DREADNOUGHT RESOURCES LTD — Regulatory Filings 2007

Oct 17, 2007

active uranium explorer EROMANGA URANIUM ANNUAL REPORT 2007

Highlights	1
Chairman's Report	2
Managing Director's Report	4
Tenement Locations	16
Tenement Schedule	17
Glossary of Terms	18
Corporate Governance Statement	19
Financial Report	21
Directors Report	22
Auditor's Independence Declaration	26
Income Statement	27
Balance Sheet	28
Statement of Changes in Equity	29
Cash Flow Statement	30
Notes to the Financial Statements	31
Directors Declaration	40
Independent Audit Report	41
ASX Additional Information	43

ASX code - ERO

The REPTEM survey is being undertaken by Geosolutions Pty Ltd., which has developed the new system as a replacement for the resources sector's internationally respected HoistEM system historically employed extensively throughout Australia for EM programs.

The REPTEM system is designed to be more stable during flight and provides improved data quality.

This improved data enhances geological interpretations from those previously possible with HoistEM surveys and therefore optimise Eromanga's selection of our first drill targets and potential outcomes.

Contents Corporate Directory

Directors

Robert Michael Kennedy (Chairman) Keven James Lines (Managing Director) Kevin John Anson Wills (Non Executive Director) Ewan John Vickery (Non Executive Director) Adam Bannister (Alternate for E J Vickery)

Company Secretary Richard Willson

Registered and Principal Office

62 Beulah Road Norwood South Australia 5067

Telephone +61 8 8362 5900 Facsimile +61 8 8362 5966

Solicitor

DMAW Lawyers Level 3 80 King William Street Adelaide South Australia 5000

Telephone +61 8 8210 2222 Facsimile +61 8 8210 2233

Share Registry

Computer Share Registry Services Level 5 115 Grenfell Street Adelaide South Australia 5000

Telephone +61 8 8236 2300 Facsimile +61 8 8236 2305

Auditor

PKF - Chartered Accountants & Business Advisers 2nd Floor 139 Frome Road Adelaide South Australia 5000

Banker

National Australia Bank Kent town South Australia 5067

Website

www.eromangauranium.com

The website includes information about the Company, its strategies, projects, reports and ASX announcements.

¹ HIGHLIGHTS

• • 3 major airborne EM surveys, totalling over 17,000 line/ km, successfully completed at the Marree, Abminga and Billa Kalina Projects.
• • Discovery of the Marree Palaeodrainage with over 100km of primary channels prospective for sandstonehosted uranium mineralisation.
• • Exciting, emerging uranium targets at Abminga in previously undefined palaeodrainage system.
• • New iron oxide-copper-gold-uranium initiative in the Northern Gawler Craton with targets at Welbourn Hill and Nicholson.
• • Established in-house skills in the computer processing and imaging of airborne EM data allowing Eromanga to maximise the return from its investments.
• • Positioned for a dynamic 2008 with a strong project portfolio, excellent exploration team and the capacity to deliver.

² CHAIRMAN'S REPORT

Dear Fellow Shareholders

This is the first Annual Report since Eromanga Uranium listed on the Australian Stock Exchange in October 2006. During the company's IPO approximately 125 million shares were issued, 47% to the public, and \$14.75 million was raised. After payments due on listing, including broker commissions, the Company commenced exploration activities with cash on hand of approximately \$13.8 million, and in its first financial year has spent about \$1.3 million on exploration activities.

This exploration expenditure has been directed towards:

completion of major airborne electromagnetic (EM) surveys at the Marree, Abminga and Billa Kalina projects totalling in excess of 17,000 line/km.

• • the initial phase of rotary-mud drill testing of the newly discovered Marree Palaeodrainage system.
• • deep diamond drill testing of the Billa Kalina Gravity Anomaly for potential iron oxide-copper-gold-uranium (IOCG) mineralisation.
• • establishment of in-house computer hardware and software systems for the processing of the expansive data sets collected during the airborne EM surveys.

Upon listing the Company already had in place an expansive property portfolio, over 20,000 sq km, of highly prospective but largely unexplored tenements. Our strategy has been to apply state-of-the-art geophysical techniques across each of our major project areas with the objective of delineating favourable drill targets as early as possible. This strategic investment has delivered results that have exceeded our initial expectations and is providing the Company with a database of very significant ongoing value.

Shortly after listing, the first of our major airborne EM surveys was successfully completed at our Marree Project. Consisting of over 4000 line/km and covering our entire tenement holding at Marree this survey was extremely successful and identified an extensive, and previously unknown, palaeodrainage system containing over 100km of primary channels with the potential for sandstone-hosted uranium mineralisation. An initial drilling program, of over 5000 metres, has been completed and has provided critical geological information that supports further drill based exploration later in 2007. Eromanga considers that the work undertaken to-date at the Marree Project supports our belief that this area is highly prospective for sandstonehosted uranium mineralisation and the project area will be a high priority for the Company in the immediate future.

The second of the Company's airborne EM surveys was successfully completed at our Abminga Project and covered over 9,000 line/km, spanning the border between South Australian and Northern Territory. Whilst detailed computer processing and imaging of the data from this survey is ongoing the initial results are exciting and have identified multiple, unexplored, palaeodrainages within the immediate area of known sandstone-hosted uranium mineralisation. Based on these early results Eromanga Uranium has consolidated its landholding in the immediate Abminga area giving the Company a pre-eminent and strategic position in what we believe is a grossly underexplored region.

At Billa Kalina the Company completed deep diamond drill testing of the Billa Kalina Gravity Anomaly. Whilst this drilling failed to intersect any significant iron oxide-coppergold mineralisation the Company will use the results of the recently completed airborne EM/magnetic survey over the project area to better understand basement geology and the potential for IOGC mineralisation. The Billa Kalina tenement holdings are positioned approximately midway between the Olympic Dam and Prominent Hill mines and hold important strategic value for Eromanga Uranium. The Company believes that Billa Kalina retains significant exploration potential and the project area will remain a priority target throughout 2007-08.

The investment by Eromanga in the acquisition of large regional data sets, principally airborne EM surveys, has positioned the Company extremely well for future growth. This "bank" of information will allow the Company to properly prioritise its exploration activities across our portfolio of projects and will reduce the time taken for exploration success, often in remote and difficult terrains. Eromanga now has the capacity to simultaneously implement multiple drill-based exploration campaigns and to leverage off our early exploration efforts. The Company's focus during the coming year will be directed at discovery and delineation of sandstone-hosted uranium mineralisation at the Marree and Abminga Projects, advancing our exciting new IOCG targets in the Northern Gawler Craton and undertaking initial exploration in the Kingoonya area.

The uranium exploration sector has been both a dynamic and highly competitive environment over the last twelve months and the creation and operation of a Company such as Eromanga Uranium requires a great deal of hard work from a number of people. I would like to take this opportunity to express my thanks to all those who have contributed so professionally to the establishment of the Company. Similarly, the Directors have been diligent in representing the Company and guiding its activities. I would particularly like to thank our Managing Director, Mr Kevin Lines, and commend him for his efforts over the last year. Finally, my thanks go to our loyal shareholders who have supported the Company during an often turbulent year and who hopefully will receive the benefits from the Company's future growth.

Robert Kennedy Chairman September 2007

In 2007, Eromanga discovered a major new palaeodrianage system at the Marree Project and completed over 17,000 line/km of airborne EM surveys across three project areas.

ACTIVITIES OVERVIEW

Eromanga Uranium has seen a very active 11 months since listing of the company on the ASX in October 2006. After initial establishment of our office facilities in Adelaide SA and the recruitment of key exploration personnel the company has been able to complete major airborne EM surveys, totalling in excess of 17,000 line/km, over three of our larger project areas. In an environment of very strong competition for the services of quality geophysical contractors this has been a particularly pleasing result for Eromanga Uranium.

The data derived from these very large regional EM surveys is a critical component of the company's exploration strategy. They provide the fundamental information requirements for Eromanga Uranium to rapidly focus its ongoing exploration efforts on those portions of its large tenement holding that exhibit the greatest discovery potential. The first of the airborne EM surveys to be completed, at the Marree Project, led to the identification of the previously unknown Marree Palaeodrainage and has provided very strong support for Eromanga's exploration approach.

Based upon the results of the Marree airborne EM survey the company completed the first phase of drill testing at Marree involving a total of 5503 metres in 41 holes. This program was designed as a series of traverses, across key features in the project area, with the objective of providing geological information for calibration and refinement of the geophysical imaging and interpretation. The results of the drill program have provided the basis for the design of ongoing drill testing at Marree in late 2007.

At the company's Abminga Project the second, and largest, of the airborne EM surveys was successfully completed and involved the collection of over 9,000 line/km of flight data. Detailed computer processing and imaging of this massive data set is ongoing but the work completed to-date has produced exciting results. Multiple palaeodrainages have been identified in an area of previous, but very limited, exploration in the late 1970-80's. This early exploration was primarily wide spaced reconnaissance drilling and returned a result of 190ppm U within the target Algebuckina Sandstone but outside the main palaeodrainage. This area will be a priority exploration target for Eromanga later in 2007 and throughout 2008.

An important focus for Eromanga after listing was to evaluate the Billa Kalina Gravity Anomaly located in the central portion of the Billa Kalina Project area.

Two deep diamond drill holes tested the main gravity feature without intersecting any significant iron oxidecopper-gold-uranium (IOCG) mineralisation. These holes did however confirm that the older basement in this region is relatively shallow and is covered by only 250-300 metres

⁶ PROJECT REVIEWS

Marree Project, South Australia

Eromanga Uranium Limited earning 70% from Maximus Resources Limited in ELs 3574, 3577, 3578 and 3579. Eromanga Uranium Limited 100% of ELAs 127/07 and 128/07

Eromanga Uranium Limited (Eromanga) is earning 70% equity in four granted exploration licences under the terms of the Eromanga Basin Joint Venture Agreement with Maximus Resources Limited. These tenements cover an area of approximately 3909 sq km and are located to the east of the township of Marree in northern South Australia (Figure 2). Eromanga has also applied for two additional exploration licences, totalling 1870 sq km and held 100% by Eromanga, which are contiguous with and immediately to the west of its initial tenement holding (Figure 2).

The focus of exploration at the Marree Project is the discovery of uranium mineralisation hosted within shallow sedimentary sandstone horizons. Targeting of this style of uranium mineralisation firstly requires the delineation of the buried river channels, or palaeodrainages, in which the host sandstones have developed. Once these palaeodrainages have been defined intensive drilling is required to discover precisely where, in the drainage, uranium mineralisation has developed in economic concentrations.

Figure 2 Marree Project location and tenements diagram

Figure 2 Location of Marree Project tenements.

