prudent that the future income tax benefit described above not be brought to account until the Economic Entity generates future income streams.

There are no franking credits available to shareholders of the Parent Entity.

Notes to the Financial Statements for the year ended 30 June 2004

	Economic Entity		Parent Entity
	2004 \$	2003 S	2004 \$	2003 \$
NOTE 4 CASH ASSETS
Cash on hand and at bank	107,774	8,812	107,774	5,371
Cash on deposit	2,008,435		2,008,435
	2,116,209	8,812	2,116,209	5,371
NOTE 5 RECEIVABLES (CURRENT)
Sundry debtors	12,556	7,322	12,556	1,137
GST receivable	41,013	15,298	41,013	15,378
Security deposit	18,200	15,000
	71,769	37,620	53,569	16,515
NOTE 6 OTHER ASSETS
Prepayments - general	36,882		36,882
Prepayment (IPO costs charged against equity)		226,116		226,116
	36,882	226,116	36,882	226,116
NOTE 7 OTHER FINANCIAL ASSETS Cash on deposit (held as security for bank guarantee for security deposit)	316,125	314,000	316,125	314,000
Secured bonds	137,187	137,187	137,187	137,187
	453,312	451,187	453,312	451,187
NOTE 8 RECEIVABLES (NON-CURRENT)
Loan to Australian Resources Management			165,194	31,419
Loan to Navaho Mining			79,189	1,530
	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	244,383	32,949
NOTE 9 INVESTMENT IN SUBSIDIARIES
Shares in controlled entities - unlisted at cost (Note 21)			79,467	79,467

34

Notes to the Financial Statements for the year ended 30 June 2004

		Economic Entity		Parent Entity
		2004	2003	2004	2003
		\$	\$	Ŝ	\$
NOTE 10	PROPERTY, PLANT AND EQUIPMENT
Freehold Building
At cost		54,535	54,535	54,535	54,535
Accumulated depreciation		(12,699)	(11,335)	(12,699)	(11,335)
		41,836	43,200	41,836	43,200
Plant and Equipment
At cost		1,993,359	1,983.999	1,942,742	1,933,382
Accumulated depreciation		(1,917,932)	(1,843,996)	(1,867,315)	(1,793,379)
		75,427	140.003	75,427	140,003
Site Infrastructure
At cost		2,443,532	2,443,532	2,443,532	2,443,532
Accumulated depreciation		(2,443,532)	(2,405,782)	(2,443,532)	(2,405,782)
			37,750		37,750
Leased Plant & Equipment
At cost		81,469		81,469
Accumulated depreciation		(13, 136)		(13, 136)
		68,333		68,333
	Computers and Office Equipment
At cost		5,850		5,850
Accumulated depreciation		(784)		(784)
		5,066	$\tilde{\phantom{a}}$	5,066	÷
Furniture and Fittings
At cost		953		953
Accumulated depreciation		(120)	$\cdot$	(120)
		833		833
Net Book value		191,495	220,953	191,495	220,953

(a) Movements in carrying amounts

Parent Entity:	Freehold Building	Plant & Equipment	Site Infra- structure	Leased Plant & Equipment	Computers & Office Equipment	Furniture & Fittings	Total
Balance at the beginning of the year	43,200	140,003	37,750	$\overline{\phantom{a}}$	$\cdot$	$\overline{\phantom{a}}$	220,953
Additions Disposals Depreciation Expenses	÷ $\overline{\phantom{a}}$ (1,364)	32,021 (6.976) (89,621)	$\overline{\phantom{a}}$ $\sim$ (37,750)	81,469 $\mathbf{r}$ (13.136)	5,850 $\mathbf{r}$ (784)	953 $\overline{\phantom{m}}$ (120)	120.293 (6,976) (142, 775)
Carrying amount at the end of the year	41,836	75,427	$\overline{a}$	68,333	5,066	833	191.495

NOTE 11 EXPLORATION EXPENDITURE

phase	Exploration and Evaluation Expenditure Costs carried forward in respect of areas of interest still in the exploration and evaluation	2,513,849	64.298	2,238,251
NOTE 12	PAYABLES (CURRENT)
	Trade and Other Creditors - unsecured	292,173	289.726	291.465	282.106

Notes to the Financial Statements for the year ended 30 June 2004

		Economic Entity		Parent Entity
		2004	2003	2004	2003
		Ŝ,	S	S	Ś.
NOTE 13	BORROWINGS (CURRENT)
Bank Overdraft			19,817		18,133
Lease Liability		14,606	$\overline{r}$	14,606
		14.606	19,817	14,606	18,133
NOTE 14	PROVISIONS (CURRENT)
Employee Benefits		12,688	$\cdot$	12,688

As at 30 June 2004, the consolidated entity employed three full-time employees plus a further eight part-time and casual staff (2003: 1 full-time employee).

