EMPIRE RESOURCES LIMITED

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EMPIRE RESOURCES LIMITED AND CONTROLLED ENTITY ABN 32 092 471 513 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2011

Empire Resources Limited is a Perth based copper and gold focused explorer with deposits in Western Australia ~~.~~

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

PAGE 1. Corporate Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFC 2. Highlights of 2010-2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3. Corporate Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4. Chairman’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5. Review of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 6. Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 7. Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 8. Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 9. Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 10. Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 11. Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 12. Directors’ Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 13. Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 14. Auditor’s Independence Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 15. Corporate Governance Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 16. Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

1. CORPORATE DIRECTORY

DIRECTORS

Tom Revy BAppSc – Chairman David Sargeant BSc – Managing Director Adrian Jessup BSc(Hons) – Executive Director

MANAGEMENT

David Ross BSc(Hons) MSc – Exploration Manager

COMPANY SECRETARY

Simon Storm BCom, BCompt(Hons), CA, FCIS

REGISTERED and PRINCIPAL OFFICE

53 Canning Highway Victoria Park 6100 Western Australia Phone +61 (0)8 9361 3100 Facsimile +61 (0)8 9361 3184 Email [email protected] Website www.resourcesempire.com.au ABN 32 092 471 513

SHARE REGISTRY

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross 6153 Western Australia

AUDITOR

HLB Mann Judd Level 4 130 Stirling Street Perth 6000 Western Australia

STOCK EXCHANGE LISTING

The Company is listed on the Australian Stock Exchange Limited. Home Exchange Perth ASX Code: Shares ERL

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

2. HIGHLIGHTS OF 2010-2011:

Company trebles land holding at the Yuinmery copper–gold project to 227km[2 ] gaining numerous new drill targets
Excellent copper grades intersected at the A Zone prospect, Yuinmery: 5m @ 2.6% Cu, 0.44g/t Au
Flotation testwork on the Just Desserts, Yuinmery mineralization gives >95% recovery for copper and >85% for gold
110m wide zone of platinum group metal mineralization discovered at the Constantine prospect, Yuinmery
Company enters into a $2 million cash + royalty sale agreement for the Penny’s Find gold project
Farm out of Troy Creek copper project completed
Government co-funding of $125,000 awarded to the Company for drilling at its Yuinmery and Wynne projects.
SUBSEQUENT TO 30 JUNE 2011
Further high grade copper intersections at the A Zone prospect, Yuinmery confirm it is a major mineralized system: 5m @ 4.4% Cu within 19m @ 1.85% Cu and 4m @ 4.7% Cu within 7m @ 3.2% Cu
High grade zinc mineralization intersected for the first time at Yuinmery. Drilling at A Zone intersects 3m @ 8.2% Zn within 8m @ 4.0% Zn
Drilling beneath the Smith Well gossan at Yuinmery intersects 8m @ 1.4% Cu, 0.2g/t Au
Drilling reinforces the view Yuinmery could be a major VMS system with strong similarities to Golden Grove
Prospecting has extended the outcropping strike length of base metal gossans at the Wynne project to seven kilometres

3. CORPORATE OBJECTIVES

The Company’s long term objective is to become a successful mining house by participation in the discovery and development of one or more world-class mineral deposits.

The short term objective is to enhance value and obtain a cash flow from the Company’s existing tenements in Australia which have potential for copper, gold and PGM deposits. This value may be realized by delineating reserves and commencing mining operations, entering into significant farmout or royalty arrangements or acquiring new opportunities to provide an early cash flow.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

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4. CHAIRMAN’S REPORT

Dear Shareholders

We certainly live in interesting times.

Markets are never simple to predict even at the best of times other than to say good times follow bad times and bad times follow good. It is difficult to ignore the European sovereign debt issues and the US fiscal gridlock situation, and the impact they have had on global equity and debt markets over the last 12 months.

The fundamentals, however, are often overlooked during these times. Emerging markets have rapidly become the key driver of global commodity demand since the emerging markets’ crisis of the late nineties. According to recent research by Morgan Stanley Smith Barney, emerging markets drive commodity markets, representing 70% of current base metals demand and all growth, despite the fall in their equity markets. This demand reflects positively on both current and long term commodity prices and especially on base metals.

Empire’s focus on becoming a base metal producer remains strong and, in the last 12 months, the Company has successfully tested and drilled existing and newly identified areas at its Yuinmery project. The option to acquire the La Mancha ground adjoining Empire’s tenements during the year provides Empire shareholders with a major land position in the highly prospective base metal rich Youanmi greenstone belt. Geophysical, drilling and preliminary metallurgical activities undertaken during the year at both A Zone and Just Desserts, add to our belief that the Company is well positioned to rapidly grow its current resource base and potentially reach its objective of near term cash flow. Many of the project targets remain open both laterally and at depth, and drilling is likely to focus on these areas over the next 12 months.

On other activities, Empire has continued with exploration programs and strategies to identify medium to long term growth for shareholders. During the year, the Company secured a $7 million strategic exploration joint venture agreement on its Troy Creek Project which, together with the Penny’s Find deal with Brimstone Resources, provides shareholders further exposure to advanced copper and gold assets.

The Wynne and Constantine projects remain part of the Company’s future growth targets. Through the ‘Western Australian Government’s Exploration Incentive Scheme’ Empire was successful in applying for a total of $125,000 in funding grants for these two projects. Securing this funding supports management’s view of the highly prospective nature of both the Wynne copper and Constantine nickel/PGM projects.

The significant outcomes achieved this year are a direct result of the commitment and efforts demonstrated by our staff and contractors who, on behalf of all shareholders, I would like to thank. I trust that as we make the transition from explorer to developer, all stakeholders will continue to show the same support during what should be exciting times ahead.

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Thomas Revy Chairman

REGISTERED and PRINCIPAL OFFICE 53 Canning Highway, Victoria Park WA 6100 (cnr Taylor Street) Phone +618 9361 3100 Fax +618 9361 3184

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

5. REVIEW OF OPERATIONS

Empire Resources Ltd is a copper and gold focused exploration company.

Since listing in February 2007, the Company has made three significant copper and/or gold discoveries in Western Australia and announced JORC compliant resources for two of these discoveries.

At the Penny’s Find project near Kalgoorlie in 2007, the Company located a near surface high grade gold deposit which has a JORC compliant resource estimated at 314,000 tonnes @ 5.2g/t Au. It is likely further drilling at depth would upgrade this resource.

Following exploration success during 2007 and 2008, the Company announced a copper–gold resource for the Just Desserts prospect at the Yuinmery project, 80km southwest of Sandstone, WA. This initial resource has been estimated at 1,070,000 tonnes @ 1.8% Cu and 0.8g/t Au at a 1% Cu cutoff. Continued drilling will likely upgrade this resource and locate additional resources at other nearby prospects such as A Zone.

In the latter part of 2008 a discovery of high grade copper sulphide mineralization was made at the large Troy Creek project, 180km northeast of Wiluna in Western Australia. Drill intersections to date at the Main Gossan prospect have consisted of 36m @ 0.8% Cu which included 2m @ 4.7% Cu and 3m @ 2.0% Cu; 8m @ 1.5% Cu and 4m @ 3.0% Cu.

The Wynne base metal project is located 260km northeast of Carnarvon in Western Australia. Surface sampling has identified highly anomalous base metal gossans outcropping over a 7km strike length which represent immediate drill targets.

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Figure 1. Project location map

Empire Resources Ltd has a 28% interest in FYI Resources Ltd, who owns the large Yarlarweelor uranium project 125km north of Meekatharra, WA which shows potential to host large tonnages of primary uranium mineralization. To date limited drilling within a 5km long zone of anomalous uranium radioactivity has returned up to 35m @ 503ppm U3O8 including 5m @ 1,069ppm U3O8, 8m @ 708ppm U3O8 and 7.8m @ 588ppm U3O8.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Yuinmery (WA):

Copper-Gold – Zinc – PGM Project (100% interest and option to earn over 82% interest on adjoining tenements)

The Yuinmery copper-gold project is situated 475km northeast of Perth, WA. It lies within the Archaean Youanmi greenstone belt and covers a synclinal sequence of chloritised felsic tuffaceous rocks with interbedded sulphide bearing chert horizons. Coppergold mineralization, previously identified from a number of prospects at Yuinmery, is of volcanogenic massive sulphide (VMS) style similar in nature to orebodies currently being mined at Golden Grove and Jaguar in Western Australia. It occurs as massive sulphides associated with chert exhalite horizons, as matrix sulphides in lapilli tuff, and associated with mafic and ultramafic intrusions.

At one of the Yuinmery prospects, Just Desserts, drilling during 2007-2008 intersected high grade copper–gold zones with assays such as 23m @ 2.7% Cu, 1.3g/t Au; 14m @ 2.6% Cu, 1.9g/t Au; 13m @ 2.6% Cu, 1.7g/t Au; 6m @ 3.8% Cu, 12.9g/t Au and 10m @ 4.2% Cu, and 6.0g/t Au.

Based on the above drilling an indicated + inferred JORC resource of 1,070,000 tonnes @ 1.8% Cu, 0.8g/t Au was estimated for the Just Desserts prospect and reported on in the March 2009 Quarterly. This resource lies between 50 and 250 metres below surface and is open at depth. Elsewhere in the world deposits of this style of mineralization commonly occur in clusters and have been mined to great depths.

In September 2010 the Company announced it had entered into an option agreement with La Mancha Resources Ltd to purchase an interest in its tenements surrounding the Just Desserts resource (see Figure 3). This agreement trebled the Company’s tenement holding to 227km[2] and positions it as a major land holder in the base metal rich but underexplored Youanmi Greenstone Belt. An airborne EM survey completed by La Mancha over their tenements identified numerous untested conductive zones considered by Empire to be prospective for base metal sulphide mineralization (see Figure 5).

During the past year the Company has undertaken RAB, RC and diamond drilling programs, surface and downhole electromagnetic (EM) surveys and Induced Polarisation (IP) surveys at Yuinmery testing fourteen different prospects on both Empire’s and La Mancha’s tenements. Twenty one holes totalling 4,208m of RC drilling, three holes, 774m of diamond drilling and 151 holes, 6,771m of RAB drilling were completed during the year.

A ZONE

RC drilling at A Zone, located 1.3km north of Just Desserts, has intersected significant copper–gold and zinc mineralization reinforcing the view Yuinmery hosts a major VMS system. Just prior to the end of year, drilling intersected 5m @ 2.6% Cu, 0.4g/t Au, and subsequently, 5m @ 4.4% Cu, 0.4g/t Au within 19m @ 1.9% Cu, 0.3g/t Au; 4m @ 4.7% Cu, 0.5g/t Au within 7m @ 3.2% Cu, 0.3g/t Au and 3m @ 8.2% Zn within 8m @ 4.0% Zn.

The copper–gold and zinc mineralization at A Zone occurs in two horizons which dip eastwards and plunge to the north (see Figure 7). Ongoing RC and diamond drilling is planned to expand on the known mineralization and enable calculation of an initial resource.

JUST DESSERTS

Diamond drilling at Just Desserts confirmed the mineralization continues at depth with intersections of 2m @ 1.8% Cu, 0.3g/t Au, 4g/t Ag and 0.2m @ 5.2% Cu, 15g/t Au, 50g/t Ag at a vertical depth of 300m. These intersections are thought to have intersected the top edge of the south-easterly plunging coppergold mineralization (see Figure 6). Further drilling is planned down plunge from the currently defined resource and also within the resource itself to upgrade inferred resources to indicated.

Initial metallurgical testwork on the Just Desserts copper–gold resource produced positive results with flotation tests on the mineralization giving >95% recovery for copper and >85% for gold.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

CONSTANTINE

At the Constantine prospect RC and RAB drilling intersected large widths of low grade platinum – palladium and nickel mineralization in mafic rocks, assaying up to 80m @ 0.49g/t Pt+Pd and 0.22% Ni. The mineralization, which ocurs in two zones up to 110m in combined width, is associated with a prominent magnetic horizon traceable under cover for at least 13km along strike. This magnetic horizon forms part of a major layered mafic – ultramafic intusive complex in the Youanmi Greenstone Belt.

Preliminary metallurgical testwork confirmed a high percentage of the PGMs at Constantine are hosted in sulphide minerals which are amenable to simple flotation separation.

Surface prospecting 3.5km south of Constantine on the same magnetic horizon located further samples over a 500m strike length containing highly anomalous platinum, palladium, nickel and copper values. The Company applied for and was successful in receiving funding of $50,000 under the Western Australian Government’s Incentive Scheme Co-Funded Drilling Program to drill one diamond hole in this area in the coming year.

OTHER PROSPECTS

RC drilling of a strong EM anomaly at the YC14 prospect located just south of C Zone, intersected 7m of massive pyrite mineralization which assayed 5m @ 0.5% Cu, 1.0g/t Au.

Subsequent to year end, RC drilling beneath the Smith Well gossan also intersected 8m @ 1.4% Cu, 0.2g/t Au. Follow up drilling is planned for both these prospects.