Eromanga is applying airborne geophysical techniques, principally electromagnetics (EM), across our entire tenement holdings to provide a three-dimensional image of the geometry and depth extent of palaeodrainage development. Eromanga has reached an agreement with Adelaide based company Geosolutions Pty Ltd to undertake airborne EM surveys using the state-of-theart REPTEM system. Geosolutions are the developers of REPTEM and have provided Eromanga with priority access to the system.

The first REPTEM survey was completed at the Marree Project in late December 2006 and involved the flying of approximately 4000 line/km, with flight lines oriented in a north-easterly direction and spaced every 1 km. Processing of the data from this survey identified a previously unknown palaeodrainage, now referred to as the Marree Palaeodrainage, with over 100km of primary channel development (Figure 3). This drainage system, contained entirely within Eromanga's tenements, flowed from east to west and is interpreted to be bounded by a major fault structure at its western limits.

7

Figure 3 Electromagnetic imaging of the Marree palaeodrainage (approximately 60 metres below surface).

Based on the interpretation of the geophysical data the company ratified an agreement with the aboriginal traditional owners, the Adnyamathanha people, obtained pre-requisite Heritage Clearance surveys and completed the first drilling program at Marree. A total of 41 holes were drilled for 5503 metres on a series of traverses designed to provide detailed geological information that could be used to calibrate the airborne EM data and strengthen the overall interpretations. All holes were geophysically logged using Eromanga's logging truck for both gamma response and induction/conductivity measurements.

The results of the drilling program have indicated that western portions of the palaeodrainage are developed over Bulldog Shale and are relatively shallow. Eromanga considers that these areas have reduced prospectivity and is focussing its ongoing exploration efforts in the central and eastern segments of the project area where deeper drainage development, and thicker sand units have been indicated.

The Company anticipates that the second major drilling campaign at Marree will commence in late November 2007, subject to necessary aboriginal clearances and drill rig availability, and will focus on testing of the deeper and thicker sandstone units discussed above.

Billa Kalina Project, South Australia

Eromanga Uranium Limited earning 50% from Maximus Resources Limited in ELs 3526, 3337, 3525, 3170 and 3338.

Eromanga Uranium Limited (Eromanga) is earning a 50% interest in the Billa Kalina project from Maximus Resources by the expenditure of \$3 million. The project tenements consist of five granted exploration licences in two main blocks that total approximately 4084 sq km (Figure 4). The Billa Kalina Project is strategically located approximately mid-way between the Olympic Dam and Prominent Hill mines, two globally significant iron oxide-copper-gold+/ uranium (IOCG) ore-bodies.

Eromanga maintains a dual exploration focus at Billa Kalina and is concurrently advancing exploration programs targeting both IOCG styles of mineralisation, and shallow sandstone-hosted uranium mineralisation. The IOCG mineralisation in the Billa Kalina region is hosted by older Proterozoic rocks which now lie beneath 250 to 450 metres of sedimentary cover. Identification and targeting of IOCG systems is reliant on the use of surface geophysical surveys, principally gravity surveys, which can delineate anomalies in the basement geology. These anomalies can only be tested for the presence of IOCG mineralisation by deep diamond drilling.

Major mineral deposit

Figure 4 Location of Billa Kalina Project tenements.

The Billa Kalina Gravity anomaly was defined by Maximus Resources prior to becoming a foundation project of Eromanga. A close spaced ground gravity survey, on a 400m x 400m grid, outlined a linear north-west/south-east gravity feature with dimensions of 7km x 2km. The peak gravity response was approximately 2 milligals and similar to that at the recent discovery of the Carrapateena deposit. Eromanga has completed a deep diamond drill program of two holes, BKDDH01 and BKDDH02, designed to test both the peak gravity response and the planks of the main anomaly (Figure 5). Both holes intersected basement volcanics under relatively shallow sedimentary cover, 317m and 248m respectively, and were completed at depths of 600m. Neither hole succeeded in intersecting significant IOCG style mineralisation. The basement geology consisted of a thick sequence of mafic to intermediate volcanics, commonly veined, with minor hematitic alteration of the host volcanics and very minor sulphide mineralisation.

9

Figure 5 Location of Billa Kalina drill holes and gravity anomaly.

Eromanga is confident that the Billa Kalina Gravity anomaly has been tested to appropriate economic depths and believes that the anomaly can be adequately explained by the presence of a large elevated body of mafic/intermediate volcanics in the Proterozoic basement. The southern sector of the Billa Kalina tenement holding remains to be fully explored, particularly given its strategic location, and will be the subject of ongoing exploration throughout late 2007 and 2008.

The second leg of the Company's exploration program at the Billa Kalina Project has focussed on the delineation of potential palaeodrainages, developed within the more recent sedimentary cover sequences, with potential to host roll-front or sandstone-hosted uranium mineralisation. The opportunity exists for the development of sandstonehosted uranium mineralisation in both the Mesozoic and older Permian sedimentary basins which overlap within the Billa Kalina Project area. Eromanga commissioned Geosolutions Pty Ltd to undertake a 4000 line/km REPTEM survey over the entire tenement position at Billa Kalina. This survey was successfully completed in mid-September and the company anticipates receipt of the processed data from Geosolutions in early October. Further computer processing and imaging of the data will be completed inhouse and will form the basis for ongoing exploration and drilling in the first half of 2008.

Abminga Project, South Australia/Northern Territory

Eromanga Uranium Limited earning 70% from Maximus Resources Limited in ELs 3575, 3599, 3600, 3601, 3602, 25163, and 25166. Eromanga 100% of ELAs 297/07, 220/07, 387/07, and 439/07. Eromanga earning 100% of uranium rights from Caldera Resources on EL 3186.

The Abminga Project is the largest of Eromanga Uranium Limited's (Eromanga) five major projects and covers a total area now exceeding 9,800 sq km. Eromanga has the right, under the terms of the Eromanga Basin Joint Venture, to earn a 70% interest from Maximus Resources in seven granted exploration licences (5 in SA and 2 in the NT) covering a total 6,914 sq km. Eromanga also has the opportunity to secure 100% of the uranium rights on EL 3186 (74 sq km) from Caldera Resources. The remainder of the tenement holding at Abminga, 2,881 sq km, is the subject of four exploration licence applications and will be held, on grant of title, 100% by Eromanga Uranium Limited (Figure 6).

The early exploration focus of Eromanga at the Abminga Project has been directed at the discovery of sandstonehosted uranium mineralisation within units of the Eromanga Basin that on-lap the uranium enriched rocks of the Musgrave Metamorphic complex. During the company's ongoing analysis of the geology and tectonic setting of the project area it was recognised that significant potential exists in the region for the discovery of IOCG styles of copper-gold-uranium mineralisation. Eromanga has sort to consolidate its landholding at Abminga both through selected joint ventures with other explorers in the region and by application for additional exploration tenure.

Figure 6 Location of Abminga Project tenements.

As the initial step in advancing the company's exploration for sandstone-hosted uranium mineralisation Eromanga commissioned Geosolutions Pty Ltd to undertake an extensive airborne EM survey utilising the REPTEM system. This survey was successfully completed and involved the acquisition of over 9,000 line/km of data. Coverage included all granted tenements and incorporated the area of the recent tenement applications ELA 220/07, ELA 297/07 and the Caldera Resources EL3186 (Figure 7). A survey of these dimensions generates massive data sets and requires significant time and resources to complete computer processing, imaging and interpretation. Eromanga has addressed these issues by sub-setting the data and focussing its resources on those areas which display the greatest initial discovery potential. Whilst processing and interpretation is ongoing the early indications from Abminga are exciting with multiple palaeodrainage systems developed in close proximity to exploration drilling undertaken in the 1970-80's by Afmeco which returned uranium values within the Algebuckina Sandstone of up to 190ppm U. The palaeodrainages have not been drilled and are the prime target for roll-front styles of uranium deposition. Figure 7 Abminga Project EM image

Exploration Licence Application

Figure 7 Abminga airborne EM image.

Figure 8 Welbourn Hill and Nicholson areas showing gravity contours over a magnetic image. Exploration Licence

Eromanga is advancing negotiations with local pastoralists, aboriginal groups and suitable contractors to allow drilling to commence at the earliest possible opportunity, hopefully by late November 2007.

Recognition of the IOCG potential of the north-eastern limits of the Gawler Craton, immediately adjacent to the company's initial landholding, led Eromanga to apply for two additional exploration licences. These applications, ELAs 387/07 and 439/07 (Figure 6) cover two significant coincident gravity/magnetic anomalies at Welbourn Hill and Nicholson (Figure 8). The Welbourn Hill target has been the subject of previous exploration by Comalco and Newcrest in the 1980's and early 1990's with the completion of detailed ground gravity surveys that delineated a large 9 milligal residual anomaly at depth. Geophysical modelling, confirmed by Eromanga, indicated that the anomaly was best explained by the presence of a large body of elevated density at a depth of 550-600 metres. Newcrest attempted to drill test the target, reaching a depth of 507m, by failed when the drill hole collapsed near the top of the hole. Eromanga has inspected the drill core from this hole and is extremely encouraged by the presence of significant steely hematite veining within the last 7 metres of the hole.

The Nicholson target, approximately 30km north-east of Welbourn Hill, is defined by the coincidence of a 10 milligal bouguer gravity anomaly and a complex lenticular magnetic signature, similar to that of a volcanic centre. The gravity anomaly is based on wide spaced regional data, at approximately 7km centres, and Eromanga intends to complete a more detailed gravity survey over the Nicholson target immediately after grant of the tenement. The available geophysical data suggests that the cratonic basement at Nicholson made be at shallower depths than at Welbourn Hill and confirmation of this interpretation will be a priority task for Eromanga.

The Abminga Project has rapidly evolved to become one of the company's most exciting exploration areas. Whilst remote, the project area is now well serviced by a sealed national highway and a new rail link between Adelaide and Darwin. The local community are generally very supportive of exploration and mine development and Eromanga anticipates the region will become one of the company's most active project areas.

Kingoonya Project, South Australia

Eromanga Uranium Limited earning 70% from Maximus Resources Limited in ELs 3613, 3591, 3573, 3576 and 3590.

Eromanga Uranium Limited (Eromanga) has the right, under the terms of the Eromanga Basin Joint Venture Agreement with Maximus Resources Limited, to earn a 70% equity position in the Kingoonya Project. The project area consists of five granted exploration licences, in two discreet blocks, covering approximately 4060 sq km (Figure 9).

The tenement area is located close to the township of Glendambo in the interpreted headwaters of the Kingoonya Palaeodrainage system. Eromanga is targeting both sandstone-hosted uranium mineralisation within palaeodrainages and unconformity styles uranium deposits beneath the Proterozoic Pandurra Formation.

