APPENDIX 4E (Listing Rule 4.3A) EVOLUTION MINING LIMITED ACN 084 669 036 (formerly known as Catalpa Resources Limited) AND CONTROLLED ENTITIES YEAR END FINANCIAL REPORT For the year ended 30 June 2012

Results for Announcement to the Market

	Consolidated	Consolidated	Percentage
	Year ended	Year ended 30	increase /
	30 June 2012	June 2011	(decrease)
	$’000	$’000
Revenue from ordinary activities	469,484	121,870	285%
Profit/(loss) from ordinary activities after tax attributable to members	37,313	(2,303)	1,720%
Net profit/(loss) for the period attributable to members	31,543	(2,146)	1,570%
Net Tangible Assets per share	$1.47	$0.90	63%
Basic Earnings per share	7.10 cents	(1.37) cents	618%
Interim dividend per share	Nil	Nil
Final dividend per share (unfranked)	Nil	Nil
Dividend date paid	N/a	N/a

Explanation of Results

Please refer to the commentary included in the Directors’ Report and accompanying ASX releases for an explanation of results.

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Evolution Mining Limited (formerly known as Catalpa Resources Limited) ABN 74 084 669 036

Appendix 4E and Annual Financial Report for the year ended 30 June 2012

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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CORPORATE INFORMATION

ABN 74 084 669 036

Directors

Jacob Klein (Executive Chairman) James Askew (Non-Executive Director) Lawrie Conway (Non-Executive Director) Graham Freestone (Lead Independent Director) Paul Marks (Non-Executive Director) John Rowe (Non-Executive Director) Peter Smith (Non-Executive Director)

Company Secretary

Evan Elstein

Registered Office

Level 28, 175 Liverpool Street SYDNEY NSW 2000

Postal Address

Level 28, 175 Liverpool Street SYDNEY NSW 2000

Tel: (+612) 9696 2900 Fax: (+612) 9696 2901

Share Register

Link Market Services Level 12, 680 George Street SYDNEY NSW 2000

Tel: 1300 554 474 or (612) 9315 2333 Fax: (+612) 9287 0303 Email: [email protected]

Auditors

PricewaterhouseCoopers 201 Sussex Street SYDNEY NSW 2000 Tel: (+612) 8266 0000

Internet Address

www.evolutionmining.com.au

Stock Exchange Listing

Evolution Mining Limited (EVN) shares are listed on the Australian Securities Exchange.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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Directors’ Report	5
Auditor’s Independence Declaration	27
Statement of Comprehensive Income	28
Statement of Financial Position	29
Statement of Changes in Equity	30
Statement of Cash Flows	31
Notes to the Financial Statements	32
Directors’ Declaration	72
Independent Auditor’s Report	73

These financial statements are the consolidated financial statements of the consolidated entity consisting of Evolution Mining Limited and its subsidiaries. The financial statements are presented in the Australian currency.

The June 2012 full year results and balances reflect twelve months of Catalpa Resources Limited (100% Edna May and 30% of Cracow operations), the consolidation of Conquest Mining Limited from 17 October 2011 and the consolidation of 100% interest in Mt Rawdon and a 70% interest in Cracow from 2 November 2011. Comparative data is based on Catalpa Resources Limited results prior to the merger.

The financial statements were authorised for issue by the directors on 30 August 2012. The directors have the power to amend and reissue the financial statements.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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The Directors present their report on Evolution Mining Limited (referred to hereafter as “Evolution” or “Company”), (formerly known as Catalpa Resources Limited), consisting of Evolution Mining Limited and the entities it controlled at the end of, or during, the year ended 30 June 2012.

DIRECTORS

The following persons were Directors of the Company at any time during the financial year and up to the date of this report:

Jacob Klein	Executive Chairman (i)
James Askew	Non-Executive Director (i)
Lawrie Conway	Non-Executive Director (i)
Graham Freestone	Lead Independent Director
Paul Marks	Non-Executive Director (i)
John Rowe	Non-Executive Director
Peter Smith	Non-Executive Director (i)
Peter Maloney	Non-Executive Chairman (ii)
Bruce McFadzean	Managing Director (iii)
Murray Pollock	Non-Executive Director (ii)
Barry Sullivan	Non-Executive Director (ii)

(i) Appointed 19 October 2011

(ii) Resigned 18 October 2011 (iii) Resigned 25 January 2012

INFORMATION ON DIRECTORS

The qualifications and experience of Directors in office at any time during or since the end of the financial year are:

Jacob Klein, B Com Hons, ACA Executive Chairman Appointed 19 October 2011

Mr Klein was appointed as Executive Chairman in October 2011, following the merger of Conquest Mining Limited and Catalpa Resources Limited approved by shareholders at an Extraordinary General Meeting. Previously he served as the Executive Chairman of Conquest Mining Limited from May 2010 up until the merger and the resultant formation of Evolution Mining Limited. Prior to that, Mr Klein was President and CEO of Sino Gold Mining Limited, where along with Mr Askew (director from 2002 and Chairman from 2005 of Sino Gold) he managed the development of that Company into the largest foreign participant in the Chinese gold industry. Sino Gold Mining Limited was listed on the ASX in 2002 with a market capitalisation of $100 million and was purchased by Eldorado Gold Corporation in late 2009 for over $2 billion. Sino Gold Mining Limited was an ASX 100 Company, operating two award-winning gold mines and engaging over 2,000 employees and contractors in China. Mr Klein resigned as a Director of Sino Gold Mining Limited in December 2009.

Prior to joining Sino Gold Mining Limited (and its predecessor) in 1995, Mr Klein was employed at Macquarie Bank and PricewaterhouseCoopers.

Mr Klein is currently a Non-Executive Director of Lynas Corporation Limited (since August 2004) and OceanaGold Corporation (since December 2009), both companies being listed on the ASX. Mr Klein is a past President of the NSW Branch of the Australia China Business Council and previously served on the NSW Asia Business Council.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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James Askew, BE (Mining), MEngSci, FAusIMM, MCIMM, MSME (AIME) Non-Executive Director

Chairman of the Risk Committee and a member of the Nomination and Remuneration Committee Appointed 19 October 2011

Mr Askew is a mining engineer with over 40 years broad international experience as a director and chief executive officer for a wide range of Australian and international publicly listed mining, mining finance and other mining related companies. He has also served on the boards of numerous resource public companies, which currently include Ivanhoe Australia Limited (since June 2011), Oceana Gold Limited (Chairman since November 2006) and Golden Star Resources Limited (since 1999).

Mr Askew served as Director of Conquest Mining Limited from May 2010 until the merger with Catalpa Resources Limited and the formation of Evolution Mining Limited in October 2011. He also served as a Director of Sino Gold Mining Limited (October 2002 to December 2009) and Eldorado Gold Corporation (December 2009 to May 2010). Mr Askew was previously a nonexecutive director of Ausdrill Limited (April 1986 to June 2011).

Lawrie Conway B Bus, CPA

Non-Executive Director and Member of the Audit and Nomination and Remuneration Committees Appointed 19 October 2011

Mr Conway is the current Newcrest Executive General Manager (Commercial and West Africa) responsible for Newcrest’s group Supply and Logistics, Marketing, Information Technology, and Laboratory functions as well as Newcrest’s business in West Africa.

Mr Conway has more than 21 years commercial experience in the resources sector across a diverse range of commercial and financial activities at Newcrest and previously at BHP Billiton. Mr Conway has held a mix of corporate and operational commercial roles within Australia, Papua New Guinea and Chile.

Graham Freestone, B Ec (Hons) Lead Independent Director and Chairman of the Audit Committee

Mr Freestone has over 40 years’ experience in the natural resources industry. He has a broad finance, corporate and commercial background obtained in Australia and internationally through senior finance positions with the Shell Group, Acacia Resources Limited and AngloGold. He was Acacia Resources Limited’s Chief Financial Officer and Company Secretary from 1994 until 2001. From 2001 to 2009 he was a Non-Executive Director of Lion Selection Limited and its Audit Committee Chair. He became a Director and Chair of the Audit and Risk Committee of Catalpa Resources Limited in 2009. Mr Freestone has not held any other listed company directorships within the last 3 years.