RC and/or diamond drilling at the B Zone, Trajan, Augustus, YC3, 4, 5 and 11 prospects intersected zones of weak copper and/or zinc mineralization associated with chloritised pyritic tuffs and volcanogenic sediments. Subsequent downhole EM surveys located strong off hole conductors at the Augustus, YC4, YC5 and YC11 prospects which will be investigated in the coming year.

RC drilling of the YC 6 and 12 prospects did not intersect anything to explain the surface EM anomalies while RAB drilling at the Nine Mile Well prospect, located 6km southeast of Just Desserts, likewise did not locate any significant base or precious metal values.

RAB drilling on lines 0.5 to 1km apart along 4km strike length of the magnetic horizon has confirmed it is continuously mineralized with low grade PGMs, the richest sections being the area mentioned above and Constantine.

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Figure 2.
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Figure 3. Figure 4.

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Figure 5.
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Figure 6. Figure 7. Figure 8.

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Penny’s Find (WA): Gold Project – 60% interest

The Penny’s Find project, situated in the Eastern Goldfields of Western Australia, lies 50km northeast of Kalgoorlie and 30km from the Kanowna Belle Gold Mine. Within mining lease M27/156, gold mineralization is associated with quartz veining developed at or near a sheared contact between basalt and sediments.

The Company has previously outlined a gold resource at Penny’s Find of 314,000 tonnes @ 5.18g/t Au down to a vertical depth of 150m below surface. The mineral resource estimate is summarized in the following table:

PENNY’S FIND MINERAL RESOURCE

Category Measured	Tonnes 79,000	Grade*(g/t Au) 4.40	Ounces 11,177
Indicated	132,000	3.98	16,893
Inferred	103,000	7.33	24,276
TOTAL	314,000	5.18	52,316

* grades are based on a minimum cut-off of 0.5g/tAu and high assays cut to 25g/tAu

In October 2009 the Company entered into a joint venture agreement with Rubicon Resources Ltd to acquire an interest in the Mt McLeay tenements located immediately north of the Penny’s Find deposit (see Figure 10).

In September 2010 the Company announced to the Australian Stock Exchange it had entered into a staged sale agreement for Penny’s Find with unlisted company Brimstone Resources Ltd. At the election of Brimstone, the sale consideration comprises either:

Staged cash payments totaling $2.0 million by December 2012 for a 100% interest of the Penny’s Find project. A 2% gross royalty will also be payable on gold produced in excess of the current JORC resource of 52,500 ozs gold.
Staged cash payments totaling $0.5 million together with exploration and development expenditure of up to $3 million by December 2013 for an 80% interest in the Penny’s Find project. Any additional development costs associated with ERL’s residual 20% interest will carried by Brimstone and repayable from the proceeds of future gold production.

During the past year Brimstone has earned a 40% interest in the project by making payments to Empire totaling $500,000. Brimstone has also been managing exploration on the project, completing programs of soil sampling and data validation to assist with open pit design. The soil sampling program was successful in outlining an anomaly >20ppb Au up to 1km long by 500m wide with a peak value of 187ppb Au, located 5km northwest of the Penny’s Find deposit.

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Figure 9.
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Figure 10.

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Wynne (WA): Copper Project – 100% interest

The Company holds two exploration licences covering an area of 105km[2] in the northern Gascoyne region of Western Australia, 260km northeast of Carnarvon. Previous exploration in the area identified extensive gossans containing geochemically anomalous copper, lead and zinc values but no drilling was ever undertaken. These gossans are associated with meta-sedimentary rocks of the Proterozoic Morrissey Metamorphic Suite.

During the past year a ground based EM geophysical survey was completed over areas of gossan outcrop. The results were inconclusive as strong polarisation effects masked late time responses from directly beneath the gossans.

Empire Resources was however successful in receiving funding of $75,000 under the Western Australian Government’s Incentive Scheme Co-Funded Drilling Program. This grant will be used to fund an 1,800m RC drilling program planned for the first half of 2012.

Surface rock chip sampling by the Company has confirmed the anomalous base metal signature of the Wynne gossans which occur in three horizons, one of which outcrops over at least a 7km strike length. Assays are highly anomalous with maximum values in various samples up to 0.25% Cu, 0.39% Pb, 0.14% Zn, 0.5g/t Au, 4.6% As, 347ppm Bi, 114ppm Mo and 128ppm W.

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Figure 12.

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Troy Creek (WA):

Copper-Gold – PGM Project – 45% interest

The Troy Creek copper-gold-platinum group metal(PGM) project is situated 900km northeast of Perth on the northern margin of the Palaeoproterozoic Earaheedy Basin where the Company holds tenements covering an area of 270km[2] .

Several prominent geochemical and magnetic targets have been identified in sedimentary rocks within the Company’s tenements. These include a large zone of multi-element anomalous geochemistry in sedimentary rocks which extend along strike for a distance of more than 20km. This zone, defined by rock chip sampling, soil geochemistry and limited drilling, is anomalous in copper, gold, PGM, arsenic, silver and antimony.

RC drilling during 2008 and 2009 at the Main Gossan prospect, which lies within this zone, intersected high grade copper sulphide mineralization. Drill intersections have included 36m @ 0.76% Cu including 2m @ 4.65% Cu and 3m @ 1.97% Cu; 8m @ 1.47% Cu and 4m @ 3.04% Cu.

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The copper mineralization consists of fine grained stratiform copper and iron sulphides in graphitic and calcareous shales and shows some similarities to “Kupferscheifer Style” mineralization which forms world class copper deposits in Germany and southwest Poland. These similarities include stratiform mineralization over large areas, the presence of adjacent haematitic oxidized rocks and comparable geochemistry i.e. anomalous copper, silver, arsenic, and zinc, with adjacent but discrete platinum group metals mineralization eg. 7m @ 0.59g/t Pt + Pd.

During the March 2011 quarter the Company agreed to farm-out terms with the unlisted Sydney-based company, Zodiac Resources Pty. Ltd. Under the terms of this agreement Zodiac may earn up to a 75% interest by spending $7 million on exploration within five years. Zodiac will also have the option to acquire a 100% interest in the Troy Creek Project within five years of commencement of the joint venture at the agreed purchase price of $5 million – a figure separate to the joint venture exploration commitments. Zodiac has planned an initial reverse circulation (RC) drill programme at the Main Gossan prospect comprising 23 RC holes for 3000m. The aim of this programme is to intersect and sample the mineralized zone in unweathered rock at 100m intervals along a 700m strike length. This program should be completed by the end of 2011.

Figure 13.

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Yarlarweelor (WA): Uranium Project – 28% indirect interest

The Yarlarweelor uranium project is located 125km north of Meekatharra in Western Australia.

The Company announced to the Australian Stock Exchange in April 2010 the sale of 100% of the Yarlarweelor project to FYI Resources Ltd. As part of the sale agreement, Empire Resources emerged with a direct 32% stake in FYI Resources and two seats on its Board of Directors.

Previous exploration during the early 1980’s discovered primary uranium mineralization in the form of uraninite at five locations within the project area. Four of these occurrences are from within the Archaean Despair Granite where limited drilling showed the uraninite mineralization to be hosted in multiple parallel shear zones and the surrounding granites.

Since the completion of the Yarlarweelor sale, FYI Resources has drilled four diamond holes, totalling 652 metres at the Kangaroo Ridge and Doris prospects. These holes intersected wide zones of uranium mineralization associated with biotite rich shear zones in granite, confirming the presence of significant uranium mineralization at Yarlarweelor. Results from the drilling at Kangaroo Ridge included:

35m @ 503ppm U3O8 including 5m @ 1,069ppm U3O8 in KRD10-02

The true widths of mineralization in KRD10-02 and 03 are estimated to be 9 metres and 3 metres respectively. The true width of mineralization in KRD10-01 is estimated to be 4 metres. The uranium mineralization at Kangaroo Ridge currently extends for 200 metres along strike and to 200 metres depth as defined by recent and historical drilling. This mineralization remains open both along strike and at depth.

The single diamond core hole drilled at the Doris prospect intersected seven zones of biotite schist ranging in true widths from 1.3m to 4.0m. Better assays from these biotite schist zones and adjacent granites are: 2.94m @ 184ppm U3O8, 5.37m @ 185ppm U3O8 and 7.23m @ 153 U3O8.

Preliminary metallurgical testwork on a composite core sample from hole KRD10-01 at Kangaroo Ridge, gave an 89% extraction of uranium to liquor in 12 hours and 91% extraction in 24 hours under mild sulphuric acid leaching conditions. This testwork confirms the potential for a significant proportion of the Yarlarweelor uranium mineralization to be amenable to recovery by simple acid leaching.

7.8m @ 588ppm U3O8 including 1m @ 1,873ppm U3O8 in KRD10-01 and
14m @ 221ppm U3O8 including 1m @ 844ppm U3O8 in KRD10-03

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Figure 15.

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Figure 16.

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During the past year FYI Resources completed a detailed aerial radiometric and magnetic survey over E52/2478 highlighting some prominent thorium anomalies. After completing an archaeological survey over parts of E52/2095, the Company also undertook a shallow RAB drilling program of 36 holes, 1,306 metres testing a number of thorium, magnetic and uranium anomalies. Due to access problems the RAB drilling program was restricted to the central portion of the project area separate from the areas previously drilled at Kangaroo Ridge and Doris. Only low level uranium and thorium values were returned from this drilling.

The coming year will see exploration efforts concentrate again on the Doris – Kangaroo Ridge trend and on uranium anomalies to the immediate north and west of Kangaroo Ridge.

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David Sargeant Managing Director September 2011

Results from a previous airborne radiometric survey and geological mapping indicate shear zones with a combined strike length in excess of 25km exist within FYI’s tenements and may be prospective for uranium mineralization. A program of field checking and sampling of aerial radiometric anomalies has confirmed significant uranium anomalies exist to the north and west of Kangaroo Ridge, none of which have been drill tested to date (see Figure 16).

Competent Person’s Statement

The information in this Annual Report that relates to Exploration Results and Resources have been compiled by Mr. David Ross B.Sc. M.Sc., who is an employee of the Company. He is a member of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. He has sufficient experience which is relevant to the style of mineralization and type of deposits under consideration and to the activity to 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”. David Ross consents to the inclusion in this Annual Report of the matters based on his information in the form and context in which it appears.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Notes on the Resources held by Empire Resources Limited

Penny’s Find Resource

An updated resource estimate for the Penny’s Find gold mineralization was completed and announced to the market on 8 August 2007 and 12 October 2007. There has been no change to the resource since that time.

The mineral resource by category is 314,000 tonnes averaging 5.2 g/t gold down to a vertical depth of 150m below surface.

The mineral resource above 0.5 g/t gold is summarised in the following table.

Penny’s Find

Classified mineral resources – August 2007

Category Measured Indicated Inferred TOTAL	Tonnes 79,000 132,000 103,000 314,000	Grade*(g/t Au) 4.40 3.98 7.33 5.18	Ounces 11,177 16,893 24,276 52,316

* grades are based on a minimum cut-off of 0.5g/tAu and high assays cut to 25g/tAu

Resource modelling consultants Datageo calculated a JORC compliant in situ resource estimate, utilising all drill hole information available on mining lease M27/156 up to the end of June 2007.

The resource grade was estimated using ordinary kriging based on the drill hole data composited downhole to 1m intervals within constraining shapes representing the mineralization. Assumed specific gravity values used were: oxide 2.0t/m[3] ; transitional 2.2t/m[3] ; fresh 2.5t/m[3] .

Yuinmery Resource

A resource estimate for the Just Desserts prospect at Yuinmery was completed and announced to the market on 9 April 2009.

There has been no change in the resource since that time.

The mineral resource by category to a depth of 250m below surface is reported below. The resource comprises no oxide mineralization, only transitional and fresh.

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Just Desserts

Classified Mineral Resources – March 2009	Classified Mineral Resources – March 2009	Classified Mineral Resources – March 2009	Classified Mineral Resources – March 2009	Classified Mineral Resources – March 2009
	Category	Tonnes	Grade*	Grade*	Grade*
1%Cu cutoff	Indicated Inferred	104,000 966,000	Cu% 1.65 1.84	Aug/t 0.86 0.77	Ag g/t 1.32 2.12
	TOTAL	1,070,000	1.82	0.78	2.06
1.5%Cu cutoff	Indicated	46,000	2.11	1.14	1.58
	Inferred	536,000	2.34	0.92	2.68
	TOTAL	582,000	2.33	0.93	2.61

*High assays have been cut to 9%Cu, 20g/tAu and 10g/tAg.

Resource modelling consultants Datageo calculated a JORC compliant in situ resource estimate, utilising all drill hole information available on Prospecting Licence P57/1215 up to the end of June 2008.

The resource grade was estimated using ordinary kriging based on the drill hole data composited down hole to 1m intervals within constraining shapes representing the mineralization. Assumed specific gravity values used were: transitional 2.7t/m[3] ; fresh 3.2t/m[3] .

