EMMERSON RESOURCES LIMITED - Annual Report 2012

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ABN 53 117 086 745

Success through continued discovery and teamwork

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Annual Report 2012

CORPORATE DIRECTORY

DIRECTORS

Andrew McIlwain, Non-executive Chairman

Rob Bills, Managing Director & Chief Executive Officer Timothy Kestell, Non-executive Director Simon Andrew, Non-executive Director

COMPANY SECRETARY

TENNANT CREEK OFFICE

1230 Standley Street Tennant Creek NT 0860

PO Box 1244 Tennant Creek NT 0861 Telephone: +61 (08) 8962 1425 Facsimile: +61 (08) 8962 3376

ASX CODE

ERM

BANKERS

National Australia Bank Level 1, 1238 Hay Street West Perth WA 6005

AUDITORS

Ernst & Young The Ernst & Young Building 11 Mounts Bay Road Perth WA 6000

Trevor Verran

REGISTERED OFFICE

3 Kimberley Street West Leederville WA 6007

PO Box 1573 West Perth WA 6872 Telephone: +61 (08) 9381 7838 Facsimile: +61 (08) 9381 5375 Internet: www.emmersonresources.com.au

SOLICITORS

Steinepreis Paganin Lawyers and Consultants Level 4, Next Building 16 Milligan Street Perth WA 6000

Ward Keller Lawyers Level 7, NT House 22 Mitchell Street Darwin NT 0807

SHARE REGISTER

Computershare Investor Services Level 2, 45 St Georges Terrace Perth WA 6000

GPO Box D182 Perth WA 6840 Telephone: 1300 850 505

Chairman’s Letter

Managing Director’s Report - Review of Operations Health, Safety, Environment, Community (HSEC) Shareholder Information Directors’ Report Corporate Governance Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Directors’ Declaration

Auditors Independence Declaration Independent Audit Report Tenement Schedule

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CHAIRMAN’S LETTER

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Andrew McIlwain
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Dear Fellow Shareholder,

This drilling will be supported by groundbased geophysics and other detailed structural studies and tools to maximise the effectiveness of our continuing drill programs.

Emmerson made two significant copper/ gold discoveries in the past year which have contributed significantly to the creation of new value for shareholders.

Emmerson will aim to increase its understanding of the new styles of mineralisation discovered at Goanna and Monitor. That work will be confined to the areas within the Gecko corridor where HeliTEM surveys have been flown and where we believe the potential is greatest

While yet to be recognised by improved share value the company has, nevertheless, substantially advanced the exploration of the Tennant Creek Mineral Field with the discovery of the high-grade Goanna and Monitor copper and gold projects.

to discover new Monitor/Goanna style deposits. In particular we will concentrate on the three solefund blocks that encompass Monitor-Gecko-Goanna, Orlando and a new project called Tetley.

These discoveries, on 100% Emmerson owned ground, will be the focus of continued and aggressive exploration in the current year as we continue to unravel the complex geology and zero in on resources which we believe can form the basis of future commercial production assets.

I believe the Emmerson exploration and management team has excelled in a difficult year with highly successful exploration programs conducted safely and in harmony with both the environment and all our stakeholders.

The consistent application of new generation exploration technologies, including HeliTEM, has clearly advanced and enhanced our understanding of the field and has formed a key component in the discovery of these new zones of mineralistion.

It is appropriate to recognise the achievement of 1000 continuous days free of lost time injury in the workplace – an outcome clearly resulting from the focus and diligence of our teams.

With continued application of these technologies, and targetted follow-up drilling programs, particularly on 100% Emmerson owned exploration leases, I believe Emmerson can continue to add value and has the potential to make further exciting new discoveries in the Tennant Creek area.

I look forward with enthusiasm to the results which will flow in the current year from the solid work and excellent outcomes achieved in the latest year.

Considerable work also took place on the Ivanhoe Joint Venture ground with a number of projects making significant advances.

At the time of writing, considerable uncertainty exists over future work programs on the Joint Venture acreage following the change of control of Ivanhoe Australia Ltd. Emmerson will continue to work with Ivanhoe to understand its future intentions to the benefit of both companies, but always with a view to maximising Emmerson shareholder value.

Andrew McIlwain Chairman

The company will continue its aggressive drilling programs with the objective of defining an ore resource at both the Goanna and Monitor discoveries to build on the already identified resources at Gecko and Orlando.

MANAGING DIRECTOR’S REPORT - Review of Operations

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The style and signature of the new discoveries is very different to the historic ironstone-hosted deposits. The discoveries are the first in this field since 2003 and testament to the application of good geoscience, new technology and systematic exploration.

Overview

Emmerson made two high-grade copper/gold discoveries, Goanna and Monitor, within the Gecko corridor of the Tennant Creek Mineral Field (TCMF) in this financial year.

These discoveries put Emmerson in a strong position to create significant value for our shareholders through continued aggressive exploration.

Emmerson adopted some very new and powerful technology (HeliTEM) which when combined with our new exploration model, proved to be highly successful. We believe this approach has the potential to unlock

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Rob Bills
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The Goanna and Monitor discoveries have two important implications. They have enhanced the potential of the near mine exploration around the Gecko and Orlando mines and significantly upgraded the exploration potential in the remainder of the company’s 3,300 sq km Tennant Creek tenement package.

further discoveries as to date, Emmerson has assessed only one of the five blocks where the HeliTEM system was deployed in 2011 and which comprises just a small portion of the company’s 3,300 sq km tenement package (figure 1).

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Figure 1: Location Plan of Emmerson Resources Tenements, Sole Fund blocks and HeliTEM survey

MANAGING DIRECTOR’S REPORT - Review of Operations

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The discovery hole at Monitor intersected 27m at 1.75% copper (GRC1355), which included 6m at 2.67% copper and 6m at 3.53% copper. This success was repeated at the eastern end of the Gecko mine with the Goanna discovery (2.5km along strike to the east). The discovery hole (GODD004) intersected 21m at 2.63% copper including 7m at 4.96% copper.

Equally significant was the intersection of high-grade gold beneath the copper at both Monitor and Goanna. These discoveries are attributable to Emmerson’s multifaceted exploration model and which predicts that gold occurs below the copper, particularly when in association with bismuth. The discovery gold hole (GODD008) at Monitor intersected 12m at 16.9g/t gold, 0.13% bismuth, 2% copper and 1.59g/t silver (figure 2). It included some spectacular grades of 4m at 37.4g/t gold, including 1m at 50.1g/t gold and 1m at 93.7g/t gold – these grades are very typical of some of the

premier historical gold deposits within the TCMF, such as Juno, White Devil and Nobles Nob. A further similar grade intersection at Goanna (GRC1367) assayed 15m at 8.13g/t gold, 4.18g/t silver and 4.19% copper but also contained a high grade core of 3m at 34.1g/t gold, 4.18g/t silver, 11.1% copper and 0.15% bismuth – testament to the predictive capability of our exploration model but also indicating the potential that lies beneath the copper zones at Monitor, Goanna and also Gecko (Gecko was a mostly copper rather than gold producer).

Systematic exploration throughout the remainder of the year continued to build on these impressive results, with intersections at Goanna of 24m at 2.18% copper including 4.7m at 3.37% copper and 0.13g/t gold (GODD020) and 24m at 1.95% copper including 9m at 3.18% copper (GODD017) (figure 3).

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Figure 2: Cross section showing drill holes with geology and photograph of high grade gold zone in GODD008

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Figure 3: Discovery History of Monitor and Goanna with key intersections announced to the ASX

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Figure 4: Location of 2012 Activities (yellow stars) and Sole Fund Blocks

MANAGING DIRECTOR’S REPORT - Review of Operations

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The new discoveries were supported by the declaration of an Indicated and Inferred JORC resource estimate over the Gecko and Orlando deposits of 2.46mt @ 2.1% copper and 2g/t gold - these deposits were closed down in the 1980’s and 1990’s due to low copper and gold prices, not because they ran out of ore. This independent resource estimate equates to 50,800t copper metal or 390,000 oz gold equivalent and is a great start given the associated nearby infrastructure of the Gecko and Orlando Mines. It also greatly lowers the barriers to production as the discoveries are on mine leases, are covered by existing native title agreements and the company owns 100% of the nearby Warrego mill.

Emmerson’s strategy to maximise shareholder value consists of 3 core objectives:

(1) Undertake additional drilling to establish a resource at both Goanna and Monitor, building on the resources at Gecko and Orlando.
(2) Testing the gold potential within the 100% owned Goanna-Gecko-Monitor projects – as predicted by our exploration model.
(3) Leveraging our insights and technology from this new style of mineralisation to make further discoveries, reactivating the famous high-grade discovery history of the TCMF – initially this will be confined to the Gecko corridor, where we have HeliTEM coverage and where we believe there is great potential for additional Monitor/Goanna style deposits.

This calendar year Emmerson remains focussed on aggressively advancing all of these objectives, but given the uncertainty over the intentions of Ivanhoe Australia within the Joint Venture areas, will concentrate solely on the 100% Emmerson owned areas, and in particular the three sole-fund blocks that encompass Monitor-Gecko-Goanna, Orlando and a new project called Tetley (figure 4).

In terms of the first objective, we continue to make great progress in understanding this new style of mineralisation, which at Goanna is largely controlled by at least five sub-parallel shear zones that trend north west – south east (figure 5).

Within these shear zones are discrete high-grade ore shoots which occur as quartz-chlorite-sulphide tension

vein arrays and also hematite-chlorite-sulphide ironstones – both very different to the historical style of mineralisation and largely blind to previous exploration techniques. Drilling is first aimed at defining the shear zones (drill holes perpendicular to the shear zones), then delineating the high-grade ore shoots (drill holes parallel to the shear zones but perpendicular to the plunge of the ore shoots). This drilling pattern has been very successful as evidenced by the impressive results at Goanna and will now be extended to Monitor during the remainder of the 2012 drilling season.

Work to expand the reported resource at the Orlando gold-copper mine has started. This has included evaluating the potential for extensions to the unmined orebodies (lens 2 & 7) plus a further reassessment of the remnant resource blocks within the immediate mine environment.

The second objective consists of testing for gold beneath Goanna, Monitor and Gecko. It includes a detailed synthesis of the 3D structural environment and identification of the “feeder conduits” to the overlying copper mineralisation. These feeder conduits are in zones of dilation, where the gold-rich fluids have precipitated with predominantly pyrite and sericite. Apart from the structural setting, Emmerson has established a number of vectors to assist in targeting the gold zones, utilising a distinctive and predictive pattern of metal and mineral zonation. This work will continue to be refined as drilling progresses.

The third objective is about leveraging our proven “recipe” for finding this new style of mineralisation out into the more regional or greenfields environments. As part of this, the importance and potential of the 12km long Gecko corridor – clearly defined in last year’s HeliTEM survey, is an obvious priority (figure 6).

This corridor exhibits many of the attributes found within the Monitor-Gecko-Goanna projects and is believed to represent a major structural corridor with great potential to host additional gold – copper deposits. This is supported by the historic gold prospects along the margin of the zones of enhanced conductivity and also from an historic drill hole by Australian Development Limited of 6.7m at 1.9% copper. At the other end of this corridor, a detailed evaluation of a new greenfields project called Tetley (figure 4) has started.

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Figure 5: Goanna Shear Zones and drill holes. Background is the HeliTEM anomaly (red/white = highest conductivities)

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Figure 6: Plan view of HeliTEM blocks 1 and 5 highlighting a 12km corridor of elevated conductivity (red/white = highest conductivity) corresponding to the Gecko Corridor

MANAGING DIRECTOR’S REPORT - Review of Operations

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Planned activities for the first half of the 2012-13 financial year

Although outside of the reporting period, as of the end of August, Emmerson has completed over 11,000m of combined Reverse Circulation and Diamond drilling, representing approximately 50% of the planned drilling metres for this calendar year.

The potential doubling of the strike extent at the Goanna Project (ASX 30 August, 2012) has recently been announced.

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Drilling at the Goanna discovery, 100% owned by Emmerson Resources, has revealed two new, thick, copper intersections with the potential to double the strike extent of the already defined copper zones.

Further drilling is required to confirm the continuity of the ore body but the new holes GRC1388 - 100m east from previous drilling (“Goanna East”) and GRC1391 - 300m east from previous drilling (“Horner 3”), now indicate a total strike extent of over 600m for the Goanna discovery.

Mineralisation remains open both along strike to the east and down plunge in all five of the previously defined shear zones (figures 5 & 7). With further drilling it is believed there is good potential to intersect similar high-grade ore shoots to those recently announced in drill holes GODD020 (24m at 2.18% copper and 4.7m at 3.37% copper and 0.13g/t gold) and GODD017 (24m at 1.95% copper including 9m at 3.18% copper).

Initial 3m composite assays from Reverse Circulation drill hole GRC1388 at Goanna East has produced a very thick zone of copper mineralisation of:

81m at 0.45% copper from 420m (~ 300m below the surface) which includes;
3m at 1.57% copper from 420m ; and
3m at 2.14% copper from 432m

Initial 3m composite assays from Reverse Circulation drill hole GRC1391 at the new Horner 3 prospect has produced a very thick overall 114m zone of copper mineralisation with higher grade intervals as follows:

15m at 0.49% copper from 333m
15m at 0.32% copper from 432m

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Figure 7: Plan view of the Monitor-Gecko-Goanna complex showing the proximity to the Gecko shaft and underground development

In light of these results and depending on further geophysics, the remainder of drilling for 2012 will be distributed as follows:

(1) Infill drilling between Goanna, Goanna East and Horner 3 (figure 5).
(2) Resource drilling at Monitor and Goanna.
(3) Testing for gold zones beneath Monitor, Goanna and Gecko.
(4) Testing for extensions to the gold-copper lenses at Orlando.

Corporate

Emmerson conducted a strongly supported capital raising of $7.5 million during the year, to continue financing further aggressive exploration within our sole fund blocks. The funds were raised through a placement of 33.94 million shares at an issue price of 22 cents per share, primarily to international and domestic clients of Hartleys Limited. This is the first time Emmerson has raised capital since our IPO in 2007 and it was pleasing to see great support from both existing and new shareholders.

Our People

The success of Emmerson is very dependent on getting the “right people” doing the right tasks, and with intense competition fuelled by the resource boom, continues to be an ongoing challenge. Despite this Emmerson has attracted and retained great people through offering flexible employment contracts and providing challenging work which rewards innovation and sound science. In the past financial year Emmerson has maintained a very stable but small corporate office in Perth together with specialised, geoscientific consultants – in total a staff of six.

The main exploration base is situated in the town of Tennant Creek, Northern Territory, and is capably managed by our onsite Exploration Manager, Steve Russell. He is supported by a highly competent and dedicated team of ten staff (plus contractors), many of whom are residents in Tennant Creek.

Emmerson continues to strive to be an employer of choice.

MANAGING DIRECTOR’S REPORT - Review of Operations

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The Emmerson Resources Team

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Justin Hankinson Special Projects

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Allan Spence Superintendent Field Services

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Hamish Johns Project Geologist

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Bill Spence Field Assistant

MANAGING DIRECTOR’S REPORT - Review of Operations

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Steve Russell Exploration Manager

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Liam Wilson Field Assistant

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Competency Statement

The information in this report relating to Exploration Results and Mineral Resources is based on information compiled by Steve Russell, who is a Member of the Australian Institute of Geoscientists and has sufficient exploration experience which is relevant to the style of mineralisation under consideration to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Steve Russell is a full time employee of Emmerson Resources Limited and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears (Figures 1 to 7).

The information in this report which relates to Mineral Resources is based upon information compiled by Ian Glacken, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Ian Glacken is an employee of Optiro Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ian Glacken consents to the inclusion in the report of a summary based upon his information in the form and context in which it appears.

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Rob Bills

Managing Director & Chief Executive Officer

Rocky Osborne Principal Geologist

HEALTH, SAFETY, ENVIRONMENT AND COMMUNITY (HSEC)

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Our Commitments

Emmerson is committed to effective implementation of our HSEC policy and to continual improvement in our HSEC performance.

Health and Safety

Emmerson Resources continues its commitment to the highest standards of workplace safety. A comprehensive Occupational Health and Safety Program is in place to ensure the health and safety of our employees, contractors, visitors and the public. A culture of taking personal responsibility for practical, risk-based safety management has been adopted by our team.

Supporting systems include a Health and Safety Committee, weekly staff safety meetings, workplace inspections, hazard and incident reporting, regular training modules, and regular fitness for work monitoring. Recently we implemented safety awards to recognise individuals who demonstrate proactive safety within the work place.

All applicable staff undertook health monitoring medicals during the year in accordance with the Work Health and Safety Act and Regulations.

Emmerson recently achieved the outstanding record of 1,000 days without a lost time injury (LTI) - a credit to the commitment of the entire team.

Summary of Key Safety Statistics:

Summary of Key Safety Statistics:
Key Indicator	2008/2009	2009/2010	2010/2011	2011/2012
Total CompanyMan Hours Worked	43,089	74,763	60,869	59,310
Lost Time Injuries (LTIs)	1	4	0	0
Medical Treated Injuries (MTIs)	1	4	1	0
LTIFR	23.2	53.5	0	0
TRIFR	23.2	53.5	16.4	0
Incidents Reported	19	12	11	3

HEALTH, SAFETY, ENVIRONMENT AND COMMUNITY (HSEC)

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Tennant Creek exploration team awarded the 2012 Community Care Golden Heart Award

Environment

Emmerson cares for the environment and is committed to the efficient use of resources, minimisation of waste and pollution and reducing the environmental impact of our operations. We strive towards the implementation and maintenance of management systems for sustainable development that drive continual improvement.

The company has adequate systems in place for the management of its environmental responsibilities and it is pleasing to report that there were no environmental incidents or breaches of the regulations during the past year – continuing our unblemished record and one that our people are committed to maintaining. A recent environmental audit from the NT Department of Resources, which inspected many former drill sites confirmed Emmerson’s environmental obligations are being met.

Community

Emmerson Resources aspires to support our community with the goal to provide lasting social and economic benefits to society. We strive to be a valued corporate citizen in our communities and respect the values and cultural heritage of local people and their social and economic needs. We also strive towards the

implementation and maintenance of management systems for sustainable development that drive continual improvement. Key commitments to our community include contributing to making the communities in which we operate better places to live and do business, and we support ethical trade in our purchasing practices.