Paul Marks, BEng (Chem), Mapp Fin Non-Executive Director and Member of the Audit Committee

Appointed 19 October 2011

Mr Marks has 35 years of experience across a range of industries from foreign exchange and commodities trading, chemical and hydrocarbon processing. Mr Marks has previously held the positions of Vice-President of Foreign Exchange with Prudential-Bache Securities, Senior Strategist Foreign Exchange AEFC, the merchant banking arm of the Commonwealth Bank of Australia and Senior Foreign Exchange Strategist with National Australia Bank.

Previously Mr Marks served as Director of Conquest Mining Limited from December 2009 until the merger with Catalpa Resources Limited and the formation of Evolution Mining Limited in October 2011 and has also served on the board of Prana Biotechnology Ltd.

John Rowe, BSc (Hons) ARSM, MAusIMM

Non–Executive Director and Chairman of Nomination and Remuneration Committee

Mr Rowe was appointed as Non-Executive Director to the Westonia Mines Limited board (being the previous name of Catalpa Resources Limited) on 12 October 2006. Mr Rowe brings a wealth of geological and business development skills to the Company. Mr Rowe has some 40 years' experience within the gold and nickel industries. He has held a variety of positions in mine management, exploration and business development and has consulted for John Rowe and Associates since 2006.

Mr Rowe is also a Non-Executive Director of Panoramic Resources Limited (since 2006) and Southern Cross Goldfields Limited (since 2010). Mr Rowe was appointed Non-Executive Chairman of Magma Metals Limited in June 2012, which was then delisted at the end of June 2012. Mr Rowe has not held any other listed company directorships within the last 3 years.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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Peter Smith, F Aus IMM, GAICD, MBA USQ Non-executive Director and Member of the Risk Committee

Appointed 19 October 2011

Mr Smith is the current Newcrest Executive General Manager Australian Operations (appointed in September 2010, following Newcrest’s merger with Lihir Gold Limited). Mr Smith has over 34 years mining experience across a broad spectrum of responsibilities, including a range of senior corporate roles with WMC Resources Ltd, Rio Tinto and Lihir Gold Limited.

Mr Smith has previously held the positions of Chief Operating Officer at Lihir Gold Limited and, prior to that, Executive Director of Western Metals Ltd.

Peter Maloney, B Com MBA Non-Executive Chairman (Resigned 18 October 2011)

Mr Maloney served as a Non-Executive Chairman of Catalpa Resources from 10 December 2009 to 18 October 2011.

Bruce McFadzean, Dip Mining FAusIMM Managing Director & CEO (Resigned 25 January 2012)

Mr McFadzean served as the Managing Director & Chief Executive Officer of Catalpa Resources from 9 June 2008 and Managing Director of Evolution to 25 January 2012.

Murray Pollock, MAICD

Non-Executive Director (Resigned 18 October 2011)

Mr Pollock served as a Non-Executive Director of Catalpa Resources from 21 October 2000 to 18 October 2011.

Barry Sullivan, BSc (Min), ARSM, F AusIMM, MAICD Non-Executive Director (Resigned 18 October 2011)

Mr Sullivan served as a Non-Executive Director of Catalpa Resources from June 2008 to 18 October 2011.

INFORMATION ON COMPANY SECRETARY

The names and particulars of the Company Secretaries of the Company during or since the end of the financial year are:

Evan Elstein, BCom (Accounting and Finance), ACA Company Secretary (Appointed 19 October 2011)

Mr Elstein is the Company’s General Manager for Information Technology and Company Secretary. He is a Chartered Accountant and a member of the Institute of Chartered Accountants in Australia. He has over 20 years’ experience in senior financial, commercial and technology roles, where his responsibilities have included the roll out of IT projects and services, business improvement initiatives and merger and acquisition activities. He has held senior positions with IT consulting companies in Australia, and previously served as the CFO and Company Secretary of Hartec Limited. Prior to that, Mr Elstein was employed by Dimension Data and Grant Thornton in South Africa.

Erik Palmbachs, BBus (CPA), MSc (Min Econ), FCIS Joint Company Secretary and Chief Financial Officer (Resigned 18 October 2011)

Mr Palmbachs was appointed Company Secretary on 30 December 2010 and resigned as Company Secretary on 18 October 2011.

Paul Mason, (BE ACA ACIS)

Joint Company Secretary and Financial Controller (Resigned 18 October 2011)

Mr Mason served as Company Secretary from 30 December 2010 to the 18 October 2011.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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PRINCIPAL ACTIVITIES

Evolution Mining Limited was formed in November 2011 through the merger of Catalpa Resources Limited and Conquest Mining Limited on 17 October 2011 and the concurrent acquisition of Newcrest Mining Limited’s 70% interest in the Cracow Gold Mine and 100% interest in the Mt Rawdon Gold Mine on 2 November 2011.

The Company owns and operates four gold mines in Queensland and Western Australia and is developing a fifth gold-silvercopper project in Queensland. The Company’s key assets are 100% interests in the Edna May Gold Mine, the Cracow Gold Mine, the Pajingo Gold Mine, the Mt Rawdon Gold Mine and the Mt Carlton gold, silver, copper development project.

During the year, the Company also engaged in exploration activities in and around its operations.

DIVIDENDS

No dividends were paid or declared during the financial year. No recommendation for payment of dividends has been made.

REVIEW OF OPERATIONS

Evolution’s attributable gold production for the year ended 30 June 2012 was 280,401 ounces (2011: 96,109 ounces). Total gold production, assuming operations were wholly-owned for the year to 30 June 2012 was 346,979 ounces.

The Cracow Gold Mine, QLD (100%), produced 102,565 ounces of gold, which was towards the upper end of the Company’s expected output range of between 90,000-107,000 ounces.

The Edna May Gold Mine, WA (100%), produced 73,264 ounces of gold. This was below the Company’s expected output range of between 85,000-93,000 ounces, predominantly as a result of lower mill throughput due to poor plant reliability. Initiatives to improve plant reliability are planned to positively impact production performance in the 2013 financial year.

Mt Rawdon Gold Mine, QLD (100%) produced 95,403 ounces of gold which was within the Company’s expected output range of between 90,000-105,000 ounces.

The Pajingo Gold Mine, QLD (100%), produced 75,747 ounces of gold which was above the Company’s expected output of 70,000 ounces. Gold production in the 2012 year represents a 65% increase on that achieved in the previous year of 45,889 ounces and is a result of the capital investment programs implemented by Evolution to improve Pajingo’s long-term sustainable performance.

The Mt Carlton gold-silver-copper project, QLD (100%), is Evolution’s key organic growth asset and is planned to expand the Company’s portfolio of 100% owned, Australian producing mines from four to five during the 2013 financial year. Procurement and engineering was largely complete and construction was approximately 50% complete at 30 June 2012. Project commissioning is planned in the December quarter of 2012. The project is planned to deliver approximately 800,000 ounces of gold, 17.3 million ounces of silver and 34,000 tonnes of copper over a 12 year life.

The Group generated gold sales revenue of $461.9 million from the sale of 288,617 ounces of gold and silver sales revenue of $7.6 million from the sale of 254,850 ounces of silver.

Reported profit from ordinary activities of the Company for the financial year ended 30 June 2012 was $37.313 million (2011: loss of $2.303 million). The net income for the period included business combination expenses of $28.518 million.

As at 30 June 2012 the Company had 601 employees and 503 contractors.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes in the state of affairs of the Company during the financial year follows in chronological order:

Successful completion and implementation of the merger between Catalpa Resources Limited and Conquest Mining Limited and the concurrent purchase of Newcrest Mining Limited's interests in Cracow and Mt Rawdon in Queensland on 2 November 2011 to form Evolution Mining Limited, thereby creating one of Australia’s largest ASXlisted gold producers.
Successful institutional and retail entitlements offer completed in December 2011, raising A$152.459 million.
On 5 December 2011, a 25 year term Mining Lease for the Mt Carlton project was granted by the Queensland Government, thus allowing project construction to commence.
In January the Company announced a management restructure which resulted in the resignation of Mr Bruce McFadzean as Managing Director of the Company with the responsibilities combined into the Executive Chairman’s role held by Mr Jacob Klein.

Apart from the above, or as noted elsewhere in this report, no significant changes in the state of affairs of the Company occurred during the financial year.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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SUBSEQUENT EVENTS

On 25 June 2012, Evolution agreed to acquire the Holleton gold project, located to south of its Edna May Gold Mine in Western Australia. Pursuant to the terms of the agreement, Evolution has subsequently issued 500,000 fully paid shares to Independence Group NL.