Exploration at the Kingoonya Project has only recently commenced due the combined influence of access limitations and contractor availabilities. Eromanga has commissioned Geosolutions Pty Ltd to undertake a 4000 line/km airborne EM survey over the entire tenement holding and anticipates completion of the survey in late September 2007. Following computer processing and interpretation of the survey data Eromanga anticipates that ground based follow-up exploration activities will commence in late 2007 and continue throughout 2008.

Figure 9 Location of Kingoonya Project tenements.

Illogwa Project, Northern Territory

Eromanga Uranium Limited earning 70% from Maximus Resources Limited in ELs 25161 and 25162.

Eromanga Uranium Limited (Eromanga) is earning a 70% interest in the Illogwa Project from Maximus Resources Limited as part of the Eromanga Basin Joint Venture Agreement. The project area consists of one granted exploration licence (EL25162) and one application (EL25161) and covers a total area of 1333 sq km. It is located approximately 200km east of Alice Springs NT.

EL25161 is located on aboriginal freehold land and, as such, Eromanga's exploration licence application can only be granted after approval by the appropriate traditional owners. The company, in conjunction with representatives of the Central Land Council (CLC), met with traditional owners in May 2007. Following consideration of the company's presentation at this meeting the traditional owners have vetoed Eromanga's application. Subsequent consultation with the CLC has indicated that the rejection of the company's application was based on concerns over uranium exploration and mining and was not specifically related to Eromanga. Figure 10 Illogwa Project location and tenements diagram

Eromanga is currently evaluating its options at the Illogwa Project. The area covered by EL25161 is now vetoed for a period of five years and places severe limitations on the viability of exploration on the remaining, and much smaller, granted tenement EL25162. The Company does not believe that the loss of access to EL25161 will significantly impact on its overall exploration programs as recent applications for additional prospective tenure in South Australia largely offsets the loss.

Kevin Lines Managing Director September 2007

Exploration Licence Application

Figure 10 Location of Illogwa Project tenements.

TENEMENT SCHEDULE

Tenement / Appl'n Number	Tenement Name	Date Granted / Applied For	Expiry Date	Area sq km	Registered Holder / Applicant	Related Agreement
South Australia
Billa Kalina Project
EL 3526	Francis	23/02/06	22/02/08	734	Flinders Diamonds Limited	Maximus BK Agreement
EL 3525	Margaret	23/02/06	22/02/08	771	Flinders Diamonds Limited	Maximus BK Agreement
EL 3170	Billa Kalina	25/02/04	24/02/08	1,435	Flinders Diamonds Limited	Maximus BK Agreement
EL 3337	Welcome Creek	19/05/05	18/05/08	373	Flinders Diamonds Limited	Maximus BK Agreement
EL 3338	Millers Creek	19/05/05	18/05/08	771	Flinders Diamonds Limited	Maximus BK Agreement
Marree Project
EL 3579	Calcutta	21/06/06	20/06/08	984	Maximus Resources Limited	Maximus EB Agreement
EL3578	Dalarinna Hill	21/06/06	20/06/08	1000	Maximus Resources Limited	Maximus EB Agreement
EL3577	Wilpoorina	21/06/06	20/06/08	962	Maximus Resources Limited	Maximus EB Agreement
EL3574	Mundowdna	21/06/06	20/06/08	963	Maximus Resources Limited	Maximus EB Agreement
ELA127/07	Callanna	16/03/07		875	Eromanga Uranium Limited
ELA128/07	Marree	16/03/07		995	Eromanga Uranium Limited
Abminga Project
EL3575	Marla	21/06/06	20/06/08	988	Maximus Resources Limited	Maximus EB Agreement
EL 3599	Alberga River	17/07/06	16/07/08	903	Maximus Resources Limited	Maximus EB Agreement
EL 3600	Mt Weir	17/07/06	16/07/08	959	Maximus Resources Limited	Maximus EB Agreement
EL 3601	Warrataddy Hill	17/07/06	16/07/08	963	Maximus Resources Limited	Maximus EB Agreement
EL 3602	Mt Anthony	17/07/06	16/07/08	966	Maximus Resources Limited	Maximus EB Agreement
ELA 220/07	Enungarenna Hill	23/04/07		877	Eromanga Uranium Limited
ELA297/07	Mount Treloar	1/06/07		990	Eromanga Uranium Limited
ELA387/07	Nicholson Hill	11/07/07		725	Eromanga Uranium Limited
ELA439/07	Welbourn Hill	23/07/07		289	Eromanga Uranium Limited
EL 3186	Warrataddy Hill (2)	17/03/04	16/03/08	74	Caldera Resources Pty Ltd	Caldera Agreement
Kingoonya project
EL3576	Whymlet	21/06/06	20/06/08	973	Maximus Resources Limited	Maximus EB Agreement
EL3573	Haggard Hill	21/06/06	20/06/08	859	Maximus Resources Limited	Maximus EB Agreement
EL 3590	Bon Bon	22/06/06	21/06/08	667	Maximus Resources Limited	Maximus EB Agreement
EL3591	McDouall Peak	22/06/06	21/06/08	980	Maximus Resources Limited	Maximus EB Agreement
EL 3613	Phar Lap	15/08/06	14/08/08	581	Maximus Resources Limited	Maximus EB Agreement
Northern Territory
Illogwa Creek
EL25161	Illogwa Creek	1/24/2006	In 5 year moratorium	1117	Maximus Resources Limited	Maximus EB Agreement
EL25162	Numery	11/22/2006	11/21/2012	216	Maximus Resources Limited	Maximus EB Agreement
Abminga
EL25163	Mt Peterswald	11/22/2006	11/21/2012	1130	Maximus Resources Limited	Maximus EB Agreement
EL25166	Jenkins Bluff	11/22/2006	11/21/2012	1005	Maximus Resources Limited	Maximus EB Agreement

16 TENEMENT LOCATIONS

Financial Report

For the year ended 30 June 2007

17

INDEX

Corporate Governance Statement	18
Directors Report	20
Auditors Independence Declaration	24
Income Statement	25
Balance Sheet	26
Statement of Changes in Equity	27
Cash Flow Statement	28
Notes to the Financial Statements	29
Directors Declaration	41
Independent Audit Report	42
ASX additional information	44

CORPORATE GOVERNANCE STATEMENT

The Board of Directors of Eromanga Uranium Limited aims to achieve the highest standards of corporate governance and has established corporate government policies and procedures, where practicable, consistent with the ASX Corporate Governance Council's publication "Principles of Good Corporate Governance and Best Practice Recommendations" ("ASXCGC").

The Company to date has not adopted the ASXCGC best practice recommendations other than those specifically identified and disclosed below as the Board believes that it cannot justify the necessary cost in view of the size and early stage of the entity's life as a listed exploration company.

This statement outlines the main corporate governance practices of the Company disclosed under the principles outlined in the ASXCGC.

Principle 1 - Lay solid foundations for management and oversight

Role of the Board

18

The Board is governed by the Corporations Act 2001, the Company's constitution and by the ASX Listing Rules. The Board's primary role is to set policy regarding the affairs of the Company for the protection and enhancement of long-term shareholder value.

The Board takes responsibility for the overall Corporate Governance of the Company including its strategic direction, management goal setting and monitoring, internal control, risk management and financial reporting.

Board processes and management

The Board has an established framework for the management of the entity including a system of internal control, a business risk management process and appropriate ethical standards.

The Board has appointed a Managing Director responsible for the day to day management of the Company including management of financial, physical and human resources, development and implementation of risk management, internal control and regulatory compliance policies and procedures, recommending strategic direction and planning for the operations of the business and the provision of relevant information to the Board.

Principle 2 - Structure Board to add value

Composition of the Board

The Board comprises individuals with a range of knowledge, skills and expertise that are appropriate to its activities and objectives.

The composition of the Board consists of four directors. Three, including the Chairman, are non-executives. Mr Kennedy's role as Chairman of the Board is separate from those of the Managing Director, Mr Lines who is responsible for the day to day management of the Company. This is in compliance with the ASXCGC best practice recommendation.

The Company's constitution specifies the number of directors must be at least three and at most ten. The Board may at any time appoint a director to fill a casual vacancy. Directors appointed by the Board are subject to election by shareholders at the following annual general meeting and thereafter directors (other than the Managing Director) are subject to re-election at least every three years.

Principle 3 - Promote ethical and responsible decision making

Ethical standards

The Company aims for a high standard of corporate governance and ethical conduct by directors and employees.

All directors are required to provide the Company with details of all securities registered in the director's name or an entity in which the director has a relevant interest.

Directors are required to disclose to the Board any material contract in which they may have an interest. In accordance with Section 195 of the Corporations Act 2001, a director having a material personal interest in any matter to be dealt with by the Board, will not be present when that matter is considered by the Board and will not vote on that matter.

Trading in the Company's Securities

Directors, officers and employees are not permitted to trade in securities of the Company at any time whilst in possession of price sensitive information not readily available to the market. The Corporations Act also prohibits the acquisition and disposal of securities where a person possesses information that is not generally available and which may reasonably be expected to have a material effect on the price of the securities if the information was generally available.

Principle 4 - Safeguard integrity in financial reporting

Audit Committee

The Board has established an audit committee. The primary role of the committee is to monitor and review the effectiveness of the control environment in the Company and provide an independent and objective review of financial and other information prepared by management, including overseeing the Company's discharge of its responsibilities with respect to:

• • reviewing, assessing and making recommendations to the Board on the annual and half year financial reports and all other financial information published or released to the market by the Company;
• • overseeing establishment, maintenance and reviewing the effectiveness of the Company's internal controls and ensuring efficacy and efficiency of operations, reliability of financial reporting and compliance with applicable Accounting Standards and ASX Listing Rules;
• • liaising with and reviewing reports of the external auditor; and
• • reviewing performance and independence of the external auditor and where necessary making recommendations for appointment and removal of the Company's auditor.

The Committee meets at least two times per annum and reports to the Board. The Managing Director, Company Secretary and external auditor may by invitation attend meetings at the discretion of the Committee.

Principle 5 - Making timely and balanced disclosure

Continuous disclosure

The Company operates under the continuous disclosure requirements of the ASX Listing Rules and ensures that all information which may be expected to affect the value of the Company's securities or influence investment decisions is released to the market in order that all investors have equal and timely access to material information concerning the Company. This is made publicly available on the Company's web-site following release to the ASX.

Principle 6 - Respect

The role of shareholders

The Board aims to ensure that shareholders are informed of all major developments affecting the Company's state of affairs. In accordance with the ASXCGC best practice recommendations, information is communicated to shareholders as follows:

• • the annual financial report which includes relevant information about the operations of the Company during the year, changes in the state of affairs of the entity and details of future developments, in addition to the other disclosures required by the Corporations Act 2001; the half yearly financial report lodged with the Australian Stock Exchange and Australian Securities and Investments Commission and sent to all shareholders who request it; notifications relating to any proposed major changes in the Company which may impact on share ownership rights that are submitted to a vote of shareholders;
• • notices of all meetings of shareholders;
• • publicly released documents including full text of notices of meetings and explanatory material made available on the Company's web-site; and
• • disclosure of the Company's Corporate Governance practices and communications strategy on the entity's web-site.