Emmerson continues to support community and sporting organisations in the Tennant Creek area. The company has provided support to Little Athletics, Tennant Creek Racing Club, Tennant Creek Speedway, Cattleman’s Association, Tennant Creek Show and Kelly’s Ranch. Employees continued their voluntary involvement in organisations such as the Tennant Creek Bush Fire Brigade, St. John Ambulance NT and the NT Fire and Rescue service.

The company’s partnership with the Clontarf Foundation and it’s academy at Barkly College continues to prosper with several Clontarf students participating in our after school work program and spending time in the field during their school vacation.

A highlight was the 2012 Community Care Golden Heart Award for the Tennant Creek and Barkly Region, demonstrating that the community of Tennant Creek and Barkly have recognised the valuable contribution Emmerson has made to the town and region.

SHAREHOLDER INFORMATION

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AS AT 10 SEPTEMBER 2012

	Number of	Number of
	holders	units held	% of issued
ORDINARY SHARES
Distribution of ordinary shares
1 – 1,000	27	5,042	0.00%
1,001 – 5,000	241	865,400	0.33%
5,001 – 10,000	270	2,291,140	0.88%
10,001 – 100,000	848	34,652,546	13.28%
100,001 and over	258	223,096,085	85.51%
Total	1,644	260,910,213	100.00%
Holdings less than a marketable parcel of shares	157	351,270	0.13%
Twenty largest ordinary shareholders
HSBC Custody Nominees (Australia) Limited - A/C 3		72,812,667	27.91%
Ivanhoe Australia Limited		22,610,000	8.67%
National Nominees Limited		12,182,442	4.67%
UBS Nominees Pty Ltd		8,680,561	3.33%
Mr Timothy Arthur Kestell		6,136,030	2.35%
Desertfox Pty Ltd		5,900,000	2.26%
Mr Simon Andrew		5,136,029	1.97%
Kurraba Investments Pty Ltd		4,000,000	1.53%
Shorlane Pty Ltd		3,500,000	1.34%
Zero Nominees Pty Ltd		2,902,961	1.11%
Mr Ross C Williams & Mrs Nicola A Williams<Williams Super	Fund A/C>	2,537,059	0.97%
HSBC Custody Nominees (Australia) Limited-Gsco Eca		2,481,954	0.95%
Mr Dean Pontin		1,500,000	0.57%
Mr Peter Pynes & Mrs Lara Pynes		1,400,000	0.54%
Willstreet Pty Ltd		1,400,000	0.54%
Equity Trustees Limited		1,300,000	0.50%
Mr Alister John Forsyth		1,287,950	0.49%
Mr Robert Trevor Bills		1,278,500	0.49%
Tejiman Holdings Pty Ltd		1,233,978	0.47%
Mr Hugh Ross Martin		1,192,202	0.46%
		159,472,333	61.12%
Substantial shareholders
HSBC Custody Nominees (Australia) Limited - A/C 3		72,812,667	27.91%
Ivanhoe Australia Limited		22,610,000	8.67%
		95,422,667	36.58%
There is no current on market buy back.

SHAREHOLDER INFORMATION

AS AT 10 SEPTEMBER 2012

UNQUOTED OPTIONS OVER ORDINARY SHARES

Exercise price of $0.50 expiring 24/11/2012 Exercise price of $0.25 expiring 13/12/2012 Exercise price of $0.30 expiring 13/12/2012 Exercise price of $0.25 expiring 11/03/2013

UNQUOTED RIGHTS OVER ORDINARY SHARES

Exercise price of nil vesting on 25/11/12 Exercise price of nil vesting on 25/11/13 Exercise price of nil vesting on 01/09/13 Exercise price of nil vesting on 01/09/14 Exercise price of nil vesting on 25/11/14 Exercise price of nil vesting on 25/11/15

Number of	Number of
holders	units held	% of issued
4	7,000,000	40.00%
1	5,000,000	28.57%
1	5,000,000	28.57%
1	500,000	2.86%
7	17,500,000	100.00%
7	150,000	12.00%
10	462,500	37.00%
8	162,500	13.00%
8	162,500	13.00%
9	156,250	12.50%
9	156,250	12.50%
51	1,250,000	100.00%

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The use of HeliTEM has allowed Emmerson to open up a new generation of prospects in the Tennant Creek Mineral Field

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Recent diamond drilling at Gecko

DIRECTORS’ REPORT

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

DIRECTORS

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

Andrew McIlwain B.Eng (Mining) – Non-executive Chairman

Andrew McIlwain is a qualified mining engineer with over 25 years’ experience in the mining industry and has held operational, technical, senior management and executive roles within Mt. Isa Mines Limited, Central Norseman Gold Corporation, WMC Resources Limited and Lafayette Mining Limited.

Mr McIlwain has been a Director of Emmerson since April 2007 and during the past three years has also served as a director of the following listed companies:

Unity Mining Limited (Managing Director & CEO since December 2011)
Kidman Resources Limited (Director October 2011)
Almonty Industries Inc. (Director October 2011)
Verus Investments Limited (Director from April 2008 to November 2011)
Tusker Gold Limited (Director from November 2009 to May 2010)

Robert Bills B.Sc, M.Sc - Managing Director and Chief Executive Officer

Rob Bills is a geologist and holds a Bachelor of Science Degree from Monash University and a Master of Science Degree from James Cook University. Prior to joining Emmerson Resources Mr. Bills had a 25 year career with Western Mining Corporation, then BHP Billiton where he held the position of global commodity specialist.

Mr Bills has been a Director of Emmerson since September, 2007 and during the past three years has not served as a director of any other listed company.

Tim Kestell B. Comm - Non-executive Director

Tim Kestell has over 14 years experience in capital markets including working for Australian stockbrokers Euroz Securities Limited and Patersons where he advised high net worth clients. In recent years, Mr Kestell has played a key role in forming and/or re capitalising publicly listed companies and finding new ventures for them. Presently Mr Kestell is the Chairman of the Company’s Audit and Risk Management Committee.

Mr Kestell has been a Director of Emmerson since November 2005 and during the past three years has also served as a director of the following listed companies:

Blue Capital Limited (Director since March 2009)
Indago Resources Limited (Director since August 2009)
Tusker Gold Limited (Director from November 2009 to May 2010)

DIRECTORS’ REPORT

Simon Andrew B.Sc (Honours) - Non-executive Director

Simon Andrew has significant experience in the Australian and Asian financial markets including equity research covering the Asian refining and petrochemical sector for a leading European investment bank. He also has extensive experience in corporate financing transactions involving both equity and hybrid equity instruments. Recent experience includes a senior executive role in the equity derivatives division of a United States investment bank. Mr Andrew also serves as a member of the Company’s Audit and Risk Management Committee.

Mr Andrew has been a Director of Emmerson since July 2006 and during the past three years has not served as a director of any other listed company.

Peter Reeve B. Sc (Metallurgy) - Non-executive Director (Resigned 8 June 2012)

Peter Reeve holds a Bachelor of Science (Metallurgy) from RMIT University and has been involved in the Australian resources industry for over 25 years. His industry experience includes Managing Director of Ivanhoe Australia Limited and positions with Rio Tinto, Shell-Billiton, Normet Consulting, Goldman Sachs/JBWere and Newcrest Mining Limited.

During the past three years Mr Reeve has also served as a director of the following publicly listed companies:

Ivanhoe Australia Limited (CEO and Managing Director from February 2007 to June 2012)
Exco Resources Limited (Director from May 2008 to July 2012)

COMPANY SECRETARY

Trevor Verran B Comm., CPA

Trevor Verran holds a Bachelor of Commerce degree from University of Western Australia and is a Certified Practicing Accountant with extensive experience in both the accounting profession and the mining industry. Prior to 2000, he held a senior position in an international firm of accountants. More recently Trevor’s experience has included the provision of accounting, financial management and company secretarial services for a number of public mining companies, including Aurora Gold Limited (2000 to 2003), Polaris Metals NL (CFO and company secretary from 2004 to 2011) and Northern Uranium Limited.

Mr Verran has been the CFO and Company Secretary of Emmerson since December 2011.

DIRECTORS’ MEETINGS

The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director was as follows:

	Directors’ Meetings	Audit Committee
		Meetings
Number of meetings held	7	1
Number of meetings attended:
Andrew McIlwain	7	-
Robert Bills	7	-
Tim Kestell	7	1
Simon Andrew	7	1
Peter Reeve	5	-

DIRECTORS’ REPORT

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DIRECTORS’ INTERESTS

Interests in shares and options of the Company and related bodies corporate at the date of this report:

		Unlisted	Unlisted	Unlisted
	Ordinary	24/11/2012	13/12/2012	13/12/2012
	shares	$0.50 options	$0.25 options	$0.30 options
Andrew McIlwain	1,067,941	2,500,000	-	-
Robert Bills	2,301,600	-	5,000,000	5,000,000
Tim Kestell	12,604,213	1,500,000	-	-
Simon Andrew	5,181,484	1,500,000	-	-
Peter Reeve	209,950	1,500,000	-	-

DIVIDENDS

No dividends were paid or declared by the Company since the end of the previous financial year.

PRINCIPAL ACTIVITIES

The principal activity of the Group during the course of the financial year was exploration and evaluation of mineral interests.

There were no significant changes in the nature of activities during the year.

OPERATING AND FINANCIAL REVIEW

Overview

Emmerson was incorporated in November, 2005 and acquired a suite of exploration and mining tenements covering some 2,700 kms[2] of the Tennant Creek Mineral Field (TCMF), the 300,000 tonne per annum Warrego gold plant (located approximately 50km to the northwest of the Tennant Creek) and associated exploration and support infrastructure in the township of Tennant Creek, Northern Territory, Australia. The Company listed on the Australian Securities Exchange (ASX) on 17 December 2007; ASX code: ERM.

Emmerson is exploring the TCMF in joint venture with Ivanhoe Australia Limited (Ivanhoe) pursuant to a Farm-in agreement whereby Ivanhoe is sole funding $28 million in exploration to acquire and retain a 51% interest in the majority of the Group’s tenements.

Operational focus during the year has been on Emmerson’s sole funded Monitor and Goanna projects in the Gecko Structural Corridor of the TCMF where new copper discoveries were identified. Emmerson identified a number of new targets including a series of anomalies within the Gecko Structural Corridor following the trial one of the world’s most powerful, helicopter borne (HeliTEM) geophysical systems over a number of known deposits. Many of these targets still remain untested.

The key to success at Goanna and Monitor was recognising that the mineralisation and alteration to many of the larger deposits could be directly detected by electrical geophysics – regardless of whether mineralisation was associated with iron-oxides.

DIRECTORS’ REPORT

OPERATING AND FINANCIAL REVIEW (continued)

Operating Results for the Year

The net loss for the year ended 30 June 2012 was $1,650,395 compared to the previous year loss of $1,686,802.

The major items comprising the net loss for the year were interest revenue of $590,691 (2011: $691,270) offset by consulting and legal expenses of $254,779 (2011: $337,216), employee benefits expense of $1,383,347 (2011: $1,130,162), insurance expense $130,802 (2011: $121,711) and other administrative expenses of $252,026 (2011: $330,358).

Financial Position

Net assets and total equity increased by $5,405,666 during the year predominantly due to capitalisation of exploration expenditure incurred on mining tenements that increased exploration and evaluation assets by $6,411,911. The balance of exploration and evaluation assets carried forward at the end of the year was $17,695,429.

Net assets and total equity at 30 June 2012 was $ 32,652,661.

Cash and assets utilised by the Company for the year is consistent with the Company’s business objectives and the Directors believe the Company is in a position to continue its exploration endeavors.

Exploration Activities

A detailed review of the Company’s exploration activities is contained in the Managing Director’s Report - Review of Operations section of this Annual Report.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

The Company’s issued capital increased to $40,111,622 from $33,151,621, an increase of $6,960,001 (net of issue costs) with the major movement comprising an issue of 33,940,000 shares at 22 cents each under a share placement.

Significant changes in assets during the year were an increase in exploration and evaluation assets of $6,411,911 due to exploration expenditure incurred on mineral interests.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

No matter or circumstance has arisen since the end of the year that has significantly affected or may significantly affect the Company’s operations, the results of those operations, or the state of affairs of the Company in future financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

The Company will continue its exploration and development activities in Tennant Creek Mineral Field (TCMF) in the Northern Territory with the object of identifying commercial resources.

The short term focus will continue to be on Emmerson’s sole funded Monitor, Goanna & Orlando projects in the Gecko Structural Corridor of the TCMF including deep drilling and resource delineation drilling in those projects.

DIRECTORS’ REPORT

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LIKELY DEVELOPMENTS AND EXPECTED RESULTS (continued)

Emmerson will also continue exploring the TCMF in joint venture with Ivanhoe Australia Limited (Ivanhoe) pursuant to a Farm-in agreement whereby Ivanhoe is sole funding $28 million in exploration to acquire and retain a 51% interest in the majority of the Group’s tenements. Pursuant to the Tennant Creek Mineral Field Joint Venture, Ivanhoe is required to spend $18,000,000 to earn a 51% interest and a Joint Venture will then be formed between Ivanhoe and the Group for the continued exploration and evaluation of the Group’s tenements that are subject to the Joint Venture. Under the terms of the Joint Venture, Ivanhoe must sole fund the initial $10,000,000 of Joint Venture expenditure over a maximum 5 year period with a minimum annual spend of $2,000,000 from the Joint Venture commencement date to retain its 51% Joint Venture interest, failure to do this will result in Ivanhoe’s Joint Venture interest reverting to 49% and the Group’s interest to 51%.

ENVIRONMENTAL REGULATION

The exploration activities of the Group are subject to environmental regulations imposed by various regulatory authorities, particularly those relating to ground disturbance and the protection of rare and endangered flora and fauna.

Santexco Pty Ltd (Santexco), a wholly owned subsidiary of the Company, entered into a Rehabilitation Agreement (dated 6 November, 2001) with the Northern Territory (NT) Government, whereby Santexco is obliged to perform rehabilitation obligations to the value of $750,000 pa. for 6 years (a total obligation of $4,500,000) on various mineral tenements, or pay the difference between the actual rehabilitation performed per year on the tenements and $750,000 into a deposit account held by the NT Government at each of the 6 anniversary dates of the agreement. To date Santexo has performed actual rehabilitation obligations of $333,041 and lodged a bank guarantee to the value of $416,958 with the NT Government. There are 5 anniversary dates for the agreement outstanding.

The Group is party to a binding agreement with the NT Government (Department of Regional Development, Primary Industry, Fisheries and Mines) dated 31 July, 2006 whereby the NT Government has agreed that the rehabilitation obligations described in the Rehabilitation Agreement are suspended (on “standstill”) until 45 days of cumulative commercial production from the Group’s tenements.

Given the permanent standstill arrangement in place with the NT Government and that any recommencement of commercial production is at the complete discretion of the Group, there is currently no requirement for the Group to perform any rehabilitation obligations on any tenements, except to the extent that the rehabilitation relates to the exploration activities of the Group since August, 2006.

The Group has complied with all material environmental requirements up to the date of this report. The directors believe that the Company has adequate systems in place for the management of its environmental responsibilities and are not aware of any breaches of the regulations during the period covered by this report.

SHARE OPTIONS AND RIGHTS

Options over ordinary shares:

Options over ordinary shares:	Options over ordinary shares:
As at the date of this report, unissued ordinary shares under options were as follows:
Exercise price of $0.50 expiring 24/11/2012	7,000,000
Exercise price of $0.25 expiring 13/12/2012	5,000,000
Exercise price of $0.30 expiring 13/12/2012	5,000,000
Exercise price of $0.25 expiring 11/03/2013	500,000
	17,500,000

DIRECTORS’ REPORT

SHARE OPTIONS AND RIGHTS (continued)

Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate or in the interest issue of any other registered scheme.

No shares were issued during or since the end of the year as a result of the exercise of an option.

1,000,000 options at an exercise price of $0.25 expiring 5 years after 1.5 x 20 day post listing VWAP and 5,000,000 options at an exercise price of $0.25 expiring on 31/07/12 were forfeited unexercised during the financial year due to cessation of employment of the holders of the options. 500,000 options at an exercise price of $0.25 expired unexercised on 31/07/2012.

Rights over ordinary shares:

As at the date of this report, unissued ordinary shares under performance rights were as follows:

Exercise price of nil vesting on 25/11/12 Exercise price of nil vesting on 25/11/13 Exercise price of nil vesting on 01/09/13 Exercise price of nil vesting on 01/09/14 Exercise price of nil vesting on 25/11/14 Exercise price of nil vesting on 25/11/15	150,000 462,500 162,500 162,500 156,250 156,250
	1,250,000

875,000 performance rights were issued during the financial year. Each performance right when exercised entitles the holder to one fully paid ordinary share in the Company (without any amount being payable for the exercise of the performance right and receipt of the share).

350,000 shares were issued on vesting and exercise of performance rights at an exercise price nil during the financial year and 325,000 shares were issued on exercise of performance rights at an exercise price of nil since the end of the year.

500,000 performance rights at an exercise price of nil were forfeited unexercised during the year due to cessation of employment of the holders of the rights.

INDEMNIFICATION AND INSURANCE OF DIRECTORS

The Company has entered into a Deed of Indemnity with each of the Directors to indemnify them to the maximum extent permitted by law against liabilities and legal expenses incurred in, or arising out of the conduct of the business of the Company or the discharge of the duties as a director.

Also pursuant to the Deed, the Company has paid premiums to insure the Directors against liabilities incurred in the conduct of the business of the Company. In accordance with common commercial practice, the insurance policy prohibits disclosure of the amount of the premium and the nature of the liability insured against. The amount of the premium is included as part of the directors remuneration in the Remuneration Report.

DIRECTORS’ REPORT

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REMUNERATION REPORT (audited)

This Remuneration Report for the year ended 30 June 2012 outlines the director and executive remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C) of the Act.

The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent Company.

For the purposes of this report the term ‘executive’ encompasses the Managing Director and Chief Executive Officer, the Chief Financial Officer and Company Secretary, the Principal Geologist and the Exploration Manager – Tennant Creek.