Competent Persons Statement

The information is this report concerning the Mineral Resources for the Penny’s Find Deposit and the Just Desserts Deposit at Yuinmery have been estimated by Mr Peter Ball B.Sc who is a director of DataGeo Geological Consultants and is a member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Ball has sufficient experience which is relevant to the styles of mineralization and types of deposit under consideration and qualifies as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Ball consents to the inclusion in the public release of the matters based on his information in the form and context in which it appears.

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==> picture [323 x 166] intentionally omitted <==

EMPIRE RESOURCES LIMITED AND CONTROLLED ENTITY ABN 32 092 471 513 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited Directors' Report

Directors’ Report

Your directors submit their report on Empire Resources Limited and its controlled entity for the financial year ended 30 June 2011.

DIRECTORS

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

Tom Revy - Chairman ( Non-Executive ) – BAppSc. Grad Dip Bus.

Mr Revy is a mining professional with in excess of 28 years experience in the mining industry to date including operations, process design and commissioning, technical and general management, business development, project and company evaluation and corporate management. Countries where extensive work has been undertaken include Australia, PNG, Southern and Central Africa, Central and South America and China.

David Sargeant - Managing Director - BSc. MAusIMM

Mr Sargeant – who holds a Bachelor of Science degree in economic geology from the University of Sydney – has more than 40 years experience as a geologist, consultant and company director. As such, he has been involved in numerous mineral exploration, ore deposit evaluation and mining development projects and is a member of AusIMM and the Geological Society of Australia.

During his career, Mr Sargeant has held a range of senior positions, including that of senior geologist with Newmont Pty Ltd and senior supervisory geologist with Esso Australia Ltd at the time of the Harbour Lights Gold Mine discovery and development. Further, Mr Sargeant was the first chief geologist at Telfer Gold Mine during exploration, development and production at that project. In addition, he was exploration manager for the Adelaide Petroleum NL group of companies, manager of resources development for Sabminco NL and a technical director of Western Reefs Limited during the period in which that company became a successful producer at the Dalgaranga Gold Project.

Mr Sargeant has been a director of the following listed companies during the past three years.

a p m o C	y n					P	n o iti s o							p A	p A	p	o	o	t n i	t n i	e	d	d
r u o s e R I Y F		c	s e	L	d t	c e x e - n o N		u	vit	e	D	ri	r o tc e	0 3	1 1 /			2 /		0 0			9
Adrian	Jessup			-Executive Director-BSc.			MAusIMM

Mr Jessup also holds a Bachelor of Science degree (with honours) in economic geology from the University of Sydney and has more than 40 years continuous experience as a geologist, company director and consultant involved in mineral exploration, ore deposit evaluation and mining. He is a member of AusIMM, the Geological Society of Australia and the Australian Institute of Geoscientists.

For the last 16 years, Mr Jessup has operated a geological consulting company. During that time, he was a founding director of Sylvania Resources Limited and remained on the board for two years. Prior to that, Mr Jessup was managing director of Giralia Resources NL for eight years, from the company's inception in 1987. Previously, he had worked for AMAX Exploration Inc., as a senior geologist and as regional manager in charge of that company's mineral exploration in Western Australia.

Mr Jessup has been a director of the following listed companies during the past three years.

Company Position Appointed FY IResource sLtd Non-execuvite Drietco r 30/11/2009

MANAGEMENT Simon Storm - Company Secretary – BCom. BCompt(Hons). CA, FCIS

Mr Storm is a Chartered Accountant with over 27 years of Australian and international experience in the accounting profession and commerce. He commenced his career with Deloitte Haskins & Sells in Africa then London before joining Price Waterhouse in Perth.

He has held various senior finance and/or company secretarial roles with listed and unlisted entities in the banking, resources, construction, telecommunications and property development industries. In the last 9 years he has provided

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited Directors' Report

consulting services covering accounting, financial and company secretarial matters to various companies in these sectors.

David Ross – Exploration Manager – BSc(Hons). MSc. MAusIMM

Mr Ross holds a Bachelor of Science degree (with honours) in geology from Aberdeen University, Scotland and a Master of Science degree in economic geology from McMaster University in Canada. He is a member of the AusIMM, the Geological Society of Australia and the Australian Institute of Geoscientists.

With over 25 years experience as an exploration geologist in Western Australia his career has seen him involved with numerous mineral exploration, ore deposit evaluation and mine development projects for both gold and base metals. He has held senior geologist positions with Brunswick NL and Giralia Resources and was geological superintendent for Australian Resources at the Gidgee Gold Mine. Most recently he held the position of chief geologist with De Grey Mining Ltd where he was instrumental in the discovery of the Orchard Well VMS deposits.

PRINCIPAL ACTIVITIES

During the period the principal activities of the Company consisted of mineral exploration and evaluation of properties in Australia. There has been no significant change in these activities during the financial period.

Dividends

No dividends have been paid during the period and no dividends have been recommended by the directors.

Result for the Financial Period

Loss from ordinary activities after provision for income tax was $1,907,860 (2010: $522,353)

REVIEW OF OPERATIONS

During the year, the Company continued exploration activities at its various exploration projects:

YUINMERY: Advanced Copper–Gold project WA (100% interest)

Entered into an option agreement to purchase over 75% interest in an extra 149 square km of tenements adjoining Empire’s; - drilling at the Just Desserts prospect intersects mineralization down plunge from existing resource and reinforces that Yuinmery could be a major VMS copper-gold system;
initial metallurgical testwork of Just Desserts mineralization confirms positive expectations for favourable recoveries;
drilling at A Zone prospect 2km north of Just Desserts prospect intersects encouraging copper and zinc grades;
drilling continues at other targets for copper and gold;
widespread low grade platinum- palladium-nickel mineralisation identified 7km north east of Just Desserts prospect; and
awarded $50,000 under the Western Australian Government’s Incentive Scheme Co-Funded Drilling Program. The grant will be used to fund a diamond drilling program during the next financial year.

PENNY’S FIND: Gold project WA (60% interest)

Sale of Penny’s Find project for up to $2 million cash plus royalty;
Brimstone Resources Ltd has paid an initial $500,000, is continuing to earn into the project and has taken over management of exploration; and
planning to develop an open pit has commenced.

TROY CREEK: Copper-Gold-PGM project WA (100% interest)

Farmout offer for Troy Creek project accepted from Zodiac Resources. Zodiac to spend $3 million to earn a 55% interest over a 5 year period; and
Zodiac to manage and carry out an initial reverse circulation (RC) drill programme early in the next financial year.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited Directors' Report

WYNNE (WA): Copper Project- 100% interest

awarded $75,000 under the Western Australian Government’s Incentive Scheme Co-Funded Drilling Program; and
grant will be used to fund a RC drilling program planned during the next financial year.

YARLARWEELOR (WA): Uranium project (28% indirect interest)

the project owner, FYI Resources Limited, completed further detailed airborne radiometric and magnetic surveys over the entire area; and
also completed a RAB drilling program consisting of thirty six holes totalling 1,306 metres testing a number of uranium, thorium and magnetic anomalies.

CORPORATE

company raised $2.78 million in capital, before costs, through a series of placements during the December 2010
9.4 million shares and 5 million shares were issued in October and November 2010 respectively, at 6.4 cents.
further placement was completed in December 2010 of 15.7 million shares at 12 cents.

In the opinion of the Directors there were no other significant changes in the state of affairs of the Company.

REMUNERATION REPORT (AUDITED)

This report details the amount and nature of remuneration of each director of the Company and the executives receiving the highest remuneration.

Remuneration Policy

The principles used to determine the nature and amount of remuneration are applied through a remuneration policy which ensures the remuneration package properly reflects the person’s duties and responsibilities and that the remuneration is competitive in attracting, retaining and motivating people of the highest quality.

The remuneration policy, setting the terms and conditions for the executive directors has been developed by the board after seeking professional advice and taking into account market conditions and comparable salary levels for companies of a similar size and operating in similar sectors.

The remuneration policy is to provide a fixed remuneration component. The board believes that this remuneration policy is appropriate given the stage of development of the Company and the activities which it undertakes and is appropriate in aligning Directors’ objectives with shareholder and businesses objectives.

The remuneration framework has regard to shareholders’ interests in the following ways:

Focuses on sustained growth as well as focusing the directors on key non-financial drivers of value, and
Attracts and retains high calibre directors.

The remuneration framework has regard to directors’ interests in the following ways:

Rewards capability and experience,
Reflects competitive reward for contributions to shareholder growth,
Provides a clear structure for earning rewards, and
Provides recognition for contribution.

Non-executive directors

The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the non-executive director and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to directors is subject to approval by shareholders at a General Meeting. Fees for non-executive directors are not linked to the performance of the Group. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company and may receive options.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited Directors' Report

The Directors have resolved that non-executive director’s fees will be $30,000 per annum for the Chairman, inclusive of statutory superannuation contributions. Shareholders have approved aggregate remuneration for all non-executive directors at an amount of $100,000 per annum. Where applicable, superannuation contributions of 9% are paid on these fees as required by law.

Share-based compensation

To ensure that the Company has appropriate mechanisms to continue to attract and retain the services of Directors and Employees of a high calibre, the Company has established the Empire Resources Limited Share Plan (“SP”) and the Empire Resources Option Plan.

The Directors consider the plans are an appropriate method to:

a) reward Directors and Employees for their past performance; b) provide long-term incentives to participate in the Company’s future growth; c) motivate Directors and Employees and generate loyalty in Employees; and d) assist to retain the services of valuable Employees.

The value attributed to the share based compensation for the year is as follows:

	Year granted	Vested %	Forfeited %	Financial years in which shares/options may vest	Total value of grant vested $	Minimum total value of grant yet to vest $	Maximum total value of grant yet to vest $
Directors Mr T Revy Mr D Sargeant Mr A Jessup Specified Executives Mr S Storm	2010 - - 2010-13 - 7,500 7,500
	2007 100% - 2008-11 104,441 - -
	2010 - - 2010-13 - 7,500 7,500
	2007 100% - 2008-11 69,627 - -
	2010 - - 2010-13 - 7,500 7,500
	2007 100% - 2008-11 48,739 - -
	2010 - - 2010-13 - 7,500 7,500

	A Remuneration consisting of shares	B Value at issue date $	C Value at exercise date $	D Value at lapse date $	E Total of columns B-D $
Directors Mr T Revy Mr D Sargeant Mr A Jessup Specified Executives Mr S Storm	0% - - - -
	5% - 61,500 - 61,500
	5% - 41,000 - 41,000
	- - 10% - 28,700 - 28,700

A = The percentage of the value of remuneration consisting of shares, based on the value of shares expensed during the current year.

B = The value at issue date calculated in accordance with AASB 2 Share-based Payment of shares issued during the year as part of remuneration.

C = The value at exercise date of shares that were issued as part of remuneration and were exercised during the year, being the intrinsic value of the shares at that date.

D = The value at lapse date of shares that were issued as part of remuneration and that lapsed during the year. Lapsed shares refer to shares that vested but expired due to the term of the loan expiring.

No shares were issued during the year upon the exercise of options.

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Empire Resources Limited Directors' Report

Executives

Executive Directors receive either a salary plus superannuation guarantee contributions as required by law, currently set at 9%, or provide their services via a consultancy arrangement. Directors do not receive any retirement benefits. Individuals may, however, choose to sacrifice part of their salary to increase payments towards superannuation. Options are not issued as part of remuneration for long term incentives.

All remuneration paid to directors and executives is valued at cost to the Company and expensed.

Compensation of Key Management Personnel for the year ended 30 June 2011.

The following table discloses the remuneration of the Key Management Personnel (Directors and executive officers) of the Company. The information in this table is audited.

Directors		Directors Fees	Consulting Fees	Short-term Benefits Total	Post- employment benefits	Share-based payments Value of shares & options
Specified Directors Non-Executive				-		-
Mr T Revy2	2011	30,000	-	30,000	-	2,500 32,500
	2010	15,000	-	15,000	-	34 15,034
Mr A Griffin1	2011	-	-	-	-	- -
Executive	2010	15,000	-	15,000	-	23,209 38,209
Mr D Sargeant	2011	-	180,000	180,000	-	31,511 211,511
	2010	-	164,000	164,000	-	34,848 198,848
Mr A Jessup3	2011	-	140,000	140,000	-	21,841 161,841
	2010	-	108,000	108,000	-	23,243 131,243
Total Specified Directors	2011	30,000	320,000	350,000	-	55,852 405,852
Specified Executives	2010	30,000	272,000	302,000	-	81,334 383,334

Mr S Storm	2011	-	37,800	37,800	-	16,039 53,839
	2010	-	34,800	34,800	-	16,280 51,080
Total Specified Eti	2011	-	37,800	37,800	-	16,039 53,839
xecuves	2010	-	34,800	34,800	-	16,280 51,080
1Resigned 8 January 2010 2Appointed 8 January 2010

3 Reduced fee whilst acting as an executive officer for FYI Resources Ltd for 5 months

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Empire Resources Limited Directors' Report

Employment contracts

– Mr D Sargeant

By agreement dated 24 October 2009, the Company and Kirkdale Holdings Pty Ltd (ACN 009 096 388) ('Kirkdale') agreed the terms and conditions under which Kirkdale would provide the services of Mr Sargeant as Managing Director of the Company.