NOTE 15 BORROWINGS (NON-CURRENT)

Lease Liability		52,649		52,649
Loan – Western Pacific Gold Inc.			7,022
		52,649	7.022	52.649
NOTE 16	PROVISIONS
Site Restoration		1,300,000	1,300,000	1,300,000	1,300,000
Opening Balance		1,300,000	700.000	1,300,000	700,000
	Provision recognised during the financial year.		600.000		600,000
Closing Balance		1,300,000	1,300,000	1,300,000.	1,300,000

In relation to this liability, the Company has the benefit of an indemnity from Maxe-tec Australia Limited in respect of certain liabilities. In addition the Company has secured performance bonds to the value of $$1,300,000$ . Further information regarding these contingent assets can be found in Note 26(a)

NOTE 17 CONTRIBUTED EQUITY

$(a)$ Issued and paid up capital

Balance 1 July	1,071,931	209.440	1.071.931	209,440
Shares Issued Costs of Issue	5,636,560 (482,905)	862,491 $\overline{\phantom{a}}$	5,636,560 (482.905)	862,491 $\overline{\phantom{a}}$
Paid up Capital 30 June	6,225,586	1.071.931	6,225,586	1,071,931

Notes to the Financial Statements for the year ended 30 June 2004

NOTE₁₇ CONTRIBUTED EQUITY (continued)

	2004		2003
	Number of	\$	Number of	\$
	shares		shares
Balance 1 July	29,812,039	1,071,931	3.200	209,440
Shares Issued During Year:
- Seed capital			17,825,000	783,000
- Consideration for 100% of the issued capital of			1,986,989	79,480
Navaho Mining Pty Ltd
- Consideration for 100% of the issued capital of			50	$10-$
Australian Resources Management (ARM) Pty Ltd
- Pre seed capital raising issue of shares to			9.996.800
Western Pacific Gold Inc.
- On 8 August 2003, 20,000,000 fully paid	20,000,000	4.000,000
ordinary shares issued as a result of the initial
public offering
- Costs associated with the initial public offering		(460, 964)
- Shares issued to Gympie Gold Ltd for	7,500,000	1,350,000
consideration for mining tenements
- On 29 December 2003 and 31 December 2003		286,560
a total of $28,656,000$ options $(\$0.20 \text{ @ } 31$ -Dec-
05) issued for \$0.01 each
- Costs associated with the option issue		(21, 941)
Balance 30 June	57,312,039	6.225,586	29.812.039	1,071,931

Ordinary shares participate in dividends and the proceeds on winding up of the Parent Entity in proportion to the number of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

$(b)$ Share Options

	Unlisted \$0.20 options exercisable on or before 31 October 2005	\$0.20 options exercisable on or before 31 March 2006
Balance at 30 June 2003	4.500.000
- On 29 December 2003, 28,656,000 options (\$0.20 $\omega$ 31 March 2006) issued for \$0.01 each	-	28.656.000
Balance as at 30 June 2004 (and date of this report)	4,500,000	28,656,000

(c) Directors' and Executive Officers' Option Plan

The Company has established the Directors' and Executive Officers' Option Plan (the "Plan"). Board members and other executive officers selected by the Board are entitled to participate in the Plan. The exercise price of the options to be issued shall be set at a price to be determined by the Board, but not less than a premium of 10% to the prevailing average market price of the shares in the Company on the ASX at the time of issue. A maximum number of options equal to 5% of the capital at the time may be issued under the Plan. When issued, the shares carry full dividend and voting rights. At the balance date, no options have been issued under the Directors' and Executive Officers' Option Plan.