FUTURE DEVELOPMENTS

Other likely developments in the operations of the Company and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the Company. Accordingly this information has not been disclosed in this report.

ENVIRONMENTAL REGULATIONS

The Company is subject to significant environmental regulation in respect to its exploration, mining and processing activities. The Company aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The Directors of the Company are not aware of any breach of environmental legislation for the year under review.

PERFORMANCE OF EVOLUTION MINING LIMITED

The table below sets out summary information about the Company’s earnings and movements in the Company’s share price for the last 5 years.

	30 June 2012	30 June 2011	30 June 2010	30 June 2009	30 June 2008
	$000	$000	$000	$000	$000
Revenue	469,484	121,870	22,274	264	595
Net profit/(loss) before tax	66,483	3,955	(4,520)	(6,849)	(2,292)
Net profit/(loss) after tax	37,313	(2,303)	5,547	6,814	(2,292)
Share price at start of year($)	$1.36	$1.62	$1.10	$0.55	$0.77
Share price at end of year($)	$1.46	$1.36	$1.62	$1.10	$0.55
Dividends	-	-	-	-	-
Basic earnings per share (cents per share)	7.10	(1.37)	3.93	(13.97)	(7.37)

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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DIRECTORS’ MEETINGS

The numbers of meetings of the Company’s board of directors and of each board committee held during the year ended 30 June 2012, and the numbers of meetings attended by each director were:

	Board Meetings Audit Committee Meetings Risk Management Meetings Nomination and Remuneration Committee Meetings
	A B A B A B A B
P Maloney B McFadzean M Pollock B Sullivan J Rowe G Freestone J Klein J Askew L Conway P Marks P Smith	4 4 - - - - 1 1 7 7 - - - - - - 4 4 2 2 - - 1 1 4 3 2 2 - - 1 1 11 11 2 2 2 2 2 2 11 9 3 3 - - 1 1 7 7 - - - - - - 7 6 - - 2 2 1 1 7 7 1 1 - - 1 1 7 7 1 1 - - - - 7 7 - - 2 2 - -

A: Number of meetings held while in office B: Meetings attended during the time the Director held office or was a member of the committee during the year. From the date of the merger with Conquest, the Audit and Risk Committees were separated.

DIRECTORS’ INTERESTS

The following table sets out each Director’s relevant interest in shares or options in shares of the Company as at the date of this report:

	Fully Paid Ordinary Shares	Share Options	Performance Rights
Jacob Klein	5,700,000	5,277,4351	803,2792
James Askew	500,000	488,651	-
Lawrie Conway	-	-	-
Graham Freestone	68,523	-	-
Paul Marks	3,552,009	-	-
John Rowe	112,582	181,820	-
Peter Smith	35,000	-	-

1 Note that 600,000 options were acquired from Southern Cross Equities on an arms-length basis in June 2011. 2 Subject to vesting conditions as described on page 14.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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REMUNERATION REPORT (AUDITED) INTRODUCTION

The Remuneration Report forms part of the Directors’ Report for the year ended 30 June 2012. This report contains details of the remuneration paid to Directors and Key Management Personnel (“KMP”) as well as the remuneration strategy and policies that were applicable in the 2012 financial year. KMP’s are defined those senior executives having the authority and responsibility for planning, directing and controlling the activities of the Company and are members of the senior leadership team.

The remuneration philosophy of the Board is to ensure that the Company remunerates fairly and responsibly. It is designed to ensure that the level and composition of remuneration is competitive, reasonable and appropriate for the results delivered and to attract and retain appropriately experienced Directors and employees. The remuneration strategies and practices in place have been designed to support this philosophy.

The Board has established a Nomination and Remuneration Committee, consisting solely of Non-Executive Directors, with the delegated responsibility to report on, and make recommendations to the Board on the:

appropriateness of the remuneration policies and systems, having regard to whether they are:
relevant to the Company’s wider objectives and strategies;
legal and defensible;
in accordance with the human resource objectives of the Company;
performance of the Executive Chairman (on an annual basis) and ensure there is a process for determining key performance indicators for the ensuing period;
remuneration of the Executive Chairman, Non-Executive Directors and KMP’s, in accordance with approved Board policies and processes.

The prescribed details for each person covered by this report are detailed below under the following headings:

Industry context
Use of remuneration consultants
Remuneration strategy
Remuneration policy
Relationship between the remuneration policy and Company performance
Director and key management personnel details
Remuneration of Directors and key management personnel
Executive service agreements
Share-based compensation and performance rights

INDUSTRY CONTEXT

Evolution is a gold producer and operates in Queensland and Western Australia. In Queensland there are three business units; two underground operations and one open pit operation. In Western Australia there is one business unit, an open pit operation. Evolution also has one project in development in Queensland.

As at 30 June 2012, the Company workforce comprised of 601 employees and 503 contractors. Evolution competes nationally for labour in the wider resources industry as skills are generally transferable across commodities and states.

USE OF REMUNERATION CONSULTANTS

Mercer (Australia) Pty Limited (“Mercer”) were engaged by the Nomination and Remuneration Committee to provide remuneration advice regarding Non-Executive and Executive Directors, and KMP’s, covering fixed remuneration and short and long term incentives. Mercer has confirmed that the above recommendations have been made free from undue influence by members of the Group’s key management personnel.

Under the terms of the engagement, the advice was provided directly to Mr John Rowe, Chairman of the Nomination and Remuneration Committee. As a result the board is satisfied that the recommendations were made free from undue influence from any members of the key management personnel. The total amount paid to Mercer was $83,000 for these services.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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REMUNERATION STRATEGY

The development of the remuneration strategy for the 2012 financial year hinged on the successful formation of Evolution following the merger of Catalpa Resources Limited with Conquest Mining Limited and the concurrent acquisition of the two Newcrest assets. The remuneration strategy was reset and new short term and long term incentive plans established to align with objectives of the newly established entity.

The objectives of the remuneration strategy for the 2012 financial year were to ensure that:

total remuneration for Directors and KMP’s and each level of the workforce was appropriate and competitive;
total remuneration comprised a reasonable fixed component and a significant “at risk” component based on performance hurdles;
corporate short term incentives were appropriate with hurdles that were measureable, transparent and achievable;
incentive plans were designed to motivate and incentivise for high performance and delivery on organisational objectives;
the corporate long term incentives focused on shareholder value, and;
the principles and integrity of the remuneration review process delivered fair and equitable outcomes.

REMUNERATION POLICY

The Evolution remuneration policy has been designed to align Executive Director and KMP objectives with shareholder and business objectives by providing a total fixed remuneration (“TFR”) component and offering specific “at risk” short and longterm incentives based on key performance areas affecting the Company’s financial performance. The Nomination and Remuneration committee was formed to review the specifics of Directors and KMP remuneration and oversee all Company compensation changes and principles. The Board of Evolution believes the remuneration policy to be strategic, appropriate and effective in its ability to attract and retain Executive Directors and KMP’s and to operate and manage the Company.

Evolution defines and applies its remuneration policy and elements by considering the overall business plan, key employee value drivers, individual employee performance and industry benchmark data.

All KMP’s receive a remuneration package in line with the overall Company policy and additionally takes into account factors such as length of service and experience. The Nomination and Remuneration Committee reviews executive packages annually by reference to the Company’s performance, individual KMP performance and comparable information from industry sectors and other listed companies in similar industries.

The remuneration elements offered by Evolution include total fixed remuneration (TFR), which consists of a base salary plus superannuation and a variable or “at risk” remuneration component provided through short and long term incentive plans. Every permanent employee has eligibility under the Company’s various short term incentive plans (“STIP’s”).

Directors and KMP’s receive a superannuation guarantee contribution (SGC) required by Law, which is currently 9% and capped in line with the SGC maximum quarterly payment, and do not receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation.

The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Nomination and Remuneration Committee determines Non-Executive Directors fees and reviews this annually, based on market practice, their duties and areas of responsibility. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at the Annual General Meeting (currently $750,000 per annum). Fees for Non-Executive Directors are not linked to the performance of the Company and they do not participate in the Company’s STIP or Long Term Incentive Plan (“LTIP)”.

RELATIONSHIP BETWEEN THE REMUNERATION POLICY AND COMPANY PERFORMANCE

The remuneration policy has been designed to align individual and team accountabilities with the Group’s business plan goals.