The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the Company's strategy and goals. The external auditor of the Company is also invited to the Annual General Meeting of shareholders and is available to answer any questions concerning the conduct, preparation and content of the auditor's report.

Principle 7 - Recognise and manage risks

Risk assessment and management

The Board recognises that there are inherent risks associated with the Company's operations including mineral exploration and mining, environmental, title and native title, legal and other operational risks. The Board endeavours to mitigate such risks by continually reviewing the activities of the Company in order to identify key business and operational risks and ensuring that they are appropriately assessed and managed.

Principle 8 - Encourage performance

Performance evaluation

The Board evaluates the performance of the Managing Director, other executive directors and senior management on a regular basis and encourages continuing professional development at these levels.

Principle 9 - Remunerate fairly and responsibly

Remuneration policy

In view of the current size of the Board, remuneration matters are monitored by the entire board having regard for industry practices and laws.

The Company's Constitution specifies that the total amount of remuneration of non-executive directors shall be fixed from time to time by the members in a general meeting. Directors may apportion any amount up to this maximum amount amongst the non-executive directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in performing their duties as directors.

The remuneration of the Managing Director is determined by the Board as part of the terms and conditions of his employment which are subject to review from time to time. The remuneration of employees is determined by the Managing Director subject to the approval of the Board.

Principle 10 - Recognise the legitimate interests of stakeholders

Code of conduct

The Company requires all its directors and employees to abide by the highest standards of behaviour, business ethics and in accordance with the law. In discharging their duties, Directors of the Company are required to:

• • act in good faith and in the best interests of the Company;
• • exercise care and diligence that a reasonable person in that role would exercise;
• • exercise their powers in good faith for a proper purpose and in the best interests of the Company;
• • not improperly use their position or information obtained through their position to gain a personal advantage or for the advantage of another person to the detriment of the Company;
• • disclose material personal interests and avoid actual or potential conflicts of interests;
• • keep themselves informed of relevant Company matters;
• • keep confidential the business of all directors meetings; and
• • observe and support the Board's Corporate Governance practices and procedures.

20 Directors Report

Your directors present their report on the company and its controlled entities for the financial year ended 30 June 2007.

Directors

The names of directors in office at any time during or since the end of the year are: Robert Michael Kennedy

Kevin James Lines Kevin John Anson Wills Ewan John Vickery Adam Bannister (alternate for E J Vickery)

The directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Company Secretary

The following person held the position of company secretary at the end of the financial year:

Richard Walter Cumming Willson B.Ac., CPA, GAICD

Bachelor of Accounting, CPA, Graduate Member of the Australian Institute of Company Directors. Mr Willson has had more than 13 years experience. He has worked in public practice and in various financial management and company secretarial roles within the Provimi Australia group, BHP Billiton and the Jumbuck Pastoral group. He has been the Company Secretary since 29 March 2006 and to the date of this report.

Principal Activities

The principal activity of the Company during the financial year was uranium exploration.

Operating Results

The consolidated net result of operations for the financial year was a loss of \$717,645.

Dividends

There were no dividends declared or paid during the period.

Review of Operations

Eromanga Uranium Limited successfully listed on the ASX on the 31st October 2006 after raising \$14.75 million. The company immediately embarked on setting up an exploration office in Norwood, SA and on the acquisition of key items of plant and equipment essential for supporting an active exploration program. A team of geologists, field technicians and support staff were recruited and field activities commenced almost immediately after listing.

Under an agreement with Geosolutions Pty Ltd, the developers of the REPTEM airborne EM system, Eromanga had priority access to this state-of-the-art technology and the first airborne EM survey, covering over 4000 line/km, was completed in December 2006 over the Marree Project area. This survey was extremely successful and identified an extensive, and previously unknown, palaeodrainage system at Marree containing over 100km of primary channels with the potential for sandstone-hosted uranium mineralisation. Initial Aboriginal Heritage Site Clearances were sought and obtained and the first phase of drilling involving 41 rotary-mud drill holes for 5523 metres was successfully completed. The drilling program has provided critical geological information, in an area with extremely limited historic exploration, and has identified target areas for follow-up drill testing. On the basis of the initial results at Marree, two (2) additional exploration licences, immediately to the west of the Company's current tenement holdings were applied for and granted.

At the Billa Kalina Project the Company's initial focus was on deep diamond drill testing of the Billa Kalina Gravity anomaly, considered prospective for Olympic Dam style iron oxide-copper-gold-uranium (IOCG) mineralisation. After a number of delays in acquiring a suitable drilling contractor the company successfully completed drill holes BKDDH 01 and 02 to depths of approximately 600 metres. Whilst the target basement volcanics were veined and altered with minor sulphide mineralisation no significant IOCG mineralisation was encountered. At years end a major airborne EM survey, of over 4000 line/km, was underway at Billa Kalina focussed on the delineation of shallower buried palaeodrainages, prospective for sandstone-hosted uranium deposits.

At the Abminga Project, on the South Australian/Northern Territory border, the company completed a major airborne EM survey over the entire tenement holding totalling in excess of 9000 line/km. The data generated from this survey is currently undergoing detailed computer processing and imaging. Initial results are considered very encouraging. Four (4) new exploration licence applications have been lodged by the company in the Abminga area that both consolidate the land position for sandstone-hosted uranium targets and cover two exciting IOCG targets at Welbourn Hill and Nicolson.

Financial Position

The net assets of the company have increased by \$22,984,866 during the financial year from \$548,925 at 30 June 2006 to \$23,533,791 at 30 June 2007. This increase has largely resulted from the proceeds from share issues raising \$14,758,300 and the acquisition by issues and options of Eromanga Uranium Resources Pty Ltd. The company has been actively undertaking exploration activities and has capitalised \$10,927,690 in exploration expenditure during the current financial year. Included in the capitalised exploration expenditure is an amount of \$9,626,536 which represents the acquisition of Eromanga Uranium Resources Pty Ltd.

The directors believe the Company is in a strong and stable financial position to continue its exploration activities.

After Balance Date Events

No circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group in future financial years.

Future Developments, Prospects and Business Strategies

The Company is extremely well positioned for very active exploration in the coming year. The investment that has already been made in the acquisition of regionally extensive airborne EM data over our major projects at Marree, Abminga and Billa Kalina will continue into early 2007-08 at Kingoonya. This provides the Company with the critical data to both properly prioritise exploration programs and to accelerate on-ground testing of portfolio of targets.

At the Marree Project, drill testing of the identified palaeodrainage system will continue with the focus on delineation of the most prospective positions within this extensive tenement holding. The second major drill program is scheduled to be undertaken before the end of 2007 along with the initial work programs on the two new exploration licences immediately west of the initial holdings. Follow-up drilling and geophysical programs will be undertaken in early 2008 based upon the results of the current exploration.

At the Abminga Project the Company is planning to complete the computer processing of airborne EM data and initiate the first phase of rotary-mud drill testing of sandstone-hosted uranium targets by the end of 2007. Further drill based exploration will continue throughout 2008. Upon grant of the four new exploration licence applications, and subject to appropriate Aboriginal clearances, the company intends to initiate deep drill testing of the Welbourn Hill and Nicolson IOCG targets in early 2008. These new targets, 100% owned by Eromanga Uranium Ltd, represent an exciting opportunity for the Company in an area of the Gawler Craton that has seen very limited modern exploration.

At the Billa Kalina and Kingoonya Projects the airborne EM surveys will have been completed by mid-October 2007 and will form the basis for initial drill testing of sandstone-hosted uranium targets in 2008. At Kingoonya, the company will also be focussed on the potential for high grade unconformity style uranium mineralisation at the base of the Pandurra Formation.

Eromanga Uranium Ltd maintains an active project review and project generation function within Australia and is continually assessing acquisition and/or farm-in opportunities that would strengthen the Company's asset portfolio. The Company retains a strong balance sheet and is very well positioned for exploration success in the coming years.

Environmental Issues

The consolidated group's operations are subject to significant environmental regulation under both Commonwealth and relevant State legislation in relation to discharge of hazardous waste and materials arising from any exploration or mining activities and development conducted by the group on any of its tenements. The group believes it is not in breach of any environmental obligation.

Information on Directors

Robert Michael Kennedy

Non-Executive Chairman - ASAIT, Grad, Dip (Systems Analysis), FCA, ACIS, Life Member AIM, FAICD

A Chartered Accountant and a consultant to Kennedy & Co, Chartered Accountants, a firm he founded. Mr Kennedy has been a director since incorporation 29 March 2006. Mr Kennedy is the Chairman of Beach Petroleum Limited (Director since 1991, Chairman since 1995), Flinders Diamonds Limited (since 2001), Maximus Resources Limited (since 2004), Monax Mining Limited (since 2004) and Ramelius Resources Limited (since 2004).

Mr Kennedy brings to the Board his expertise in finance and management consultancy and extensive experience as chairman and non-executive director of a range of listed public companies.

Mr Kennedy is a member of the Audit Committee.

Kevin James Lines

Managing Director - B.Sc.(Geology), MAusIMM

A director since incorporation 29 March 2006. Mr Lines has over 25 years experience in mineral exploration and mining for gold, copper, lead/zinc and tin. He has held senior geological and management positions within Newmont Australia Limited, Normandy Mining Limited and the CRA group of companies. He was the foundation Chief Geologist at Kalgoorlie Consolidated Gold Mines where he led the team that developed the ore-body models and geological systems for the Super-Pit Operations in Kalgoorlie. He has managed the Eastern Australian Exploration Division of Newmont Australia that included responsibility for the expansive tenement holdings of the Tanami region.

Mr Lines has extensive experience in the assessment and evaluation of exploration projects, development properties and mining operations globally. During the last decade he has completed assignments in China, South America, North America, West Africa, Indonesia, and multiple regions of the Former Soviet Union. Most recently he has acted as Consulting Geologist-Newmont Australia with responsibility for the Western Pacific Region. He is a Member of the Australasian Institute of Mining and Metallurgy.

Kevin John Anson Wills

Non-Executive Director - ARSM, PhD, FAusIMM

A director since incorporation 29 March 2006. Dr Kevin Wills is a geologist with 31 years experience in multi commodity mineral exploration including uranium exploration, feasibility studies and mine operations in Australasia. Dr Wills spent seven years with CRA Exploration Pty Ltd, the highlight of which was involvement with the location and evaluation of the Argyle Diamond Deposit. Later, with Penarroya Australia Pty Ltd, his work led to an expansion of reserves at Thalanga and the discovery of the Waterloo base metals deposit.