The agreement has:

(a) a term of three years;
(b) requires the payment to Kirkdale of a fee of $15,000 (GST excl) per month (increasing by 10% each year) and reimbursement of expenses;
(c) provisions requiring the payment of a termination benefit of 50% of the amount due on termination of the agreement.

– Mr A Jessup

By agreement dated 24 October 2009, the Company and Murilla Exploration Pty Ltd (ACN 068 277 190) ('Murilla') agreed the terms and conditions under which Murilla would provide the services of Mr Jessup as an executive officer of the Company.

The agreement has:

(a) a term of three years;
(b) requires the payment to Murilla of a fee of $15,000 (GST excl) per month (increasing by 10% each year) and reimbursement of expenses;
(c) provisions requiring the payment of a termination benefit of 50% of the amount due on termination of the agreement.

Directors may be paid additional fees for special duties or services outside the scope of the ordinary duties of a Director. Directors will also be reimbursed for all reasonable expenses incurred in the course of their duties.

End of Remuneration Report.

Share Options

At the date of this report unissued ordinary shares of the Company under option are:

Grant Date	Date of Expiry	Exercise Price $	Number under Option
2-Jun-10 2-Jun-13 0.15 25-Jun-10 25-Jun-13 0.14 9-Aug-11 9-Aug-14 0.09			8,227,729 2,700,000 1,500,000
			12,427,729

Directors’ Interest

The relevant interest of each director in the shares and options over shares issued by the Company at the date of this report is as follows:

Director	Direct Indirect Number of Ordinary Shares	Direct Indirect Number of Ordinary Shares	Direct Indirect Number of Options	Direct Indirect Number of Options
Mr T Revy	-	710,000	500,000	-
Mr DSargeant	-	6,100,000	-	500,000
Mr AJessup	722,222	1,345,333	-	500,000

Company Performance

Comments on performance are set out in the review of operations.

Significant Changes in the State of Affairs

There were no other significant changes in the state of affairs of the Company other than those noted in the review of operations.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited Directors' Report

Likely Developments and Expected Results

Disclosure of likely developments in the operations of the Company and the expected results of those operations in future financial years, and any further information, has not been included in this report because, in the reasonable opinion of the Directors to do so would be likely to prejudice the business activities of the Company.

Environmental Regulation

The Company’s operations were subject to environmental regulations under both Commonwealth and State legislation in relation to its exploration activities.

The directors are not aware of any breaches during the period covered by this report.

Meetings of Directors

The following table sets out the number of meetings of the Company’s directors held during the period ended 30 June 2011 and the number of meetings attended by each director.

Director	A B Directors’ Meetings	A B Directors’ Meetings
Mr Thomas Revy	5	5
Mr David Sargeant	5	5
Mr AdrianJessup	5	5
A - meetings attended B - meetings held whilst a director

As at the date of this report the Company has not formed any committees as the directors consider that at present the size of the Company does not warrant such. Audit, corporate governance, director nomination and remuneration matters are all handled by the full board.

Proceedings on Behalf of the Company

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

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under Section 237 of the Corporations Act 2001.

Indemnification and Insurance of Directors and Officers

Indemnification

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

Insurance

The directors have not included details of the amount of the premium paid in respect of the directors’ and officers’ liability insurance contracts, as such disclosure is prohibited under the terms of the contract.

Events subsequent to reporting date

No matter or circumstance has arisen, since the end of the financial year, which significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in subsequent financial years.

Non-audit Services

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the Group are important.

Details of the amounts paid or payable to the auditor (HLB Mann Judd) for audit and non-audit services provided during the year are set out below.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited Directors' Report

During the period, the following fees were paid or payable for services provided by the auditors of the parent entity HLB Mann Judd, its related practices and non-related audit firms: Assurance Services HLB Mann Judd (Current Auditor) 1. Audit services Audit and review of financial reports and other audit work under the Corporations Act 2001 Total remuneration for audit services 2. Other assurance services Tax related Total remuneration for other assurance services Total remuneration for assurance services	Consolidated Year ended 30 June 2011 $ Year ended 30 June 2010 $
	19,025 18,500
	19,025 18,500
	- -
	- -
	19,025 18,500

Auditors Independence Declaration

Section 307C of the Corporations Act 2001 requires the company’s auditors, HLB Mann Judd, to provide the directors with a written Independence Declaration in relation to their audit of the financial report for the year ended 30 June 2011. This written Auditor’s Independence Declaration is attached to the Auditor’s Independent Audit Report to the members and forms part of this Director’s Report.

Signed in accordance with a resolution of Directors.

_____ D Sargeant Managing Director Perth, Western Australia 8 September 2011

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

EMPIRE RESOURCES LIMITED

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011

Note Revenue from continuing operations 2 Depreciation expense 3 Exploration expense 3 Employee benefits expense Management fee expense Directors fees Accounting expense Consultancy expense Share-based payment ASX expense Corporate relations expense Insurance expense Other expenses Share of loss of equity accounted investees 8 Loss before income tax Income tax benefit 4 Net loss for the year Other comprehensive income Share of comprehensive loss of equity accounted investees Income tax relating to components of other comprehensive income Other comprehensive loss for the year, net of tax Total comprehensive loss for the year Loss per share for loss from continuing operations attributable to the ordinary equity holders of the Company Basic and diluted loss per share (cents per share) 5	Note	Consolidated	Consolidated
		2011 $	2010 $
		523,311 1,534,161 (20,691) (23,577) (1,575,018) (1,147,416) (27,215) (20,032) (315,254) (254,772) (30,000) (30,000) (58,073) (48,265) (26,825) (6,658) (108,270) (113,909) (17,127) (15,415) (48,203) (27,134) (15,639) (15,482)
		(139,124) (110,695) (253,754) (243,159)
		(2,111,882) (522,353) 204,022 -
		(1,907,860) (522,353)
		- - (139,664) - - -
		(139,664) -
		(2,047,524) (522,353)
		(1.65) (0.61)

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

8. STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011

Note ASSETS CURRENT ASSETS Cash and cash equivalents 6 Trade and other receivables 7 Total Current Assets NON-CURRENT ASSETS Investments accounted for using the equity method 8 Plant and equipment 9 Total Non-Current Assets TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables 10 Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 11 Reserves 12 Accumulated losses TOTAL EQUITY	Note	Consolidated	Consolidated
		2011 $	2010 $
		1,781,147 595,674 310,855 70,861
		2,092,002 666,535
		863,227 1,256,645 23,691 34,427
		886,918 1,291,072
		2,978,920 1,957,607
		297,851 130,106
		297,851 130,106
		297,851 130,106
		2,681,069 1,827,501
		14,516,700 11,723,878 847,444 739,174 (12,683,075) (10,635,551)
		2,681,069 1,827,501

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

EMPIRE RESOURCES LIMITED

9. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2011

	Consolidated Group	Consolidated Group	Consolidated Group	Consolidated Group
	Issued Capital $	Accumulated Losses $	Option Reserve $	Total $

*Balance at* *1 July 2009*	10,269,731 (10,113,198) 625,265 781,798
Shares issued during the year Options issued during the year Equity issue expenses Loss for the year	1,539,691 - - 1,539,691 - - 113,909 113,909 (85,544) - - (85,544) - (522,353) - (522,353)
*Balance at* *30 June 2010*	11,723,878 (10,635,551) 739,174 1,827,501

*Balance at* *1 July 2010*	11,723,878 (10,635,551) 739,174 1,827,501
Shares issued during the year Options issued during the year Equity issue expenses Loss for the year Other comprehensive loss for the year	2,977,700 - - 2,977,700 - - 108,270 108,270 (184,878) - - (184,878) - (1,907,860) - (1,907,860) - (139,664) - (139,664)
*Balance at* *30 June 2011*	14,516,700 (12,683,075) 847,444 2,681,069

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes

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EMPIRE RESOURCES LIMITED

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2011

Note Cashflows from Operating Activities Receipts from customers Payments to suppliers and employees Interest received Net cash used in operating activities 6(i) Cash Flows from Investing Activities Purchase of plant and equipment Sale of prospect Exploration and evaluation expenditure Net cash used in investing activities Cash Flows from Financing Activities Proceeds from issue of equity securities Equity securities issue costs Net cash provided by financing activities Net increase / (decrease) in cash held Cash at the beginning of the financial year Cash at the end of the financial year 6	Consolidated	Consolidated
	2011 $	2010 $
	- 11,000 (683,871) (537,650) 41,932 24,357
	(641,939) (502,293)
	(9,955) - 500,000 - (1,453,408) (1,167,660)
	(963,363) (1,167,660)
	2,977,700 1,539,691 (186,925) (83,497)
	2,790,775 1,456,194
	1,185,473 (213,759) 595,674 809,433
	1,781,147 595,674

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

1. Statement of Significant Accounting Policies

The financial report covers the consolidated entity of Empire Resources Limited (“Empire”) and its controlled entity and Empire as an individual parent entity. Empire is a listed public company limited by shares, incorporated and domiciled in Australia.

(a) Basis of Preparation

This general purpose financial report has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. It is prepared on the basis of historical costs. The financial report is presented in Australian dollars.

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the consolidated financial report, comprising the financial statements and notes thereto, complies with the International Financial Reporting Standards (IFRS).

The financial report was authorised for issue by the Board on 8 September 2011.

The following is a summary of the material accounting policies adopted by the Group in the preparation of the financial report. The accounting policies have been consistently applied by the controlled entity and are consistent with those in the June 2010 financial report.

(b) Going Concern

As disclosed in the Statement of Comprehensive Income, the Group recorded operating losses of $1,907,860 (2010: $522,353) and as disclosed in the Statement of Cash Flows, the Group recorded cash outflows from operating activities of $641,939 (2010: $502,293) and investing activities of $963,363 (2010: $1,167,660) and a cash inflow from financing activities of $2,790,775 (2010: $1,456,194). Cash flows from financing activities arose from capital raisings that are disclosed in Note 11(a). After consideration of these financial conditions, the Directors have assessed the following matters in relation to the adoption of the going concern basis of accounting by the Group:

The Group has successfully completed capital raisings during the year as disclosed in Note 11(a) and has the ability to continue doing so on a timely basis, pursuant to the Corporations Act 2001, as is budgeted to occur in the twelve month period from the date of this financial report;
The Group has net current assets of $1,794,151 (2010: $536,429) at balance date and expenditure commitments for the next 12 months of $344,299 (2010:$752,054), as disclosed in Note 14 (ii), and retains the ability to scale down its operations to conserve cash, in the event that the capital raisings are delayed or partial; and
The company and Group have the ability, if required, to undertake mergers, acquisitions or restructuring activity or to wholly or in part, dispose of interests in mineral exploration and development assets.

Due to the above matters, the Directors believe that it is reasonably foreseeable that the company and Group will continue as a going concern and that it is appropriate that this basis of accounting be adopted in the preparation of the financial statements.

(c) Basis of Consolidation

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

A list of the controlled entity is contained in Note 8 to the financial statements. The controlled entity has a June financial year end.

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

Where a controlled entity enters or leaves the consolidated group during the year, their operating results are included/excluded from the date control was obtained or until the date control ceased.

Page 30

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

1. Statement of Significant Accounting Policies (continued)

Business Combinations

Business combinations occur where control over another business is obtained and results in the consolidation of its assets and liabilities. All business combinations, including those involving entities under common control, are accounted for by applying the purchase method. The purchase method requires an acquirer of the business to be identified and for the cost of the acquisition and fair values of identifiable assets, liabilities and contingent liabilities to be determined as at acquisition date, being the date that control is obtained. Cost is determined as the aggregate of fair values of assets given, equity issued and liabilities assumed in exchange for control together with costs directly attributable to the business combination. Any deferred consideration payable is discounted to present value using the entity’s incremental borrowing rate.

(d) Investment in associated entities

The Group’s investment in its associate is accounted for using the equity method of accounting in the consolidated financial statements, after initially being recognised at cost. The associate is an entity in which the Group has significant influence and which is neither a subsidiary nor a joint venture.

Under the equity method, the investment in the associate is carried in the consolidated statement of financial position at cost plus post-acquisition changes in the Group's share of net assets of the associate. Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in the associate. Goodwill included in the carrying amount of the investment in associate is not tested separately, rather the entire carrying amount of the investment is tested for impairment as a single asset. If an impairment is recognised, the amount is not allocated to the goodwill of the associate.