A cornerstone element of the remuneration policy is the introduction of various incentive plans for eligible employees at the Company, addressing both short and long term goals. The purpose of these incentives is to encourage the alignment of employee effort with shareholder interests.

Evolution’s STIPs includes the Corporate Plan, a Production Bonus, an Annual Performance Bonus and the Mt Carlton Construction Bonus. Employees have eligibility into one plan only and are measured consistently against outcomes at Threshold, Target and Maximum milestones.

The Corporate STIP applies to employees at the level of Manager and above across the Company. The STIP Award is a cash bonus, up to maximum percentage of TFR. It is assessed and paid annually conditional upon the achievement of key corporate objectives, which for FY12 were in areas of safety, production, merger activities and project development goals, as well as individual KPI’s. All KPI’s were established to ensure effort and performance was aligned to business goals.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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A Corporate STIP bonus totalling $2.3 million was awarded to the eligible group at 30 June 2012 to be communicated and paid in September quarter of FY13.

The Production bonus applies to site personnel, who are not eligible for the Corporate STIP (Manager and above). The Production STIP is a cash award of up to 20 per cent on TFR which is paid monthly against the outcomes of each Operational Site KPI’s scorecard.

The Annual Performance Bonus applies to corporate employees and those employees who, by exception, are not included in a Corporate STIP or Production Bonus Plan. The Annual Bonus award is targeted at up to 20 per cent, depending on the employees position, as a cash bonus on TFR paid annually against the outcomes of functional (eg: exploration) and personal KPI’s.

The Mt Carlton Construction bonus applies to employees at Mt Carlton, who are not eligible in the Corporate STIP. The Construction award is a cash bonus of up to 20 per cent on TFR paid aligned to milestone events and outcomes during the construction and commissioning phase of Mt Carlton.

The Company believes its incentive policy is effective in increasing shareholder wealth and delivering appropriate and motivational reward to all employees.

Details of Corporate STIP’s and bonuses paid are shown in the Remuneration Table on page 18.

There are two long term incentive plans currently in existence at Evolution specifically, the Employees and Contractors Option Plan (“ECOP”) and the Employee Share Option and Performance Rights Plan (“ESOP”), also referred to as the Long Term Incentive Plan (“LTIP”).

Employees and Contractors Option Plan (“ECOP”)

The ECOP was established and approved at the Annual General Meeting on 27 November 2008. The plan permits the Company, at the discretion of the Directors, to grant options over unissued ordinary shares of the Company to eligible Directors, members of staff and contractors as specified in the plan rules.

Options under ECOP

Following the merger of Evolution (then named Catalpa Resources Limited) and Conquest Mining Limited (“Conquest”) by a scheme of arrangement implemented on 2 November 2011, 488,651 options were issued on 17 November 2011 to the former Conquest option holders as consideration for the cancellation of the outstanding options in Conquest Mining Limited, under this plan. During the year 227,282 options were exercised and there were 2,261,387 options outstanding at 30 June 2012 (2011: 2,000,018), all of which have been issued to Directors and KMP’S.

The movement in the options under this plan is summarised in the table below:

Outstanding balance at the beginning of the year (1 July) Issued during the period Exercised during the period Expired during the period Outstanding balance at the end of the year	30 June 2012 Number 30 June 2011 Number 2,000,018 2,018,200 488,651 - (227,282) - - (18,182)
	2,261,387 2,000,018

This plan is now closed and no further options will be issued under this plan.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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The Employee Share Option and Performance Right Plan (“ESOP”)

The ESOP was established and approved at the Annual General Meeting on 23 November 2010, and amended on 19 October 2011. The plan permits the Company, at the discretion of the Directors, to grant both options and performance rights over unissued ordinary shares of the Company to eligible Directors and members of staff as specified in the plan rules.

Under the ESOP, the options and performance rights, issued for nil consideration, are granted in accordance with performance guidelines established by the Directors of the Company. In exercising their discretion under the rules, the Directors will take into account matters such as the position of the eligible person, the role they play in the Company, the nature or terms of their employment or contract and the contribution they make to the Company as a whole. The options and performance rights are issued for a specified period and each option or performance right is convertible into one ordinary share. The exercise price of the options, determined in accordance with the rules of the plan, is based on the market price of a share on invitation date, grant date, or another specified date after grant close. All options and performance rights expire on the earlier of their expiry date or termination of the employee’s employment subject to Director discretion. Options and performance rights do not vest until a specified period after granting and their exercise is conditional on the achievement of certain performance hurdles that are aligned with shareholder interests.

There are no voting or dividend rights attached to the options or performance rights. Voting rights will attach to the ordinary shares when the options have been exercised or the performance rights vested. Unvested options and performance rights cannot be transferred and will not be quoted on the ASX.

Options under ESOP

Following the merger of Evolution and Conquest, 8,586,087 options were issued on 17 November 2011 to the former Conquest option holders as consideration for the cancellation of the outstanding options in Conquest Mining Limited, under this plan. During the year 5,068,319 options were exercised and there were 9,215,087 options outstanding at 30 June 2012 (2011: 5,856,542), of which 6,941,436 were issued to Directors and KMP’s (2011: 679,000)

The movement in the options under this plan is summarised in the table below:

Outstanding balance at the beginning of the year (1 July) Issued during the period Exercised during the period Expired during the period Outstanding balance at the end of the year	30 June 2012 Number 30 June 2011 Number 5,856,542 5,402,605 8,586,087 679,000 (5,068,319) (225,063) (159,223) -
	9,215,087 5,856,542

No further options will be issued under ESOP as Performance Rights are the selected long term incentive mechanism.

2012 Performance rights under ESOP

A long term incentive plan approved by shareholders on 23 November 2010 provided for the issuance of performance rights to Executive Directors and eligible employees. The introduced LTIP for employees at the level of Manager and above, effective from 1 July 2011, provides equity based “at risk” remuneration, up to maximum percentages, based on, and in addition to each eligible employee’s Total Fixed Remuneration (TFR). These incentives are aimed at retaining and incentivising KMP’s and senior managers on a basis that is aligned with shareholder interests, and are provided via performance rights.

During the year the Company issued 3,668,344 Performance Rights to employees. The movement in Performance Rights under this plan is summarised in the table below:

Outstanding balance at the beginning of the year (1 July) Performance rights granted during the period Exercised during the period Lapsed during the period Forfeited during the year Outstanding balance at the end of the year	30 June 2012 Number 30 June 2011 Number 1,151,000 - 3,668,344 1,151,000 (1,026,000) - (125,000) - (87,586) -
	3,580,758 1,151,000

None of the performance rights granted during the period have vested as at the reporting date.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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For the 2012 financial year the Performance Rights have been split into two tranches, hereinafter referred to as the “First Tranche” and “Second Tranche”, to reflect Evolution’s remuneration strategy following the merger between Catalpa Resources Limited and Conquest Mining Limited. Performance Rights issued during the year under the LTIP generally have a term of 3 years (other than a two year period for the First Tranche) and vest based on the achievement of specific targets with respect to:

Evolution’s relative total shareholder return (TSR) measured against the TSR for a peer Company of 20 comparator gold mining companies (Peer Group); (60% weighting) and
Evolution’s net C1 cash costs per ounce ranking amongst the Peer Group (40% weighting).

The first tranche of performance rights will be tested on 30 June 2013 and the second tranche tested on 30 June 2014.

(i) TSR Performance

A total of 60% of the Performance Rights will be tested against Evolution’s TSR performance relative to the Peer Group (on the 30 June 2013) and the Second Tranche Performance Rights will be tested on the 30 June 2014, together the “Relevant Date”.

Evolution’s TSR will be based on the percentage by which its 30-day volume weighted average share price quoted on ASX (VWAP) at the close of trade on the Relevant Date (plus the value of any dividends paid during the performance period) has increased over the company’s 30-day VWAP at the close of trade on the Grant Date.