The remuneration report is presented under the following sections:

Individual key management personnel disclosures
Remuneration at a glance
Board oversight of remuneration
Non-executive director remuneration arrangements
Executive remuneration arrangements
Employment contracts of key management personnel
Details of remuneration
Equity instruments disclosures

1. Individual key management personnel disclosures

Details of key management personnel in the Company and the Group are set out below:

Non-executive Directors: Andrew McIlwain Chairman (Non-executive) Tim Kestell Director (Non-executive) Simon Andrew Director (Non-executive) Peter Reeve (resigned 8/06/12) Director (Non-executive)

Executive Director: Robert Bills Managing Director and Chief Executive Officer

Other Executives: Shane Volk (resigned 2/12/11) Chief Financial Officer and Company Secretary Trevor Verran (appointed 2/12/11) Chief Financial Officer and Company Secretary Grant Osborne Principal Geologist Steve Russell Exploration Manager – Tennant Creek

There have been no changes to key management personnel after the reporting date and before the date the financial report was authorised for issue.

DIRECTORS’ REPORT

REMUNERATION REPORT (audited) (continued)

2. Remuneration at a glance

Executive Remuneration

Emmerson Resources Limited’s remuneration strategy is designed to attract, motivate and retain employees and non-executive directors by identifying and rewarding high performers and recognise the contribution of each employee to the exploration success and growth of the Group.

The remuneration policy is to bench-mark total remuneration for individual employee’s and directors against peer-group organisations to ensure a competitive offering.

There have been no material changes to the short-term incentive bonus plan for the 2012 financial year. For the performance period covered by this report (January 2011 to December 2011) 50% of the short-term incentive payment is based on the increase in the market capitalisation of the Company based on a 20 day moving average of market capitalisation from 1 January to 31 December, 30% is based on “discovery success” and 20% is based on the attainment of individual key performance indicators. In recognition of the performance of the Company and the executive during the year a total of $263,523 was earned by the Company KMPs during the 2012 financial year.

Long-term incentive awards consisting of share purchase options which vest based on the attainment of service mile-stones were awarded to Mr. Bills and Mr. Volk when they joined the Company in 2007 prior to the Company converting to a public Company and subsequent listing on the Australian Securities Exchange. All of the options have vested, none of the options have been exercised. Mr. Volk’s options were forfeited unexercised during the year following his resignation.

Long-term incentive awards consisting of share purchase options which vest based on the attainment of service mile-stones were awarded to Mr. Russell when he joined the Company just prior to ASX listing in December, 2007. All of the options have vested, none of the options have been exercised.

At the 2009 Annual General Meeting of the Company, shareholders approved a Performance Rights Plan. The objectives of this long-term incentive scheme are to provide the Company with a remuneration mechanism, through share ownership, to motivate, retain and reward the performance of employees (including directors). Mr. Osborne and Mr. Russell have been awarded performance rights under this scheme, the rights vest based on pre-determined periods of service. 150,000 the rights (75,000 to each of Mr. Osborne and Mr. Russell) awarded under this scheme vested during the year.

3. Board oversight of remuneration

Remuneration Committee

The Company does not have a Remuneration Committee hence the full board is responsible for determining the remuneration arrangements for all members of the board and executives.

The board assesses the appropriateness of the nature and amount of remuneration of the non-executive directors and executives on a periodic basis by reference to relevant employment market conditions, with the overall objective of ensuring maximum stakeholder benefit from the retention of a high performing director and executive team. In determining the level and composition of executive remuneration, the board takes advice from external consultants to bench mark remuneration against the external market.

DIRECTORS’ REPORT

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REMUNERATION REPORT (audited) (continued)

3. Board oversight of remuneration (continued)

Remuneration approval process

The board approves the remuneration arrangements of the Chief Executive Officer, executives and all awards made under the long term incentive plans. The board also sets the aggregate remuneration of non-executive directors which is then subject to shareholders approval.

The board also approves, having regard to the recommendations made by the Chief Executive Officer and Managing Director, all payments awarded to executives and employees under the Company’s short term incentive plan.

Remuneration strategy

Emmerson Resources Limited’s remuneration strategy is designed to attract, motivate and retain employees and non-executive directors by identifying and rewarding high performers and recognising the contribution of each employee to the success of the Group.

The performance of the Company depends upon the quality of its directors and executives. To prosper, the Company must attract, motivate and retain highly skilled directors and executives.

To this end, key objectives of the Company’s reward framework are to ensure that remuneration practices:

Are aligned to the Company’s business strategy;
Offer competitive remuneration benchmarked against the external market;
Provide strong linkage between individual and Company performance and rewards; and
Align the interests of executives with shareholders.

Remuneration Structure

In accordance with best practice corporate governance, the structure of non-executive director and executive remuneration is separate and distinct.

4. Non-executive Director remuneration arrangements

Remuneration Policy

The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed annually against fees paid to non-executive directors of comparable companies. The Board considers advice from external sources (for example remuneration surveys) when undertaking the annual review process.

The Company’s constitution and the Australian Securities Exchange (ASX) listing rules specify that the nonexecutive director fee pool shall be determined from time to time by shareholders in general meeting. The latest determination by shareholders was at the 2009 annual general meeting (AGM) held on 25 November, 2009 when shareholders approved an aggregate fee pool of $250,000 per year.

The board will not seek any increase for the non-executive director pool at the 2012 AGM.

DIRECTORS’ REPORT

REMUNERATION REPORT (audited) (continued)

4. Non-executive Director remuneration arrangements (continued)

Structure

Each non-executive director receives an annual fee $36,000 for being a director of the Company and the Chairman of the Board receives an annual fee of $75,000. Director fees are paid quarterly in arrears; the Company also pays the compulsory 9% superannuation guarantee where applicable in addition to the base fees.

Variable remuneration – long term incentive (LTI)

LTI awards are made periodically to non-executive directors subject to the approval of shareholders as is required by ASX listing rule 10.14 in order to reward directors in a manner that aligns remuneration with the creation of shareholder wealth and provides a marked linked incentive as part of their respective roles as non-executive directors and for the future performance by each of them in their respective roles.

LTI – share options

LTI share options are made under the Company Incentive Option Scheme at the determination of the Board, subject to shareholder approval. Each option entitles the holder to one fully paid ordinary share of the Company and the number of options issued is determined by the Board for approval by shareholders. Options are typically awarded to non-executive directors with an exercise price at a significant premium to the prevailing Company share price at the time of issue, consequently there are no vesting and performance conditions attached to the options, with the recipient typically having a three year period to exercise the options before lapse. The Board feels that the expiry date and exercise price of options currently on issue to the directors is sufficient to align the goals of the directors and executives with that of the shareholders to maximise shareholder wealth.

Directors are prohibited from entering into any hedging arrangements over unvested options under the Incentive Option Scheme.

There were no options granted in the 2012 financial year.

5. Executive remuneration arrangements

Remuneration levels and mix

The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and aligned with market practice. The remuneration policy is to bench-mark total remuneration for executives against peer-group organisations to ensure a competitive offering; bench-marking is conducted annually. All Key Management Personnel’s cash remuneration mix comprises 75% fixed remuneration and 25% short term incentive.

Structure

Remuneration packages contain the following key elements:

Executive remuneration framework consists of the following components:

Fixed remuneration;
• Short Term Incentive; and
Long Term Incentive

DIRECTORS’ REPORT

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REMUNERATION REPORT (audited) (continued)

5. Executive remuneration arrangements (continued)

Remuneration	Vehicle	Purpose	Link to performance
component	• Represented by total	• Set with reference to	• No link to performance
Fixed Remuneration	employment cost	role, market and
	• Comprises base salary,	experience
	superannuation	• Executives receive their
	contributions and other	fixed remuneration as
	benefits	cash
Short Term Incentive	• Paid in cash	• Rewards executives for	• 20 day moving average
component		their contribution to	Company market
		achievement of	capitalisation is a key
		Company outcomes, as	metric.
		well as key	• Linked to other internal
		performance indicators	measure such as
		(KPI’s)	discovery success
Long Term Incentive	• Awards are made in the	• Rewards executives for	• Vesting of awards is
component	form of share purchase	their contribution to the	dependent on continuity
	options, or share	creation of shareholder	of employment
	purchase rights	value over the longer
		term

Fixed Remuneration

Executive contracts of employment do not include any guaranteed base pay increases. Total employment cost is reviewed annually by the Board. The process consists of a review of Company and individual performance, relevant comparative remuneration internally and externally and, where appropriate, external information independent of the board.

Variable remuneration – short term incentive (STI)

The Company operates an annual STI program that is available to all executives and awards a cash bonus subject to the attainment of clearly defined Company, business and individual measures.

The total potential STI available to individual executives is set at a level so as to provide sufficient incentive to executives to achieve their targets and such that the cost to the Company is reasonable in the circumstances.

Actual STI payments awarded to each executive depend on the extent to which specific targets set at the beginning of the calendar year are met. The targets consist of a number of key performance indicators covering financial, non-financial, corporate and individual measures of performance.

DIRECTORS’ REPORT

REMUNERATION REPORT (audited) (continued)

5. Executive remuneration arrangements (continued)

Performance measures	Proportion of STI award measure applies to
Financial measure
• Market capitalisation of the Company,	50%
measured on a 20 daymovingaverage
Non-financial measures
• Discovery success
• Individual key project delivery	50%
• Leadership/team contribution

The measures were chosen as they represent the key drivers for the short term success of the business and provide a framework for delivering long-term value.

The aggregate of the annual STI payments available for executives across the Company is subject to the approval of the Board. On an annual basis, after consideration of performance against KPI’s, the Board, in line with their responsibilities, determine the amount if any, of the short-term incentive to be paid to each executive and in the case of all executives except the Managing Director and Chief Executive Officer, the Board gives due consideration to the recommendations of the Managing Director and Chief Executive Officer in this regard. This process usually occurs within three months after the end of each calendar year. Payments made are delivered as a cash bonus and were paid in the last quarter of the current reporting period.

In recognition of the performance of the Company and the executive during the year a total of $263,523 was earned by the executives as STI cash bonuses during the 2012 financial year. There was no alteration to the STI bonus plan for the year.

Variable remuneration – long term incentive (LTI)

LTI awards are made periodically to executives in order to align remuneration with the creation of shareholder value over the long-term.

LTI – share options

LTI share options are made under the Company’s Incentive Option Scheme at the determination of the Board. Each option entitles the holder to one fully paid ordinary share of the Company and the number of options issued is determined by the Board. Options are typically awarded to executives at the commencement of their employment with the Company, the options vest after two years, there are no performance measures attached to vesting, the exercise price of the options is set at a premium to the market price of the shares at the date of grant and the options have a term of five years with the executive able to exercise the options up to three years after vesting before the options lapse. The Board feels that the expiry date and exercise price of options currently on issue to the executives is sufficient to align the goals of the executives with that of the shareholders to maximise shareholder wealth.

Executives are prohibited from entering into any hedging arrangements over unvested options under the Incentive Option Scheme.

DIRECTORS’ REPORT

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REMUNERATION REPORT (audited) (continued)

5. Executive remuneration arrangements (continued)

There were no share options awarded during the financial year ended 30 June, 2012.

LTI – share purchase rights

LTI share purchase rights are made under the Company Performance Rights Plan (approved by shareholders at the Company annual general meeting held on 25 November, 2009) at the determination of the Board. Each share purchase right entitles the holder to one fully paid ordinary share of the Company and the number of rights issued is determined by the board. Rights may be awarded to executives on an annual basis with vesting conditions set by the board. The share purchase rights issued during the 2012 financial year vest as follows, 50% two years from issue date, 25% three years from issue date and 25% four years from issue date and there are no performance measures attached to vesting, the rights are issued primarily as a retention initiative . The exercise price of each right is Nil and the rights have a term of five years with the executive able to exercise the rights up to five years after issue before the rights lapse.

Executives are prohibited from entering into any hedging arrangements over unvested rights under the Performance Rights Plan.

150,000 share purchase rights were granted to each of Mr. Grant Osborne and Mr. Steve Russell under the Performance Rights Plan during the financial year ended 30 June, 2012.

6. Employment contracts of key management personnel

On appointment to the board, all non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the board policies and terms, including remuneration, relevant to the office of director.

Remuneration and other terms of employment for the Managing Director and Chief Executive Officer and the other key management personnel are also formalised in service agreements. Each of these agreements provides for the provision of performance related cash bonuses (STI) and LTI.

Key terms of agreements for key management personnel are as follows:

	Commence	Term	Notice	Base salary	Variable
	-ment date			period & fees	remuneration
Non-executive directors:
Andrew McIlwain	26/04/07	No fixed term	n/a	$75,000	LTI
Tim Kestell	10/11/05	No fixed term	n/a	$36,000	LTI
Simon Andrew	21/07/06	No fixed term	n/a	$36,000	LTI
Executive director:
Robert Bills	11/09/07	No fixed term	12 months	$400,000	STI/LTI
Other executives:
Trevor Verran	02/12/12	No fixed term	3 months	$200,000	STI/LTI
Grant Osborne	01/09/09	No fixed term	4 weeks	$220,000	STI/LTI
Steve Russell	10/12/07	No fixed term	1 month	$190,000	STI/LTI

DIRECTORS’ REPORT

REMUNERATION REPORT (audited) (continued)

7. Details of remuneration

		Short-term	Short-term		Post-	Share-	Total	Perfor-
				Employment		based		mance
						payments		related
	Salary &	Cash	Non-	Other	Superann-	Options &
	fees	bonus	monetary	benefits	uation	rights
			benefits		benefits
	$		$	$	$	$	$	%
2012
Non-executive directors:
Andrew McIlwain	75,000	-	-	1,654	-	-	76,654
Tim Kestell	36,000	-	-	1,654	3,240	-	40,894
Simon Andrew	36,000	-	-	1,654	3,240	-	40,894
Peter Reeve
(resigned 8/06/12)	36,000	-	-	1,654	3,240	-	40,894
Executive director:
Robert Bills	367,086	175,000	-	4,024	53,224	-	599,334	29.2%
Other executives:
Shane Volk
(resigned 2/12/11)	96,662	-	-	-	7,639	-	104,301
Trevor Verran
(appointed 2/12/11)	89,335	-	-	-	35,825	-	125,160
Grant Osborne	184,421	47,850	-	-	41,884	26,388	300,543	15.9%
Steve Russell	175,003	40,673	35,185	-	19,411	26,388	296,660	13.7%
	1,095,507	263,523	35,185	10,640	167,703	52,776	1,625,334
2011
Non-executive directors:
Andrew McIlwain	75,000	-	-	-	-	-	75,000
Tim Kestell	36,000	-	-	-	3,240	-	39,240
Simon Andrew	36,000	-	-	-	3,240	-	39,240
Peter Reeve	36,000	-	-	-	3,240	-	39,240
Executive director:
Robert Bills	308,340	-	4,814	2,220	69,417	-	384,791
Other executives:
Shane Volk	200,003	-	-	-	18,000	9,961	227,964
Grant Osborne	133,535	8,400	745	-	52,574	22,365	217,619	3.9%
Steve Russell	170,867	2,100	41,279	-	15,339	22,365	251,950	0.8%
	995,745	10,500	46,838	2,220	165,050	54,691	1,275,044

There were no termination benefits during the 2011 or 2012 financial years.

DIRECTORS’ REPORT

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REMUNERATION REPORT (audited) (continued)

8. Equity instrument disclosures

KMP rights granted, exercised and lapsed for the 2012 financial year

	Grant	Number	Value at	Value at	Exercise	Exercise	Expiry	Number	%
	date	granted	grant date		price	date	date	vested	Vested
Grant Osborne	25/11/11	75,000		$0.245	$0.00	25/11/13	25/11/16	-	-
	25/11/11	37,500		$0.245	$0.00	25/11/14	25/11/16	-	-
	25/11/11	37,500		$0.245	$0.00	25/11/15	25/11/16	-	-
Steve Russell	25/11/11	75,000		$0.245	$0.00	25/11/13	25/11/16	-	-
	25/11/11	37,500		$0.245	$0.00	25/11/14	25/11/16	-	-
	25/11/11	37,500		$0.245	$0.00	25/11/15	25/11/16	-	-
	Value of	Value of		No. of	shares	Paid per	Value of	Remuneration
	rights		rights	issued on		share on	rights	consisting
	granted	exercised		exercise of		exercise	lapsed	of rights
					rights	of rights
Grant Osborne	$26,388	$18,375			75,000	-	-	8.8%
Steve Russell	$26,388	$18,375			75,000	-	-	8.9%

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Emmerson Resources support and have adhered to the principles of corporate governance. The Company’s corporate governance statement is contained in the following section of this annual report.

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 year.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration under Section 307C of the Corporations Act 2001 is set out on page 74 and forms part of the Director’s Report for the year ended 30 June 2012.

NON-AUDIT SERVICES

The auditor independence requirements of the Corporations Act 2001 were not compromised during the year since there were no non-audit services provided by the Group’s auditor, Ernst & Young.

Signed in accordance with a resolution of the Directors.

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Rob Bills Managing Director & Chief Executive Officer 25 September 2012

CORPORATE GOVERNANCE STATEMENT

This statement reports on Emmerson Resources Limited (“Emmerson” or the “Company”) corporate governance framework, principles and practices as at the date of this report. These principles and practices are reviewed regularly and revised as appropriate to reflect changes in law and best practice in corporate governance.

ASX Listing Rule 4.10.3 requires ASX listed companies to report on the extent to which they have followed the ASX Corporate Governance Principles and Recommendations (“ASX Principles”) released by the ASX Corporate Governance Council (“CGC”). The ASX Principles require the board to consider carefully the development and adoption of appropriate corporate governance policies and practices founded on the ASX Principles. A description of the Company’s main corporate governance practices is set out below. All these practices, unless otherwise stated, were in place for the entire year.

The Board aims to comply with the ASX Principles to the extent that the Board believes the recommendations are practical and applicable to the Company. It is noted that the ASX Principles are not compulsory for listed companies and where the Company has not complied with a particular recommendation an explanation as to why not have been provided. As the Company’s activities expand in size, nature and scope, the implementation of additional corporate governance structures will be given further consideration.