The consolidated statement of comprehensive income reflects the Group's share of the results of operations of the associate, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised in comprehensive income as a component of other income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any unsecured long-term receivable and loans, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

The balance dates of the associate and the Group are identical and the associate's accounting policies conform to those used by the Group for like transactions and events in similar circumstances.

(e) Plant and Equipment

Plant and equipment is measured on the cost basis less depreciation and impairment losses.

The carrying amount of plant & equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from those assets. Recoverable amount is assessed on the basis of the expected net cash flows which will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Depreciation is calculated on the straight line basis and is brought to account over the estimated useful lives of all plant and equipment from the time the asset is held ready for use. The depreciation rates used are:

Office furniture 15-33% Office computer equipment 33% Motor vehicles 20%

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

An asset’s carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than its estimated recoverable amount. Gains and losses on disposal are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to the assets are then transferred to accumulated losses.

Page 31

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

1. Statement of Significant Accounting Policies (continued)

(f) Income Tax

The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary difference and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date.

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

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

when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

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

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

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

(g) Cash & Cash Equivalents

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

(h) Acquisition of Assets

The purchase method of accounting is used for all acquisitions of assets regardless of whether shares or other assets are acquired. Cost is determined as the fair value of the assets given up at the date of the acquisition

Page 32

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

1. Statement of Significant Accounting Policies (continued)

plus costs incidental to the acquisition. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

(i) Impairment of assets

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

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

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

(j) Financial Instruments

Recognition

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

Loans and receivables

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

Available-for-sale financial assets

Available for sale financial assets include any financial assets not included in the above categories. Availablefor-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Fair value

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

Impairment

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

(k) Exploration and Development Expenditure

Exploration, evaluation and acquisition costs are written off in the year they are incurred. Development costs are capitalised. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production.

(l) Employee Entitlements

Salaries, wages and annual leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within twelve months of the reporting date are recognised in other creditors in respect to employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

Page 33

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

1. Statement of Significant Accounting Policies (continued)

Equity settled transactions

The Group provides benefits to employees (including senior executives) of the Group in the form of sharebased payments, whereby employees render services in exchange for shares or rights over shares (equitysettled transactions).

There are currently two plans in place to provide these benefits:

the Employee Share Option Plan (ESOP), which provides benefits to directors and senior executives; and
the Employee Share Loan Plan (ESLP), which provides benefits to all employees, excluding senior executives and directors.



The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a Black Scholes model, further details of which are given in Note 18. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Empire Resources Limited (market conditions) if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

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

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

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

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see Note 5).

The Group expenses equity-settled share-based payments such as share and option issues after ascribing a fair value to the shares and/or options issued. The fair value of option and share plan issues of option and share plan shares are recognised as an expense together with a corresponding increase in the share based payments reserve or the share option reserve in equity over the vesting period. The proceeds received net of any directly attributable transaction costs are credited to share capital when options are exercised.

The value of shares issued to employees financed by way of a non recourse loan under the employee Share Plan is recognised with a corresponding increase in equity when the company receives funds from either the employees repaying the loan or upon the loan termination, pursuant to the rules of the share plan. All shares issued under the plan with non recourse loans are considered, for accounting purposes, to be options.

(m) Trade Receivables

All trade receivables are recognised at the amounts receivable as they are due for settlement no more than 30 days from the date of recognition.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. An allowance for doubtful debts is raised where some doubt as to collection exists.

Page 34

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

1. Statement of Significant Accounting Policies (continued)

(n) Trade creditors

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial period and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(o) Recoverable Amount of Non-current Assets

The recoverable amount of an asset is the net amount expected to be recovered through the cash inflows and outflows arising from its continued use and subsequent disposal.

Where the carrying amount of a non-current asset is greater than its recoverable amount, the asset is written down to its recoverable amount. Where net cash inflows are derived from a group of assets working together, recoverable amount is determined on the basis of the relevant group of assets. The decrement in the carrying amount is recognised as an expense in net profit or loss in the reporting period in which the recoverable amount write-down occurs. The expected net cash flows used in determining recoverable amount are not discounted to their present value.

(p) Leases

A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets, and operating leases under which the lessor effectively retains substantially all such risks and benefits

Operating lease payments are charged as expenses in the periods in which they are incurred, as this represents the pattern of benefits derived from the leased assets.

(q) Revenue Recognition

Amounts disclosed as revenue are net of duties and taxes paid. Revenue is recognised as follows:

(i) Interest

Interest earned is recognised as and when it is receivable, including interest which is accrued and is readily convertible to cash within two working days. Accrued interest is recorded as part of other debtors.

(ii) Sundry income

Sundry income is recognised as and when it is receivable. Income receivable, but not received at balance date, is recorded as part of other debtors.

(r) Goods and Services Tax (GST)

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

(s) Critical accounting estimates and judgements

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

Key Estimates — Impairment

The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

Share-based payment transactions

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 by an external valuer using a Black Scholes model, using the assumptions detailed in Note 18.

Page 35

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

1. Statement of Significant Accounting Policies (continued)

The Group measures the cost of cash-settled share-based payments at fair value at the grant date using the Black and Scholes formula taking into account the terms and conditions upon which the instruments were granted, as discussed in Note 18.

This fair value is expensed over the period until vesting with recognition of a corresponding liability. The liability is re-measured to fair value at each balance date up to and including the settlement date with changes in fair value recognised in profit or loss.

(t) Adoption of new and revised standards

Changes in accounting policies on initial application of Accounting Standards

In the year ended 30 June 2011, the Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period.

It has been determined by the Group that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies.

The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2011. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Group accounting policies.

(u) Segment Reporting

Operating segments are now reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Empire Resources Ltd.

The Group operates only in one business and geographical segment being predominantly in the area of mineral exploration in Western Australia. The Group considers its business operations in mineral exploration to be its primary reporting function.

(v) Earnings per share

Basic earnings per share is calculated as net profit or loss attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit or loss attributable to members of the parent, adjusted for:

costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(w) Parent Entity Financial Information

The financial information for the parent entity, Empire resources Limited disclosed in Note 22 has been prepared on the same basis as the Group.

Page 36

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

==> picture [338 x 146] intentionally omitted <==

----- Start of picture text -----

2. Revenue
Consolidated
2011 2010
$ $
Revenue
Interest received 68,766 24,357
Sale of tenement 454,545 1,499,804
Other income - 10,000
523,311 1,534,161
3. Loss from ordinary activities
----- End of picture text -----

Loss before income tax The loss from ordinary activities before income tax has been determined after: (a) Expenses Depreciation Exploration costs written off	Consolidated	Consolidated
	2011 $	2010 $
	20,691 23,577
	1,575,018 1,147,416

Page 37

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

4. Income tax

(a) Income tax recognised in loss

No income tax is payable by the parent or consolidated group as they both recorded losses for income tax purposes for the year.

(b) Numerical reconciliation between income tax expense and the loss before income tax.

b) Numerical reconciliation between income ta	x expense and the loss before inco	x expense and the loss before inco
Loss before tax Income tax benefit at 30% (2010:30%) Tax effect of: - deductible capital raising expenditure - non deductible expenditure - deductible temporary differences - share based payment - gain on sale of tenement Deferred tax asset not recognised Previously unrecognised tax losses now recouped to reduce current tax expense R&D tax offset payment from prior year Income tax benefit attributable to loss from ordinary activities before tax (c) Unrecognised deferred tax balances Tax losses attributable to members of the group - revenue Potential tax benefit at 30% *Deferred tax asset asset not booked* Amounts recognised in statement of comprehensive income -employee provisions -other -R&D tax offset Amounts recognised in equity - share issue costs Net unrecognised deferred tax asset at 30%	Consolidated
	2011 $	2010 $
	(2,111,882) (522,353)
	633,565 156,706 45,204 35,484 (76,686) (236,294) 3,981 (2,291) (32,481) (34,173) - (242,868) (573,583) - - 323,436 204,022 -
	204,022 -
	8,975,065 7,063,124
	2,692,520 2,118,937 2,160 4,061 6,150 7,725 - 204,022 48,676 50,013
	2,749,506 2,384,758

A deferred tax asset attributable to income tax losses has not been recognised at balance date as the probability criteria disclosed in Note 1(f) is not satisfied and such benefit will only be available if the conditions of deductibility also disclosed in Note 1(f) are satisfied.

Page 38

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

5. Loss per share

Basic and diluted loss per share (cents per share) Loss used in the calculation of basic EPS Weighted average number of shares outstanding during the year used in calculations of basic loss per share Diluted loss per share has not been disclosed as it is not materially different from basic loss per share	Consolidated	Consolidated
	2011 Cents	2010 Cents
	(1.65) (0.61)
	(1,907,860) (522,353)
	115,668,524 85,856,572

6. Cash and cash equivalents

6. Cash and cash equivalents
Cash at bank and in hand	Consolidated Group
	2011 $	2010 $
	1,781,147 595,674
	1,781,147 595,674

(i) Reconciliation of cash flow from operations with loss after income tax

Loss after income tax Sale of tenement Depreciation Share based payments expense Exploration expenditure written off Income tax benefit	Consolidated Group	Consolidated Group
	2011 $	2010 $
	(1,907,860) (522,353) (454,545) (1,499,804) 20,691 23,577 108,270 113,909 1,453,408 1,167,660 (204,022) - 253,754 243,159
Share of loss of equity accounted investees
Changes in assets and liabilities, net of the effects of purchase of subsidiaries: (Increase)/decrease in trade and other receivables (Decrease)/increase in trade and other payables (Decrease)/increase in employee benefits Net cash outflow from operating activities	(730,304) (473,852) (69,406) (53,904) 166,984 24,422 (9,213) 1,041
	(641,939) (502,293)

Page 39

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

7. Trade and other Receivables

Current Trade receivables Other receivables	Consolidated Group	Consolidated Group
	2011 $	2010 $
	26,360 36,090 284,495 34,771
	310,855 70,861

Provision for Impairment of Receivables

Current trade receivables are non-interest bearing and generally on 30 day terms. A provision for impairment is recognised when there is objective evidence that an individual trade receivable is impaired.

8. Investments

(a) Investments accounted for using the Equity Method

			Consolidated Group	Consolidated Group	Consolidated Group	Consolidated Group	Consolidated Group	Consolidated Group
			2011 $		2010 $
Reconciliation of movements in investments accounted for using the equity method: Balance at 1 July Acquisitions Share of loss since acquistion Movement in investment's reserves Balance at 30 June

				Ownership interest			Published fair value
				2011		2010	2011	2010
Name of entity	Principal activity	Country of incorporation		%		%	$	$
Associated entity FYI Resources Ltd Mineral exploration Australia				28% 32% 985,617 1,353,559

Page 40

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

8. Investments (continued)

	Consolidated Group	Consolidated Group
	2011 $	2010 $
Summarised financial information of associates: Financial position Total assets Total liabilities Net assets Group’s share of associates’ net assets Financial performance Total revenue Total loss for the year Group’s share of associate’s profit/(loss) Group’s share of associate’s compehensive loss Capital commitments and contingent liabilities of associate: Share of capital commitments incurred jointly with other investors Share of contingent liabilities incurred jointly with other investors	3,689,651 4,678,120 169,589 450,124
	3,520,062 4,227,996
	985,617 1,353,559 50,709 29,645 (867,439) (1,223,518) (253,754) (243,159) (139,664) - 370,570 406,534 - -

(b) Investments in subsidiary

Controlled entity	Country of incorporation	Percentage Owned 2011 %	Percentage Owned 2010 %
Parent Entity: Empire Resources Limited Subsidiary of Empire Resources Limited: Torrens Resources Pty Ltd	Australia - - Australia 100 100

Page 41

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

9. Plant & equipment

Plant and Equipment Cost Accumulated depreciation Motor Vehicles Cost Accumulated depreciation Total Plant and Equipment	Consolidated Group	Consolidated Group
	2011 $	2010 $
	37,153 27,198 (27,618) (25,069)
	9,535 2,129
	90,217 90,217 (76,061) (57,919)
	14,156 32,298
	23,691 34,427

Movements in the carrying amounts of each class of property, plant & equipment at the beginning and end of the current financial period is as set out below:

Plant and Equipment Balance at the beginning of year Additions Depreciation expense Carrying amount at the end of the year Motor Vehicles Balance at the beginning of year Additions Depreciation expense Carrying amount at the end of the year	Consolidated Group	Consolidated Group
	2011 $	2010 $

	2,129 7,563 9,955 - (2,549) (5,434)
	9,535 2,129
	32,298 50,441 - - (18,142) (18,143)
	14,156 32,298

10. Trade and other payables

10. Trade and other payables
Trade payables and accruals Employee benefits	Consolidated Group
	2011 $	2010 $
	283,827 106,869 14,024 23,237
	297,851 130,106