The TSR for each Peer Group will be based on the percentage by which the Peer Group’s 30-day VWAP at the close of trade on the Relevant Date (plus the value of any dividends paid during the performance period) has increased over that company’s 30-day VWAP at the close of trade on the Grant Date. The current Peer Group selected by the Board is:

AlacerGold Corp	CGA MiningLtd	MedusaMiningLtd	RegisResourcesNL
Alamos GoldInc	DundeePreciousMetalsInc	NewGoldInc	ResoluteMiningLtd
Allied GoldLtd	GoldenStar ResourcesLtd	NorthgateMinerals Corp 1	SemafoInc
Aurico GoldInc	IntrepidMinesLtd	Oceana Gold Corp	StBarbaraLtd
Centamin EgyptInc	Kingsgate ConsolidatedLtd	PerseusMiningLtd	TroyResourcesNL

The Board has the discretion to adjust the composition and number of the companies in the peer group to take into account events including, but not limited to, takeovers, mergers and demergers that might occur during the performance period.

The proportion of the TSR Performance Rights that will vest will be based on the Relevant Date TSR as compared to the 2013 or 2014 Peer Group TSRs. The proportion of the TSR Performance Rights that will vest will be determined as follows:

Level of performance achieved	Evolution TSR performance as	% of TSR Performance Rights
	compared to the Peer Group TSR	vesting
Threshold	Top 50th percentile	33%
	Above the top 50th percentile and	Straight-line pro-rata between 33%
	below the top 25th percentile	and 66%
Target	Top 25th percentile	66%
	Above the top 25th percentile and	Straight-line pro-rata between 66%
	below the top 10th percentile	and 100%
Exceptional	Top 10th percentile or above	100%

1 Northgate has been taken over and has been replaced by Silver Lake for the FY13 LTIP’s.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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(ii) C1 Cash Costs Performance

The remaining 40% of the Performance Rights will be tested against Evolution’s C1 cash costs per ounce performance relative to the Peer Group Companies ( C1 Performance Rights ).

The net C1 cash costs per ounce (in Australian dollars) for Evolution and the Peer Group Company will be determined for the year ended on the Relevant Date (Cash Costs ).

The Company’s Cash Costs will be ranked against the Cash Costs for the Peer Group ( Evolution’s C1 Rank ).

The proportion of the C1 Costs Performance Rights that will vest will be determined based on Evolution’s C1 Rank as follows:

Level of performance achieved	Evolution’s C1 Rank	% of C1 Performance Rights
		vesting
Threshold	Top 70th percentile	33%
	Above the top 70th percentile and	Straight-line pro-rata between 33%
	below the top 50th percentile	and 66%
Target	Top 50th percentile	66%
	Above the top 50th percentile and	Straight-line pro-rata between 66%
	below the top 35th percentile	and 100%
Exceptional	Top 35th percentile or above	100%

(iii) Performance Right valuation

The performance rights have three performance components: a market-based TSR condition, and two non-market based conditions, being C1 condition and continued employment at the vesting date.

The fair value of the TSR Performance Rights (market-based condition) was estimated at the date of grant using Monte Carlo simulation, taking into account the terms and conditions upon which the awards were granted.

In accordance with the rules of the plan, the valuation of the C1 Performance Rights (non-market based performance condition) is based on information from other companies in the comparator group and not a market price or market condition. The fair value before considering expected C1 rankings against the Comparator is essentially the share price on grant date as dividends are not considered as future dividends cannot be reliably estimated.

The following tables list the inputs to the models used for the performance rights, the fair value and number of performance rights at grant date granted for the year:

	TSR Tranche 1	C1 Tranche 1	TSR Tranche 2	C1 Tranche 2

November 2011 rights issue
Number of rights issued	400,820	267,213	400,820	267,213
Spot price ($)	1.72	1.72	1.72	1.72
Risk-free rate (%)	3.13	3.13	3.15	3.15
Term (years)	1.6	1.6	2.6	2.6
Volatility	50%	50%	50%	50%
FV at Grant Date	$1.070	$1.720	$1.180	$1.720


February/April 2011 rights issue
Number of rights issued	699,683	466,456	699,683	466,456
Spot price ($)	1.865	1.865	1.865	1.865
Risk-freerate (%)	3.32	3.32	3.21	3.21
Term (years)	1.4	1.4	2.4	2.4
Volatility	50%	50%	50%	50%
FV at Grant Date	$1.104	$1.865	$1.208	$1.865

For details of Director and KMP interests in options at year end, refer to Note 25.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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DIRECTOR AND KEY MANAGEMENT PERSONNEL DETAILS

Except as noted, the named persons held their current positions for the whole of the financial year and up to the date of this report:

Jacob Klein	Executive Chairman (appointed 19 October 2011)
James Askew	Non-Executive Director (appointed 19 October 2011)
Lawrie Conway	Non-Executive Director (appointed 19 October 2011)
Graham Freestone	Lead Independent Director
Paul Marks	Non-Executive Director (appointed 19 October 2011)
John Rowe	Non-Executive Director
Peter Smith	Non-Executive Director (appointed 19 October 2011)
Peter Maloney	Non-Executive Chairman (resigned 18 October 2011)
Bruce McFadzean	Managing Director (resigned 25 January 2012)
Murray Pollock	Non-Executive Director (resigned 18 October 2011)
Barry Sullivan	Non-Executive Director (resigned 18 October 2011)

The term “key management personnel” is used in this remuneration report to refer to the following Senior Executives. These are defined as having the authority and responsibility for planning, directing and controlling the activities of the Company and are members of the senior leadership team. Except as noted, the named persons held their current positions for the whole of the financial year and up to the date of this report:

Tim Churcher Vice President Finance & Chief Financial Officer (appointed 24 October 011) Aaron Colleran Vice President Business Development and Investor Relations (appointed 19 October 2011) Evan Elstein Company Secretary and General Manager Information Technology (appointed 19 October 2011) Mark Le Messurier Chief Operating Officer (appointed 19 October 2011) Adrian Pelliccia General Manager Exploration (Australia) Raelene Wyatt General Manager Human Resources John Fraser General Manager – Edna May Gold Mine (Resigned 23 December 2011) Paul Mason Joint Company Secretary (resigned as Company Secretary on 18 October 2011 and as Financial Controller on 27 January 2012) Erik Palmbachs Chief Financial Officer and Joint Company Secretary (resigned as Company Secretary 18 October 2011 and as Chief Financial Officer on 29 February 2012) Stuart Pether Vice President Project Development (resigned effective 30 June 2012)

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL

The Directors and the Company executives received the following amounts as compensation for their services as Directors and executives of the Company during the period:

YEAR ENDED 30 JUNE 2012

Name	TOTAL FIXED REMUNERATION POST EMPLOYMENT BENEFITS STI LTI
	Base Salary and Fees Non- Monetary Benefits (viii) Superannuation Bonus Amortised value (ix) Termination Total
Directors Jacob Klein (i) Bruce McFadzean (ii) Peter Maloney (iii) John Rowe Murray Pollock (iii) Barry Sullivan (iii) Graham Freestone James Askew (i) Paul Marks (i) Peter Smith (i) Lawrie Conway (i)	$484,931 - $11,079 $390,600 $223,093 - $1,109,703 $435,891 $37,725 $17,980 $70,000 $578,955 $625,019 $1,765,570 $37,205 - $3,348 - - - $40,553 $99,635 - $3,881 - - - $103,516 $23,333 - $2,100 - - - $25,433 $21,104 - $1,899 - - - $23,003 $94,037 - $8,463 - - - $102,500 $68,333 - - - - - $68,333 $61,033 - $4,773 - - - $65,806 $65,003 - - - - - $65,003 $70,274 - - - - - $70,274
Key Management Personnel Erik Palmbachs (iv) Stuart Pether (vi) Adrian Pelliccia Paul Mason (v) Aaron Colleran (i) Tim Churcher (vii) Mark Le Messurier (i) Evan Elstein (i) Raelene Wyatt John Fraser (x)	$232,809 $25,602 $48,766 $38,000 $191,040 $298,000 $834,217 $337,039 $23,493 $18,850 $146,000 $256,749 $391,527 $1,173,658 $240,395 $9,002 $18,997 $166,300 $122,549 - $557,243 $109,610 - $9,567 - $43,338 $45,005 $207,520 $269,418 - $11,479 $188,000 $39,403 - $508,300 $265,017 - $10,517 $128,767 $32,782 - $437,083 $271,980 $6,377 $11,079 $189,880 $39,797 - $519,113 $178,227 - $11,079 $122,600 $17,731 - $329,637 $226,868 - $14,799 $100,000 $51,876 - $393,543 $181,987 - $19,691 - - - $201,678
Total	$3,774,129 $102,199 $228,347 $1,540,147 $1,597,313 $1,359,551 $8,601,686