In the late 1980s, Dr Wills was exploration manager with Metana Minerals NL. He built up a successful exploration team which extended known gold ore bodies and made new discoveries. In the early 1990s Dr Wills was regional exploration manager with Dominion Mining Ltd, based in Adelaide. His work on the Gawler Craton led to the development of a calcrete sampling technique which, later on, was instrumental in the Challenger gold discovery.

Dr Wills is currently managing director of Flinders Diamonds Limited (since 2000) and Maximus Resources Limited (since 2004). He is a recent past chairman of the Adelaide Branch of the AusIMM and the Exploration Committee at the South Australian Chamber of Mines and Energy.

22 Directors Report

Ewan John Vickery

Non-Executive Director – L.LB

A director since incorporation 29 March 2006. Mr Vickery is a corporate and business lawyer with over 30 years experience in private practice in Adelaide. He has acted as an advisor to companies on a variety of corporate and business issues including capital and corporate restructuring, native title and land access issues, and as lead native title advisor and negotiator for numerous mining and petroleum companies.

Mr Vickery is a Director of Flinders Diamonds Limited (since 2001), Maximus Resources Limited (since 2004) and member of the Exploration Committee of the South Australian Chamber of Mines and Energy Inc, the International Bar Association Energy and Resources Law Section, the Financial Services Institute of Australasia, the Australian Institute of Company Directors and is a past national president of Australian Mining and Petroleum Law Association (AMPLA Limited).

Mr Vickery is the Chairman of the audit committee.

Adam Bannister

Alternate for E J Vickery (Non Executive) – L.LB

Alternate Director since 22 May 2006. Mr Bannister is a lawyer who has specialised in commercial litigation for 20 years. He is the Lead litigation lawyer for the Adelaide and Darwin partnership of Minter Ellison and sits on the Firm's Board.

Mr Bannister has successfully prosecuted and defended claims on behalf of public and private organisations across every industry sector. He has a special interest in competition law, regulatory matters and complex large scale litigation chiefly in the areas of building and construction and technology and information law.

Significant changes in State of Affairs

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

On 26 October 2006 Eromanga Uranium Limited acquired 100% of the shares in Eromanga Uranium Resources Pty Ltd for 44,357,143 shares in Eromanga Uranium Limited and 8,035,714 options to acquire shares in Eromanga Uranium Limited.

On 31 October 2006 Eromanga Uranium Limited completed a successful Initial Public Offering and was listed on the Australian Securities Exchange after issuing 59,033,200 shares at a price of 20 cents.

Directors and Executive Officers Interests

The relevant interest of each director and executive officer in the ordinary share capital of the company at the date of this report is:

	Shares	Options
R M Kennedy	3,640,001(1)	3,500,000(1)
K J Lines	4,475,001(1)	4,375,000(1)
K J A Wills	3,500,000	3,500,000
E J Vickery	3,836,001(1)	3,500,000(1)
A Bannister	-	-
R W C Willson	200,000	305,000(1)

(1) held by directors and entities in which directors have a relevant interest.

Remuneration Report

This report details the nature and amount of remuneration for each director and senior executive of Eromanga Uranium Limited.

The board of Eromanga Uranium Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Company, as well as create goal congruence between directors, executives and shareholders.

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

• • The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed and approved by the board.
• • Executives receive a base salary (which is based on factors such as length of service and experience), and superannuation, or Consulting Fees.
• • The board reviews executive packages annually by reference to the Company's performance, executive performance and comparable information from industry sectors.

The policy is designed to attract the highest calibre of executives and reward them for performance that results in long-term growth in shareholder wealth.

Executives are also entitled to participate in the employee option arrangements.

The directors and executives remunerated by salary receive superannuation inclusive of the superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits.

Details of remuneration for year ended 30 June 2007

The remuneration for each director and senior executive of the consolidated entity during the year was as follows:

Directors and senior executives	Salary, fees and commissions	Super annuation contribution	Consulting fees paid to entities in which the director has a relevant interest	Share based payments	Total
	\$	\$	\$	\$	\$
R M Kennedy	48,930	4,404	-	-	53,334
K J Lines	188,837	16,995	-	-	205,832
K J A Wills	27,523	2,477	-	-	30,000
E J Vickery	-	-	30,000	-	30,000
A Bannister	-	-	-	-	-
R W C Willson(i)	-	-	-	8,800	8,800
	265,290	23,876	30,000	8,800	327,966

(i) Richard W C Willson is employed by FME Exploration Services Pty Ltd. His services are provided as part of the services agreement in place between FME Exploration Services Pty Ltd and Eromanga Uranium Limited.The management fees paid by Eromanga Uranium Limited to FME Exploration Services are outlined in Note 25. This agreement was formalised 3 August 2006.

Employment contracts of directors

The employment conditions of the managing director, Mr Lines are formalised in an employment agreement. The agreement is for a fixed term of three years from October 2006, after which the agreement continues on a monthly basis.

Meetings of Directors

During the financial year, 12 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:

		Directors meetings	Audit Committee meeting
	Number eligible to attend	Number attended	Number eligible to attend	Number attended
R M Kennedy	10	10	2	2
K J Lines	10	10	1	1
K J A Wills	10	9	1	1
E J Vickery	10	10	2	2
A Bannister	-	-	-	-

Indemnifying Officers or Auditor

During or since the end of the financial year the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:

The company has paid premiums to insure each of the following directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director of the company, other than conduct involving a wilful breach of duty in relation to the company. The amount of the premium was \$6,707 for each director.

Mr R M Kennedy Mr K J Lines Mr K J A Wills Mr E J Vickery Mr A Bannister

Options

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

Grant date	Date of expiry	Exercise price	Number under Option
4 April 2006	30 June 2011	\$0.30	17,500,000
20 June 2006	30 June 2011	\$0.30	1,250,000
26 October 2006	30 June 2011	\$0.30	8,035,714
10 April 2007	20 March 2012	\$0.22	283,000
			27,068,714

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

Proceedings on Behalf of 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 purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not a party to any such proceedings during the financial year.

Non-Audit Services

The board of directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor's independence for the following reasons:

• • all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
• • the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

The following fees for non-audit services were paid/payable to the external auditors during the year ended 30 June 2007:

Preparation of Independent Accountants Report for Prospectus \$10,000.

Auditor's Independence Declaration

The lead auditor's independence declaration for the year ended 30 June 2007 has been received and can be found on page 8 of the directors' report.

Dated at Adelaide this 19th day of September 2007 and signed in accordance with a resolution of the directors.

Robert M Kennedy

Chairman

24 Auditors Independence Declaration

AUDITOR'S INDEPENDENCE DECLARATION TO THE DIRECTORS OF EROMANGA URANIUM LIMITED

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Eromanga Uranium Limited for the year ended 30 June 2007, I declare that, to the best of my knowledge and belief, there have been:

• (a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• (b) No contraventions of any applicable code of professional conduct in relation to the audit.

GRANT THORNTON South Australian Partnership Chartered Accountants

S J GRAY Partner

Signed at Adelaide this 19 day of September 2007

Income Statement

For the year ended 30 June 2007

Note		Consolidated Group
	2007 \$	2006 S	2007 \$	2006 \$
2	621,256	-	621,256	-
3	240,403	-	240,403	-
3	739,132	32,530	739,132	32,530
	1,411	48	1,411	48
	70,354	-	70,354	-
	(430,044)	(32,578)	(430,044)	(32,578)
4	287,601	-	287,601	-
				(32,578)
	7 7	(717,645) (0.79) (0.79)	(32,578) (0.18) (0.18)	Parent Entity (717,645)

The accompanying notes form part of these financial statements.

	26	Balance			Sheet
--	----	---------	--	--	-------	--

As at 30 June 2007

	Note	Consolidated Group			Parent Entity
		2007 \$	2006 S	2007 \$	2006 \$
CURRENT ASSETS
Cash and cash equivalents	8	12,041,138	511,100	12,041,138	511,100
Trade and other receivables	9	425,740	8,013	425,740	8,013
Other current assets	10	-	79,399	-	79,399
TOTAL CURRENT ASSETS		12,466,878	598,512	12,466,878	598,512
NON-CURRENT ASSETS
Trade and other receivables	9	-	-	1,301,154	-
Plant and equipment	15	360,234	-	360,234	-
Investments accounted for using the equity method	11	1	-	1	-
Financial assets	13	-	-	9,626,536	-
Exploration and evaluation expenditure	16	10,927,690	-	-	-
TOTAL NON-CURRENT ASSETS		11,287,925	-	11,287,925	-
TOTAL ASSETS		23,754,803	598,512	23,754,803	598,512
CURRENT LIABILITIES
Trade and other payables	17	208,654	49,587	208,654	49,587
Short-term provisions	18	12,358	-	12,358	-
TOTAL CURRENT LIABILITIES		221,012	49,587	221,012	49,587
TOTAL LIABILITIES		221,012	49,587	221,012	49,587
NET ASSETS		23,533,791	548,925	23,533,791	548,925
EQUITY
Issued capital	19	23,543,734	581,503	23,543,734	581,503
Reserves	20	740,280	-	740,280	-
Retained earnings		(750,223)	(32,578)	(750,223)	(32,578)
TOTAL EQUITY		23,533,791	548,925	23,533,791	548,925

The accompanying notes form part of these financial statements.

Statement Of Changes In Equity

For the year ended 30 June 2007

	Issued Capital	Share Option Reserve	Retained Earnings	Total
	\$	\$	\$	\$
CONSOLIDATED GROUP
Balance at 29 March 2006	-	-	-	-
Loss for the period	-	-	(32,578)	(32,578)
Shares issued during the period	581,503	-	-	581,503
Balance at 30 June 2006	581,503	-	(32,578)	548,925
Loss for the period	-	-	(717,645)	(717,645)
Shares issued during the period	23,638,300	-	-	23,638,300
Options issued during the period	-	740,280	-	740,280
Transaction costs (net of tax)	(676,069)	-	-	(676,069)
Balance at 30 June 2007	23,543,734	740,280	(750,223)	23,533,791
PARENT ENTITY
Balance at 29 March 2006	-	-	-	-
Loss for the period	-	-	(32,578)	(32,578)
Shares issued during the period	581,503	-	-	581,503
Balance at 30 June 2006	581,503	-	(32,578)	548,925
Loss for the period	-	-	(717,645)	(717,645)
Shares issued during the period	23,638,300	-	-	23,638,300
Options issued during the period	-	740,280	-	740,280
Transaction costs (net of tax)	(676,069)	-	-	(676,069)
Balance at 30 June 2007	23,543,734	740,280	(750,223)	23,533,791

The accompanying notes form part of these financial statements.