(d) Employee Share Option Plan

The Company has established the D'Aguilar Employee Share Option Plan ("ESOP") to assist in the retention and motivation of employees by providing them with the opportunity to acquire shares. Any employees selected by the Board are entitled to participate in the ESOP. The exercise price of the options to be issued shall be set at a price to be determined by the Board, but not less than a premium of 10% to the prevailing average market price of the shares in the Company on the ASX at the time of issue. A maximum number of options equal to 5% of the capital at the time may be issued under the Plan. When issued, the shares carry full dividend and voting rights. At the balance date, no options have been issued under the ESOP.

Notes to the Financial Statements for the year ended 30 June 2004

		Economic Entity		Parent Entity
		2004 2003		2004	2003
		\$	\$	\$	\$
NOTE 18	ACCUMULATED LOSSES
	Accumulated losses attributable to members of D'Aguilar Ltd at beginning of the financial year	(1,679,510)	(3,704,484)	(1.639.612)	(3,704,484)
	Operating Profit/(Losses) after income tax	(828,212)	2.024.974	(837,350)	2,064,872
	Accumulated losses attributable to members of D'Aguilar Gold Ltd at the end of the financial year	(2,507,722)	(1,679,510)	(2.476.962)	(1,639,612)

NOTE₁₉ DIRECTOR AND EXECUTIVE DISCLOSURES

(a) Details of Specified Directors and Specified Executives

Christopher Rawlings	Chairman (non-executive)
Nicholas Mather	Managing Director
Ian Levy	Director (non-executive)
Brian Moller	Director (non-executive)
Damien Reynolds	Director (non-executive)
Vincent Mascolo	Director (non-executive)

(ii) Specified executives
Ron Cunneen	Exploration Manager
Duncan Cornish	Company Secretary and Financial Controller

(b) Remuneration of Specified Directors and Specified Executives

(i) Remuneration Policy

The Remuneration and Nomination Committee of the Board of Directors is responsible for determining the reviewing compensation arrangements for the directors and the executive team. The Remuneration and Nomination Committee assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash and fringe benefits. It is intended that the manner of payments chosen will be optimal for the recipient without creating undue cost for the Company.

To assist is achieving these objectives, the Board links the nature and amount of directors', executives and officers emoluments to the company's financial performance. All directors and executives have the opportunity to qualify for participation in the Directors' and Executive Officers' Option Plan, subject to the approval of Shareholders. All employees have the opportunity to qualify for participation in the D'Aguilar Employee Share Option Plan intended to provide incentives, at the Board's discretion, based on individual key performance indicators ("KPI's") being met and other exploration and/or operational criteria.

In addition, the exploration manager is entitled to:

• (a) the grant of up to $2,000,000$ options pursuant to the ESOP over a three year term; and
• (b) a bonus capped at a maximum of \$300,000 per annum payable upon the achievement of exploration discovery of a JORC resource status.

All non-executive directors have contracts of employment.

It is the Board's policy that employment agreements are entered into with all executive directors, executives and employees. The current employment agreements with the Managing Director and the Company Secretary have three month notice periods. All other employment agreements have one month (or less) notice periods. No current employment contracts contain early termination clauses.

Notes to the Financial Statements for the year ended 30 June 2004

NOTE 19 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

(ii) Remuneration of Specified Directors and Specified Executives

		Primary		Post-Employment		Equity	Other	Total
	Salary &	Cash	Non-cash	Superan-	Retirement	Options
	Fees	Bonus	benefits	mation	benefits
Specified Directors
Christopher Rawlings
2004	36,697			3,303				40,000
2003	4,045			364			÷	4,409
Nicholas Mather
2004	175,000						٠	175,000
2003	92,215						L,	92,215
lan Levy
2004	30,000						$\tilde{\phantom{a}}$	30,000
2003	11,429						J.	11,429
Brian Moller
2004	30,000						÷.	30,000
2003	27,500						J,	27,500
Damien Reynolds
2004	30.000						$\omega$	30,000
2003	27,500						÷.	27,500
Vincent Mascolo
2004	30,000						$\sim$	30,000
2003	27,500						÷.	27,500
Total Remuneration: Specified Directors
2004	331,697		٠	3,303			$\tilde{\phantom{a}}$	335,000
2003	190,189			364			à.	190,553
Specified Executives
Ron Cunneen
2004	83,804			7,542				91,346
Duncan Cornish
2004	87,200						J.	87,200
Total Remnaeration: Specified Executives
2004	171,004		÷.	7,542			÷.	178,546

(c) Remuneration options: Granted and vested during the year

During the year no options were granted as equity compensation benefits to specified directors or executives.