(i) Employment commenced on 19 October 2011

(ii) Employment terminated on 25 January 2012

(iii) Employment terminated on 18 October 2011

(iv) Employment terminated on 29 February 2012

(v) Employment terminated on 27 January 2012

(vi) Employment terminated on 30 June 2012

(vii) Employment commenced on 24 October 2011

(viii) Non-monetary benefits relate to fully maintained vehicles provided by the Company (ix) Amortised value of share based rights comprises the fair value of options and performance rights expensed during the year (x) Employment terminated on 23 December 2011

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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YEAR ENDED 30 JUNE 2011

Name	TOTAL FIXED REMUNERATION POST EMPLOYMENT BENEFITS STI LTI
	Base Salary and Fees Non- Monetary Benefits (iv) Superannuation Bonus(vi) Amortis ed value (vi) Termination Total
Directors Peter Maloney Bruce McFadzean John Rowe (v) Murray Pollock Barry Sullivan (v) Graham Freestone	$89,900 - $45,600 - - - $135,500 $447,453 $43,739 $40,446 $408,293 $162,215 - $1,102,146 $89,000 - $6,750 - $425 - $96,175 $70,000 - $6,300 - $213 - $76,513 $75,000 - $6,300 - $213 - $81,513 $75,000 - $6,750 - - - $81,750
Key Management Personnel Erik Palmbachs Stuart Pether Adrian Pelliccia John Fraser Paul Mason (i) Graham Anderson and Leonard Math (ii), (iii)	$258,026 $11,834 $24,049 $57,967 $70,347 - $422,223 $300,963 $11,887 $23,336 $84,728 $79,685 - $500,599 $185,917 - $15,956 $33,640 $36,293 - $271,806 $268,202 $7,859 $24,199 $46,485 $50,876 - $397,621 $172,508 - $15,888 $10,631 $14,357 - $213,384 $42,000 - - - - - $42,000
Total	2,073,969 75,319 215,574 641,744 414,624 - 3,421,230

(i) Appointed 30 December 2010. Remuneration includes 12 month period for his role as financial controller. (ii) Resigned 30 December 2010.

(iii) These payments are to GDA Corporate, a company in which Graham Anderson is a Director and Leonard Math is an employee. The fees include company secretarial, accounting and other corporate services provided to the Company.

(iv) Non-monetary benefits relate to fully maintained vehicles provided by the Company.

(v) Included in these amounts are consulting services fees paid to Barry Sullivan of $5,000 and John Rowe of $14,000. Further information relating to fees paid to Directors and KMP’s are disclosed in Note 25.

(vi) Includes related superannuation.

(vii) Amortised value of share based rights comprises the fair value of options and performance rights expensed during the year.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:

	Fixed Remuneration	Fixed Remuneration	At Risk – STI	At Risk – STI	At Risk –	LTI(ii)
Name	2012	2011	2012	2011	2012	2011
Directors
Jacob Klein	44.7%	-	35.2%	-	20.1%	-
Bruce McFadzean	63.2%	48.2%	4.0%	37.0%	32.8%	14.7%
Peter Maloney	100.0%	100.0%	-	-	-	-
John Rowe (i)	100.0%	99.6%	-	-	-	0.4%
Murray Pollock (i)	100.0%	99.7%	-	-	-	0.3%
Barry Sullivan (i)	100.0%	99.7%	-	-	-	0.3%
Graham Freestone	100.0%	100.0%	-	-	-	-
James Askew	100.0%	-	-	-	-	-
Paul Marks	100.0%	-	-	-	-	-
Peter Smith	100.0%	-	-	-	-	-
Lawrie Conway	100.0%	-	-	-	-	-
Key Management
Personnel
Erik Palmbachs	72.5%	69.6%	4.6%	13.7%	22.9%	16.7%
Stuart Pether	65.7%	67.2%	12.4%	16.9%	21.9%	15.9%
Adrian Pelliccia	48.2%	74.3%	29.8%	12.4%	22.0%	13.4%
Paul Mason	79.1%	88.3%	-	5.0%	20.9%	6.7%
Aaron Colleran	55.3%	-	37.0%	-	7.7%	-
Tim Churcher	63.0%	-	29.5%	-	7.5%	-
Mark Le Messurier	55.8%	-	36.6%	-	7.6%	-
Evan Elstein	57.4%	-	37.2%	-	5.4%	-
Raelene Wyatt	61.4%	-	25.4%	-	13.2%	-
John Fraser	100.0%	75.5%	-	11.7%	-	12.8%

(i) Relates to options issued in December 2008 (ii) Comprises share options and performance rights expensed as share based payments during the year.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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EXECUTIVE SERVICE AGREEMENTS

Remuneration and other key terms of employment for the Executive Directors and Key Management Personnel are formalized in the Executive Services Agreements table below:

	Term of	Total Fixed	Notice	Notice	Termination
Name	Agreement	Remuneration	Period by	Period by	Payment
		($)	Executive	Evolution
Existing Executive Directors and Key Management Personnel
Jacob Klein Executive Chairman (i)	Open	800,000 200,000 fixed	6 months	6 months	12 month total fixed remuneration
		Director’s fees
Timothy Churcher Chief Financial Officer (iv)	Open	415,000	3 months	6 months	6 month total fixed remuneration
Mark Le Messurier Chief Operating Officer (i)	Open	435,000	3 months	6 months	6 month total fixed remuneration
Aaron Colleran Vice President Business Development and Investor Relations (i)	Open	415,000	3 months	6 months	6 month total fixed remuneration
Evan Elstein(i) Company Secretary and General Manager - IT and Business Systems	Open	290,000	3 months	6 months	6 month total fixed remuneration
Adrian Pelliccia General Manager – Exploration (Australia)	Open	290,000	3 months	6 months	6 month total fixed remuneration
Raelene Wyatt General Manager - Human Resources	Open	270,000	3 months	6 months	6 month total fixed remuneration
Terminated Executive Directors and Key	Management	Personnel
Bruce McFadzean Managing Director (ii)	-	650,000	6 months	6 months	12 month total fixed remuneration
Stuart Pether Vice President Project Development (iii)	-	400,000	3 months	6 months	12 month total fixed remuneration
Erik Palmbachs (v) Joint Company Secretary and Chief Financial Officer (Catalpa Resources Limited)	-	310,000	1 month	1 month	12 month total fixed remuneration
Paul Mason (vi) Joint Company Secretary and Financial Controller (Catalpa Resources Limited)	-	196,200	1 month	1 month	3 month total fixed remuneration
John Fraser (vii) General Manager – Edna May Gold Mine	-	310,000	1 month	1 month	1 month total fixed remuneration

(i) Employment commenced on 19 October 2011

(ii) Employment terminated on 25 January 2012

(iii) Employment terminated on 30 June 2012

(iv) Employment commenced on 24 October 2011

(v) Employment terminated on 29 February 2012

(vi) Employment terminated on 27 January 2012

(vii) Employment terminated on 23 December 2011

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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Fixed salary, inclusive of the required superannuation contribution amount, is reviewed annually by the Board following the end of the financial year. The amounts set out above are the Executives’ total fixed remuneration as at 30 June 2012.