27

28 Cash Flow StatemenT

For the year ended 30 June 2007

	Note		Consolidated Group		Parent Entity
		2007 \$	2006 S	2007 \$	2006 \$
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received		318,403	-	318,403	-
Payments to suppliers and employees		(993,141)	(70,403)	(993,141)	(70,403)
Net cash provided by (used in) operating activities	22	(674,738)	(70,403)	(674,738)	(70,403)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment		(376,510)	-	(376,510)	-
Purchase of subsidiaries		-	-	(66,537)	-
Payment for exploration activities		(1,265,327)	-	-	-
Loans to related entities		-	-	(1,198,790)	-
Net cash provided by (used in) investing activities		(1,641,837)	-	(1,641,837)	-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares		14,758,300	581,503	14,758,300	581,503
Capital raising costs		(911,687)	-	(911,687)	-
Net cash provided by (used in) financing activities		13,846,613	581,503	13,846,613	581,503
Net increase in cash held		11,530,038	511,100	11,530,038	511,100
Cash at beginning of financial year		511,100	-	511,100	-
Cash at end of financial year	8	12,041,138	511,100	12,041,138	511,100

The accompanying notes form part of these financial statements.

Notes To The Financial Statements

For the year ended 30 June 2007

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

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

The financial report covers the consolidated group of Eromanga Uranium Limited and controlled entities, and Eromanga Uranium Limited as an individual parent entity. Eromanga Uranium Limited is a listed public company, incorporated and domiciled in Australia.

Compliance with IFRS

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the consolidated financial statements and notes of Eromanga Uranium Limited comply with International Financial Reporting Standards (IFRS).

The following is a summary of the material accounting policies adopted by the consolidated group in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

Basis of preparation

The accounting policies set out below have been consistently applied to all years presented.

Reporting basis and conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Accounting policies

a) Principles of consolidation

A controlled entity is any entity Eromanga Uranium Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities.

A list of controlled entities is contained in Note 14 to the financial statements. All controlled entities have a June financial year-end.

All inter-company balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Where controlled entities have entered or left the consolidated group during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

b) Income tax

The charge for income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

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 consolidated group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

c) Plant and equipment

Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment

Plant and equipment are measured on the cost basis.

The carrying amount of 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 that will be received from the assets' employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Subsequent costs are included in the assets' carrying amount or recognised as separate assets, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which are they are incurred.

Depreciation

The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the consolidated group commencing from the time the asset is held ready for use.

The depreciation rates used for each class of depreciable assets are:

Class of non current asset	Depreciation rate	Basis of depreciation
Plant and equipment	12.5 - 40%	Straight line

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined in comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When re-valued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

d) Exploration expenditure

Exploration and evaluation 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 recouped through the successful development of the area or where activities in the area have not yet reached a stage that 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.

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 structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.

Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site.

e) Financial instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Available-for-sale financial assets

Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar instruments and option pricing models.

Impairment

At each reporting date, the group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement.

f) Impairment of assets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the assets carrying value. Any excess of the assets carrying value over its recoverable amount is expensed to the income statement.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

g) Investments in associates

Investments in associate companies are recognised in the financial statements by applying the equity method of accounting. The equity method of accounting recognised the group's share of post-acquisition reserves of its associates.

h) Interests in joint ventures

The consolidated group's share of the assets, liabilities, revenue and expenses of joint venture operations are included in the appropriate items of the consolidated financial statements. Details of the consolidated group's interests are shown at Note 12.

The consolidated group's interests in joint venture entities are brought to account using the equity method of accounting in the consolidated financial statements. The parent entity's interests in joint venture entities are brought to account using the cost method.

i) Employee benefits

Provision is made for the group's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. 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.

Equity-settled compensation

The cost of equity-settled transactions is measured by the fair value at the date at which the equity instruments are granted. The fair value is determined using the Black-Scholes pricing model. The cost is recognised as an expense in the income statement with a corresponding increase in the share option reserve or issued capital when the options or shares are issued.

j) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

k) Revenue

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

l) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense. Receivables and payables in the balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

m) Comparative figures

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

Critical accounting estimates and judgments

The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key estimates — exploration and evaluation

The group's policy for exploration and evaluation is discussed in note 1(d). The application of this policy requires management to make certain assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure, management concludes that the capitalised expenditure is unlikely to be recovered by future sale or exploration, then the relevant capitalised amount will be written off through the income statements.

NOTE 2. REVENUE

		Consolidated Group		Parent Entity
	2007 \$	2006 S	2007 \$	2006 \$
Operating activities
- Interest received from other persons	621,256	-	621,256	-

NOTE 3. LOSS FOR THE YEAR

	Consolidated Group		Parent Entity
	2007 \$	2006 S	2007 \$	2006 \$
Marketing expenses
Company promotion	141,229	-	141,229	-
Corporate consulting	41,560	-	41,560	-
Public relations	13,983	-	13,983	-
Subscriptions	24,840	-	24,840	-
Conferences	15,994	-	15,994	-
Other	2,797	-	2,797	-
	240,403	-	240,403	-
Administration expenses
Accounting	6,842	492	6,842	492
ASX fees	54,275	-	54,275	-
Audit	23,929	5,000	23,929	5,000
Depreciation	16,276	-	16,276	-
Depreciation capitalised - exploration and evaluation	(5,551)	-	(5,551)	-
Directors fees	95,154	-	95,154	-
Insurance	25,895	-	25,895	-
Legal fees	21,917	20,672	21,917	20,672
Management services	135,331	-	135,331	-
Employee benefits expense	309,154	-	309,154	-
Share registry	45,930	-	45,930	-
Other	9,980	6,366	9,980	6,366
	739,132	32,530	739,132	32,530

NOTE 4. INCOME TAX EXPENSE

The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows:

	Consolidated Group			Parent Entity
	2007 \$	2006 S	2007 \$	2006 \$
Prima facie tax benefit on loss from ordinary activities before income tax at 30% (2006 30%) Add:	(129,013)	(9,773)	(129,013)	(9,773)
Deferred tax asset arising from transaction costs not brought to account	287,601	-	287,601	-
Non deductable entertaining expense	708	-	708	-
Current year tax loss not brought to account	128,305	9,773	128,305	9,773
Income tax attributable to entity	287,601	-	287,601	-

Unrecognised deferred tax assets:

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

	Consolidated Group		Parent Entity
	2007 \$	2006 S	2007 \$	2006 \$
Carried forward tax losses	575,123	10,421	575,123	10,421
Temporary differences not recognised	(135,219)	13,621	255,127	13,621
	439,904	24,042	830,250	24,042

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the consolidated group can utilise the benefits from them.

32 Notes To The Financial Statements continued

NOTE 5. KEY MANAGEMENT PERSONNEL COMPENSATION

a. Names and positions held of consolidated group and parent entity key management personnel in office at any time during the financial year are:

Key management person	Position
R M Kennedy	Non-Executive Chairman
K J Lines	Managing Director
E J Vickery	Non-Executive Director
K J A Wills	Non-Executive Director
R W C Willson	Chief Financial Officer & Company Secretary
A Bannister	Alternate Director for E J Vickery

Directors and senior executives	Salary, fees and commissions	Superannuation contribution	Consulting fees paid to entities in which the director has a relevant interest	Shared based payments	Total
	\$	\$	\$	\$	\$
R M Kennedy	48,930	4,404	-	-	53,334
K J Lines	188,837	16,995	-	-	205,832
K J A Wills	27,523	2,477	-	-	30,000
E J Vickery	-	-	30,000	-	30,000
A Bannister	-	-	-	-	-
R W C Willson(i)	-	-	-	8,800	8,800
	265,290	23,876	30,000	8,800	327,966

(i) Richard W C Willson is employed by FME Exploration Services Pty Ltd. His services are provided as part of the services agreement in place between FME Exploration Services Pty Ltd and Eromanga Uranium Limited. The management fees paid by Eromanga Uranium Limited to FME Exploration Services are outlined in Note 25. This agreement was formalised 3 August 2006.

b. Options and Rights Holdings

Number of options held by key management personnel.

	Balance	Issued as remuneration	Balance	Total vested	Total exercisable	Total unexercisable
	1.7.2006		30.6.2007	30.6.2007	30.6.2007	30.6.2007
R M Kennedy	3,500,000	-	3,500,000	3,500,000	3,500,000	-
K J Lines	4,375,000	-	4,375,000	4,375,000	4,375,000	-
K J A Wills	3,500,000	-	3,500,000	3,500,000	3,500,000	-
E J Vickery	3,500,000	-	3,500,000	3,500,000	3,500,000	-
R W C Willson	250,000	55,000	305,000	305,000	305,000	-
A Bannister	-	-	-	-	-	-
	15,125,000	55,000	15,180,000	15,180,000	15,180,000	-

c. Share Holdings

Number of shares held by key management personnel.

	Balance 1.7.2006	Received as compensation	Net change other*	Balance 30.6.2007
R M Kennedy	3,500,001	-	140,000	3,640,001
K J Lines	4,475,001	-	-	4,475,001
K J A Wills	3,500,000	-	-	3,500,000
E J Vickery	4,100,001	-	(50,000)	4,050,001
R W C Willson	200,000	-	-	200,000
A Bannister	-	-	-	-
	15,775,003	-	90,000	15,865,003

* Net change other refers to shares purchased or sold during the financial year.

NOTE 6. AUDITORS REMUNERATION

	Consolidated Group			Parent Entity
	2007 \$	2006 S	2007 \$	2006 \$
Remuneration of the auditor of the company for:
- Auditing or reviewing the financial report	23,929	-	23,929	-
- Independent Report for Prospectus	10,000	-	10,000	-
	33,929	-	33,929	-

NOTE 7. EARNINGS PER SHARE

	2007 \$	2006 \$
Earnings used to calculate basic & dilutive EPS	(\$717,645)	(\$32,578)
Weighted average number of ordinary shares outstanding during the year used to calculate basic EPS	91,185,178	18,190,812
Weighted average number of options outstanding during the year used to calculate dilutive EPS Weighted average number of ordinary shares outstanding during the year used to calculate	-	-
dilutive EPS	91,185,178	18,190,812

The weighted average number of options on issue at 30 June 2007 was 24,136,714 (2006 16,382,979). Options have an anti dilutive effect and therefore have not been included in the calculation of earnings per share.

NOTE 8. CASH AND CASH EQUIVALENTS

	Consolidated Group		Parent Entity
	2007 \$	2006 S	2007 \$	2006 \$
Cash at bank and in hand	1,141,138	511,100	1,141,138	511,100
Short-term bank deposits	10,900,000	-	10,900,000	-
	12,041,138	511,100	12,041,138	511,100

The effective interest rate on short-term bank deposits was 6.5% (2006 - 4.9%) These deposits have an average maturity of 53 days.