The table below summarises the Company’s compliance with the CGC’s recommendations.

Recommendation	Comply
	Yes/No
Principle 1 - Lay solid foundations for management and oversight
1.1 Companies should establish the function reserved to the board and those delegated
to senior executives and disclose those functions.	Yes
1.2 Companies should disclose the process for evaluating the performance of senior executives.	Yes
1.3 Companies should provide the information indicated in the guide to reporting on Principle 1.	Yes
Principle 2 - Structure the board to add value
2.1 A majority of the board should be independent directors.	No
2.2 The chair should be an independent director.	Yes
2.3 The roles of chair and chief executive officer should not be exercised by the same individual.	Yes
2.4 The board should establish a nomination committee.	No
2.5 Companies should disclose the process for evaluating the performance of the board,
its committees and individual directors.	Yes
2.6 Companies should provide the information indicated in the guide to reporting on Principle 2.	Yes
Principle 3 - Promote ethical and responsible decision-making
3.1 Companies should establish a code of conduct and disclose the code or a summary of
the code as to:
• the practices necessary to maintain confidence in the company’s integrity
• the practices necessary to take into account their legal obligations and the reasonable
expectations of their stakeholders
• the responsibility and accountability of individuals for reporting and investigating
reports of unethical practices.	Yes
3.2 Companies should establish a policy concerning diversity and disclose the policy or a
summary of that policy. The policy should include requirements for the board to establish
measurable objectives for achieving gender diversity for the board to assess annually both
the objectives and progress in achieving them.	No

CORPORATE GOVERNANCE STATEMENT

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Recommendation	Comply
	Yes/No
Principle 3 - Promote ethical and responsible decision-making (continued)
3.3 Companies should disclose in each annual report the measurable objectives for
achieving gender diversity set by the board in accordance with the diversity policy
and progress towards achieving them.	No
3.4 Companies should disclose in each annual report the proportion of women employees
in the whole organisation, women in senior executive positions and women on the board.	Yes
3.5 Companies should provide the information indicated in the guide to reporting on Principle 3.	Yes

Recommendation

Principle 4 - Safeguard integrity in financial reporting

4.1	The board should establish an audit committee.	Yes
4.2	The audit committee should be structured so that it:
	• consists only of Non-executive Directors	Yes
	• consists of a majority of independent directors	No
	• is chaired by an independent chair, who is not chair of the board	No
	• has at least three members.	No
4.3	The audit committee should have a formal charter.	Yes
4.4	Companies should provide the information indicated in the guide to reporting on Principle 4.	Yes

Principle 5 - Make timely and balanced disclosure

5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies. Yes
5.2 Companies should provide the information indicated in the guide to reporting on Principle 5. Yes

Principle 6 - Respect the rights of shareholders

6.1 Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy. Yes
6.2 Companies should provide the information indicated in the guide to reporting on Principle 6. Yes

Principle 7 - Recognise and manage risk

7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies. Yes
7.2 The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks. Yes
7.3 The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks. Yes
7.4 Yes
7.4 Companies should provide the information indicated in the guide to reporting on Principle 7.

CORPORATE GOVERNANCE STATEMENT

Recommendation

Comply Yes/No

Principle 8 - Remunerate fairly and responsibly

8.1 The board should establish a remuneration committee. No
8.2 The remuneration committee should be structured so that it:
Consists of a majority of independent directors
Is chaired by an independent chair
Has at least three members
8.3 Companies should clearly distinguish the structure of Non-executive Directors’ remuneration from that of executive directors and senior executives. Yes
8.4 Companies should provide the information indicated in the guide to reporting on Principle 8. Yes

Copies of all of the Company’s Corporate Governance policies are available on the Company’s website: www.emmersonresources.com.au

PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Functions reserved to the board and delegated to senior executives:

The board is ultimately responsibility for all matters relating to the running of the Company, however the board’s role is to govern the Company rather than manage it. The operation and day to day management of the Company is delegated by the board to the Managing Director and Chief Executive Officer and the executive management team.

A copy of the Company’s board Charter is available on the Company’s web site and contained within this charter is a statement of matters reserved for the board. Also available on the Company’s website is the Company’s Delegation of Authority policy which further details matters that specifically require the approval of the board and those matters reserved for management.

Whilst at all times the board retains full responsibility for guiding and monitoring the Company, in discharging its stewardship it makes use of sub-committees. Specialist sub-committees are able to focus on a particular responsibility and provide informed feedback to the board. To this end the board has established and Audit and Risk Management Committee. The role and responsibilities of this committee is discussed in Principle 4 of this Corporate Governance Statement.

Senior executive performance review:

The board ensures that the executive management team is appropriately qualified and experienced to discharge their responsibilities and the board has in place procedures to assess the performance of the Managing Director and Chief Executive Officer and all other members of the executive; specifically the board provides regular feedback to executive management on their performance during the year and conducts a formal annual review of the performance of the Chief Executive Officer. During the year the board conducted a formal review of the performance of the Chief Executive Officer against Key Performance Indicators and Critical Tasks and the Chief Executive Officer conducted a similar review of the executive management team.

CORPORATE GOVERNANCE STATEMENT

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PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE

Skills:

The skills, experience and expertise relevant to the position of director held by each director in office at the date of the annual report is included in the Directors Report.

The composition of the board comprises a variety of skills and experience across the financial and commercial, exploration and resource industries. The board reviews its composition on an annual basis to ensure that it has an appropriate mix of expertise and experience. When a vacancy occurs, for whatever reason, or where it is considered that the board would benefit from the services of a new director with particular skills, the board will select appropriate candidates with relevant qualifications, skills and experience. External advisers may be used to assist in such a process. The board will then appoint the most suitable candidate who must stand for election at the next general meeting of shareholders.

Period of office:

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

Andrew McIlwain 5 years and 5 months Tim Kestell 6 years and 10 months Simon Andrew 6 years and 2 months Rob Bills 5 years

Independent directors:

The Board does not have a majority of directors who are independent because the Board is of the view that shareholders’ interests are best served by the serving directors intimate knowledge of the evolution of the Company and the board is also of the view that the current Directors possess a suite of skills and experience appropriate for the Company at this time.

Directors of Emmerson Resources Limited are considered to be independent if they are free from any business or other relationship that could materially interfere with – or could reasonably be perceived to materially interfere with – the exercise of their unfettered independent judgment.

In the context of director independence, ‘materiality’ is considered from both the Group and individual director perspective. The determination of materiality requires consideration of both quantitative and qualitative elements. An item is presumed to be quantitatively immaterial if it is equal to or less than 5% of the appropriate base amount. It is presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to or greater than 10% of the appropriate base amount. Qualitative factors considered include whether a relationship is strategically important, the competitive landscape, the nature of the relationship and the contractual or other arrangements governing it and other factors that point to the actual ability of the director in question to shape the direction of the Group.

In accordance with the definition of independence above, and the materiality thresholds set, the independent director of the Board is Andrew McIlwain who is the independent Chair of the Board.

Rob Bills is Managing Director and Chief Executive Officer of the Company and is not considered to be independent. Nor are Peter Reeve (who resigned from the Board on 8 June 2012), Tim Kestell, and Simon Andrew considered to be independent.

Regardless of individual Director Independence, the board expects that each Director will bring their independent views and judgment to bear on board decisions at all times.

CORPORATE GOVERNANCE STATEMENT

PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE (continued)

Chairman and CEO:

The chairman is responsible for leading the Board, ensuring directors are properly briefed in all matters relevant to their role and responsibilities, facilitating board discussions and managing the board’s relationship with the Company’s senior executives. The Managing Director and Chief Executive Officer is responsible for implementing strategies and policies. The Board charter specifies that the Chairman cannot be the Chief Executive Officer of the Company.

Independent professional advice:

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

Nomination Committee:

At this time the board has not formed a nomination committee as it is the view of the board that the functions and responsibilities that would normally be the dealt with by this committee can be adequately addressed by the board in its entirety as specific agenda items at scheduled board meetings. When the Board convenes as the Nomination Committee it carries out those functions which are delegated in the Company’s Nomination Committee Charter. The Board deals with any conflicts of interest that may occur when convening in the capacity of Nomination Committee by ensuring the director with conflicting interests is not party to the relevant discussions. When deemed appropriate (e.g. board performance review), the board engages independent consultants to assist it in fulfilling such functions.

Retirement and rotation of directors are governed by the Corporations Act 2001 and the constitution of the Company. Each year one third of the directors (excluding the CEO) must retire and may offer themselves for re- election.

Board performance review:

Due to the size of the board and the nature of its business, it has not been deemed necessary to institute a formal documented performance review program of the Board, its committees and individual board members. During the reporting period the Chairman conducted the Company’s annual informal review process whereby he discusses with individual directors their attitude, performance and approach to a variety of key performance areas including:

Attendance at scheduled board and committee meetings.
Behavior and contribution at meetings.
Interaction with peers.
Engagement with management.
Timeliness of attending to tasks.

As and when deemed necessary, a more formalised board performance review process, including the establishment of Key Performance Criteria, will be put in place. It is not envisaged that this would be required until the Company’s activities, as well as those of the board, have expanded.

Access to information:

Directors have the right of access to any employee of the group for the purpose of seeking information about aspects of the Company’s business and are encouraged to do so.

For each formal meeting of the board, a set of board papers is prepared by management addressing each of the functional areas of the business and is typically provided to directors in advance of the meeting to afford directors the opportunity to familiarise themselves with matters to be considered ahead of the meeting. Information provided to the board includes all material information on: exploration, development, operations, finance and corporate activities including budgets, cash flows, funding requirements, shareholder movements, broker activity in the Company’s securities, assets and liabilities, disposals, financial accounts, external audits, internal controls, risk assessment, new venture proposals, and health, safety and environmental reports.

CORPORATE GOVERNANCE STATEMENT

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PRINCIPLE 3 - PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING

Code of conduct:

The Company has established a code of conduct in accordance with Australian Standard 8002-2003 ‘Organisational Code of Conduct’. The code provides a framework for decisions and actions in relation to ethical conduct, fair dealing and a duty of care for those engaged by the Company. The code applies to all directors, officers and employees of the Company and all consultants and contractors are made aware of the expectations contained within the code. A summary of the main provisions of the Code is available on the Company’s website. The Company has established a policy concerning trading Company securities which applies to Company directors, executives, employees and consultants and a copy of the policy is also available on the Company’s web site.

Diversity:

The Company has adopted an equal opportunity and anti-discrimination policy whereby to the extent possible permitted by the laws of the jurisdictions in which we operate, Emmerson is committed to providing diversity of employment opportunities for, but not limited to, gender, age, ethnicity and cultural background for all Company roles and to providing a workplace where differences are respected and accepted and anti-discriminatory behaviour of any kind is strictly prohibited.

In respect of gender diversity, the Company has not determined a target proportion of appointments but relies on the requirement of “most suitable person for roles” as the overarching selection criteria for personnel.

While not setting specific targets for achieving gender diversity, the Group:

Does not discriminate for or against the appointment of women to roles at any level of the organisation.
Does not discriminate in terms of making training and career development opportunities available to all employees, irrespective of gender.
Does not discriminate on the basis of gender in setting salary levels. Salaries are set on the basis of the level of responsibility of the position, technical skills and qualifications required to perform the role and have no bearing on the employee’s gender.
Does to the extent practically possible, taking into account the nature of work performed by employees, provide flexible work arrangements.

As at the balance date, 25% of employees of the Company were women. There are currently no women in senior executive positions and no women serving on the Company’s board.

PRINCIPLE 4 - SAFEGUARD INTEGRITY IN FINANCIAL REPORTING

Audit committee:

The board has established an Audit and Risk Management Committee which operates under a charter approved by the board. It is the board’s responsibility to ensure that an effective internal control framework exists and that proper oversight of material business risks exists within the Company. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information as well as non-financial considerations such as the integrity of exploration data and information, the processes for the identification and management of business risks and the benchmarking of operational key performance indicators. The board has delegated responsibility for establishing and maintaining a framework of internal control, ethical standards and risk management to the Audit and Risk Management Committee.

CORPORATE GOVERNANCE STATEMENT

PRINCIPLE 4 - SAFEGUARD INTEGRITY IN FINANCIAL REPORTING (continued)

The Committee has also provided the board with additional assurance regarding the reliability of financial information for inclusion in the financial reports and the independence of the Company’s external auditors. All members of the Audit and Risk Management Committee are non-executive directors. A copy of the Audit and Risk Management Committee charter is available on the Company’s web site; this charter contains details of the procedure for the selection and appointment of the external auditor. Ernst and Young were appointed as the external auditors in 2008 and it is Ernst and Young policy to rotate audit engagement partners on listed companies at least every five years.

The members of the Audit and Risk Management Committee and meetings held during the year were:

Name		Meetings held	Meetings attended
Tim Kestell (Chairman)	Non-executive Director	1	1
Simon Andrew	Non-executive Director	1	1

Details of the qualifications and expertise of these directors is included in the Director’s Report. All members of the Audit and Risk Management Committee are financially literate and have an appropriate understanding of the mining and exploration industry.

The majority of the Audit and Risk Management Committee does not consist of independent directors however the board is of the view that the absence of independence of Audit and Risk Management Committee members is not inhibiting the effectiveness of the committee in the discharge of its functions and responsibilities.

The Audit and Risk Management Committee is chaired by Tim Kestell and although Mr Kestell is not an independent director, the board is of the opinion that he possesses the necessary skills and experience required to chair this committee.

The committee currently comprises only two members at this point in time and having regard to the size of the Group and the present composition of the Board, the Board is satisfied that the size of the committee is not detrimental to the discharge of its functions and responsibilities.

PRINCIPLES 5 AND 6 - MAKE TIMELY AND BALANCED DISCLOSURES AND RESPECT THE RIGHTS OF SHAREHOLDERS

The Company has policies and procedures and accountability for compliance on information disclosure that focus on continuous disclosure of any information concerning the Company and its controlled entities that a reasonable person would expect to have a material effect on the price of the Company’s securities. Such policies and procedures include mechanisms for ensuring relevant matters are communicated and that the information is released in a timely and balanced manner.

All stock exchange announcements including all financial reports are posted to the Company’s website as soon as possible.

Shareholders and interested investors are also encouraged to subscribe to the Company’s database, through which participants are made aware of news releases as soon as possible after such releases have been issued to the ASX. Hard copies of financial reports and news releases are made available on request.

Shareholders are encouraged to attend and participate in the annual general meetings of the Company. The external auditors attend the annual general meeting and are available to answer any shareholder questions about the conduct of the audit and the preparation and content of the audit report.

Policies on these principles are disclosed on the Company’s website.

CORPORATE GOVERNANCE STATEMENT

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PRINCIPLE 7 - RECOGNISE AND MANAGE RISK

The board determined the Company’s risk profile and is responsible for overseeing and approving risk management strategy and policies, internal compliance and internal control. The board has established an Audit and Risk Management Committee (refer to Principal 4) to aid it in the discharge of this responsibility. The Company’s process of risk management and internal compliance and control includes:

establishing the Company’s goals and objectives, and implementing and monitoring strategies and policies to achieve these goals and objectives;
continuously identifying and measuring risks that might impact upon the achievement of the Company’s goals and objective, and monitoring the environment for emerging factors and trends that affect these risks;
formulating risk management strategies to manage and identify risks and designing and implementing appropriate risk management policies and internal controls; and
monitoring the performance of and continuously improving the effectiveness of risk management systems and internal compliance and controls, including an annual assessment of the effectiveness of risk management and internal compliance and control.

To this end, comprehensive practices are in place that is directed towards achieving the following objectives:

effective and efficient use of Company resources;
compliance with all applicable laws and regulations; and
preparation of reliable published financial and geological information.

The Company has adopted a Risk Management policy, a copy of which is available on the Company’s website. The board (via the Audit and Risk Management Committee) oversees an annual assessment of the effectiveness of risk management and internal compliance and control. The responsibility for undertaking and assessing risk management and internal control effectiveness is delegated to management. Management is required by the Audit and Risk Management Committee to assess risk management and associated internal compliance and control procedures and report back on the efficiency and effectiveness of risk management.

The Audit and Risk Management Committee has received a report from management on the risk management and internal control systems of the Company, including an opinion as to whether the Company’s material business risks are being managed effectively.

The Chief Executive Officer and the Chief Financial Officer have provided a written statement to the board that:

their view provided on the Company’s financial report is founded on a sound system of risk management and internal compliance and control which implements the financial policies adopted by the board; and
that the Company’s risk management and internal compliance and control system is operating effectively in all material respects.

PRINCIPLE 8 - REMUNERATE FAIRLY AND RESPONSIBLY

It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality board and executive team and the remuneration of directors and key executives fairly and appropriately with reference to prevailing employment market conditions is a key component of attaining this objective.

The board is responsible for determining and reviewing compensation arrangements for the directors themselves, the Managing Director and Chief Executive Officer and the executive team.

The remuneration of non-executive directors consists of directors’ fees (fixed remuneration) and share purchase options (variable remuneration). Non-executive directors do not receive retirement benefits.

CORPORATE GOVERNANCE STATEMENT

PRINCIPLE 8 - REMUNERATE FAIRLY AND RESPONSIBLY (continued)

During 2012 director fees were maintained at the same level as the prior year. There was no award of share purchase options to Directors during the year. Directors were last issued share purchase options in 2009 when shareholders approved the award of 7,000,000 share purchase options with an exercise price of $0.50 expiring on 24 November, 2012. None of the options have been exercised.

At this time the board has not formed a remuneration committee as it is the view of the board that the functions and responsibilities that would normally be the dealt with by this committee can be adequately addressed by the full board as specific agenda items at scheduled board meetings. When deemed appropriate the board engages independent consultants to assist it in fulfilling such functions.

The Company does not have a scheme to provide retirement benefits to non-executive directors.