Page 42

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

11. Issued capital

(a) Ordinary shares

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

On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

	Consolidated Group	Consolidated Group
	2011 $	2010 $
127,295,921 (2010: 97,195,921) fully paid ordinary shares	14,516,700 11,723,878
(i) Ordinary shares - number At 1 July 2010 Shares issued - 10,750,000 on 14 August 2009 at $0.05 Sophisticated investors Shares issued - 1,850,000 on 24 November 2009 at $0.05 Sophisticated investors Shares placement - 4,450,000 on 23 December 2009 at $0.075 Shares placement - 8,227,729 on 12 May 2010 at $0.07 Share placement - 9,400,000 on 13 October 2010 at $0.062 Share placement - 5,000,000 on 26 November 2010 at $0.062 Share placement - 15,700,000 on 7 December 2010 at $0.12 Balance at 30 June 2011
	Consolidated Group
	2011	2010
	No.	No.
	97,195,921 71,918,192 - 10,750,000 - 1,850,000 - 4,450,000 - 8,227,729 9,400,000 - 5,000,000 - 15,700,000 -
	127,295,921 97,195,921

Page 43

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

11. Issued capital (continued)

(ii) Ordinary shares – value At 1 July 2010 Shares issued - 10,750,000 on 14 August 2009 at $0.05 Sophisticated investors Shares issued - 1,850,000 on 24 November 2009 at $0.05 Sophisticated investors Shares placement - 4,450,000 on 23 December 2009 at $0.075 Shares placement - 8,227,729 on 12 May 2010 at $0.07 Share placement - 9,400,000 on 13 October 2010 at $0.062 Share placement - 5,000,000 on 26 November 2010 at $0.062 Share placement - 15,700,000 on 7 December 2010 at $0.12 Shares issued ERL share Plan - 2,450,000 on 8 May 2011 at $0.0821 Less share issue costs Balance at 30 June 2011	Consolidated Group	Consolidated Group
	2011 $	2010 $
	11,723,878 10,269,731 - 537,500 - 92,500 - 333,750 - 575,941 582,800 - 310,000 - 1,884,000 - 200,900 - (184,878) (85,544)
	14,516,700 11,723,878

Note 1 - In May 2008, 2,450,000 shares were issued under the Company's share plan and the loans were repaid pursuant to the share plan in May 2011.

(b) Options

As at 30 June 2011 (30 June 2010: 13,927,729) the Company had the following options on issue over ordinary shares:-

Grant Date	Date of Expiry	Exercise Price $	Number under Option
2-Jun-10 2-Jun-13 0.15 25-Jun-10 25-Jun-13 0.14			8,227,729 2,700,000
			10,927,729

Page 44

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

12. Reserves

Reserves Reserves comprise the following: Options reserve Balance as at start of financial year Share-based payment Balance as at end of the financial year	Consolidated Group	Consolidated Group
	2011 $	2010 $
	847,444 739,174
	739,174 625,265 108,270 113,909
	847,444 739,174

Details of certain components of the option reserve arising as a consequence of equity based payments are included in Note 18.

13. Financial risk management

The Group’s financial situation is not complex. It’s activities may expose it to a variety of financial risks in the future: market risk (including currency risk and fair value interest rate risk), credit risk, liquidity risk and cash flow interest rate risk. At that stage the Group’s overall risk management program will focus on the unpredictability of the financial markets and seek to minimise potential adverse effects on the financial performance of the Group.

Risk management is carried out under an approved framework covering a risk management policy and internal compliance and control by management. The Board identifies, evaluates and approves measures to address financial risks.

The Group hold the following financial instruments:

	Consolidated Group	Consolidated Group
	2011 $	2010 $
Financial assets Cash and cash equivalents Trade and other receivables Financial liabilities Trade and other payables	1,781,147 595,674 310,855 70,861
	2,092,002 666,535
	297,851 130,106

Page 45

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

13. Financial risk management (continued)

(a) Market risk

Cash flow and fair value interest rate risk

The Group’s main interest rate risk arises from cash deposits to be applied to exploration and development of areas of interest. Deposits at variable rates expose the Group to cash flow interest rate risk. Deposits at fixed rates expose the Group to fair value interest rate risk. During 2011 and 2010, the Group’s deposits at variable rates were denominated in Australian Dollars.

As at the reporting date, the Group had the following variable rate deposits and there were no interest rate swap contracts outstanding:

	2011 Weighted average interest rate %	Balance $	2010 Weighted average interest rate %	Balance $
Deposit Other cash available Net exposure to cash flow interest rate risk	1,622,503 537,828 158,644 57,846 5.1% 1,781,147 3.0% 595,674

The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into the renewal of existing positions.

Sensitivity – Consolidated and Parent entity

During 2011, if interest rates had been 1% higher or lower than the prevailing rates realised, with all other variables held constant, there would be an immaterial change in post-tax profit for the year. Equity would not have been impacted.

(b) Credit risk

The Group has no significant concentrations of credit risk. Cash transactions are limited to high credit quality financial institutions.

Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures on outstanding receivables and committed transactions. In relation to other credit risk areas management assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.

The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised at the beginning of this note.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close-out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group will aim at maintaining flexibility in funding by accessing appropriate committed credit lines available from different counterparties where appropriate and possible. Surplus funds when available are generally only invested in high credit quality financial institutions in highly liquid markets.

Financing arrangements

The Consolidated and parent entity has no borrowing facilities.

Page 46

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

13. Financial risk management (continued)

30 June 2011	Weighted Average Effective Interest Rate	Floating Interest Rate Within Year 1 to 5 Years Over 5 Years Non-interest bearing Total $ $ $ $ $ $ Fixed Interest Rate Maturing
Financial Assets: Cash & cash equivalents 5.1% 1,761,147 20,000 - - - 1,781,147 Trade and other receivables - - 310,855 310,855 Total Financial Assets 1,761,147 20,000 - - 310,855 2,092,002 Financial Liabilities: Trade and other payables - - - - 297,851 297,851 Short-term borrowings - - - - - - Total financial liabilities - - - - 297,851 297,851
		1,761,147 20,000 - - 310,855 2,092,002
		- - - - 297,851 297,851 - - - - - -
		- - - - 297,851 297,851

30 June 2010	Weighted Average Effective Interest Rate	Floating Interest Rate Within Year 1 to 5 Years Over 5 Years Non-interest bearing Total $ $ $ $ $ $ Fixed Interest Rate Maturing
Financial Assets: Cash & cash equivalents 3.0% 575,674 20,000 - - - 595,674 Trade and other receivables - - - 70,861 70,861 Total Financial Assets 575,674 20,000 - - 70,861 666,535 Financial Liabilities: Trade and other payables - - - - 130,106 130,106 Short-term borrowings - - - - - - Total financial liabilities - - - - 130,106 130,106
		575,674 20,000 - - 70,861 666,535
		- - - - 130,106 130,106 - - - - - -
		- - - - 130,106 130,106

Maturities of financial assets and liabilities

The note above analyses the Consolidated and parent entity's financial liabilities. These liabilities comprise trade and other payables, are non interest bearing and will mature within 12 months. The amounts disclosed are the contractual undiscounted cash flows. There are no derivatives.

Page 47

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

13. Financial risk management (continued)

Maturity analysis of financial assets and liability based on management’s expectation

Year ended 30 June 2011	<6 months	6-12 months	1-5 years	>5 years	Total
Consolidated Financial assets Cash & cash equivalents Trade & other receivables Financial liabilities Trade & other payables Net maturity	1,781,147 - - - 1,781,147 310,855 - - - 310,855
	2,092,002 - - - 2,092,002
	297,851 - - - 297,851
	1,794,151 - - - 1,794,151

(d) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of financial instruments that are not traded in an active market (for example, investments in unlisted subsidiaries) is determined using valuation techniques or cost (impaired if appropriate). The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.

14. Capital and Leasing Commitments

(i) Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable - minimum lease payments - not later than 12 months - between 12 months and 5 years - greater than 5 years	Consolidated	Consolidated
	2011 $	2010 $
	53,069 48,493 55,881 102,136 - -
	108,950 150,629

The company entered into an operating lease on 1 August 2007 for office space it occupies in Victoria Park. The term of the lease is 3 years and expired on 1 August 2010. The lease was renewed for a further 3 years to 31 July 2013.

Page 48

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

14. Capital and Leasing Commitments (continued)

(ii) Expenditure commitments contracted for: Exploration Tenements In order to maintain current rights of tenure to exploration tenements, the Company is required to outlay rentals and to meet the minimum expenditure requirements. These obligations are not provided for in the financial statements and are payable: - not later than 12 months - between 12 months and 5 years - greater than 5 years	2011 2010 $ $ Consolidated	2011 2010 $ $ Consolidated
		2010 $

	344,299 752,054 1,377,196 3,008,216 - -
	1,721,495 3,760,270

15. Directors and other key management personnel

(i) Details of Key Management Personnel

Chairman – non-executive

Mr T Revy (from 8 January 2010)

Managing Director

Mr D Sargeant (from 13 April 2000)

Executive director

Mr A Jessup (from 15 August 2003)

Company Secretary

Mr S Storm (from 30 April 2007)

(ii) Compensation of Key Management Personnel

	Consolidated	Consolidated
	2011 $	2010 $
Short-term employee benefits Post-employment benefits Share-based payments	387,800 336,800 - - 71,891 97,614
	459,691 434,414

The company has taken advantage of the relief provided by AASB 2008-4 Amendments to Australian Accounting Standard – Key Management Personnel Disclosures by Disclosing Entities, and has transferred the detailed remuneration disclosures to the directors’ report. The relevant information can be found in the Remuneration Report on pages 3 to 6. Remuneration Report on pages 20 to 23.

(iii) Equity instrument disclosures relating to directors and other key management personnel

Shareholdings

The number of ordinary shares in the Company held during the year by each director and other key management personnel, including their personally related entities or associates, are set out below.

Page 49

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

15. Directors and other key management personnel (continued)

2011 Shareholdings of Key Management Personnel

Directors	Balance at the start of the period	Issued under share plan	On exercise of options	Net change other	Balance at the end of the period

Mr T Revy Mr D Sargeant	350,000 - - 360,000 710,000 6,100,000 - - - 6,100,000
Mr A Jessup	2,067,555 - - - 2,067,555
	8,517,555 - - 360,000 8,877,555

Specified Executives
Mr S Storm	350,000 - - - 350,000
	350,000 - - - 350,000

2010 Shareholdings of Key Management Personnel

Directors	Balance at the start of the period	Issued under share plan	On exercise of options	Net change other	Balance at the end of the period

Mr A Griffin1	500,000 - - - 500,000
Mr T Revy2 Mr D Sargeant	- - - 350,000 350,000 6,100,000 - - - 6,100,000
Mr A Jessup	2,067,555 - - - 2,067,555
	8,667,555 - - 350,000 9,017,555

Specified Executives
Mr S Storm	350,000 - - - 350,000
	350,000 - - - 350,000

1 Resigned 8 January 2010

2 Appointed 8 January 2010

All equity transactions with key management personnel, which relate to the Company’s listed ordinary shares, have been entered into on an arms length basis.

Page 50

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

15. Directors and other key management personnel (continued)

Option holdings

Details of shares issued as remuneration can be found in the remuneration report.

The number of options over ordinary shares in the Company held during the reporting period by each director and key management personnel, including their personally related entities, are set out below.

2011 Option holdings of Key Management Personnel

Directors	Balance at the start of the period	Issued	Expired	Net change other	Balance at the end of the period	Vested and exercisable at 30 June 2011

Mr T Revy Mr D Sargeant	500,000 - - - 500,000 - 500,000 - - - 500,000 -
Mr A Jessup	500,000 - - - 500,000 -
	1,500,000 - - - 1,500,000 -

Specified Executives
Mr S Storm	500,000 - - - 500,000 -
	500,000 - - - 500,000 -

2010 Option holdings of Key Management Personnel

Directors	Balance at the start of the period	Issued	Expired	Net change other	Balance at the end of the period	Vested and exercisable at 30 June 2010

Mr A Griffin1	- - - - - -
Mr T Revy2 Mr D Sargeant	- 500,000 - - 500,000 - - 500,000 - - 500,000 -
Mr A Jessup	- 500,000 - - 500,000 -
	- 1,500,000 - - 1,500,000 -

Specified Executives
Mr S Storm	- 500,000 - - 500,000 -
	- 500,000 - - 500,000 -

Page 51

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

16. Related Parties

Directors and specified executives

Disclosures relating to the remuneration and shareholdings of directors and specified executives are set out in the Directors’ Report and Note 15 respectively.

Other transactions with directors, their associates and director related entities are as follows:

	Consolidated	Consolidated
	2011 $	2010 $
Amounts paid to companies associated with certain Directors for management services Kirkdale Holdings Pty Ltd - Mr D Sargeant Murilla Exploration Pty Ltd - Mr A Jessup Mr T Revy Total Amounts payable to Directors for Directors Fees Mr T Revy Mr A Griffin	180,000 164,000 140,000 108,000 22,500 -
	342,500 272,000
	7,500 15,000 - 15,000
	7,500 30,000

The following table provides the total amount of transactions that were entered into with related parties for the relevant financial year:

Related party		Revenue from Related Parties $	Reimbursement of Expenditure Related Parties $	Amounts owed by Related Parties as at 30 June $	Amounts Owed to Related parties as at 30 June $
Consolidated Associate: FYI Resources Ltd	2011 2010	- 1,509,804	103,604 172,538	26,360 36,090	- -

Associate

The Group has a 28% interest in FYI Resources Limited (2010: 32%).