(d) Shares issued on exercise of remuneration options

There have been no options granted as remuneration options during the year or in previous years. Therefore, no remuneration options were exercised during the year.

Notes to the Financial Statements for the year ended 30 June 2004

NOTE 19 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

(e) Option holdings of specified directors and specified executives

(Unlisted) options $(50.20 \; \text{\textcircled{a}}\; 31/10/05)$

	Balance 1 July 2003	Granted as Remuneration	On Exercise of Options	Net Change Other	Balance 30 June 2004
Specified Directors
Christopher Rawlings
Nicholas Mather	1,730,770		$\overline{\phantom{a}}$		1,730,770
lan Levy
Brian Moller
Damien Reynolds	1,384,615				1,384,615
Vincent Mascolo	1,384,615				1,384,615
Specified Executives
Ron Cunneen
Duncan Cornish	$\overline{\phantom{a}}$	٠	٠
Total	4,500,000				4,500,000

Options (\$0.20 @ 31/3/06)

	Balance	Granted as	On Exercise of	Net Change	Balance
	1 July 2003	Remuneration	Options	Other	30 June 2004
Specified Directors
Christopher Rawlings				694,969	694,969
Nicholas Mather				638,019	638,019
lan Levy		$\overline{\phantom{a}}$		332,469	332,469
Brian Moller		٠		544,969	544,969
Damien Reynolds				463,719	463,719
Vincent Mascolo				655,522	655,522
Specified Executives
Ron Cunneen		$\overline{\phantom{a}}$		232,470	232,470
Duncan Cornish		$\overline{\phantom{a}}$	٠	282.469	282.469
Total	-	$\blacksquare$		3,844,606	3,844,606

(f) Shareholdings of specified director and specified executives

Shares held in D'Aguilar Gold Ltd (number)	Balance 1 July 2003	Granted as Remuneration	On Exercise of Options	Net Change Other	Balance 30 June 2004
Specified Directors
Christopher Rawlings	800,000	٠	$\overline{\phantom{a}}$	125,000	925,000
Nicholas Mather	650.000			161,100	811,100
lan Levy	200,000				200,000
Brian Moller	500,000	مد	$\overline{\phantom{a}}$	125,000	625,000
Damien Reynolds	312,500	٠		150,000	462,500
l Vincent Mascolo	1,311,044				1,311,044
Specified Executives
Ron Cunneen
Duncan Cornish	100,000	$\overline{\phantom{a}}$	۔		100,000
Total	3.873.544	$\blacksquare$		561,100	4,434,644

Notes to the Financial Statements for the year ended 30 June 2004

NOTE 19 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

(g) Loans to specified director and specified executives

There were no loans to specified directors or specified executives during the period.

(h) Other transactions to specified director and specified executives

Other transactions with (specified) directors are set out in Note 19. There were no other transactions or balances with specified executives during the period.