Further information on Directors’ and Executives’ remuneration is set out in the Remuneration Report contained within the Directors’ Report.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

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FOR THE YEAR ENDED 30 JUNE 2012

Notes REVENUE Management fee – exploration services Interest revenue TOTAL REVENUE OTHER INCOME Sundry TOTAL REVENUE AND OTHER INCOME EXPENSES Compliance and regulatory expenses Consulting and legal expenses Depreciation expense Employee benefits expense Exploration expenditure impairment Finance costs Insurance expense Loss on sale of assets Occupancy expense General and administration expenses TOTAL EXPENSES LOSS BEFORE INCOME TAX Income tax benefit 4 LOSS FOR THE YEAR OTHER COMPREHENSIVE INCOME TOTAL COMPREHENSIVE INCOME FOR YEAR Basic loss per share - cents per share 5 Diluted loss per share - cents per share 5	Consolidated 2012 2011 $ $ 89,863 237,190 590,691 691,270
	680,554 928,460 18,537 -
	699,091 928,460
	108,529 119,879 254,779 337,216 35,922 136,910 1,383,347 1,130,162 105,941 328,636 281 20,214 130,802 121,711 - 9,062 106,402 93,670 252,026 330,358
	2,378,029 2,627,818
	(1,678,938) (1,699,358) 28,543 12,556
	(1,650,395) (1,686,802) - -
	(1,650,395) (1,686,802)
	(0.67) (0.75) (0.67) (0.75)

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2012

Notes ASSETS Current Assets Cash and cash equivalents 6 Trade and other receivables 7 Other current assets Other financial assets 8 Total Current Assets Non-current Assets Property, plant and equipment 9 Exploration and evaluation assets 10 Total Non-current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables 11 Provisions 12 Interest bearing liabilities 13 Total Current Liabilities Non-current Liabilities Interest bearing liabilities 13 Total Non-current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 14 Other reserves 15 Accumulated losses 16 TOTAL EQUITY	Consolidated 2012 2011 $ $ 8,761,603 9,405,131 472,504 176,067 - 19,665 889,682 1,618,000
	10,123,789 11,218,863
	5,985,428 6,139,722 17,695,429 11,283,518
	23,680,857 17,423,240
	33,804,646 28,642,103
	989,809 1,213,941 161,342 177,235 834 3,102
	1,151,985 1,394,278
	- 830
	- 830
	1,151,985 1,395,108
	32,652,661 27,246,995
	40,111,622 33,151,621 2,757,150 2,661,090 (10,216,111) (8,565,716)
	32,652,661 27,246,995

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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FOR THE YEAR ENDED 30 JUNE 2012

YEAR ENDED 30 JUNE 2011: Balance at 1 July 2010 Loss for the year Other comprehensive income Total comprehensive income Share-based payments Balance at 30 June 2011 YEAR ENDED 30 JUNE 2012: Balance at 1 July 2011 Loss for the year Other comprehensive income Total comprehensive income Shares issued during the year Share issue costs Share-based payments Balance at 30 June 2012	Issued Other Accumulated Total Capital Reserves Losses Equity $ $ $ $ 33,151,621 2,552,131 (6,878,914) 28,824,838
	- - (1,686,802) (1,686,802) - - - -
	- - (1,686,802) (1,686,802)
	- 108,959 - 108,959
	33,151,621 2,661,090 (8,565,716) 27,246,995
	33,151,621 2,661,090 (8,565,716) 27,246,995
	- - (1,650,395) (1,650,395) - - - -
	- - (1,650,395) (1,650,395)
	7,466,799 - - 7,466,799 (506,798) - - (506,798) - 96,060 - 96,060
	40,111,622 2,757,150 (10,216,111) 32,652,661

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2012

CASH FLOWS FROM OPERATING ACTIVITIES Management fees received Payments to suppliers and employees Reimbursement of costs from Ivanhoe Interest received Interest paid Other NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from withdrawal of security deposits Proceeds from sales of equipment Payments for security deposits Purchase of property, plant and equipment Payments for exploration NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Payment of share issue costs Payment of finance lease liabilities NET CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES NET DECREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of period CASH AND CASH EQUIVALENTS AT END OF PERIOD	Consolidated 2012 2011 $ $ 80,927 292,883 (3,825,120) (7,515,610) 1,194,501 6,950,890 602,166 672,967 (281) (596) 18,537 -
	(1,929,270) 400,534
	728,318 - - 6,091 - (147,000) (39,519) (106,062) (6,359,961) (1,627,642)
	(5,671,162) (1,874,613)
	7,466,800 - (506,798) - (3,098) (2,783)
	6,956,904 (2,783)
	(643,528) (1,476,862) 9,405,131 10,881,993
	8,761,603 9,405,131

The accompanying notes form part of these financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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1. CORPORATE INFORMATION

The financial report of Emmerson Resources Limited (the Company) for the year ended 30 June 2012 was authorised for issue in accordance with a resolution of the directors on 25 September 2012.

Emmerson Resources Limited is a public company incorporated in Australia and listed on the Australian Securities Exchange.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report has been prepared on a historical cost basis. Cost is based on the fair values of the consideration given in exchange for assets. The financial report is presented in Australian dollars which is the Company’s functional currency.

(b) Compliance with IFRS

The financial report complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

(c) Use of judgements, estimates and assumptions

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

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

Judgments made by management in the application of accounting policies that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the financial statements.

Management has identified the following critical accounting policies for which significant judgements, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods.

Further details of the nature of these assumptions and conditions may be found in the relevant notes to the financial statements.

Impairment of capitalised exploration and evaluation expenditure

The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related leases itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, which could impact the cost of mining, future legal changes (including changes to environmental restoration obligation) and changes to commodity prices. The extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future profits and net assets will be reduced in the period in which this determination is made.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(c) Use of judgements, estimates and assumptions (continued)

In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be written off, profits and net assets will be redirect in the period in which this determinations is made. An impairment loss of $105,941 (2011: $328,636) was recognised in the current year in respect of exploration expenditure. The impairment loss is directly attributable to mining tenements for which the Group no longer holds title and mining tenements where title is still held at but where an assessment was made that no future exploration is planned or budgeted due to a lack of exploration potential.

Impairment of property, plant and equipment

Property, plant and equipment are reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Where a review for impairment is conducted, the recoverable amount is assessed by reference to the higher of “value in use” (being the net present value of expected future cash flows of the relevant cash generating unit) and “fair value less cost to sell”.

In determining value in use, future cash flows are based on:

estimates of the quantities of ore reserves and mineral resources for which there is a high degree of confidence of economic extraction;
future production levels;
future commodity prices; and
future cash costs of production and capital expenditure.

Variations to the expected future cash flows, and the timing thereof, could result in significant changes to any impairment losses recognised, if any, which could in turn impact future financial results.

Share Based Payments

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes model, with the assumptions detailed in the relevant notes to the financial statements. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.

(d) Going Concern

The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business. The loss of the Company for the year ended 30 June 2012 amounted to $1,650,395 and net cash outflows from operating activities was $1,929,270. The cash balance at 30 June 2012 was $8,761,603 and net assets as at 30 June 2012 were $32,652,661.

In considering whether the going concern basis is appropriate for preparing this financial report, the directors recognise that current levels of working capital may be insufficient to meet its planned and proposed levels of expenditure in future years. However, the directors of the Company are confident that the necessary funds will be raised as required and have concluded that the going concern basis is the appropriate basis for preparing the financial statements based on the following key considerations:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Going Concern (continued)

Expenditure can be reduced to minimum exploration expenditure commitments if necessary;
The directors believe they will be able to access capital markets for further funds if necessary;
The directors expect that major shareholders of the Company will support fund raising;
The Company will pursue, where appropriate, potential farm out of the Company’s exploration assets; and
The company will seek, where appropriate, to obtain exemptions on exploration and mining.

(e) Adoption of new and revised accounting standards

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current annual reporting period. The adoption of these new and revised Standards and Interpretations has not resulted in a significant or material change to the Group’s accounting policies and did not have a material effect on the financial statements.

The following standards that have been issued but not yet effective which may impact the Group in the period of initial application have not been early adopted in preparing this financial report. These changes in standards are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

AASB 9 Financial Instruments replaces the requirements of AASB 139 for the classification, measurement and derecognition of financial assets and financial liabilities (applicable from 1 January 2013 but likely to be extended to 2015).

AASB 10 Consolidated Financial Statements replaces the requirements of AASB 127 and Interpretation 112 pertaining to the principles to be applied in the preparation and presentation of consolidated financial statements and introduces a new definition of control, however as all of Emmerson’s subsidiaries are 100% owned, the change in definition is not expected to have material impact (applicable from 1 January 2013).

AASB 11 Joint Arrangements replaces the requirements of AASB 131 pertaining to the principles to be applied for financial reporting by entities that have in interest in arrangements that are jointly controlled introducing a principles based approach to accounting for joint arrangements (applicable from 1 January 2013).

AASB 12 Disclosure of Interests in Other Entities replaces the disclosure requirements of AASB 127 and AASB 131 pertaining to interests in other entities (applicable from 1 January 2013).

AASB 13 Fair Value Measurement provides a clear definition of fair value, a framework for measuring fair value and requires enhanced disclosures about fair value measurement (applicable from 1 January 2013).

AASB 119 Employee Benefits prescribes the accounting and disclosure for employee benefits. This Standard prescribes the recognition criteria when in exchange for employee benefits (applicable from 1 January 2013).

AASB 127 Separate Financial Statements prescribes the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements (applicable from 1 January 2013).

AASB 128 Investments in Associates and Joint Ventures prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures (applicable from 1 January 2013).

IFRIC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine. This Interpretation clarifies the requirements for accounting for stripping costs in the production phase of a surface mine, such as when such costs can be recognised as an asset and how that asset should be measured, both initially and subsequently (applicable from 1 January 2013).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(f) Basis of consolidation

The consolidated financial statements comprise the financial statements of Emmerson Resources Limited and its subsidiaries (“the Group”). The financial statements of subsidiaries are prepared for the same reporting period as the parent Company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which the parent Company has control. On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Subsequent to initial recognition, investments in subsidiaries are measured at cost less any impairment provision on the Company’s accounts.

(g) Operating segments

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segments and assess its performance and for which discrete financial information is available. This includes startup operations which are yet to earn revenues. Management will also consider other factors in determining operating segments such as the existence of a line manager and the level of segment information presented to the board of directors.

Operating segments have been identified based on the information provided to the chief operating decision makers – being the executive management team.

(h) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and shortterm deposits with an original maturity of 3 months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Bank overdrafts are included with interest-bearing loans and borrowings in current liabilities on the statement of financial position.

(i) Receivables

Current receivables, which generally have 30-60 day terms, are recognised initially at fair value, with an allowance made for impairment as deemed appropriate.

Collectability of all receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified. An impairment provision is recognised when there is objective evidence that the Group will not be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 60 days overdue are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rate.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(j) Property, plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairments losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised in profit or loss as incurred.

Land and buildings are stated at historical cost less accumulated depreciation on buildings and any accumulated impairments losses.

Depreciation is calculated on a diminishing value basis to write off the net cost of each item of property, plant and equipment, including leased equipment, over its estimated useful life as follows:

Land Not depreciated Buildings 20 years Plant, equipment, furniture, vehicles and software 3 - 15 years Mill and processing plant Life of mine

The assets’ residual values and useful lives are reviewed for impairment and adjusted if appropriate, at each reporting date.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of comprehensive income.

(k) Leases

Finance leases where the Group as lessee has substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the income statement.

Leased assets are depreciated over the asset’s useful life or the shorter of the asset’s useful life and the lease term if there is no certainty that the group will obtain ownership at the end of the lease term.

Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term.

(l) Exploration and evaluation expenditure

Exploration and evaluation expenditure incurred in respect of each identifiable area of interest is capitalised and recognised as an exploration and evaluation asset. These costs are only carried forward as an exploration and evaluation asset to the extent that the Group’s rights of tenure to that area of interest are current and that the costs are expected to be recouped through sale or the successful development and exploitation 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.

Development costs related to an area of interest are carried forward to the extent that they are expected to be recouped either through sale or successful exploitation of the area of interest.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(l) Exploration and evaluation expenditure (continued)

When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in respect of that area are written off in the financial period the decision is made. Each area of interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences.

(m) Impairment of assets

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

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(n) Trade and other payables

Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial period that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Group. The amounts are unsecured and are usually paid within 30 days of recognition.

(o) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision resulting from the passage of time is recognised in finance costs.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(p) 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 are measured at the present value of the estimated future cash outflows to be made for those benefits.

(q) Share-based payment transactions

The Group provides benefits to its employees (including Key Management Personnel) in the form of share based payments, whereby, at the discretion of the Board, employees are from time to time issued with share purchase options as part of their total remuneration package and/or render services in exchange for rights over shares. There are currently two plans in place to provide these benefits:

Incentive Option Scheme (IOS), which provides benefits to directors, senior executives and employees; and
Performance Rights Plan (PRP), which provides benefits to senior executives and employees.

The cost of these share-based payments is measured by reference to the fair value of the equity instruments at the date at which they are granted using a Black-Scholes pricing model. The equity instruments are generally subject to performance and/or service vesting conditions and their fair value is recognised as an expense, together with a corresponding increase in other reserve equity over the vesting period, ending on the date on which the relevant employees become fully entitled to the award (the vesting date).

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

(r) Issued capital

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

(s) Revenue recognition

Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

(i) Rendering of exploration services

Revenue from services rendered for management of exploration pursuant to the Tennant Creek Mineral Field Exploration Joint Venture is recognised in the statement of comprehensive income by reference to the works completed at the reporting date and the corresponding management fee payable to the Group for the completed services.

(ii) Interest revenue

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(t) Comparatives

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

(u) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income or loss adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

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.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities settled, based on those tax rates which are enacted. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences arising from the initial recognition of an asset or liability.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable profits will be available to utilise those temporary differences and losses.

Tax consolidation legislation

Emmerson Resources Limited and its wholly-owned subsidiaries have formed an income tax consolidated group under tax consolidation legislation.

(v) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the GST incurred is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

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

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

(w) Earnings per share

Basic earnings per share are calculated by dividing the profit or loss attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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3. SEGMENT INFORMATION

The Company has identified its operating segments based on the internal management reports that are reviewed and used by the board of directors (chief operating decision maker) in assessing performance and determining the allocation of resources.

The Company operates in one business segment and one geographical segment, namely mineral exploration in Australia. The revenues and results of this segment are those of the Company as a whole and are set out in the statement of comprehensive income.

4. INCOME TAX a) Reconciliation of income tax to loss before income tax Loss before income tax Tax benefit calculated at 30% on loss before tax Add/(less) tax effect of: Share-based payments not deductible Share issue costs deductible Research & development tax offset Other Tax losses and temporary differences not recognised Income tax revenue b) Unrecognised tax assets and liabilities Deferred tax assets Unused tax losses Deductible temporary differences: Accrued expenses Provision for employee entitlements Provision for rehabilitation Deferred tax liabilities Assessable temporary differences: Interest income receivable Exploration and evaluation assets capitalised Net unrecognised tax balances	Consolidated 2012 2011 $ $ (1,678,938) (1,699,358)
	(503,681) (509,807) 28,818 32,688 (111,233) (93,684) (28,543) (12,556) 1,896 - 584,200 570,803
	(28,543) (12,556)
	7,315,001 4,686,894 22,775 17,695 36,527 40,733 11,876 12,437
	7,386,179 4,757,759
	(21,478) (24,920) (4,765,252) (2,698,602)
	(4,786,730) (2,723,522)
	2,599,449 2,034,237

The net deferred tax assets and deferred tax liabilities are not recognised since it is not probable that future taxable profits will be available to utilise deductible temporary differences and losses.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

		Consolidated
	2012	2011
	$	$
5. LOSS PER SHARE
Loss for the year	(1,650,395)	(1,686,802)
Loss used in calculating basic and diluted loss per share	(1,650,395)	(1,686,802)
	Number of shares	Number of shares
Weighted average number of ordinary shares used in
calculating basic and diluted loss per share	245,282,751	226,295,213
As the company has incurred a loss, the diluted loss per
share is disclosed as the same as basic loss per share.
	$	$
6. CASH AND CASH EQUIVALENTS
Cash at bank and in hand	106,975	86,901
Bank deposits at call	654,628	13,058
Bank short term deposits	8,000,000	9,305,172
	8,761,603	9,405,131
7. TRADE AND OTHER RECEIVABLES
Trade receivables	347,094	81,481
Interest receivable	71,592	83,068
Income tax refundable	28,543	-
Other receivables and prepayments	25,275	11,518
	472,504	176,067

Trade and other receivables are non-interest bearing and normally received within 30 days. Due to the short term nature of these receivables, their carrying amount is a reasonable approximation of fair value.