SHARE-BASED COMPENSATION & PERFORMANCE RIGHTS

The following share options granted to Directors and Key Management Personnel as remuneration were outstanding at the beginning of the period:

	Awarded No	Grant date	Expiry date	Fair value	Fair value	Exercise	Vested %
				per award	of options	price
				$	at grant
					date
DIRECTORS
B McFadzean(i)	180,000	1-Jul-10	30-Jun-15	0.98	176,400	1.69	100%
	180,000	1-Jul-10	30-Jun-15	0.98	176,400	1.69	100%
	227,274	23-Dec-08	23-Dec-13	0.2	45,455	1.049	100%
	227,272	23-Dec-08	23-Dec-13	0.1	22,727	1.489	100%
	227,273	23-Dec-08	23-Dec-13	0.18	40,909	1.269	100%
	227,273	23-Dec-08	23-Dec-13	0.14	31,818	0.829	100%
	1,269,092				493,709
J Rowe	45,455	23-Dec-08	23-Dec-13	0.2	9,091	1.049	100%
	45,455	23-Dec-08	23-Dec-13	0.18	8,182	1.269	100%
	45,454	23-Dec-08	23-Dec-13	0.1	4,545	1.489	100%
	45,456	23-Dec-08	23-Dec-13	0.14	6,364	0.829	100%
	181,820				28,182
KMP’s
S Pether(ii)	62,500	1-Jul-10	30-Jun-15	0.980	61,250	1.69	100%
	62,500	1-Jul-10	30-Jun-15	0.980	61,250	1.69	100%
	113,637	11-Mar-09	11-Mar-14	0.150	17,046	0.609	100%
	113,637	11-Mar-09	11-Mar-14	0.140	15,909	0.829	100%
	113,637	11-Mar-09	11-Mar-14	0.200	22,727	1.049	100%
	113,637	11-Mar-09	11-Mar-14	0.180	20,455	1.269	100%
	579,548				198,637
E Palmbachs(iii)	55,000	1-Jul-10	30-Jun-15	0.980	53,900	1.69	100%
	55,000	1-Jul-10	30-Jun-15	0.980	53,900	1.69	100%
	56,819	23-Dec-08	23-Dec-13	0.150	8,523	0.609	100%
	56,819	23-Dec-08	23-Dec-13	0.140	10,227	0.829	100%
	56,819	23-Dec-08	23-Dec-13	0.200	11,364	1.049	100%
	56,819	23-Dec-08	23-Dec-13	0.180	7,955	1.269	100%
	337,276				145,869
A Pelliccia	34,000	1-Jul-10	30-Jun-15	0.980	33,320	1.69	100%
	34,000				33,320

(i) Employment terminated on 25 January 2012

(ii) Employment terminated on 30 June 2012

(iii) Employment terminated on 29 February 2012

All share options listed above were outstanding at the end of the year. No grants of share-based payment compensation to Directors and Key Management Personnel lapsed d u r i n g t h e financial year.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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The options were issued in accordance with the provisions of the Transaction Implementation Deed to the former Conquest Mining Limited Directors as part of the merger with Catalpa Resources Limited, prior to the formation of Evolution Mining.

No other share options were granted to Directors and Key Management Personnel during the year.

The following performance rights were granted to Executive Directors and Key Management Personnel during the year.

Name	Grant Date	Max No. of Performance	Value of Performance
		Rights Granted	Rights at Grant Date
Directors
Jacob Klein (i)	28/11/2011	803,279	$1,094,869
Bruce McFadzean(ii)	28/11/2011	532,787	$726,189
Key Management Personnel
Mark Le Messurier (i)	17/02/2012	198,689	$286,032
Aaron Colleran (i)	17/02/2012	196,721	$283,200
Tim Churcher (iii)	17/02/2012	163,665	$235,612
Evan Elstein (i)	17/02/2012	88,525	$127,440
Raelene Wyatt	17/02/2012	81,967	$118,000
Adrian Pelliccia	17/02/2012	88,525	$127,440

(i) Employment commenced on 19 October 2011

(ii) Employment terminated on 25 January 2012

(iii) Employment commenced on 24 October 2011

Details of the performance rights plan and vesting conditions are provided on page 14 of this report.

During the year the following Directors or Key Management Personnel exercised options that were granted to them in previous years as part of their compensation. Each option converted into one ordinary share of Evolution Mining Limited.

	No. of	No. of ordinary	Amount paid	Amount		Value of options
	options	shares issued on		unpaid		exercised at the
	exercised	exercise of options				exercise date(ii)
		during the year
Barry Sullivan (i)	45,458	45,458	$64,414		-	$13,319
Murray Pollock (i)	90,912	90,912	$108,822		-	$52,092

(i) Resigned on 18 October 2011

(ii) The value at the exercise date of the options granted as part of remuneration and were exercised during the year has been determined as the intrinsic value of the options at that date.

No grants of share-based payment compensation to Directors and Key Management Personnel lapsed in the current financial year.

The value of share-based payments granted during the period is recognised in compensation over the vesting period of the grant, in accordance with Australian Accounting Standards.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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SHARES UNDER OPTION

At the date of this report, the Company has 13,666,474 unissued shares under option with exercise prices ranging between $0.609 and $3.062 and with expiry dates between 19 October 2012 and 25 November 2016.

The holders of these options, which are unlisted, do not have the right, by virtue of the option, to participate in any share issue of the Company.

Details of shares issued during and up to the date of this report as a result of exercise of unlisted and listed options issued by the Company are:

Date	Details	Opening	No. of	Amount	Amount		Options	Closing
		Balance as	Options	Paid for	Unpaid		Expired	Balance
		at 1 July	Converted	the	for the
		2011	into	Shares	Shares
			Ordinary
			Shares
	Listed	5,177,542
	Options
04/08/2011	Conversion		118,977	$1.10		-		5,036,565
06/09/2011	Conversion		84,250	$1.10		-		4,952,315
11/10/2011	Conversion		643,870	$1.10		-		4,308,445
27/10/2011	Conversion		1,569,409	$1.10		-		2,739,036
31/10/2011	Conversion		2,601,813	$1.10		-		159,223
04/11/2011	Cancellation						159,223	-
30/06/2012	Total		5,018,319				159,223	Nil
	Unlisted	8,739,624
	Options
21/10/2011	Conversion		45,455	0.867		-		8,694,169
21/10/2011	Conversion		45,457	1.087		-		8,648,712
21/10/2011	Conversion		45,456	1.307		-		8,603,256
21/10/2011	Conversion		45,456	1.527		-		8,557,800
17/11/2011	New issue(i)	11,324,738						19,882,538
03/11/2011	Conversion		22,730	1.527		-		19,859,808
03/11/2011	Conversion		22,728	1.307		-		19,837,080
21/02/2012	Conversion		50,000	1.69		-		19,787,080
21/02/2012	Conversion		6,060,606	0.825		-		13,726,474
05/8/2012	Expired						60,000	13,666,474
30/06/2012	Total		6,337,888				60,000	13,666,474

(i) The new issue of options over ordinary shares in Evolution Mining on 17/11/2011 was issued as a replacement for the Conquest Mining Limited options following the merger between Catalpa Resources Limited and Conquest Mining Limited.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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IMDEMNIFICATION OF OFFICERS AND AUDITORS

During the financial year the Company paid a premium in respect of a contract insuring the Directors of the Company, the company secretaries and all executive officers of the Company and of any related body corporate against a liability incurred as such a Director, secretary or executive officer to the extent permitted by the Corporations Act 2001 . The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

The Company has entered into a Deed of Indemnity, Insurance and Access with each Director. In summary the Deed provides for:

Access to corporate records for each Director for a period after ceasing to hold office in the Company,
The provision of Directors and Officers Liability Insurance, and
Indemnity for legal costs incurred by Directors in carrying out the business affairs of the Company

Except for the above the Company has not otherwise, during or since the financial year, except to the amount permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.

NON-AUDIT SERVICES

Details of amounts paid or payable to the auditor for non-audit services provided during the period by the auditor are detailed in Note 25 . The Directors are satisfied that the provision of non-audit services during the period by the auditor is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The Directors are of the opinion that the services disclosed in Note 26 to the financial statements do not compromise the external auditor’s independence, based on the Auditor’s representations and appraisal and advice received from the Audit Committee, for the following reasons:

All non-audit services have been reviewed to ensure they do not impact the integrity and objectivity of the auditor; and
None of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

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AUDITOR’S INDEPENDENCE DECLARATION

The Auditor’s Independence Declaration is included on page 27 of the financial report.

ROUNDING OFF AMOUNTS

The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the directors’ report and the financial report are rounded to the nearest thousand dollars unless otherwise indicated.

Signed in accordance with a resolution of the directors made pursuant to s306(3) of the Corporations Act 2001 .

On behalf of the Directors

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Jacob Klein Executive Chairman

Graham Freestone

Lead Independent Director and Chair of the Audit Committee

Sydney 30 August 2012

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Auditor’s Independence Declaration

As lead auditor for the audit of Evolution Mining Limited for the year ended 30 June 2012 , I declare that to the best of my knowledge and belief, there have been:

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

This declaration is in respect of Evolution Mining Limited and the entities it controlled during the period.