NOTE 20 RELATED PARTY DISCLOSURES

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

• a) Transactions with Directors and Director-Related Entities
• $(i)$ D'Aguilar Gold Ltd has an agreement with Samuel Capital Ltd, an entity associated with Nicholas Mather (a director), and Nicholas Mather for the provision of certain consultancy services. Samuel Capital will provide Nicholas Mather as the Managing Director of D'Aguilar Gold Ltd for a base fee of \$175,000 per annum, with provision for adjustment based on semiannual review by the Board on the basis of a minimum 25 hours per week. These amounts are included in the Remuneration of Directors and Executives note (Note 19).
• D'Aguilar Gold Ltd has an agreement with Samuel Capital Ltd, an entity associated with Nicholas Mather (a director) whereby $(ii)$ Samuel Capital Ltd will provide administration and management services to the Company, Samuel Capital Ltd will also provide office facilities to the Company under a non-exclusive licence to occupy. Samuel Capital Ltd will be reimbursed for the costs it incurs in providing these services plus a 10% margin, and in any event, not more than \$7,500 per month. Samuel Capital Ltd was paid \$90,000 for the provision of administration, management and office facilities to the Company during the vear.
• $(iii)$ Mr Brian Moller (a director), is a partner in the firm Hopgood Ganim Lawyers. Hopgood Ganim were paid \$32,322 for the provision of legal services to the Company during the year (\$21,335 for general legal services plus \$10,987 for legal services relating to the Company's IPO – these costs were capitalised). The services were based on normal commercial terms and conditions.
• $(iv)$ Samuel Capital Ltd. a entity associated with Nicholas Mather (a director), Vincent Mascolo (a director) and Damien Reynolds (a director) have entered into Performance Bonds for \$500,000, \$400,000 and \$400,000 respectively in relation to environmental liability of the Company. Under the terms of the Bonds, the Bondholders are entitled to an annual fee of 10% of the amount provided for under the Bond payable quarter in advance. Interest on the Bonds of \$43,140, \$34,348 and \$34,348 respectively was paid or payable during the period.
• Samuel Capital Ltd, an entity associated with Nicholas Mather, Vincent Mascolo and Brian Moller each entered into sub- $(v)$ underwriting agreements in respect of the initial public offering of the Company on ordinary commercial terms. Fees of \$25,000, \$12,500 and \$7,500 respectively were paid during the year, representing 5% of the amounts sub-underwritten by them.
• $(b)$ Share and Option transactions of Directors and Director-Related Entities are shown in Note 19

Notes to the Financial Statements for the year ended 30 June 2004

NOTE 21 INVESTMENT IN CONTROLLED ENTITIES

Details of Controlled Entities

Name of Entity	Country of Incorporation	Class of Shares	Cost of Parent Entity's		Equity Holding
			Investment 2003 2004		2004	2003
			S	\$	多	$\%$
Parent Entity:
D'Aguilar Gold Ltd	Australia
Controlled Entities: Australian Resource
Management (ARM) Pty Ltd	Australia	Ordinary	10	10	100	100.
Navaho Mining Pty Ltd	Australia	Ordinary	79,457 - 79,467	79.457 79,467	100	100

All controlled entities are directly controlled by D'Aguilar Gold Ltd

NOTE 22 SEGMENT INFORMATION

The Economic Entity operates predominantly in one business and geographical segment being in the mining industry in Australia. No revenue from this activity has been earned to date as the Economic Entity is still in the exploration and evaluation stage.

		Economic Entity		Parent Entity
		2004	2003	2004	2003
		S	\$	S	\$
NOTE 23	EARNINGS PER SHARE
(a)	Basic earnings per share
	- cents per share.	(0.0161)	0.1251
(b)	It is considered that the potential ordinary shares are not dilutive due to the operating profit and, therefore, no separate calculation has been made for diluted negative earnings per share.
(c) share.	Earnings used in the calculation of earnings per	(828,212)	2,024,974
(d)	Weighted Average number of ordinary shares used in the calculation of basic earnings per share.	51,579,162	16,185,006

Notes to the Financial Statements for the year ended 30 June 2004

Economic Entity		Parent Entity
2004	2003	2004	2003

NOTE 24 CASH FLOWS INFORMATION

Fixed Assets acquired by finance leases $(a)$

During the financial year, the Economic Entity acquired plant and equipment with the aggregate fair value of \$81,479 (2003: nll) by means of finance lease agreements. These acquisitions are not reflected in the Statement of Cash Flows.

$(b)$ Assets acquired by non-cash transactions

During the financial year, the Economic Entity acquired mining tenements by the issue of 7,500,000 ordinary shares with a value of $$1.350,000.$

$(c)$ Reconciliation of Cash

For the purposes of the Statements of Cash flows, cash includes cash on hand, eash at bank and bank overdraft.