8. OTHER FINANCIAL ASSETS

Bank term deposits 889,682 1,618,000

These bank term deposits are held as security for bank guarantee performance bonds in favour of the Northern Territory government for potential environmental rehabilitation obligations in relation to exploration activities. As such the term deposits are not accessible to the Company.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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9. PROPERTY, PLANT AND EQUIPMENT Land and buildings Gross carrying amount at beginning of year Disposals Gross carrying amount at end of year Accumulated depreciation at beginning of year Depreciation expense Disposals Accumulated depreciation at end of year Carrying amount at beginning of year Carrying amount at end of year Motor vehicles Gross carrying amount at beginning of year Additions Disposals Gross carrying amount at end of year Accumulated depreciation at beginning of year Depreciation expense Disposals Accumulated depreciation at end of year Carrying amount at beginning of year Carrying amount at end of year	Consolidated 2012 2011 $ $ 146,215 147,668 - (1,453)
	146,215 146,215
	14,603 4,649 9,906 10,899 - (945)
	24,509 14,603
	131,612 143,019
	121,706 131,612
	370,283 404,620 1,824 3,663 - (38,000)
	372,107 370,283
	293,560 269,689 29,824 48,079 - (24,208)
	323,384 293,560
	76,723 134,931
	48,723 76,723

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. PROPERTY, PLANT AND EQUIPMENT (continued) Computer software & hardware Gross carrying amount at beginning of year Additions Transfer from construction in progress Disposals Gross carrying amount at end of year Accumulated depreciation at beginning of year Depreciation expense Disposals Accumulated depreciation at end of year Carrying amount at beginning of year Carrying amount at end of year Plant and equipment (a) Gross carrying amount at beginning of year Additions Disposals Gross carrying amount at end of year Accumulated depreciation at beginning of year Depreciation expense Disposals Accumulated depreciation at end of year Carrying amount at beginning of year Carrying amount at end of year	Consolidated 2012 2011 $ $ 432,112 378,075 34,107 49,489 4,263 6,634 - (2,086)
	470,482 432,112
	269,232 182,939 84,699 88,038 - (1,745)
	353,931 269,232
	162,880 195,136
	116,551 162,880
	6,158,325 6,150,212 1,529 10,277 - (2,164)
	6,159,854 6,158,325
	422,429 341,937 59,167 82,145 (1,653)
	481,596 422,429
	5,735,896 5,808,275
	5,678,258 5,735,896

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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9. PROPERTY, PLANT AND EQUIPMENT (continued) Office equipment, furniture & fittings (b) Gross carrying amount at beginning of year Additions Gross carrying amount at end of year Accumulated depreciation at beginning of year Depreciation expense Accumulated depreciation at end of year Carrying amount at beginning of year Carrying amount at end of year Construction in progress Gross carrying amount at beginning of year Additions Transfer to computer software & hardware Gross carrying amount at end of year Accumulated depreciation at beginning of year Accumulated depreciation at end of year Carrying amount at beginning of year Carrying amount at end of year	Consolidated 2012 2011 $ $ 101,658 90,012 2,059 11,646
	103,717 101,658
	73,310 59,209 10,217 14,101
	83,527 73,310
	28,348 30,803
	20,190 28,348
	4,263 6,634 - 4,263 (4,263) (6,634)
	- 4,263
	- -
	- -
	4,263 6,634
	- 4,263

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. PROPERTY, PLANT AND EQUIPMENT (continued) Total property plant and equipment Gross carrying amount at beginning of year Additions Disposals Gross carrying amount at end of year Accumulated depreciation at beginning of year Depreciation expense Disposals Accumulated depreciation at end of year Carrying amount at beginning of year Carrying amount at end of year	Consolidated 2012 2011 $ $ 7,212,856 7,177,221 39,519 79,338 - (43,703)
	7,252,375 7,212,856
	1,073,134 858,423 193,813 243,262 - (28,551)
	1,266,947 1,073,134
	6,139,722 6,318,798
	5,985,428 6,139,722

a) Plant and equipment includes the Warrego mill and processing plant with a carrying value of $5,500,000 (2011: $5,500,000) that is not being depreciated and depreciation will commence on recommencement of use.

b) Office equipment includes a photocopier with a carrying value of $1,066 (2011: $1,776) pledged as security under a finance lease for the associated finance lease liability.

10. EXPLORATION AND EVALUATION ASSETS

Costs carried forward in respect of areas of interest in pre-production exploration and evaluation phases

Carrying amount at beginning of period Additions Impairment Carrying amount at end of period	11,283,518 9,767,380 6,517,852 1,844,774 (105,941) (328,636)
	17,695,429 11,283,518

The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the continuance of the Group’s rights to tenure of the interest, the results of future exploration, and the successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

Expenditure on mineral exploration tenements (other than the Group’s sole funded tenements) is being incurred by Ivanhoe Australia Limited pursuant to the Farm-In and Exploration Joint Venture agreement to meet minimum tenement expenditure requirements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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			Consolidated
		2012	2011
		$	$
11. TRADE AND OTHER PAYABLES
Trade payables		281,018	648,055
Non-trade payables and accrued expenses		708,791	565,886
		989,809	1,213,941
Trade and other payables are non-interest bearing and are normally settled on 30 day terms. Due to the short
term nature of these payables, their carrying amount is a reasonable approximation of fair value.
12. PROVISIONS
Employee benefits provision for annual leave		121,756	135,779
Exploration rehabilitation provision	(a)	39,586	41,456
		161,342	177,235

a) The Group has recognised a provision for the expected rehabilitation of sites subject to exploration during the reporting period and it is anticipated that most of the costs for this rehabilitation will be incurred in the next financial year.

13. INTEREST BEARING LIABLITIES

Current:

Finance lease liability Non-current: Finance lease liability	834 3,102
	- 830

The finance lease liability is in respect of the lease of a photocopier payable by monthly instalments over a 5 year term expiring September 2012. The finance lease liability is secured by a charge over the photocopier. The original amount financed was $11,800 exclusive of GST and total credit charges payable under the lease are $3,914.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. ISSUED CAPITAL (a) Fully paid ordinary shares Balance at beginning of year: 226,295,213 (2011: 226,295,213) shares 350,000 (2011: nil) shares issued to employees under performance rights plan 33,940,000 (2011: nil) shares issued for cash under a share placement Share issue costs Balance at end of year: 260,585,213 (2011: 226,295,213) shares	Consolidated 2012 2011 $ $ 33,151,621 33,151,621 - - 7,466,800 - (506,799) -
	40,111,622 33,151,621

The Company does not have authorised capital or par value in respect of its issued shares.

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.

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

(b) Options over ordinary shares

(b) Options over ordinary shares
Unissued ordinary shares for which options are outstanding: Exercise price of $0.25 expiring 31/07/2012 Exercise price of $0.50 expiring 24/11/2012 Exercise price of $0.25 expiring 13/12/2012 Exercise price of $0.30 expiring 13/12/2012 Exercise price of $0.25 expiring 11/03/2013 Exercise price of $0.25 expiring 5 years after 1.5 x 20 day post listing VWAP	Consolidated 2012 2011 Number of Number of options options 500,000 5,500,000 7,000,000 7,000,000 5,000,000 5,000,000 5,000,000 5,000,000 500,000 500,000 - 1,000,000
	18,000,000 24,000,000

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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14. ISSUED CAPITAL (continued)

(c) Rights over ordinary shares

(c) Rights over ordinary shares
		Consolidated
	2012	2011
	Number of	Number of
	rights	rights
Unissued ordinary shares for which employee
performance rights are outstanding:
Exercise price of nil vesting on 25/11/11	-	350,000
Exercise price of nil vesting on 25/11/12	150,000	175,000
Exercise price of nil vesting on 25/11/13	462,500	175,000
Exercise price of nil vesting on 01/09/12	325,000	425,000
Exercise price of nil vesting on 01/09/13	162,500	212,500
Exercise price of nil vesting on 01/09/14	162,500	212,500
Exercise price of nil vesting on 25/11/14	156,250	-
Exercise price of nil vesting on 25/11/15	156,250	-
	1,575,000	1,550,000
		Consolidated
	2012	2011
	$	$
15. OTHER RESERVES
Share based payments reserve
Balance at beginning of year	2,661,090	2,552,131
Recognition of share-based payment expense	96,060	108,959
Balance at end of year	2,757,150	2,661,090
The share based payments reserve is used to recognise the fair value of options and rights provided to employees
as part of their remuneration.
16. ACCUMULATED LOSSES
Balance at beginning of year	(8,565,716)	(6,878,914)
Loss for year	(1,650,395)	(1,686,802)
Balance at end of year	(10,216,111)	(8,565,716)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. NOTES TO THE STATEMENT OF CASH FLOWS (a) Reconciliation of net loss to cash flows used in operating activities Net loss Add non-cash items: Depreciation expense Exploration expenditure impairment Share-based payment Change in assets and liabilities: (Increase)/decrease in trade and other receivables Decrease in other current assets Decrease in trade and other payables Increase/(decrease) in provisions Net cash flows from/(used) in operating activities (b) Reconciliation of cash Cash balance comprises: Cash and cash equivalents (c) Financing facilities available At reporting date, the following credit card facility had been negotiated and was available: Total facility Facility used at reporting date Facility unused at reporting date	Consolidated 2012 2011 $ $ (1,650,395) (1,686,802) 35,922 136,910 105,941 328,636 96,060 108,959 (296,438) 1,552,130 19,665 4,071 (224,132) (85,691) (15,893) 42,321
	(1,929,270) 400,534
	8,761,603 9,405,131
	50,000 50,000 18,685 -
	31,315 50,000

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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18. EXPENDITURE COMMITMENTS

a) Operating lease commitments

The Company leases office premises at Kimberley Street, West Leederville under an operating lease for a term of 3 years commencing 1 April 2012 and expiring 31 March 2015. The annual rent payable is $95,856 and will be reviewed for CPI increases on 1 April 2013 and 1 April 2014.

During the financial year ended 30 June 2012, $100,958 was recognised as an expense in the income statement in respect of operating leases (2011: $89,148).

Non-cancellable operating lease rentals not provided for in the financial report are payable as follows:

Not later than one year Later than one year and not later than five years	Consolidated 2012 2011 $ $ 95,856 84,407 167,748 -
	263,604 84,407

b) Finance lease commitments

The Company has a finance lease for a photocopier payable by monthly instalments of $282 over a 5 year term expiring 27 September 2012. Future minimum lease payments and present value of the lease payments are as follows:

Not later than one year Later than one year and not later than five years Total minimum lease payments Less amounts representing finance charges Present value of minimum lease payments	845 3,378 - 845
	845 4,223 (15) (292)
	830 3,931

c) Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Company and the Group are required to perform minimum exploration work to meet the minimum expenditure covenants specified by the Northern Territory Government. These obligations can be reduced by selective relinquishment of exploration tenure or renegotiation. Due to the nature of the Company’s operations in exploring and evaluating areas of interest, exploration expenditure commitments beyond twelve months cannot be reliably determined. It is anticipated that expenditure commitments in subsequent years will be similar to that for the forthcoming twelve months. These obligations are not provided for in the financial report and are payable:

Not later than one year

1,517,750 1,770,318

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18. EXPENDITURE COMMITMENTS (continued)

18. EXPENDITURE COMMITMENTS (continued)
		Consolidated
	2012	2011
	$	$
d) Remuneration commitments
Commitments for the payment of salaries and other remuneration
under long-term employment contracts in existence at the reporting
date but not recognized as liabilities, payable:
Not later than one year	543,992	431,358

Amounts disclosed as remuneration commitments include commitments arising from the service contracts of directors and executives referred to in the remuneration report of the directors’ report that are not recognised as liabilities and are not included in the compensation of KMP.

19. REHABILITATION COMMITMENTS

Santexco Pty Ltd (Santexco) a wholly owned subsidiary of the Company entered into a Rehabilitation Agreement dated 6 November 2001 with the Northern Territory (NT) Government, whereby Santexco is obliged to perform rehabilitation obligations to the value of $ 750,000 pa. for 6 years totalling obligation of $4,500,000 on various mineral tenements, or pay the difference between the actual rehabilitation performed per year on the tenements and $750,000 into a deposit account held by the NT Government each of the 6 anniversary dates of the agreement. To date Santexo has performed actual rehabilitation obligations of $333,041 and lodged a bank guarantee to the value of $416,959 with the NT Government. There are 5 anniversary dates for the agreement outstanding.

The Group is party to a binding agreement with the NT Government (Department of Primary Industry, Fisheries and Mines) dated 31 July 2006 whereby the NT Government has agreed that the rehabilitation obligations described in the Rehabilitation Agreement are suspended (on “standstill”) until 45 days of cumulative commercial production from the Group’s tenements.

20. FARM-IN AND JOINT VENTURE AGREEMENT

The Company entered into the Tennant Creek Mineral Field Joint Venture Agreement (Agreement) dated 24 August, 2009 with Ivanhoe Australia Limited (Ivanhoe) for an exploration Farm-In and Joint Venture covering the majority of the Company’s extensive tenement holdings in the Tennant Creek Mineral Field.

The Agreement provides for the Company to be appointed as operator and to manage and perform the exploration on behalf of Ivanhoe during the Farm-In period, which is sole funded by Ivanhoe. Key terms contained in the Agreement include:

Farm-In period whereby Ivanhoe sole fund a minimum expenditure of $18,000,000 over three years to earn a 51% interest in the majority of the Group’s tenements. The Company has been performing the exploration on behalf of Ivanhoe during the Farm-In period, with Ivanhoe paying all costs and an administration fee where applicable;
Payment of a 10% management fee by Ivanhoe to the Company for the management of exploration during the Farm-In;
Ivanhoe must sole fund the initial $10,000,000 of Joint Venture expenditure upon completion of the Farm-In, this expenditure to be completed over a maximum 5 year period for Ivanhoe to retain their 51% Joint Venture Interest;

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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20. FARM-IN AND JOINT VENTURE AGREEMENT (continued)

Ownership of the Warrego gold plant remains with the Company;
Tier 2 Projects (i.e. those with less than a 250,000 gold equivalent ounce resource) will be retained by the Company; and
A 70% interest in individual projects may be earned by Ivanhoe if they sole fund expenditure to define a minimum 1,000,000 gold equivalent ounce resource hurdle.

Ivanhoe is a shareholder of the Company holding 22,610,000 shares (8.68% of total issued shares).

As at 30 June 2012 Emmerson has invoiced Ivanhoe a total $17,990,000 since commencement of the Agreement for exploration costs incurred on their behalf towards meeting the $18,000,000 Earn In Obligation.

Emmerson is currently in the process of confirming that Ivanhoe has completed their Earn In Obligation of $18,000,000.

On completion of the Earn In obligation:

a Joint Venture will be formed with Ivanhoe holding a 51% share and Emmerson 49%;
Emmerson will transfer 51% of Tenements to Ivanhoe;
Ivanhoe must enter into deeds of assignment and assumption to assume its 51% share of:
a) royalty obligations in connection with the Tenements;
a) the Rehabilitation Agreement and Standstill Deed, provided that Emmerson will be responsible for all rehabilitation liabilities in relation to the Warrego Tenements, all other rehabilitation liabilities will be to the account of the Joint Venture; and
a) any Land Use Agreements in relation to the Tenements.
a Management Committee is to be established with each Joint Venturer to appoint two representatives;
a Management Committee shall determine either Ivanhoe or Emmerson to be the Manager;
an Exploration Programme and Budget is to be prepared and approved;
Ivanhoe will have a Joint Venture sole funding obligation of $10 million within 5 years at not less than $2 million each year;

In addition Emmerson is currently in the process seeking clarity in respect of Ivanhoe’s intention to fund the further $10 million over the next five years required to retain their 51% interest.

21. SHARE-BASED PAYMENTS

a) Incentive Option Scheme

The Group has established an Incentive Option Scheme to provide benefits to directors, executives, employees and key consultants in the form of share-based payment transactions, whereby options to acquire ordinary shares are issued as an incentive to improve employee and shareholder goal congruence and provide a retention incentive for participants.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

21. SHARE-BASED PAYMENTS (continued)

a) Incentive Option Scheme (continued)

The following Incentive Option Scheme arrangements were in existence during the year:

Granted Exercise Vesting Expiry price date date 01/08/07 $0.25 01/08/10 31/07/12 01/08/07 $0.25 31/10/07 $0.25 13/12/10 13/12/12 31/10/07 $0.30 13/06/10 13/12/12 11/03/08 $0.25 11/03/11 11/03/13 25/11/09 $0.50 25/11/09 24/11/12 Lapsed unexercised during the year Outstanding at end of year	Consolidated 2012 2011 $ $ Number of Number of options options 5,500,000 5,500,000 1,000,000 1,000,000 5,000,000 5,000,000 5,000,000 5,000,000 500,000 500,000 7,000,000 7,000,000 (6,000,000) -
	18,000,000 24,000,000

Exercise price of $0.25 vesting 5 years after 1.5 x 20 day post listing VWAP and expiring 3 years after vesting date

The number and weighted average exercise prices of options granted as share based payments are as follows:

Outstanding at beginning of year Forfeited during the year Outstanding at end of year Exercisable and vested at end of the year	2012 2011 Number Weighted of options average exercise price 24,000,000 $0.333 (6,000,000) $0.250 18,000,000 $0.361 18,000,000 $0.361

No share-based payment options were exercised in the current financial year or the previous year.

The range of exercise prices for options outstanding at the end of the year was $0.25 to $0.50 (2011: $0.25 to $0.50) and a weighted average remaining contractual life of 0.43 years (2011: 1.40 years).

No options were granted during the current financial year or the previous year.

The fair value of the options is recognised as an expense over the period from grant to vesting date. The amount recognised as part of employee benefits expense during the year was nil (2011: $9,961).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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21. SHARE-BASED PAYMENTS (continued)

b) Performance Rights Plan

The Group has established a Performance Rights Plan approved by shareholders at the 2009 annual general meeting to provide benefits to directors, executives, employees and key consultants in the form of share-based payment transactions, whereby rights to acquire ordinary shares are issued as an incentive to improve employee and shareholder goal congruence and provide a retention incentive for participants. All currently issued rights vest 50% after 2 years, 25% after 3 years with the balance after 4 years. Generally no cash consideration is required to be paid to exercise rights and the rights are generally forfeited if vesting conditions have not been satisfied.

The following Performance Rights Plan arrangements were in existence during the year:

Granted 25/11/09 vesting on 25/11/11 Granted 25/11/09 vesting on 25/11/12 Granted 25/11/09 vesting on 25/11/13 Granted 01/09/10 vesting on 01/09/12 Granted 01/09/10 vesting on 01/09/13 Granted 01/09/10 vesting on 01/09/14 Granted 25/11/11 vesting on 25/11/13 Granted 25/11/11 vesting on 25/11/14 Granted 25/11/11 vesting on 25/11/15 Vested and exercised during the year Forfeited during the year Outstanding at end of year	Consolidated 2012 2011 Number of Number of rights rights 350,000 437,500 175,000 218,750 175,000 218,750 425,000 512,500 212,500 256,250 212,500 256,250 437,500 - 218,750 - 218,750 - (350,000) - (500,000) (350,000)
	1,575,000 1,550,000

Granted 25/11/09 vesting on 25/11/11
Granted 25/11/09 vesting on 25/11/12
Granted 25/11/09 vesting on 25/11/13
Granted 01/09/10 vesting on 01/09/12
Granted 01/09/10 vesting on 01/09/13
Granted 01/09/10 vesting on 01/09/14
Granted 25/11/11 vesting on 25/11/13
Granted 25/11/11 vesting on 25/11/14
Granted 25/11/11 vesting on 25/11/15
Vested and exercised during the year
Forfeited during the year
Outstanding at end of year

Consolidated
2012
2011
Number of
Number of
rights
rights
350,000
437,500
175,000
218,750
175,000
218,750
425,000
512,500
212,500
256,250
212,500
256,250
437,500
-
218,750
-
218,750
-
(350,000)
-
(500,000)
(350,000)

1,575,000
1,550,000

The number and weighted average exercise prices of rights granted as share based payments are as follows:

Outstanding at beginning of year Issued during the year Vested and exercised during the year Forfeited during the year Outstanding at end of year Exercisable and vested at end of the year	2012 2011 Number Weighted of options average exercise price 1,550,000 - 875,000 - (350,000) - (500,000) - 1,575,000 - - -

The weighted average share price at the date of exercise of rights exercised during the year was $0.245. No share-based payment rights were exercised in the previous financial year.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

21. SHARE-BASED PAYMENTS (continued)

b) Performance Rights Plan (continued)

All rights outstanding at the end of the year have an exercise price of nil (2011: nil) and a weighted average remaining contractual life of 3.51 years (2011: 3.82 years).