Reconciliation of cash

Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows:

Cash and cash equivalents	12,041,138	511,100	12,041,138	511,100

NOTE 9. TRADE AND OTHER RECEIVABLES

	Note	Consolidated Group		Parent Entity
		2007 \$	2006 S	2007 \$	2006 \$
Current
Interest receivable		302,854	-	302,854	-
Receivable from FME Exploration Services
Pty Ltd	9a	117,690	-	117,690	-
Other receivable		5,196	8,013	5,196	8,013
		425,740	8,013	425,740	8,013
Non Current
Receivable from Eromanga Uranium
Resources Pty Ltd	9b	-	-	1,301,154	-
		-	-	1,301,154	-

9a The entity advanced this amount to assist in the funding of working capital. The entity provides support to the associated company to ensure it can pay its debts as and when they fall due and payable.

This receivable from the associated company has no fixed date for repayment and is non interest bearing. The entity will not seek repayment where such repayments would prejudice the associated company's ability to meet any obligations as and when they fall due.

9b The parent entity advanced this amount to assist in the funding of working capital.The parent entity provides support to the subsidiary to ensure it can pay its debts as and when they fall due and payable.

This receivable from the subsidiary has no fixed date for repayment and is non interest bearing. The parent entity will not seek repayment where such repayments would prejudice the subsidary's ability to meet any obligations as and when they fall due.

34 Notes To The Financial Statements continued

NOTE 10. OTHER CURRENT ASSETS

	Consolidated Group		Parent Entity
	2007 2006 \$ S		2007 \$	2006 \$
Prepaid issue costs	-	79,399	-	79,399
	-	79,399	-	79,399

NOTE 11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Interests are held in the following associated companies.

Name	Principal activities	Country of incorporation	Shares	Ownership interest		Carrying amount of investment
				2007 %	2006 %	2007 \$	2006 \$
Unlisted:

FME Exploration Services Pty Ltd Administration Services Australia Ord 33.3 - 1 -

a. Summarised presentation of aggregate assets, liabilities and performance of associates.

	Consolidated Group		Parent Entity
	2007	2006	2007	2006
Current assets	114,142	-	114,142	-
Non current assets	321,184	-	321,184	-
Total assets	435,326	-	435,326	-
Current liabilities	435,323	-	435,323	-
Total liabilities	435,323	-	435,323	-
Net assets	3	-	3	-
Share of associate's profit after tax	-	-	-	-

NOTE 12. JOINT VENTURES

The Consolidated group has the following interests in Joint Ventures:

Agreement Name	Parties	Summary
Eromanga Basin Joint Venture	Eromanga Uranium Ltd and Maximus Resources Ltd (MXR)	ERO can earn a 70%interest in MXR's Eromanga Basin project tenements in SA and the NT by spending \$7,000,000 on the tenements within 6 years
Billa Kalina Joint Venture	Eromanga Uranium Ltd and Maximus Resources Ltd (MXR)	ERO can earn a 50% interest in the non-diamond mineral rights of MXR's Billa Kalina project tenements by spending \$3,000,000 on the tenements within 6 years
Abminga Project - Letter of Offer - EL 3186	Eromanga Uranium Ltd and Caldera Resources Pty Ltd and Ellendale Resources NL	ERO has earned 100% of the uranium rights in EL 3186 for a cash payment of \$20,000, a commitment to undertake an airborne EM survey over the project area within 12 months and to maintain the tenement in good standing

NOTE 13 FINANCIAL ASSETS

	Note	Consolidated Group		Parent Entity
		2007 \$	2006 S	2007 \$	2006 \$
Available for sale financial assets	13a	- -		9,626,536
a. Available for sale financial assets comprise
Unlisted investments at cost
- Shares in controlled entities		-	-	9,626,536	-
Total available for sale financial assets		-	-	9,626,536	-

Available for sale financial assets comprise investments in the ordinary issued capital of Eromanga Uranium Resources Pty Ltd.There are no fixed returns or fixed maturity date attached to this investment.The fair value of unlisted available for sale financial assets cannot be readily measured as variability in the range of reasonable fair value estimates is significant. As a result, all unlisted investments are reflected at cost.

9,560,000

NOTE 14. CONTROLLED ENTITIES

a. Controlled Entities Consolidated

	Country of Incorporation		Percentage Owned (%)
		2007	2006
Parent Entity
Eromanga Uranium Limited	Australia
Subsidiaries of Eromanga Uranium Limited
Eromanga Uranium Resources Pty Ltd	Australia	100	-

b. Acquisition of Controlled Entities

Pursuant to a contract between the company and Maximus Resources Limited (Maximus), and with the satisfaction of the conditions within the contract, on 26 October 2006 the company acquired 100% of the issued capital in Eromanga Uranium Resources Pty Ltd from Maximus for a consideration of 44,357,143 shares in Eromanga Uranium Limited and 8,035,714 options to acquire shares in Eromanga Uranium Limited. Eromanga Uranium Resources Pty Ltd hold interests in Joint Ventures in uranium exploration tenements.

The acquisition had the following effect on the consolidated group's assets and liabilities:

		Acquiree's carrying amont	Fair value
		\$	\$
Cash		1	1
Exploration assets		-	9,626,536
Net identifiable assets and liabilities		1	9,626,537
Consideration paid:
- Ordinary shares at fair value			8,870,000
- Options at fair value			690,000
Transaction costs on acquisition			66,537
Goodwill on acquisition			-
	No. of shares	Fair value	\$
Purchase consideration
Ordinary shares	44,357,143	\$0.20	8,870,000
Options	8,035,714	\$0.09	690,000

NOTE 15. PLANT AND EQUIPMENT

	Consolidated Group		Parent Entity
	2007 \$	2006 \$	2007 \$	2006 \$
Plant and equipment at cost	376,510	-	376,510	-
Accumulated depreciation	(16,276)	-	(16,276)	-
Total plant and equipment	360,234	-	360,234	-

a. Movements in carrying amounts:

Movements in the carrying amounts for each class of plant and equipment between the beginning and the end of the current financial year.

	Consolidated Group		Parent Entity
	Plant and equipment	Total	Plant and equipment	Total
Balance at 1 July 2006	-	-	-	-
Additions	376,510	-	376,510	-
Disposals	-	-	-	-
Depreciation	(16,276)	-	(16,276)	-
Balance at 30 June 2007	360,234	-	360,234	-

36 Notes To The Financial Statements continued

NOTE 16. CAPITALISED EXPLORATION AND EVALUATION EXPENDITURE

	Consolidated Group			Parent Entity
	2007 \$	2006 \$	2007 \$	2006 \$
Exploration and evaluation phases - Joint Ventures	10,927,690	-	-	-
Total exploration and evaluation expenditure	10,927,690	-	-	-
Movements in carrying amounts:
Exploration and evaluation
Balance at the beginning of the year	-	-	-	-
Amounts capitalised during the year	1,301,154	-	-	-
Recognised through acquisition of subsidiary	9,626,536	-	-	-
Carrying amount at the end of year	10,927,690	-	-	-

The recoverability of the carrying value of exploration and expenditure assets is dependant upon the successful development and commercial exploitation or alternatively, sale of respective area of interest. For details of the Group's interests in tenements and Joint Ventures, refer to Note 12.

NOTE 17. TRADE AND OTHER PAYABLES

	Consolidated Group			Parent Entity
	2007 \$	2006 \$	2007 \$	2006 \$
Unsecured
Trade payables	135,584	-	135,584	-
Sundry payables and accrued expenses	52,186	29,634	52,186	29,634
Amounts payable to associated companies for
management services	20,884	19,953	20,884	19,953
	208,654	49,587	208,654	49,587

NOTE 18. SHORT-TERM PROVISIONS

	Consolidated Group			Parent Entity
	2007 \$	2006 \$	2007 \$	2006 \$
Employee entitlements	12,358	-	12,358	-
Opening balance at 1 July 2006	-	-	-	-
Additional provisions	25,419	-	25,419	-
Amounts used	(13,061)	-	(13,061)	-
Balance at 30 June 2007	12,358	-	12,358	-

NOTE 19. ISSUED CAPITAL

		Consolidated Group		Parent Entity
	2007 \$	2006 \$	2007 \$	2006 \$
125,442,346 (2006: 21,972,003) fully paid ordinary shares	23,543,7354	581,503	23,543,7354	581,503
	Number	Number	Number	Number
a. Ordinary Shares
At the beginning of the reporting period	21,972,003	-	21,972,003	-
Shares issued during the year
29/03/2006		3		3
30/03/2006		17,500,000		17,500,000
24/05/2006		4,472,000		4,472,000
16/10/2006(i)	80,000		80,000
26/10/2006(ii)	44,357,143		44,357,143
31/10/2006(iii)	59,033,200		59,033,200
	125,442,346	21,972,003	125,442,346	21,972,003

NOTE 19. ISSUED CAPITAL continued

• (i) On 16 October 2006 80,000 shares were issued at 12.5 cents per share in relation to work done on the Inital Public Offer.
• (ii) On 26 October 2006 44,357,143 shares were issued at 20 cents per share as part consideration for the purchase of Eromanga Uranium Resources Pty Ltd.

(iii) On 31 October 2006 59,033,200 shares were issued at 25 cents per share as a result of the Initial Public Offer.

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. Options

For information relating to options issued as part consideration of the purchase of Eromanga Uranium Resources Pty Ltd refer to Note 23 Share Based Payments.

For information relating to the Eromanga Uranium Limited Employee option plan including details of options issued and exercised during the finacial year and the options outstanding at year end refer to Note 23 Share Based Payments.

NOTE 20. RESERVES

Share Option Reserve

The Share Option Reserve records items recognised as expenses on valuation of employee options and options issued to external parties in consideration for goods and services rendered.

NOTE 21. COMMITMENTS FOR EXPENDITURE

Exploration Licences

In order to maintain current rights of tenure to exploration tenements the group will be required to outlay in the year ending 30 June 2008 amounts of approximately \$1,782,000 in respect of tenement lease rentals and to meet minimum expenditure requirements pursuant to various joint venture requirements.

NOTE 22. CASH FLOW INFORMATION

Reconciliation of cash flow from operations with loss after income tax.