Cash on hand and at bank	107,774	8,812	107,774	5,371
Bank overdraft		(19, 817)		(18, 133)
Cash on deposit	2,008,435		2,008,435
	2,116,209	(11,005)	2,116,209	(12,762)
Reconciliation of net cash outflows from (d) operating activities to Profit/(loss) from ordinary activities after tax Profit/(loss) from ordinary activities after tax	(828, 212)	2,024,974	(837,350)	2,064,872
Add back/(deduct) items not involving cash flows:
Loss on sales of fixed assets	4,311		4,311
Debts forgiveness		(3,860,273)		(3,860,273)
Depreciation	142,775	417,881	142,775	417,881
Changes in assets and liabilities:
(Increase)/Decrease in receivables	(71,031)	(15,298)	(73,936)	(15,378)
(Increase)/Decrease in inventories ÷		16,580		16,580
(Increase)/Decrease in other assets ÷	(6, 464)	(226, 116)	(6,464)	(226, 116)
Increase/(Decrease) in payables	70,962	246,131	84,896	238,511
Increase/(Decrease) in site restoration		600,000		600,000
Net cash outflows from operating activities	(687, 659)	(796, 121)	(685,768)	(763, 923)

Notes to the Financial Statements for the year ended 30 June 2004

		Economic Entity		Parent Entity
		2004	2003	2004	2003
		S	\$	\$	\$
NOTE 25	COMMITMENTS FOR EXPENDITERE
Future Exploration $\left( a\right)$
	The Economic Entity has certain obligations to expend minimum amounts on exploration in tenement areas. These obligations may be varied from time to time and are expected to be fulfilled in the normal course of operations of the Economic Entity.
	The commitments to be undertaken are as follows:
	Payable - within one year	604,208	323,178	347,926	151,984
	- between one and five years	254,329	261,534	108,452

There are currently no minimum expenditure requirements for the Company's Solomon Island tenements. All of the Company's other EPM's are in Queensland. To keep EPM's in good standing in Queensland, work programs should meet certain minimum expenditure
requirements. If the minimum expenditure requirements are not met, the Company has the option to tenements. The Company also has the ability to meet expenditure requirements by joint venture or farm in agreements.

(b) Lease expenditure commitments
(i) Operating leases (non-cancellable):
Minimum lease payments
- not later than one year	17,126	17,126
- later than one year and not later than five years	60,244	60,244
- later than five years
	77,370	77,370
(ii) Finance leases:
- not later than one year	19,457	19,457
- later than one year and not later than five years	59,073	59,073
- later than five years
Total minimum lease payments	78,530	78,530
- future finance charges	(11, 275)	(11,275)
- lease liability	67,255	67,255
- current liability	14,606	14,606
- non-current liability	52,649	52,649
	67,255	67,255

Notes to the Financial Statements for the vear ended 30 June 2004

NOTE 26 CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(a) Contingent Assets - Provision for Rehabilitation Costs

The Company has conducted an extensive review of the environmental status of the Mining Leases with a view to making an assessment of the appropriate provision it should make in its accounts for future liabilities in respect of rehabilitation and restoration.

In the course of this exercise, advice was received from different parties providing estimations on the potential costs for future rehabilitation and restoration. Based on this information, the Company has made provision in its accounts in respect of these contingent liabilities (\$1,300,000).

The Company also has the benefit of an indemnity from Maxe-tec Australia Limited in respect of liabilities in respect of facts or circumstances arising to 30 October 2001, when Western Pacific Gold Inc acquired D'Aguilar from Maxe-tec. Maxe-tec disputes its liability under this indemnity. In the event that at some future time the Company is required to discharge these liabilities it intends to call upon Maxe-tec to perform under the indemnity. If Maxe-tec fails or refuses to perform, the Company may be required to enforce the indemnity.

The Directors have also taken steps to enter into agreements with third parties to accept responsibility for a portion of the present liability of the company in respect of the rehabilitation costs. Pursuant to Deeds entered into in May 2003 between the Company and interests associated with three of the Directors of the Company ("the Bondholders"), the Bondholders have agreed to assume the responsibility for the discharge of \$1,300,000 in total of the environmental liability and restoration obligations of the Company in respect of its mining leases. The Deeds may be terminated by the Bondholders after 31 December 2004 by notice to the Company.

Samuel Capital Limited has taken \$500,000 of Bonds and is an entity associated with Mr Mather, a director. Vincent Mascolo and Damien Reynolds, both directors of the Company, have taken \$400,000 of the Bonds, respectively.

NOTE 27 EVENTS OCCURRING AFTER BALANCE DATE

There have been no events since the end of the financial year that impact upon the financial repot as at 30 June 2004.