The weighted average fair value of $0.245 (2011: $0.14) for rights granted during the year was calculated using a Black and Scholes pricing model inputting a weighted average share price of $0.245 ($0.14), a weighted average exercise price of nil (2011: nil), a weighted average risk free interest rate of 4.5% (2011: 4.25%), a weighted average contractual life of 5 years (2011: 5 years), a volatility factor of 85% (2011: 85%) based on historical volatility and expected changes to future volatility. No other features such as a market condition were incorporated into the measurement of fair value.

The fair value of the rights is recognised as an expense over the period from grant to vesting date. The amount recognised as part of employee benefits expense during the year was $96,060 (2011: $98,998).

					Consolidated	Consolidated
				2012		2011
				$		$
22. KEY MANAGEMENT PERSONNEL DISCLOSURES
a) Compensation for key management personnel
Short-term employee benefits				1,404,855		1,055,303
Post-employment benefits				167,703		165,050
Share-based payments				52,776		54,691
Total compensation				1,625,334		1,275,044
b) Option holdings of key management personnel
	Held at	Exercise	Lapsed	Held at		Vested
	1 July	of options		30	June	and exercis-
						able at
						30 June
2012
Directors:
Andrew McIlwain	2,500,000	-	-	2,500,000		2,500,000
Robert Bills	10,000,000	-	-	10,000,000		10,000,000
Tim Kestell	1,500,000	-	-	1,500,000		1,500,000
Simon Andrew	1,500,000	-	-	1,500,000		1,500,000
Peter Reeve (resigned 8/06/12)	1,500,000	-	-	1,500,000		1,500,000
Executives:
Shane Volk (resigned 2/12/11)	6,000,000	-	(6,000,000)		-	-
Steve Russell	500,000	-	-	500,000		500,000
Total	23,500,000	-	(6,000,000)	17,500,000		17,500,000

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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22. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)	22. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)	22. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)
b) Option holdings of	key management personnel (continued)
	Held at	Exercise	Lapsed	Held at	Vested
	1 July	of options		30 June	and exercis-
					able at
					30 June
2011
Directors:
Andrew McIlwain	5,500,000	-	(3,000,000)	2,500,000	2,500,000
Robert Bills	10,000,000	-	-	10,000,000	10,000,000
Tim Kestell	1,500,000	-	-	1,500,000	1,500,000
Simon Andrew	1,500,000	-	-	1,500,000	1,500,000
Peter Reeve	1,500,000	-	-	1,500,000	1,500,000
Executives:
Shane Volk	6,000,000	-	-	6,000,000	5,000,000
Steve Russell	500,000	-	-	500,000	500,000
Total	26,500,000	-	(3,000,000)	23,500,000	22,500,000
c) Rights holdings of key management personnel
	Held at	Granted as	Exercise	Held at	Vested and
	1 July	compens-	of rights	30 June	exercis-
		ation			able at
					30 June
2012
Executives
Steve Russell	300,000	150,000	(75,000)	375,000	-
Grant Osborne	300,000	150,000	(75,000)	375,000	-
Total	600,000	300,000	(150,000)	750,000	-
2011
Executives:
Steve Russell	150,000	150,000	-	300,000	-
Grant Osborne	150,000	150,000	-	300,000	-
Total	300,000	300,000	-	600,000	-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

d) Shareholdings of key management personnel

2012 Directors: Andrew McIlwain Robert Bills Tim Kestell Simon Andrew Peter Reeve (resigned 20/06/12) Executives: Shane Volk (resigned 2/12/11) Steve Russell Grant Osborne Total 2011 Directors: Andrew McIlwain Robert Bills Tim Kestell Simon Andrew Peter Reeve Executives: Shane Volk Steve Russell Grant Osborne Total	Held at Granted as Exercise Net Held at 1 July 2011 compens- of rights Purchases 30 June ation (sales) 2012 840,668 - - 227,273 1,067,941 2,301,600 - - - 2,301,600 8,536,030 - - 4,068,183 12,604,213 6,136,029 - - (954,545) 5,181,484 209,950 - - - 209,950 631,250 - - (50,000) 581,250 12,500 - 75,000 87,500 100,000 - 75,000 175,000
	18,768,027 - 150,000 3,290,911 22,208,938
	Held at Granted as Exercise Net Held at 1 July 2010 compens- of rights Purchases 30 June ation (sales) 2011 840,668 - - - 840,668 2,301,600 - - - 2,301,600 8,536,030 - - - 8,536,030 6,136,029 - - - 6,136,029 209,950 - - - 209,950 631,250 - - - 631,250 12,500 - - - 12,500 100,000 - - - 100,000
	18,768,027 - - - 18,768,027

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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22. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

e) Other transactions with key management personnel

Andrew McIlwain services as a director of the Company were provided by Andrew McIlwain and Associates Pty Ltd, a company of which Mr McIlwain is a shareholder and beneficiary. The Company has an contract in place with Andrew McIlwain and Associates Pty Ltd for the provision of these services and amounts were billed based on normal market rates for such services and were due and payable under normal payment terms. The amount recognised as an expense during the year was $78,037 (2011: $77,815).

23. RELATED PARTY DISCLOSURES

a) Subsidiaries

The consolidated financial statements include the financial statements of Emmerson Resources Limited and its following wholly owned subsidiaries which were incorporated in Australia. Emmerson Resources Limited is the parent entity within the Group.

parent entity within the Group.
	2012	2011
	% Interest	% Interest
Giants Reef Exploration Pty Ltd	100%	100%
Santexco Pty Ltd	100%	100%
TC8 Pty Ltd	100%	100%

The Company made loans to subsidiaries during the year for the purpose of exploration expenditure on its mineral tenements and administrative overheads. Outstanding loan balances at the year end to and from subsidiaries are unsecured and non-interest bearing with no fixed repayment date.

b) Key management personnel

Details of remuneration, share, rights and option holdings of directors and key management personnel and other transactions with key management personnel are disclosed in note 22.

transactions with key management personnel are disclosed in note 22.
		Consolidated
	2012		2011
	$		$
24. AUDITORS REMUNERATION
Amounts paid to the auditor for audit and review of financial reports	45,217		49,852

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

25. PARENT ENTITY INFORMATION The individual financial statements for the parent entity show the following aggregate amounts: Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets Issued capital Other reserves Accumulated losses Total equity Loss for the year Total comprehensive income for the year	Consolidated 2012 2011 $ $ 10,123,789 9,600,863 24,392,907 19,041,240
	34,516,696 28,642,103
	(1,151,985) (1,394,278) (712,050) (830)
	(1,864,035) (1,395,108)
	32,652,661 27,246,995
	(40,111,622) (33,151,621) (2,757,150) (2,661,090) 10,216,111 8,565,716
	(32,652,661) (27,246,995)
	(1,650,395) (1,580,160) (1,650,395) (1,580,160)

26. FINANCIAL RISK MANAGEMENT

The Group’s principal financial instruments comprise cash, short-term deposits, receivables and payables. The main purpose of these financial instruments is to fund the Group’s operations.

The main risks arising from the Group’s financial instruments are credit risk, liquidity risk and interest rate risk. To monitor existing financial assets and liabilities as well as to enable an effective controlling of future risks, the Company has established comprehensive risk reporting. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and assessments of market forecasts for interest rate and liquidity risk is monitored through future rolling cash flow forecasts.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Notes 26. FINANCIAL RISK MANAGEMENT (continued) The carrying amounts of all financial assets and liabilities (including liabilities contractual maturities) at balance date are as follows: Financial assets Cash and cash equivalents 6 Trade and other receivables 7 Other financial assets 8 Total financial assets Financial liabilities Trade and other payables: 11 - 6 months or less Interest bearing liabilities: 13 - 6 months or less - 6 to 12 months - 1 to 2 years Total financial liabilities	Consolidated 2012 2011 $ $ 8,761,603 9,405,131 472,504 176,067 889,682 1,618,000
	10,123,789 11,199,198
	989,809 1,213,941 834 1,509 - 1,593 - 830
	990,643 1,217,873

The carrying amount of all financial assets and liabilities approximates their fair value due to their short term nature.

Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, other receivables and other financial assets. Receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. The Group has adopted the policy of only dealing with recognised credit worthy counterparties. Cash term deposits are placed only with Australian banks and where possible spread across more than one bank.

The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due.

The Group currently does not have major funding in place. However, the Group continuously monitors forecasts and actual cash flows and the maturity profiles of financial assets and liabilities to manage its liquidity risk. The decision on how the Company will raise future capital will depend on market conditions existing at that time.

The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Surplus funds are generally only invested in short term bank deposits.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

26. FINANCIAL RISK MANAGEMENT (continued)

Interest rate risk

The Group’s exposure to the risk of changes in market interest rates relates primarily to cash assets and variable interest rates.

At balance date the Group had the following financial assets exposed to Australian variable interest rate risk:

Notes Cash and cash equivalents 6 Other financial assets 8	Consolidated 2012 2011 $ $ 8,761,603 9,405,131 889,682 1,618,000
	9,651,285 11,023,131

Cash term deposits are generally placed on term deposit for periods of between 30 days and 90 days and are therefore exposed to movements in term deposit interest rates. The Company constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, and the mix of fixed and variable interest rates and term deposits terms.

The following sensitivity analysis shows the effect on profit after tax to a 1.0% change in interest rates with other variables held constant on the interest rate exposures in existence at balance date (there would be no effect on other equity to a change in the interest rates).

Impact on profit after tax to:
1.0% increase in interest rates	109,387	127,658
1.0% decrease in interest rates	(109,387)	(127,658)

Capital management risk

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company manages its capital to ensure it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of its capital structure comprising equity and cash.

The capital structure of the Company consists of cash and cash equivalents and equity, comprising issued capital, reserves and accumulated losses as disclosed in Notes 14, 15 and 16 respectively. Capital management predominantly takes the form of managing of the Company’s cash reserves, taking into account forecast operating and capital expenditure requirements of the Group.

The Company had no debt at 30 June 2012.

During 2011 and 2012 the Company has maintained the capital base through a clear cash management strategy and when required the issue of equity instruments.

There were no changes in the Company’s approach to capital management during the year.

The Company is not subject to externally imposed capital requirements.

27. EVENTS SUBSEQUENT TO REPORTING DATE

There has not been any material events subsequent to the end of the reporting date and the date of this financial report that has not been recognised in this financial report.

DIRECTORS’ DECLARATION

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In accordance with a resolution of the directors of Emmerson Resources Limited, I state that:

(1) In the opinion of the directors:
(a) the financial statements and notes of Emmerson Resources Limited for the financial year ended 30 June 2012 are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of its financial position as at 30 June 2012, and performance for the year ended on that date; and
- (ii) complying with Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2.
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
(2) This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2012.

On behalf of the Board

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Rob Bills Managing Director & Chief Executive Officer

25 September 2012

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Auditor’s Independence Declaration to the Directors of Emmerson Resources Limited

In relation to our audit of the financial report of Emmerson Resources Limited for the financial year ended 30 June 2012, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

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Ernst & Young

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R J Curtin Partner 25 September 2012

Liability limited by a scheme approved under Professional Standards Legislation

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Independent auditor's report to the members of Emmerson Resources Limited

Report on the financial report

We have audited the accompanying financial report of Emmerson Resources Limited, which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration 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 of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards .

Auditor's responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgment, 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 controls relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Independence

In conducting our audit we have complied with the independence requirements of the Corporations Act 2001 . We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the directors’ report.

Liability limited by a scheme approved under Professional S tandards Legislation

Opinion

In our opinion:

a. the financial report of Emmerson Resources Limited is in accordance with the Corporations Act 2001 , including:
i giving a true and fair view of the consolidated entity's financial position as at 30 June 2012 and of its performance for the year ended on that date; and
ii complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Report on the remuneration report

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

Opinion

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

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Ernst & Young

==> picture [79 x 89] intentionally omitted <==

R J Curtin Partner Perth 25 September 2012

TENEMENT SCHEDULE

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All tenements are held in Northern Territory, Australia

Tenement	Name	Interest	Tenement	Name	Interest	Tenement	Name	Interest
A23236	Udall Road	100%	HLDC100	Sally No Name	100%	HLDC75	Wiso Basin	100%
A27163	Eagle	100%	HLDC101	Sally No Name	100%	HLDC76	Wiso Basin	100%
EL10114	McDougall	100%	HLDC23	Eldorado Dam	100%	HLDC77	Wiso Basin	100%
EL10124	Speedway	100%	HLDC24	Eldorado SWR	100%	HLDC78	Wiso Basin	100%
EL10313	Kodiak	100%	HLDC32	Great Western	100%	HLDC79	Wiso Basin	100%
EL10406	Montana	100%	HLDC34	Black Angel,	100%	HLDC80	Wiso Basin	100%
EL23285	Corridor 2	100%	HLDC35	Black Angel,	100%	HLDC81	Wiso Basin	100%
EL23286	Corridor 3	100%	HLDC36	Blue Moon	100%	HLDC82	Wiso Basin	100%
EL23905	Jackie	100%	HLDC37	Warrego, No 1	100%	HLDC83	Wiso Basin	100%
EL26594	Bills	100%	HLDC39	Warrego Min,	100%	HLDC84	Wiso Basin	100%
EL26595	Russell	100%	HLDC40	Warrego, No 2	100%	HLDC85	Wiso Basin	100%
EL26787	Rising Ridge	100%	HLDC41	Warrego, No 3	100%	HLDC86	Wiso Basin	100%
EL27011	Snappy Gum	100%	HLDC42	Warrego, S7	100%	HLDC87	Wiso Basin	100%
EL27136	Reservoir	100%	HLDC43	Warrego , S8	100%	HLDC88	Wiso Basin	100%
EL27164	Hawk	100%	HLDC44	Warrego, No.2	100%	HLDC89	Wiso Basin	100%
EL27408	Grizzly	100%	HLDC45	Warrego, No.1	100%	HLDC90	Wiso Basin	100%
EL27537	Chappell	100%	HLDC46	Warrego, No.1	100%	HLDC91	Wiso Basin	100%
EL27538	Mercury	100%	HLDC47	Wiso Basin	100%	HLDC92	Wiso Basin	100%
EL28601	Malbec	100%	HLDC48	Wiso Basin	100%	HLDC93	Wiso Basin	100%
EL28602	Red Bluff	100%	HLDC49	Wiso Basin	100%	HLDC94	Warrego, No.4	100%
EL28603	White Devil	100%	HLDC50	Wiso Basin	100%	HLDC95	Warrego, No.3	100%
EL28618	Comstock	100%	HLDC51	Wiso Basin	100%	HLDC96	Wiso Basin	100%
EL28760	Delta	100%	HLDC52	Wiso Basin	100%	HLDC97	Wiso Basin	100%
EL28761	Quartz Hill	100%	HLDC53	Wiso Basin	100%	HLDC98	Wiso Basin	100%
EL28774	Colombard	100%	HLDC54	Wiso Basin	100%	HLDC99	Wiso, No.3 pipe	100%
EL28775	Trinity	100%	HLDC55	Warrego, No.4	100%	MCC1032	Metallic Hill	100%
EL28776	Whippet	100%	HLDC56	Warrego, No.5	100%	MCC1033	Metallic Hill	100%
EL28777	Bishops Creek	100%	HLDC57	Warrego	100%	MCC1034	EXP195	100%
EL28913	Amstel	100%	HLDC58	Wiso Line, No.6	100%	MCC1038	Rocky Range	100%
EL29012	Tetley	100%	HLDC59	Warrego, No.6	100%	MCC1039	Rocky Range	100%
EL9403	Jess	100%	HLDC69	Wiso Basin	100%	MCC1065	Marathon	100%
EL9958	Running Bear	100%	HLDC70	Wiso Basin	100%	MCC1077	Gecko	100%
ELA27539	Telegraph	100%	HLDC71	Wiso Basin	100%	MCC1078	Gecko	100%
ELA27902	Lynx	100%	HLDC72	Wiso Basin	100%	MCC1079	Gecko	100%
ELA29488		100%	HLDC73	Wiso Basin	100%	MCC1080	Gecko	100%
ELA7809	Mt Samuel	100%	HLDC74	Wiso Basin	100%	MCC1081	Gecko	100%

On completion of the Earn In Obligation under The Tennant Creek Mineral Field Exploration Joint Venture Agreement with Ivanhoe Australia Limited, Emmerson will transfer a 51% interest in the majority of the above tenements to Ivanhoe – refer Note 20 to the financial statements.