	Consolidated Group			Parent Entity
	2007	2006	2007	2006
Loss after tax	(717,645)	(32,578)	(717,645)	(32,578)
Non-cash flows in loss
Depreciation	16,276	-	16,276	-
Issue of options to employees	45,280	-	45,280	-
Deferred tax asset written off	287,601	-	287,601	-
Changes in operating assets and liabilities
Decrease/(Increase) in trade and other receivables	(417,727)	(8,013)	(417,727)	(8,013)
Decrease/(Increase) in other assets	79,399	(79,399)	79,399	(79,399)
Increase/(Decrease) in trade and other payables	19,720	49,587	19,720	49,587
Increase/(Decrease) in provisions	12,358	-	12,358	-
Net cash used in operating activities	(674,738)	(70,403)	(674,738)	(70,403)

38 Notes To The Financial Statements continued

NOTE 23. SHARE-BASED PAYMENTS

The following share-based payment arrangement existed at 30 June 2007:

On 4 April 2006 17,500,000 options were issued to the Directors and promoters of the Company upon incorporation. The options are exercisiable at 30 cents on or before 30 June 2011. The options hold no voting or dividend rights.

On 20 June 2006 1,250,000 options were issued to the Company Secretary and the Company's Corporate Advisors. The options are exercisiable at 30 cents on or before 30 June 2011. The options hold no voting or dividend rights.

On 26 October 2006 8,035,714 options were issued as part consideration for the purchase of Eromanga Uranium Resources Pty Ltd. The options are exercisable at 30 cents on or before 30 June 2011. The options hold no voting or dividend rights.

On 10 April 2007 283,000 options were issued to employees under the Company's employee option plan. The options are exercisable at 22 cents on or before 30 March 2012. The options hold no voting or dividend rights.

		Consolidated Group					Parent Entity
	2007		2006		2007		2006
	Number of Options	Weighted average Exercise Price \$	Number of Options	Weighted average Exercise Price \$	Number of Options	Weighted average Exercise Price \$	Number of Options	Weighted average Exercise Price \$
Outstanding at the
beginning of the year	18,750,000	0.300	-	0.000	18,750,000	0.300	-	0.000
Granted	8,318,714	0.297	18,750,000	0.300	8,318,714	0.297	18,750,000	0.300
Outstanding at the end of
the year	27,068,714	0.299	18,750,000	0.300	27,068,714	0.299	18,750,000	0.300
Exercisable at year end	27,068,714	0.299	18,750,000	0.300	27,068,714	0.299	18,750,000	0.300

The options outstanding at 30 June 2007 had a weighted average exercise price of \$0.30 and a weighted average remaining contractual life of 4 years. Exercise prices range from \$0.22 to \$0.30 in respect of options outstanding at 30 June 2007.

The weighted average fair value of the options granted during the year was \$0.088.

This price was calculated by using a Black Scholes option pricing model applying the following inputs:

Weighted average exercise price	\$0.30
Weighted average life of the option	4.0	years
Underlying share price	\$0.32
Expected share price volatility	20.42%
Risk free interest rate	6.12%

Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future trends, which may not eventuate. The life of the options is based on the historical exercise patterns, which may not eventuate in the future. Included under "Administrative Expense" in the income statement is \$45,280 (2006: \$nil) which relates to share-based payments in accordance with the Company's Share Option Plan. An amount of \$690,000 (2006 \$nil) is included in the Investment in Eromanga Uranium Resources Pty Ltd representing the value of the options given as part consideration of the acquisition of Eromanga Uranium Resources Pty Ltd.

NOTE 24. EVENTS AFTER THE BALANCE SHEET DATE

No circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group in future financial years.

NOTE 25. RELATED PARTY TRANSACTIONS

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

Associated companies

• • Administrative services were provided by FME Exploration Services Pty Ltd to Eromanga Uranium Limited for \$161,185.
• • Eromanga Uranium Limited advanced FME Exploration Services Pty Ltd \$117,690 to fund working capital.

Other related parties

• • Payments during the period to Flinders Diamonds Limited for expenses incurred on behalf of Eromanga Uranium Limited totalled \$255.
• • Payments during the period to Maximus Resources Limited for expenses incurred on behalf of Eromanga Uranium Limited totalled \$7,754.

NOTE 26. SEGMENT INFORMATION

The entity operates predominately in the mining industry, in Australia and as such has no material reportable segments.

NOTE 27. FINANCIAL INSTRUMENTS

a. Financial risk management

The group's financial instruments consist mainly of deposits with banks, accounts receivable and payable, and loans to subsidiaries.

i Treasury risk management

The senior executives of the group regularly analyse interest rate exposure and evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.

ii Financial risks

The main risk the group is exposed to through its financial instruments is liquidity risk.

Liquidity risk

The group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate funds are available to meet the cash demands.

b. Financial instruments

i) Interest rate risk

The consolidated group's exposure to interest rate risk, which is the risk that a financial instrument's 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 financial liabilities, is as follows:

	Weighted average effective interest rate	Floating interest rate	Non-interest bearing	Total
Financial assets:
Cash and cash equivalents	6.5	12,041,138	-	12,041,138
Receivables	-	-	425,740	425,740
Total financial assets		12,041,138	425,740	12,466,878
Financial liabilities:
Payables	-	-	208,654	208,654
Total financial liabilities		-	208,654	208,654

ii) Net fair values

The company's financial assets and liabilities are included in the balance sheet at amounts that approximate net fair value.

40 Notes To The Financial Statements continued

NOTE 28. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS

The following Australian Accounting Standards have been issued or amended and are applicable to the parent and consolidated group but are not yet effective. They have not been adopted in the preparation of the financial statements at reporting date.

AASB No.	Title	Issue date	Operative date (annual reporting periods beginning on or after)
7	Financial Instruments: Disclosure	Aug 2005	1 Jan 2007
8	Operating segments	Feb 2007	1 Jan 2009
101	Presentation of Financial Statements (amended)	Oct 2006	1 Jan 2007
123	Borrowing costs (amended)	June 2007	1 Jan 2009
2007-4	Amendments to Australian Accounting Standards arising from ED 151 and other amendments [AASB 1, 2, 3, 4, 5, 6, 7, 102, 107, 108, 110, 112, 114, 116, 117, 118, 119, 120, 121, 127,	April 2007	1 July 2007

128, 129, 130, 131, 132, 133, 134, 136, 137, 138, 139, 141, 1023, &1038]

NOTE 29. COMPANY DETAILS

The principal place of business and registered office is:

Eromanga Uranium Limited 62 Beulah Road Norwood South Australia 5067

Directors Declaration

The directors of the company declare that :

• 1 the financial statements and notes, as set out on pages 9 to 24 are in accordance with the Corporation Act 2001 and:
• a comply with Accounting Standards and the Corporations Regulations 2001; and
• b give a true and fair view of the financial position as at 30 June 2007 and of the performance for the year ended on that date of the company and consolidated group;
• 2 the Managing Director and Chief Finance Officer have each declared that:
• a the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;
• b the financial statements and notes for the financial year comply with the Accounting Standards; and
• c the financial statements and notes for the financial year give a true and fair view;
• 3 in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

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

Robert M Kennedy Director

Dated this 19 day of September 2007

41

42 Independent Audit Report

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF EROMANGA URANIUM LIMITED ACN 119 031 864

Report on the financial report

We have audited the accompanying financial report of Eromanga Uranium Limited, which comprises the balance sheet as at 30 June 2007, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors' declaration of the consolidated entity comprising the Company and the entities it controlled at the year's end or from time to time during the financial year.

Directors' responsibility for the financial report

The directors of the Company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1 the Directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor's responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards, which require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance as to whether the financial report is free of material misstatement.

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

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

Independence

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

Auditor's opinion

In our opinion:

• (a) The financial report of Eromanga Uranium Limited is in accordance with the Corporations Act 2001, including:
• i. Giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2007 and of their performance for the year ended on that date; and
• ii. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
• (b) The financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

GRANT THORNTON South Australian Partnership Chartered Accountants

S J GRAY Partner

Signed at Adelaide this 19 day of September 2007

ASX Additional Information

Additional information required by the Australian Stock Exchange and not shown elsewhere in this report is as follows.

The information is current as of 19 September 2007.

Distribution of equity securities

Ordinary share capital

Fully paid ordinary shares are held by 2,511 individual shareholders. All issued ordinary shares carry one vote per share.

Restricted securities

There are 62,187,143 shares and 26,535,714 options held in escrow until 31 October 2008.

Options

44

Options are held by 16 individual option holders.

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

	Fully paid ordinary shares	Options
1 – 1,000	35	-
1,001 – 5,000	357	-
5,001 – 10,000	944	-
10,001 – 100,000	1,091	7
100,001 and over	84	9
	2,511	16
Holdings of less than a marketable parcel	142	-

Substantial shareholders

Fully paid ordinary shares	Number	%
Maximus Resources Limited	44,357,143	35.36

Twenty largest shareholders

	Fully paid ordinary shares	Number	%
1	Maximus Resources Limited	44,357,143	35.36
2	Senil Pty Ltd	4,475,001	3.57
3	Chaffey Consulting Pty Ltd	3,736,000	2.98
4	Triple Eight Gold Pty Ltd	3,506,000	2.79
5	Mr Kevin John Anson Wills	3,500,000	2.79
6	Mr Gary Eric Maddocks + Mrs Paula Maddocks	2,625,000	2.09
7	ANZ Nominees Limited	2,358,186	1.88
8	Mr Zbigniew Suminski	1,001,177	0.8
9	Mr Michael Dilettoso + Mr Vincent Dilettoso	1,000,000	0.8
10	Mrs Yan Zhang	860,000	0.69
11	Merrill Lynch (Australia) Nominees Pty Limited	786,000	0.63
12	Mr Edward Sarnicki	440,000	0.35
13	Copulos Superannuation Pty Ltd	400,000	0.32
14	FGC Developments Pty Ltd	400,000	0.32
15	Mr Henry Szalacki	400,000	0.32
16	Mvr Gerdy Mia Kreber-Van Der Windt	323,800	0.26
17	Florin Mining Investment Co Ltd	300,000	0.24
18	Intercontinental Assets Pty Ltd	300,000	0.24
19	Musona Pty Ltd	300,000	0.24
20	Mr Ettore Gino Ponta	300,000	0.24
		71,368,307	56.91

Twenty largest optionholders

	Options	Number	%
1	Maximus Resources Limited	8,035,714	29.69
2	Senil Pty Ltd	4,375,000	16.16
3	Chaffey Consulting Pty Ltd	3,500,000	12.93
4	Triple Eight Gold Pty Ltd	3,500,000	12.93
5	K J A Wills	3,500,000	12.93
6	G E & P Maddocks	2,625,000	9.70
7	Nick Smart	500,000	1.85
8	Adelaide Equity Partners	500,000	1.85
9	R W C Willson	305,000	1.13
10	Steve Hogan	100,000	0.37
11	Chris Johnson	30,000	0.11
12	Warwick Newton	25,000	0.09
13	Ray Young	23,000	0.08
14	Andrew Bonner	20,000	0.07
15	Joanne Conner	15,000	0.06
16	Kerrie Kelly	15,000	0.06
		27,068,714	100.00