Notes to the Financial Statements for the year ended 30 June 2004

NOTE 28 FINANCIAL INSTRUMENTS

Terms and Conditions relating to financial assets and liabilities: $(a)$

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

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

Lease Liabilities - Finance leases have an average term of 3 years with the option to purchase the asset at the completion of the lease term. Secured lease liabilities are secured by a charge over the leased asset.

$(b)$ Interest Rate Risk

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

	Floating interest rate	Fixed interest rate	Non-interest bearing	Total carrying amount as per the balance sheet	Weighted average effective interest rate
	2004	2004	2004	2004	2004
(i) Financial assets	S	\$	\$	$\ddot{\textbf{j}}$	$\%$
Cash		2,116,209		2,116,209	4.83%
Other Financial Assets		316,125	137,187	453,312	2.61%
Receivables			71,769	71,769
Total financial assets		2,432,334	208,956	2,641,290
(ii) Financial liabilities
Payables			292,173	292,173
Borrowing (Current)		14,606		14,606	8.00%
Borrowing (Non-Current)		52,649		52,649	8.00%
Total financial liabilities	ä,	67,255	292,173	359,428
Net financial assets / (liabilities)		2,365,079	(83,217)	2,281,862
	Floating interest rate	Fixed interest rate	Non-interest bearing	Total carrying amount as per the balance sheet	Weighted average effective interest rate
	2003	2003	2003	2003	2003
(i) Financial assets Cash	S	\$	\$ 8,812	\$ 8,812	$\frac{4}{10}$
Receivables			37,609	37,609
Total financial assets		$\overline{a}$	46,421	46,421
(ii) Financial liabilities
Payables			289,726	289,726
Borrowing (Current)			19,817	19,817
Borrowing (Non-Current)			7,022	7,022
Total financial liabilities		$\overline{a}$	316,565	316,565
Net financial assets / (liabilities)			(270, 144)	(270, 144)

Notes to the Financial Statements for the year ended 30 June 2004

FINANCIAL INSTRUMENTS (continued) NOTE 28

$(c)$ Credit Risk

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 provisions, as disclosed in the statement of financial position and notes to the financial statements.

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

$(d)$ Net Fair Values

The net fair values for all assets and liabilities approximates their carrying value.

NOTE 29 IMPACTS OF ADOPTING AISTRLAIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

Australian equivalents to International Financial Reporting Standards ("IFRS") will be adopted in the financial report for the year ended 30 June 2006 and the comparative information presented in that report for the year ended 30 June 2005. In preparation for the transition, opening balances as at 1 July 2004 for the comparative year ending 30 June 2005 will be converted to AIFRS in accordance with new accounting standard AASB 1"First Time Adoption of Australian Financial Reporting Pronouncements".

D'Aguilar Gold Ltd's management are assessing the significance of these changes and preparing for their implementation. The Audit and Risk Management Committee will oversee and manage the Company's transition to IFRS. The board has authorised ongoing training courses for members of the Audit and Risk Management Committee (where appropriate) and will also provide access to selected appropriately skilled consultants where necessary to ensure the successful implementation and transition to IFRS. We will seek to keep stakeholders informed as to any material impact of these new standards as they are finalised.

The key differences in accounting policy that may arise from the adoption of AIFRS are listed below:

Income Tax

AASB 112 "Income Tax" requires all income tax balances to be calculated using the comprehensive balance sheet liability method. Deferred tax items will be calculated by comparing the difference in carrying amounts to tax bases for all assets and liabilities and multiplying this by the tax rates expected to apply to the period when the asset is realised or the liability settled. Recognition of the resulting amounts are subject to some exceptions, but generally deferred tax balances must be calculated for each item in the statement of financial position. Deferred tax assets will only be recognised where there exists the probability that future taxable profit will be available to recognise the asset.

The application of AASB 112 "Income Tax" should not result in any significant adjustment to either tax assets and liabilities or net profit.

Property, Plant & Equipment

Under AASB 116 "Property Plant & Equipment" an impairment test is required when there is an indication that impairment exists by reference to internal and external market factors. Any item of property, plant and equipment which is impaired must be written down to its recoverable amount. The amount of the impairment write down for assets carried at cost will be expensed through the statement of financial performance.