TENEMENT SCHEDULE

All tenements are held in Northern Territory, Australia

Tenement	Name	Interest	Tenement	Name	Interest	Tenement	Name	Interest
Tenement	Name	Interest	Tenement	Name	Interest	Tenement	Name	Interest
MCC1082	Gecko	100%	MCC338	Black Cat	100%	MCC790	Verdelho	100%
MCC1083	Gecko	100%	MCC339	Black Cat	100%	MCC791	Marsanne	100%
MCC1315	Warrego East	100%	MCC340	The Trump	100%	MCC792	Marsanne	100%
MCC1316	Warrego East	100%	MCC341	The Trump	100%	MCC793	Sauvignon	100%
MCC1317	Warrego East	100%	MCC342	True Blue	100%	MCC794	Durif	100%
MCC1318	Warrego East	100%	MCC344	Mt Samuel	100%	MCC795	Durif	100%
MCC1319	Warrego East	100%	MCC348	Bomber	100%	MCC796	Durif	100%
MCC1320	Warrego East	100%	MCC349	Bomber	100%	MCC797	EXP 80	100%
MCC1321	Warrego East	100%	MCC350	Bomber	100%	MCC798	Ivanhoe	100%
MCC1322	Warrego East	100%	MCC351	Bomber	100%	MCC799	Wolseley	100%
MCC1323	Warrego East	100%	MCC354	Scheurber	100%	MCC800	Wolseley	100%
MCC1348	Archimedes	100%	MCC355	Scheurber	100%	MCC801	Gris	100%
MCC1349	Archimedes	100%	MCC364	Estralita	100%	MCC802	Zinfandel	100%
MCC1426	Pinnacles South	100%	MCC365	Estralita	100%	MCC803	Thurgau	100%
MCC1530	Jacqueline the	100%	MCC366	Estralita	100%	MCC804	EXP212	100%
MCC167	Comstock	100%	MCC377	Blue Moon	100%	MCC805	Jubilee	100%
MCC168	New Hope	100%	MCC461	Gibbet	100%	MCC806	Jubilee	100%
MCC169	Plumb	100%	MCC5	The Pup	100%	MCC807	Merlot	100%
MCC174	Mt Samuel	0%	MCC522	Gibbet	100%	MCC808	Merlot	100%
MCC203	Galway	100%	MCC523	Gibbet	100%	MCC809	The Extension	100%
MCC21	Battery Hill	100%	MCC524	Gibbet	100%	MCC810	Colombard	100%
MCC211	Shamrock	100%	MCC55	Mondeuse	100%	MCC811	Colombard	100%
MCC212	Mt Samuel	85%	MCC56	Shiraz	100%	MCC812	Dong Dui	100%
MCC22	Battery Hill	100%	MCC57	Mondeuse	100%	MCC813	Grenache	100%
MCC23	Battery Hill	100%	MCC6	The Pup	100%	MCC888	Hermitage	100%
MCC239	West Peko	100%	MCC66	Golden Forty	100%	MCC889	Hermitage	100%
MCC240	West Peko	100%	MCC67	Golden Forty	100%	MCC890	Hermitage	100%
MCC287	Mt Samuel	0%	MCC755	Comstock	100%	MCC891	Hermitage	100%
MCC288	Mt Samuel	0%	MCC756	Comstock	100%	MCC892	Hermitage	100%
MCC308	Mt Samuel	85%	MCC757	Comstock	100%	MCC893	Hermitage	100%
MCC313	Pedro	100%	MCC758	Semillon	100%	MCC894	Hermitage	100%
MCC314	Pedro	100%	MCC759	Smelter	100%	MCC895	Hermitage	100%
MCC315	Pigale	100%	MCC76	Red Bluff North	100%	MCC9	Eldorado	100%
MCC316	The Trump	100%	MCC760	Dark	100%	MCC904	Restina	100%
MCC317	The Trump	100%	MCC761	Noir	100%	MCC905	Restina	100%
MCC334	Estralita Group	100%	MCC762	Noir	100%	MCC906	Restina	100%

TENEMENT SCHEDULE

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All tenements are held in Northern Territory, Australia

Tenement	Name	Interest	Tenement	Name	Interest	Tenement	Name	Interest
Tenement	Name	Interest	Tenement	Name	Interest	Tenement	Name	Interest
MCC907	Troy	100%	MLC134	Golden Forty	100%	MLC208	Argo West	100%
MCC908	Troy	100%	MLC135	Golden Forty	100%	MLC209	Argo West	100%
MCC909	Troy	100%	MLC136	Golden Forty	100%	MLC21	Gecko	100%
MCC910	Troy	100%	MLC137	Golden Forty	100%	MLC217	Perserverance	30%
MCC912	Troy	100%	MLC138	Golden Forty	100%	MLC218	Perserverance	30%
MCC913	Troy	100%	MLC139	Golden Forty	100%	MLC219	Perserverance	30%
MCC914	Rising Star	100%	MLC140	Golden Forty	100%	MLC22	Warrego	100%
MCC915	Rising Star	100%	MLC141	Golden Forty	100%	MLC220	Perserverance	30%
MCC925	Brolga	100%	MLC142	Golden Forty	100%	MLC221	Perserverance	30%
MCC926	Brolga	100%	MLC143	Golden Forty	100%	MLC222	Perserverance	30%
MCC969	Pinot	100%	MLC144	Golden Forty	100%	MLC223	Perserverance	30%
MCC970	Pinot	100%	MLC146	Golden Forty	100%	MLC224	Perserverance	30%
MCC971	Pinot	100%	MLC147	Golden Forty	100%	MLC23	North Doria	100%
MCC972	Pinot	100%	MLC148	Golden Forty	100%	MLC235	Kia Ora	100%
MCC981	Franc	100%	MLC149	Golden Forty	100%	MLC236	Kia Ora	100%
MCC982	Franc	100%	MLC15	Eldorado 4	100%	MLC237	Kia Ora	100%
ML22284	Billy Boy	100%	MLC158	Warrego gravel	100%	MLC238	Kia Ora	100%
ML23216	Chariot	100%	MLC159	Warrego gravel	100%	MLC24	Orlando	100%
ML23969Gecko Headframe		100%	MLC16	Eldorado 5	100%	MLC25	Orlando	100%
MLA23911Golden Slipper		100%	MLC160	Warrego gravel	100%	MLC253	Mulga 1	100%
MLC100	Warrego	100%	MLC161	Warrego gravel	100%	MLC254	Mulga 1	100%
MLC101	Warrego	100%	MLC162	Warrego gravel	100%	MLC255	Mulga 1	100%
MLC102	Warrego	100%	MLC163	Warrego gravel	100%	MLC256	Mulga 2	100%
MLC107	Warrego	100%	MLC164	Warrego gravel	100%	MLC257	Mulga 2	100%
MLC108	Warrego	100%	MLC165	Warrego gravel	100%	MLC258	Mulga 2	100%
MLC120	Cabernet/Nav 7	100%	MLC176	Chariot	100%	MLC259	Mulga 2	100%
MLC121	Cabernet/Nav 7	100%	MLC177	Chariot	100%	MLC26	Orlando	100%
MLC122	Cabernet/Nav 7	100%	MLC18	West Gibbet	100%	MLC260	Mulga 2	100%
MLC123	Cabernet/Nav 7	100%	MLC182	Riesling	100%	MLC261	Mulga 2	100%
MLC124	Quartz Hill	100%	MLC183	Riesling	100%	MLC27	Orlando	100%
MLC127	Peko East Ext 4	100%	MLC184	Riesling	100%	MLC28	Orlando	100%
MLC129	Peko Sth- East	100%	MLC20	One Oh Two	100%	MLC29	Orlando	100%
MLC130	Golden Forty	100%	MLC204	Argo West	100%	MLC30	Orlando	100%
MLC131	Golden Forty	100%	MLC205	Argo West	100%	MLC304	North Star	100%
MLC132	Golden Forty	100%	MLC206	Argo West	100%	MLC305	North Star	100%
MLC133	Golden Forty	100%	MLC207	Argo West	100%	MLC306	North Star	100%

TENEMENT SCHEDULE

All tenements are held in Northern Territory, Australia

Tenement	Name	Interest	Tenement	Name	Interest	Tenement	Name	Interest
Tenement	Name	Interest	Tenement	Name	Interest	Tenement	Name	Interest
MLC307	North Star	100%	MLC351	Brolga	100%	MLC40	Short Range 5	100%
MLC308	North Star	100%	MLC352	Golden Forty	100%	MLC406	Comet	100%
MLC309	North Star	100%	MLC353	Golden Forty	100%	MLC407	Comet	100%
MLC31	Orlando	100%	MLC354	Golden Forty	100%	MLC408	Comet	100%
MLC310	North Star	100%	MLC355	Golden Forty	100%	MLC409	Comet	100%
MLC311	North Star	100%	MLC36	Golden Forty	100%	MLC41	Short Range 5	100%
MLC312	North Star	100%	MLC362	Lone Star	100%	MLC432	Mulga 1	100%
MLC313	North Star	100%	MLC363	Lone Star	100%	MLC48	Tinto	100%
MLC32	Golden Forty	100%	MLC364	Lone Star	100%	MLC49	Mt Samual	100%
MLC323	Gecko	100%	MLC365	Lone Star	100%	MLC498	Eldorado	100%
MLC324	Gecko	100%	MLC366	Lone Star	100%	MLC499	Eldorado	100%
MLC325	Gecko	100%	MLC367	Lone Star	100%	MLC5	Peko Extended	100%
MLC326	Gecko	100%	MLC368	Lone Star	100%	MLC50	Eldorado Anom	100%
MLC327	Gecko	100%	MLC369	Lone Star	100%	MLC500	Eldorado	100%
MLC328	Queen of Sheba	100%	MLC37	Golden Forty	100%	MLC501	Eldorado	100%
MLC329	Queen of Sheba	100%	MLC370	Lone Star	100%	MLC502	Eldorado	100%
MLC33	Orlando	100%	MLC371	Lone Star	100%	MLC503	Eldorado	100%
MLC330	Queen of Sheba	100%	MLC372	Lone Star	100%	MLC504	Eldorado	100%
MLC331	Queen of Sheba	100%	MLC373	Lone Star	100%	MLC505	Eldorado	100%
MLC332	Queen of Sheba	100%	MLC374	Lone Star	100%	MLC506	Marion Ross	100%
MLC333	Queen of Sheba	100%	MLC375	Lone Star	100%	MLC51	Eldorado Anom	100%
MLC334	Queen of Sheba	100%	MLC376	Mulga 1	100%	MLC518	Ellen, Eldorado	100%
MLC335	Queen of Sheba	100%	MLC377	Mulga 1	100%	MLC52	Muscadel	100%
MLC336	Queen of Sheba	100%	MLC378	Mulga 1	100%	MLC520	Great Northern	100%
MLC337	Queen of Sheba	100%	MLC379	Mulga 1	100%	MLC522	Aga Khan	100%
MLC34	Orlando	100%	MLC38	Memsahib East	100%	MLC523	Eldorado	100%
MLC342	Tinto	100%	MLC380	Mulga 1	100%	MLC524	Susan	100%
MLC343	Rocky Range	100%	MLC381	Mulga 1	100%	MLC527	Mt Samual	100%
MLC344	Rocky Range	100%	MLC382	Mulga 1	100%	MLC528	Dingo, Eldorado	100%
MLC345	Rocky Range	100%	MLC383	Mulga 1	100%	MLC529	Cats Whiskers	100%
MLC346	Rocky Range	100%	MLC384	Mulga 2	100%	MLC53	Golden Forty	100%
MLC347	Tinto	100%	MLC385	Mulga 2	100%	MLC530	Lone Star	100%
MLC348	Brolga	100%	MLC386	Mulga 2	100%	MLC535	Eldorado No 5	100%
MLC349	Brolga	100%	MLC387	Mulga 2	100%	MLC54	Golden Forty	100%
MLC35	Golden Forty	100%	MLC39	Short Range 5	100%	MLC546	The Mount	100%
MLC350	Brolga	100%	MLC4	Peko Extended	100%	MLC55	Golden Forty	100%

TENEMENT SCHEDULE

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All tenements are held in Northern Territory, Australia

Tenement	Name	Interest	Tenement	Name	Interest	Tenement	Name	Interest
Tenement	Name	Interest	Tenement	Name	Interest	Tenement	Name	Interest
MLC551	Orlando	100%	MLC594	TC8 Lease	100%	MLC675	Black Angel	100%
MLC552	Orlando	100%	MLC595	TC8 Lease	100%	MLC676	Black Angel	100%
MLC554	White Devil	100%	MLC596	TC8 Lease	100%	MLC683	Eldorado	100%
MLC557	White Devil	100%	MLC597	TC8 Lease	100%	MLC69	Gecko	100%
MLC558	New Hope	100%	MLC598	Golden Forty	100%	MLC692	Warrego Mine	100%
MLC559	White Devil	100%	MLC599	Mt Samuel	85%	MLC693	Olivewood 102	100%
MLC56	Golden Forty	100%	MLC60	Verdot	100%	MLC699	Orlando,Webb	100%
MLC560	White Devil	100%	MLC601	TC8 Lease	100%	MLC70	Gecko	100%
MLC562	North Star	100%	MLC602	TC8 Lease	100%	MLC700	White Devil	100%
MLC563	North Star	100%	MLC603	TC8 Lease	100%	MLC702		100%
MLC564	North Star	100%	MLC604	TC8 Lease	100%	MLC705	Apollo 1	100%
MLC565	North Star	100%	MLC605	TC8 Lease	100%	MLC71	Warrego	100%
MLC566	North Star	100%	MLC606	Lone Star	100%	MLC72	Warrego	100%
MLC567	North Star	100%	MLC607	Lone Star	100%	MLC73	Warrego	100%
MLC568	North Star	100%	MLC608	Lone Star	100%	MLC74	Warrego	100%
MLC569	North Star	100%	MLC609	Lone Star	100%	MLC75	Warrego	100%
MLC57	Perserverence	30%	MLC61	Verdot	100%	MLC76	Warrego	100%
MLC570	North Star	100%	MLC610	Lone Star	100%	MLC78	Gecko	100%
MLC571	North Star	100%	MLC611	Lone Star	100%	MLC83	Warrego	100%
MLC572	North Star	100%	MLC612	Lone Star	100%	MLC84	Warrego	100%
MLC573	North Star	100%	MLC613	Lone Star	100%	MLC85	Gecko	100%
MLC574	North Star	100%	MLC614	Lone Star	100%	MLC86	Gecko	100%
MLC575	Blue Moon	100%	MLC615	Lone Star	100%	MLC87	Gecko	100%
MLC576	Golden Forty	100%	MLC616	Lone Star	100%	MLC88	Gecko	100%
MLC577	Golden Forty	100%	MLC617	Mt Samuel	50%	MLC89	Gecko	100%
MLC58	Verdot	100%	MLC619	True Blue	85%	MLC90	Gecko	100%
MLC581	Eldorado ABC	100%	MLC62	Verdot	100%	MLC91	Carraman/Klond	100%
MLC582	Eldorado ABC	100%	MLC626	Caroline	100%	MLC92	Carraman/Klond	100%
MLC583	Eldorado ABC	100%	MLC644	Enterprise	100%	MLC93	Carraman/Klond	100%
MLC584	Golden Forty	100%	MLC645	Estralita	100%	MLC94	Carraman/Klond	100%
MLC585	Golden Forty	100%	MLC650	Argo Water	100%	MLC95	Carraman/Klond	100%
MLC586	Golden Forty	100%	MLC651	Argo Power	100%	MLC96	Osprey	100%
MLC588	Kia Ora	100%	MLC653	Argo Road	100%	MLC97	Osprey	100%
MLC59	Verdot	100%	MLC654	TC8 Lease	100%	MLC98	Warrego	100%
MLC591	TC8 Lease	100%	MLC66	Traminer	100%	MLC99	Warrego	100%
MLC592	TC8 Lease	100%	MLC668	Gecko	100%	MLCA708		100%
MLC593	TC8 Lease	100%	MLC67	Traminer	100%

www.emmersonresources.com.au

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3 Kimberley Street West Leederville WA 6007 Telephone: +61 (08) 9381 7838 Facsimile: +61 (08) 9381 5375

AI assistant

EMMERSON RESOURCES LIMITED — Annual Report 2012

64876_rns_2012-09-25_570c0223-f22d-462b-9263-d36fc1529c82.pdf

CORPORATE DIRECTORY

DIRECTORS

COMPANY SECRETARY

TENNANT CREEK OFFICE

ASX CODE

BANKERS

AUDITORS

REGISTERED OFFICE

SOLICITORS

SHARE REGISTER

CONTENTS

CHAIRMAN’S LETTER

MANAGING DIRECTOR’S REPORT - Review of Operations

Overview

MANAGING DIRECTOR’S REPORT - Review of Operations

MANAGING DIRECTOR’S REPORT - Review of Operations

MANAGING DIRECTOR’S REPORT - Review of Operations

Planned activities for the first half of the 2012-13 financial year

Corporate

Our People

MANAGING DIRECTOR’S REPORT - Review of Operations

MANAGING DIRECTOR’S REPORT - Review of Operations

Competency Statement

HEALTH, SAFETY, ENVIRONMENT AND COMMUNITY (HSEC)

Our Commitments

Health and Safety

Summary of Key Safety Statistics:

HEALTH, SAFETY, ENVIRONMENT AND COMMUNITY (HSEC)

Environment

Community

SHAREHOLDER INFORMATION

SHAREHOLDER INFORMATION

UNQUOTED OPTIONS OVER ORDINARY SHARES

UNQUOTED RIGHTS OVER ORDINARY SHARES

DIRECTORS’ REPORT

DIRECTORS

Andrew McIlwain B.Eng (Mining) – Non-executive Chairman

Robert Bills B.Sc, M.Sc - Managing Director and Chief Executive Officer

Tim Kestell B. Comm - Non-executive Director

DIRECTORS’ REPORT

COMPANY SECRETARY

Trevor Verran B Comm., CPA

DIRECTORS’ MEETINGS

DIRECTORS’ REPORT

DIRECTORS’ INTERESTS

DIVIDENDS

PRINCIPAL ACTIVITIES

OPERATING AND FINANCIAL REVIEW

Overview

DIRECTORS’ REPORT

OPERATING AND FINANCIAL REVIEW (continued)

Operating Results for the Year

Financial Position

Exploration Activities

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

DIRECTORS’ REPORT

LIKELY DEVELOPMENTS AND EXPECTED RESULTS (continued)

ENVIRONMENTAL REGULATION

SHARE OPTIONS AND RIGHTS

Options over ordinary shares:

DIRECTORS’ REPORT

SHARE OPTIONS AND RIGHTS (continued)

Rights over ordinary shares:

INDEMNIFICATION AND INSURANCE OF DIRECTORS

DIRECTORS’ REPORT

REMUNERATION REPORT (audited)

1. Individual key management personnel disclosures

DIRECTORS’ REPORT

REMUNERATION REPORT (audited) (continued)

2. Remuneration at a glance

Executive Remuneration

3. Board oversight of remuneration

Remuneration Committee

REMUNERATION REPORT (audited) (continued)

3. Board oversight of remuneration (continued)

EMMERSON RESOURCES LIMITED Annual Report 2012