Page 52

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

17. Remuneration of auditors

The auditor of Empire Resources Ltd is HLB Mann Judd.

Amounts received or due and receivable by HLB Mann Judd for: Audit or review of the financial reports of the Company Amounts received or due and receivable by HLB Mann Judd audit firms: Other services	Consolidated	Consolidated
	2011 $	2010 $
	19,025 18,500 - -
	19,025 18,500

18. Share Based Payments

(a) Employee share plan

The Company has established an employee share plan, which is also available to Directors, known as the 2008 Empire Resources Limited Employee Share Plan and was approved by shareholders on 28 November 2007.

The issue price for Shares offered under the Plan is at the discretion of the Board, provided that the issue price is not less than 1% below the weighted average sale price of Shares sold through ASX during the one week period up to and including the offer date.

A Director or Employee who is invited to subscribe for Shares under the Plan may also be invited to apply for a loan up to the amount payable in respect of the Shares accepted, on the following terms:

a) Loans must be made solely to the Participant or their nominee and in the name of either the Participant or their nominee as the case may be.

b) The principal amount outstanding under a Loan will be interest free.

c) Any loan made available to a Participant shall be applied by the Company directly toward payment of the issue price of the Shares to be acquired under the Plan.

d) the term of the loan shall be three (3) years from the date of issue of the Shares

e) The Company retains a lien over each share acquired pursuant to the loan until such time as the loan is repaid.

Set out below is a summary of shares issued to Directors and employees under the Empire Resources Employee Share Plan:

Consolidated entity – 30 June 2011 Issue date	Expiry date	Balance at start of period Number	Issued during year Number	Loan repaid during year Number	Expercised during year Number	Balance at end of year Number	Exercisable at end of year Number
12 May2008	12 May2011 2,450,000 - - 2,450,000 - -
Weighted average exerciseprice	$0.188 $0.082

Page 53

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

18. Share Based Payments (continued)

(b) Option plan

The Company has established an option share plan, which is also available to directors, employees and some consultants, known as the 2010 Empire Resources Option Plan and was approved by shareholders on 25 June 2010.

The following table illustrates the number and weighted average exercise prices of and movements in share options issued during the year:

	2011 Number	2011 Weighted average exercise price	2010 Number	2010 Weighted average exercise price
Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year	2,700,000 $0.14 - - - - 2,700,000 $0.14 - - - - - - - - - - - -
	2,700,000 $0.14 2,700,000 $0.14
	- -

A corporate goal must be met before the options may be exercised: The corporate goal that has been set is the Company’s market capitalisation reaching $10.77 million (which was the market capitalisation of the Company at 1 December 2009 plus 50%) and remaining at that level for 50 contiuously traded ASX Business Days.

The fair value of the equity-settled share options is estimated as at the date of grant using the Black and Scholes model taking into account the terms and conditions upon which the options were granted.

The following table lists the inputs to the model used for the year ended 30 June 2011:

	Grant Date	Expiry date	Exercise price	Vesting Period	Fair value at grant date of options	Expected Volatility	Option life	Dividend yield	Risk-free interest rate	Grant date share price
Key Management Personnel options	25-Jun-10	25-Jun-13	$0.14	25-Jun-13	$0.02	107%	3years	0%	4.57%	$0.04
Employee options	25-Jun-10	25-Jun-13	$0.14	25-Jun-13	$0.02	107%	3years	0%	4.57%	$0.04
Consultant options	25-Jun-10	25-Jun-13	$0.14	25-Jun-13	$0.02	107%	3years	0%	4.57%	$0.04

Page 54

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

18. Share Based Payments (continued)

(c) Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows:

employee benefit expense were as follows:
	Consolidated
	2011 $	2010 $
Shares issued under employee share plan Options issued	$	$
	94,770 113,724 13,500 185
	108,270 113,909

19. Segment Information

The Group has applied AASB 8 Operating Segments from 1 July 2009. AASB 8 requires a “management approach” under which segment information is presented on the same basis as that used for internal reporting purposes.

Operating segments are now reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Empire Resources Ltd.

Consistent with prior year, the Group operates only in one business and geographical segment being predominantly in the area of mining and exploration in Australia. The Group considers its business operations in mineral exploration to be its primary reporting function.

20. Contingent assets

Penny's Find

In September 2010, the Company entered into a staged sale agreement for the Penny’s Find gold project with Brimstone Resources Limited (Brimstone). At the election of Brimstone, the sale consideration comprises either:

• Staged cash payments totalling $2.0 million for a 100% interest of the Penny’s Find project. A royalty will also be payable on gold produced in excess of the current JORC resource of 52,500 ozs gold.

• Staged cash payments totalling $0.5 million together with exploration and development expenditure of up to $3 million for an 80% interest in the Penny’s Find project. Any additional development costs associated with the Company's residual 20% interest will carried by Brimstone and repayable from the proceeds of future gold production.

An initial $500,000 (GST inclusive) payment has been made by Brimstone during the year to earn a 40% interest in the project. Brimstone must then continue funding exploration and development work by expending up to $3 million by 31st December 2013 to earn an 80% interest in the project. After expending $1.5 million by December 2012, Brimstone can elect to purchase 100% of the project for $1.5 million plus a

2% gross royalty on gold produced in excess of the current JORC resource of 52,500 ozs gold. The royalty would only apply when the gold price is above A$700/oz and would not exceed A$50 per ounce of gold recovered.

Troy Creek

During the March 2011 quarter, the Company finalised an agreement with unlisted Sydney based company, Zodiac Resources Ltd, whereby Zodiac may earn a 55% interest by spending $3 million on exploration within three years and earn a 75% interest by spending an additional $4 million on exploration and development within 5 years. Zodiac will have the option to acquire a 100% interest in the Troy Creek project within five years of commencement of the joint venture for a purchase price of $5 million – this amount being separate to the joint venture commitments.

21. Events after the Balance Date

Since 30 June 2011 there has not been any matter or circumstance not otherwise dealt with in the financial report that has significantly affected or may significantly affect the Company.

Page 55

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

Empire Resources Limited

Notes to the Financial Statements 30 June 2011

22. Parent Entity Financial Information

The individual financial statements for the parent entity show the following aggregate amounts:

ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Total Current Assets NON-CURRENT ASSETS Trade and other receivables Financial assets Plant and equipment Total Non-Current Assets TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY Loss before income tax expense Income tax benefit Other comprehensive loss for the year, net of tax Total comprehensive loss for the year	Parent Entity	Parent Entity
	2011 $	2010 $

	1,781,147 595,674 310,855 70,861
	2,092,002 666,535
	13 -
	863,227 1,256,645
	23,691 34,427
	886,931 1,291,072
	2,978,933 1,957,607
	297,851 130,106
	297,851 130,106
	297,851 130,106
	2,681,082 1,827,501
	14,516,700 11,723,878 847,444 739,174 (12,683,062) (10,635,551)
	2,681,082 1,827,501
	(2,111,869) (522,353) 204,022 - (139,664) -
	(2,047,511) (522,353)

Page 56

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

DIRECTORS’ DECLARATION

In the directors’ opinion:
(a) the financial statements and notes set out on pages 9 to 39 are in accordance with the Corporations Act the financial statements and notes set out on pages 26 to 56 are in accordance with the Corporations Act 2001 including:
(i) complying with Australian Accounting Standards (including the Australian Accounting Interpretations), the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements; and
(ii) giving a true and fair view of the Consolidated entity’s financial position as at 30 June 2011 and of its performance for the financial year ended on that date; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and
(c) the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.
The directors have been given the declarations by the Chief Executive Officer and the Chief Financial Officer required by section 295A of the Corporations Act 2001 for the financial year ended 30 June 2011.

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

_______ David Sargeant Managing Director

Perth, Western Australia 8 September 2011

Page 57

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

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13. INDEPENDENT AUDITOR’S REPORT

To the members of Empire Resources Limited

Report on the Financial Report

We have audited the accompanying financial report of Empire Resources Limited (“the company”), which comprises the statement of financial position as at 30 June 2011, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for the consolidated entity. The consolidated entity comprises 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 control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

In Note 1(a), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements that the consolidated financial report complies with International Financial Reporting Standards.

Auditor’s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation 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 company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

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

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers.

Page 58

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

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INDEPENDENT AUDITOR’S REPORT (continued)

Matters relating to the electronic presentation of the audited financial report

This auditor’s report relates to the financial report and remuneration report of Empire Resources Limited for the financial year ended 30 June 2011 included on Empire Resources Limited’s website. The company’s directors are responsible for the integrity of the Empire Resources Limited website. We have not been engaged to report on the integrity of this website. The auditor’s report refers only to the financial report and remuneration report identified in this report. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report. If users of the financial report are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial report and remuneration report to confirm the information contained in this website version of the financial report.

Independence

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

Auditor’s Opinion

In our opinion:

(a) the financial report of Empire 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 2011 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 1(a).

Report on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2011. 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.

Auditor’s Opinion

In our opinion, the Remuneration Report of Empire Resources Limited for the year ended 30 June 2011 complies with section 300A of the Corporations Act 2001 .

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Perth, Western Australia 8 September 2011

HLB MANN JUDD Chartered Accountants N G NEILL Partner

Page 59

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

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14. AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Empire Resources Limited for the year ended 30 June 2011, I declare that to the best of my knowledge and belief, there have been no contraventions of:

a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) any applicable code of professional conduct in relation to the audit.

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Perth, Western Australia N G NEILL 8 September 2011 Partner, HLB Mann Judd

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HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

Page 60

EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

CORPORATE GOVERNANCE PRINCIPLES

Introduction

Empire Resources Limited ("Company") has made it a priority to adopt systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised in this statement. To the extent that they are applicable, and given its circumstances, the Company adopts the Eight Essential Corporate Governance Principles and Best Practice Recommendations ('Recommendations') published by the Corporate Governance Council of the ASX.

Where the Company's corporate governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. Where, after due consideration, the Company's corporate governance practices depart from a recommendation, the Board has offered full disclosure and reason for the adoption of its own practice, in compliance with the "if not, why not" regime.

As the Company's activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance structures will be afforded further consideration.

DISCLOSURE OF CORPORATE GOVERNANCE PRACTICES

Summary Statement

Recommendation	ASX Principles and Recommendations	If not, why not	Recommendation	ASX Principles and Recommendations	If not, why not
1.1	X	Refer (a) below	4.3	n/a	n/a
1.2	X	Refer (a) below	4.4³	n/a	n/a
1.3	X	Refer (a) below	5.1	X	Refer (h) below
2.1	X	Refer (b) below	5.2	n/a	n/a
2.2	√	Refer (b) below	6.1	X	Refer (i) below
2.3	√	Refer (b) below	6.2	n/a	n/a
2.4	X	Refer (c) below	7.1	X	Refer (j) below
2.5	X	Refer (d) below	7.2	n/a	n/a
2.6	√	Refer (e) below	7.3	√	Refer (k) below
3.1	X	Refer (f) below	7.4	n/a	n/a
3.2	√	Refer (g) below	8.1	X	Refer (l) below
3.3	X	Refer (f) below	8.2	n/a	n/a
4.1	X	Refer (c) below	8.3	n/a	n/a
4.2	n/a	n/a

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

(a) Principle 1 Recommendation 1.1, 1.2 and 1.3

Notification of Departure

Empire has not formally disclosed the functions reserved to the Board and those delegated to senior executives. The appointment of non-executive directors to the Board is not formalised in writing by way of a letter or other agreement.

Explanation for Departure:

The Board recognises the importance of distinguishing between the respective roles and responsibilities of the Board and management. The Board has established an informal framework for the management of the Company and the roles and responsibilities of the Board and management. Due to the small size of the Board and of the Company, the Board do not think that it is necessary to formally document the roles of Board and management as it believes that these roles are being carried out in practice and are clearly understood by all members of the Board and management. The Board is responsible for the strategic direction of the Company, establishing goals for management and monitoring the achievement of these goals, monitoring the overall corporate governance of the Company and ensuring that Shareholder value is increased. The Company has two executives, being the Managing Director and an executive Director. The Managing Director is responsible for ensuring that the Company achieves the goals established by the Board.

The appointments of non-executive directors are formalised in accordance with the regulatory requirements and the Company’s constitution.

(b) Principle 2 Recommendations 2.1, 2.2, 2.3

Notification of departure

The Company does not have a majority of independent directors, with only one of the 3 Board members being independent.