Items of property, plant and equipment measured at fair value will still be carried at fair value, however the offsets of balances in the asset revaluation reserve under the new standards will be determined on an "asset by asset" basis rather than the current "class by class" treatment. This means that a change to profit or loss will occur where an impairment write down is necessary and there is no existing balance for that asset in the asset revaluation reserve.

All consolidated entity assets of property plant and equipment assets are tested to ensure the carrying amount is less than recoverable and write downs are made to reflect losses arising.

Notes to the Financial Statements for the year ended 30 June 2004

IMPACTS OF ADOPTING AUSTRLAIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING NOTE 29 STANDARDS (continued)

Share Based Payments

The entity currently engages in the practice of allocating to its employees share options as part of their remuneration packages under the employee share option plan. AASB 2 "Share Based Payments" require that these payments and also payments made to other counterparties in return for goods and services shall be measured at the more readily determinable fair value of the good/service or the fair values of the equity instrument. Under the new standards this amount will be expensed in the statement of financial performance. Where the grant date and the vesting date are different the total expenditure calculated will be allocated between the two dates taking into account the terms and conditions attached to the instruments and the counterparties as well as management's assumptions about probabilities of payments and compliance with and attainment of the set out terms and conditions.

Business Combinations

AASB 3 "Business Combinations" mandates that discounts on acquisition will no longer be allocated over the non-monetary assets of the entity. Instead a discount on acquisition will be recognised in profit and loss as income.

This standard has retrospective application however the exemption provisions in AASB 1 "First Time Adoption of Australian International Financial Reporting Pronouncements" allows the prospective application of the standard from the time of initial adoption of the standards. If the exemption in AASB 1 is not applied this will result in the entity reinstating the balances of goodwill and non monetary items in relation to its acquisitions for all business combinations effected from 30 July 2003 to the date of adoption of the new standards and adjusting retained earnings by those amounts. Any reverse acquisition situations will also then be accounted for accordingly and will result in an altered consolidated entity column for reporting purposes. The directors propose to utilise this exemption and will not retrospectively apply this standard.

Exploration Expenditure

Until such time as the International Accounting Standards Board (JASB) completes an extractive industries IFRS, the IASB has determined that national accounting standards will be grandfathered. Therefore, the Consolidated Entity will continue to apply the requirements of AASB 1022: Accounting for the Extractive Industries.

DIRECTORS' DECLARATION

The Directors of the Company declare that:

• $(1)$ the financial statements and notes to the financial statements:
• comply with Australian Accounting Standards, the Corporations Act 2001, and the Corporations $(a)$ Regulations 2001.
• give a true and fair view of the financial position as at 30 June 2004 and of the performance for the $(b)$ year ended on that date of the Company and Economic Entity; and
• in the Directors' opinion there are reasonable grounds to believe that the Company will be able to $(2)$ pay its debts as and when they become due and payable.

As set out in Note 1 the financial statements have been prepared on a going concern basis.

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

Brian Moller Director

Brisbane Dated this 30th day of September 2004

INDEPENDENT AUDIT REPORT

Independent audit report to members of D'Aguilar Gold Ltd and Controlled Entities

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for both D'Aguilar Gold Ltd (the Company) and its controlled entities (the Consolidated entity), for the year ended 30 June 2004 The Consolidated entity comprises both the Company and the entities it controlled during that year.

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

Audit approach

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

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

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

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

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

Independence

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

Audit opinion

In our opinion, the financial report of D'Aguilar Gold Ltd and Controlled Entities is in accordance with: the Corporations Act 2001, including:

• giving a true and fair view of the Company's and Consolidated entity's financial position as at $\blacksquare$ 30 June 2004 and of their performance for the year ended on that date; and
• $\blacksquare$ complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
• $\hat{\mathbf{m}}$ other mandatory financial reporting requirements in Australia.

Emphasis of Matter Regarding Going Concern

Without qualification to the opinion expressed above attention is drawn to the following matter. As set out in Note 1 the financial statements have been prepared on a going concern basis. The ability of the Economic Entity to maintain continuity of normal business activities and to pay its debts and when they fall due is dependent upon the success of capital raising.

No adjustments have been made to the carrying value of assets or recorded amount of liabilities should the Company's plans not eventuate.

BDO Kendalls Chartered Accountants

T J Kendall Partner

Brisbane Dated this 30th day of September 2004