Explanation for departure

The Board considers that the current composition of the Board is adequate for the Company's current size and operations and includes an appropriate mix of skills and expertise relevant to the Company's business. The current Board structure presently consists of the independent non-executive chairman, Mr Thomas Revy, the managing director (Mr David Sargeant) and one executive director (Mr Adrian Jessup), both of whom are not independent. The Company considers that each of the directors possess skills and experience suitable for building the Company. It is the Board's intention to appoint another independent director as and when the size and complexity of its operations changes and a suitable candidate is identified.

(c) Principle 2 Recommendation 2.4 and Principle 4 Recommendations 4.1, 4.2, 4.3, 4.4

Notification of Departure

Separate nomination and audit committees have not been formed.

Explanation for Departure

The Board considers that the Company is not currently of a size, or its affairs of such complexity, that the formation of separate or special committees is justified at this time. The Board as a whole is able to address the governance aspects of the full scope of the Company's activities and ensure that it adheres to appropriate ethical standards.

In particular, the Board as a whole considers those matters that would usually be the responsibility of an audit committee and a nomination committee. The Board considers that, at this stage, no efficiencies or other benefits would be gained by establishing a separate audit committee or a separate nomination committee.

(d) Principle 2 Recommendation 2.5

Notification of Departure

Empire does not have in place a formal process for evaluation of the Board, its committees, individual directors and key executives.

Explanation for Departure

Evaluation of the Board is carried out on a continuing and informal basis. The Company will put a formal process in place as and when the level of operations of the Company justifies this.

(e) Principle 2 Recommendation 2.6

Companies should provide the information indicated in the Guide to Reporting on Principle 2.

Disclosure:

Skills, Experience, Expertise and term of office of each Director

A profile of each director containing their skills, experience, expertise and term of office is set out in the Directors' Report.

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Identification of Independent Directors

The independent director of the Company during the Reporting Period is disclosed in (b) above.

Independence is measured having regard to the relationships listed in Box 2.1 of the Principles & Recommendations.

Statement concerning availability of Independent Professional Advice

To assist directors with independent judgement, it is the Board's policy that if a director considers it necessary to obtain independent professional advice to properly discharge the responsibility of their office as a director then, provided the director first obtains approval for incurring such expense from the Chair, the Company will pay the reasonable expenses associated with obtaining such advice.

Nomination Matters

The full Board sits in its capacity as a Nomination Committee.

Performance Evaluation

During the Reporting Period the performance evaluations for the Board and individual directors did occur in accordance with the disclosed process in Recommendation 2.5.

Selection and Reappointment of Directors

The Board considers the balance of independent directors on the Board as well as the skills and qualifications of potential candidates that will best enhance the Board's effectiveness.

Each director other than the managing director must retire from office no later than the longer of the third annual general meeting of the company or 3 years following that director’s last election or appointment. At each annual general meeting a minimum of one director or a third of the total number of directors must resign. A director who retires at an annual general meeting is eligible for re-election at that meeting. Reappointment of directors is not automatic.

(f) Principle 3 Recommendation 3.1, 3.3

Notification of Departure

Empire has not established a formal code of conduct.

Explanation for Departure:

The Board considers that its business practices, as determined by the Board and key executives, are the equivalent of a code of conduct.

(g) Principle 3 Recommendation 3.2

Companies should establish a policy concerning trading in company securities by directors, senior executives and employees, and disclose the policy or a summary of that policy.

Disclosure:

The board has adopted a policy which prohibits dealing the Company's securities by directors, officers and employees when those persons possess inside information. The policy prohibits short term or speculative trading of the Company's securities. The policy provides that permission be obtained from the Chairman prior to trading.

(h) Principle 5 Recommendation 5.1, 5.2

Notification of Departure

Empire has not established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and accountability for compliance.

Explanation for Departure

The Directors have a long history of involvement with public listed companies and are familiar with the disclosure requirements of the ASX listing rules.

The Company has in place informal procedures that it believes are sufficient for ensuring compliance with ASX Listing Rule disclosure requirements and accountability for compliance. The Board has nominated the Managing Director and the Company Secretary as being responsible for all matters relating to disclosure.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

(i) Principle 6 Recommendation 6.1, 6.2

Notification of Departure

Empire has not established a formal Shareholder communication strategy.

Explanation for Departure

While the Company has not established a formal Shareholder communication strategy, it actively communicates with its Shareholders in order to identify their expectations and actively promotes Shareholder involvement in the Company. It achieves this by posting on its website copies of all information lodged with the ASX. Shareholders with internet access are encouraged to provide their email addresses in order to receive electronic copies of information distributed by the Company. Alternatively, hard copies of information distributed by the Company are available on request.

(j) Principle 7 Recommendation 7.1, 7.2

Notification of Departure

Empire has an informal risk oversight and management policy and internal compliance and control system.

Explanation for Departure

The Board does not currently have formal procedures in place but is aware of the various risks that affect the Company and its particular business. Section 8 of the prospectus dated 7 November 2006 provides a summary of the relevant risk factors that may affect the Company. As the Company develops, the Board will develop appropriate procedures to deal with risk oversight and management and internal compliance, taking into account the size of the Company and the stage of development of its projects.

(k) Principle 7 Recommendation 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.

Disclosure:

The Chief Executive Officer (or equivalent) and the Chief Financial Officer (or equivalent) have provided a declaration to the Board in accordance with section 295A of the Corporations Act and have assured the Board that such declaration 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 risk.

(l) Principle 8 Recommendations 8.1

Notification of departure

Empire does not have a formal remuneration policy and has not established a separate remuneration committee. Directors and management may receive options or shares.

Explanation for Departure

The current remuneration of the Directors is disclosed in the Directors’ Report. Non-executive Directors receive a fixed fee for their services and may also receive options or shares. The issue of options or shares to non-executive Directors may be an appropriate method of providing sufficient incentive and reward while maintaining cash reserves.

Due to the Company's early stage of development and small size, it does not consider that a separate remuneration committee would add any efficiency to the process of determining the levels of remuneration for the Directors and key executives. The Board believes it is more appropriate to set aside time at specified Board meetings each year to specifically address matters that would ordinarily fall to a remuneration committee. In addition, all matters of remuneration will continue to be in accordance with regulatory requirements, especially in respect of related party transactions; that is, none of the Directors will participate in any deliberations regarding their own remuneration or related issues.

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

ADDITIONAL INFORMATION

Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 6 October 2011.

(a) Distribution of shares

The numbers of shareholders, by size of holding are:

Category (size of holding)	Number of Holders
1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - and over	23 77 140 411 223
	874

The number of shareholdings held in less than marketable parcels is 120.

(b) Twenty largest shareholders

The names of the twenty largest holders of quoted shares are:

	SHAREHOLDERS	Number of shares held	% Holding
1 WESTORIA RESOURCE INV LTD 2 RBJ NOM PL 3 KIRKDALE HLDGS PL 4 AGENS PL 5 MEEKAL PL 6 ANKAA SPRINGS PL 7 A N SUPER PL 8 BLAMNCO TRADING PL 9 TRONES INV PL 10 SUHARITDUMRONG SUKHON 11 H WALLACE-SMITH & CO PL 12 D W SARGEANT PL 13 CANARY PL 14 HOLDREY PL 15 MCCUBBING BRIAN 16 LENNARD JUDITH BARRETT- 17 FIRST FARLEY PL 18 COLTRANGE PL 19 MARTINI 5 PL 20 DRAPER NICHOLAS S + M J		3,698,571 2.60% 3,313,306 2.33% 3,300,000 2.32% 3,275,806 2.30% 3,098,333 2.18% 3,056,160 2.15% 3,000,000 2.11% 3,000,000 2.11% 2,800,000 1.97% 2,268,500 1.59% 2,110,000 1.48% 2,000,000 1.41% 2,000,000 1.41% 1,907,776 1.34% 1,900,000 1.34% 1,700,000 1.19% 1,700,000 1.19% 1,527,677 1.07% 1,470,000 1.03% 1,310,000 0.92%
		48,436,129 34.04%

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(c) Stock Exchange Listing

Listing has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Stock Exchange Limited except for the following which are not quoted by virtue of restriction agreements.

Quoted shares on ASX and total issued share capital 142,295,921

(d) Voting rights

All shares carry one vote per unit without restriction.

(e) Unlisted options

Unlisted options (Ex Price 13.7 cents; Exp 25 June 2013) Unlisted options (Ex Price 15 cents; Exp 2 June 2013) Unlisted options (Ex Price 9 cents; Exp 9 August 2014)	2,700,000
	8,227,729
	1,500,000

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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2011

INTERESTS IN MINING AND EXPLORATION TENEMENTS as 30 September 2011

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PROJECT TENEMENT INTEREST REMARKS
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PROJECT	TENEMENT	INTEREST	REMARKS
TROY CREEK	E69/1729 E69/2357 E69/2358 E69/2485 E69/2869 E69/2870 P69/45	45% 45% 45% 45%	Application not yet granted Application not yet granted Application not yet granted
PENNY'S FIND	E27/410 E27/420 M27/156 P27/1713 P27/1714 P27/1715 P27/1716 P27/1717 P27/1718 P27/1719 P27/1720 P27/1721 P27/1722 P27/1723 P27/1724 P27/1725 P27/1726 P27/1727 P27/1728 P27/1729 P27/1730 P27/1731 P27/1814 P27/1922 P27/1923 P27/1962 P27/2007 P27/2008	60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60%
YUINMERY	M57/265 P57/1214 P57/1215 P57/1216 P57/1217 E57/735 E57/766 E57/783 E57/840	100% 100% 100% 100% 100% 100% 100% 100% 100%

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PROJECT TENEMENT INTEREST REMARKS
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PROJECT	TENEMENT	INTEREST	REMARKS
YUINMERY OPTION	E57/514 E57/524 E57/681 P57/1130 P57/1131	Option for 82% Interest Option for 82% Interest Option for 82% Interest Option for 82% Interest Option for 82% Interest
WYNNE	E08/1979 E08/2275	100%	Application not yet granted

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EMPIRE RESOURCES LIMITED
–
ANNUAL REPORT 2011
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AI assistant

EMPIRE RESOURCES LIMITED — Annual Report 2011

64875_rns_2011-10-25_6b486f52-f9a0-4f1d-91b3-2f07dd10aa71.pdf

TABLE OF CONTENTS

1. CORPORATE DIRECTORY

DIRECTORS

MANAGEMENT

COMPANY SECRETARY

REGISTERED and PRINCIPAL OFFICE

SHARE REGISTRY

AUDITOR

STOCK EXCHANGE LISTING

2. HIGHLIGHTS OF 2010-2011:

3. CORPORATE OBJECTIVES

4. CHAIRMAN’S REPORT

5. REVIEW OF OPERATIONS

A ZONE

JUST DESSERTS

CONSTANTINE

OTHER PROSPECTS

Penny’s Find (WA): Gold Project – 60% interest

PENNY’S FIND MINERAL RESOURCE

Troy Creek (WA):

Copper-Gold – PGM Project – 45% interest

David Sargeant Managing Director September 2011

Competent Person’s Statement

Penny’s Find Resource

Penny’s Find

Yuinmery Resource

Just Desserts

Competent Persons Statement

Empire Resources Limited Directors' Report

Directors’ Report

DIRECTORS

Tom Revy - Chairman ( Non-Executive ) – BAppSc. Grad Dip Bus.

David Sargeant - Managing Director - BSc. MAusIMM

MANAGEMENT Simon Storm - Company Secretary – BCom. BCompt(Hons). CA, FCIS

Empire Resources Limited Directors' Report

David Ross – Exploration Manager – BSc(Hons). MSc. MAusIMM

PRINCIPAL ACTIVITIES

Dividends

Result for the Financial Period

REVIEW OF OPERATIONS

YUINMERY: Advanced Copper–Gold project WA (100% interest)

PENNY’S FIND: Gold project WA (60% interest)

TROY CREEK: Copper-Gold-PGM project WA (100% interest)

Empire Resources Limited Directors' Report

WYNNE (WA): Copper Project- 100% interest

YARLARWEELOR (WA): Uranium project (28% indirect interest)

CORPORATE

REMUNERATION REPORT (AUDITED)

Remuneration Policy

Non-executive directors

Empire Resources Limited Directors' Report

Share-based compensation

Empire Resources Limited Directors' Report

Executives

Compensation of Key Management Personnel for the year ended 30 June 2011.

Empire Resources Limited Directors' Report

Employment contracts

– Mr D Sargeant

– Mr A Jessup

Share Options

Directors’ Interest

Company Performance

Significant Changes in the State of Affairs

Empire Resources Limited Directors' Report

Likely Developments and Expected Results

Environmental Regulation

Meetings of Directors

Proceedings on Behalf of the Company

Indemnification and Insurance of Directors and Officers

Indemnification

Insurance

Events subsequent to reporting date

Non-audit Services

Empire Resources Limited Directors' Report

Auditors Independence Declaration

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011

EMPIRE RESOURCES LIMITED

EMPIRE RESOURCES LIMITED Annual Report 2011