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Tim Goldsmith Partner PricewaterhouseCoopers

Sydney 30 August 2012

PricewaterhouseCoopers, ABN 52 780 433 757 Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012

Notes Sales revenue Cost of sales 5 Gross profit Interest income Fair value re-measurement of previously held interest in the Cracow gold mine 22 Exploration and evaluation costs expensed as incurred Share based payments expense 23 Corporate administration costs 5 Costs related to business combinations 22 Other income Finance costs 5 Profit before income tax expense Income tax expense 6 Profit/(Loss) for the year attributable to owners of the parent Other comprehensive income/(loss), net of income tax Change in fair value of available for sale financial assets (net of tax) Total comprehensive income/(loss) for the year attributable to owners of the parent Earnings per share Basic profit/(loss) cents per share 24 Diluted profit/(loss) cents per share 24	Consolidated Year ended 30 June 2012 30 June 2011 $’000 $’000 469,484 121,870 (337,697) (101,757)
	131,787 20,113
	5,633 1,626 2,757 - (5,482) (2,631) (2,299) (560) (28,762) (8,366) (28,518) (974) 735 - (9,368) (5,253)
	66,483 3,955 (29,170) (6,258)
	37,313 (2,303) (5,770) 157
	31,543 (2,146)
	7.10 (1.37) 6.94 (1.37)

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

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

Notes Current assets Cash and cash equivalents 21 Trade and other receivables 7 Inventories 8 Other current assets 9 Total current assets Non-current assets Other financial assets 10 Other non-current assets 11 Property, plant and equipment 12 Mine development and exploration 13 Inventories 8 Deferred tax asset 6 Goodwill 14 Total non-current assets Total assets Current liabilities Trade and other payables 15 Interest bearing liabilities 17 Provisions 16 Total current liabilities Non-current liabilities Interest bearing liabilities 17 Deferred Tax Liability 6 Provisions 16 Total non-current liabilities Total liabilities Net assets Equity Issued capital 18 Reserves 19 Accumulated earnings/(losses) 20 Total equity	Consolidated 30 June 2012 30 June 2011 $’000 $’000 141,784 30,051 27,939 2,719 35,144 18,099 14,306 1,255
	219,173 52,124
	3,714 784 122 864 265,079 103,367 758,687 60,526 4,308 - - 7,831 18,365 -
	1,050,276 173,372
	1,269,449 225,496
	110,440 19,496 18,392 15,133 8,550 1,716
	137,382 36,345
	17,454 29,620 10,711 - 47,483 4,840
	75,648 34,460
	213,030 70,805
	1,056,418 154,691
	1,045,751 185,465 9,429 5,301 1,238 (36,075)
	1,056,418 154,691

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

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012

Consolidated	Share- based Fair value Issued payments Revaluation Accumulated Total capital reserve Reserve Losses equity $’000 $’000 $’000 $’000 $’000
Balance at 1 July 2010 Correction of error Restated total equity Loss for the year Other comprehensive income for the year : Fair value gain on available for sale financial assets, net of tax Total comprehensive loss for the year Issue of share capital Recognition of share-based payments Balance at 30 June 2011*	162,613 4,584 - (28,469) 138,728 (5,303) (5,303)
	162,613 4,584 - (33,772) 133,425 - - - (2,303) (2,303) - - 157 - 157
	- - 157 (2,303) (2,146)
	22,852 - - - 22,852 - 560 - - 560
	185,465 5,144 157 (36,075) 154,691

The opening balance as at 1 July 2010 has been restated for an error in the opening tax balances relating to property, plant and equipment and other assets.

** Issue proceeds net of transaction costs

Consolidated	Share- based Fair value Accumulated Issued payments Revaluation Earnings Total capital reserve Reserve /(Losses) Equity $’000 $’000 $’000 $’000 $’000
Balance at 1 July 2011 Profit for the year Other comprehensive income for the year: Fair value loss on available for sale financial assets, net of tax Total comprehensive income for the year Issue of share capital (Note 18) Transaction costs on share issues Cost of replacement options Other Recognition of share-based payments Balance at 30 June 2012	185,465 5,144 157 (36,075) 154,691 - - - 37,313 37,313 - - (5,770) - (5,770) - - (5,770) 37,313 31,543 865,377 - - - 865,377 (5,091) - - - (5,091) - 7,525 - - 7,525 - 74 - - 74 - 2,299 - - 2,299 1,045,751 15,042 (5,613) 1,238 1,056,418

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

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012

Notes Cash flows from operating activities Receipts from sales of gold Payments to suppliers and employees (inclusive of goods and services tax) Interest received Interest paid Net cash provided by operating activities 21 Cash flows from investing activities Purchase of property, plant and equipment Payment for mine development and exploration Cash acquired on acquisition of Conquest Mining Limited 22 Maturity of/(investments in) term deposits Proceeds on the disposal of investments Gold sale receipts capitalised Interest paid and capitalised Net cash used in investing activities Cash flows from financing activities Proceeds from issue of equity securities Transaction costs of issuing shares Repayment of interest bearing liabilities Net cash provided by financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 21	Consolidated Year ended 30 June 2012 30 June 2011 $’000 $’000
	448,499 121,870 (275,499) (96,675) 5,559 1,626 (6,275) (4,362)
	172,284 22,459
	(55,783) (22,990) (161,019) (28,359) 12,748 - 895 (865) 2 - - 21,481 - (1,921)
	(203,157) (32,654)
	163,346 22,852 (5,091) - (15,649) (17,719)
	142,606 5,133
	111,733 (5,062) 30,051 35,113
	141,784 30,051

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

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the consolidated entity consisting of Evolution Mining Limited and its subsidiaries (“Evolution” or “Group”).

(a) Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001 . Evolution is a for-profit entity for the purpose of preparing the financial statements.

The consolidated financial statements of the Group also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). These financial statements have been prepared on the basis of historical cost, except for the revaluation of certain available for sale financial assets. Cost is based on the fair values of the consideration given in exchange for assets.

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2.

The Group did not adopt any new and/or revised Accounting Standards, Amendments and Interpretations from 1 July 2011 which had an effect on the financial position or performance of the Group. The Group has also not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2011.

The June 2012 year results and balances reflect twelve months of Catalpa Resources (100% Edna May and 30% of Cracow operations), the consolidation of Conquest Mining Limited from 17 October 2011 and the consolidation of Mt Rawdon and a 70% interest in Cracow from 2 November 2011. Comparative data is based on the Group’s results before the business combinations outlined in Note 22.

(b) Principles of consolidation

(i) Business Combinations

Business combinations are accounted for by applying the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Consideration is measured at the fair value of the assets transferred, liabilities incurred and equity interests issued by the Group on acquisition date. Consideration also includes the acquisition date fair values of any contingent consideration arrangements, any pre-existing equity interests in the acquiree and share-based payment awards of the acquiree that are required to be replaced in a business combination. Where equity instruments are issued as part of the consideration, the value of the equity instruments is their published market price at the acquisition date unless, in rare circumstances it can be demonstrated that the published price at acquisition date is not fair value and that other evidence and valuation methods provide a more reliable measure of fair value.

Identifiable assets acquired and liabilities and contingent liabilities assumed in business combinations are, with limited exceptions, initially measured at their fair values at acquisition date. Goodwill represents the excess of the consideration transferred and the amount of the non-controlling interest in the acquiree over fair value of the identifiable net assets acquired. If the consideration and non-controlling interest of the acquiree is less than the fair value of the net identifiable assets acquired, the difference is recognised in profit or loss as a bargain purchase price, but only after a reassessment of the identification and measurement of the net assets acquired.

Acquisition related costs are expensed when incurred. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Where settlement of any part of the cash consideration is deferred, the amounts payable in future are discounted to present value at the date of exchange using the entity's incremental borrowing rate as the discount rate.

If the Group holds a non-controlling equity investment in an acquiree immediately before obtaining control, the Group remeasures that previously held equity investment at its acquisition date fair value and recognises any resulting gain or loss in profit or loss.

Acquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders and no goodwill is recognised as a result of these transactions.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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(ii) Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.

(iii) Joint venture arrangements

Until the acquisition on 2 November 2011, the Group had an interest in a joint venture that is a jointly controlled operation being a 30% interest in Cracow. A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. A jointly controlled operation involves use of assets and other resources of the venturers rather than establishment of a separate entity. The Group recognises its interest in the jointly controlled operation by recognising its interest in the assets and the liabilities of the joint venture. The Group also recognises the expenses that it incurs and its share of the income that it earns from the sale of goods or services by the jointly controlled operation.

(iv) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(v) Change in ownership interests

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received in recognised in a separate reserve within equity attributable to owners of Evolution.

When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

(c) Operating Segments

An operating segment is a component of equity that engages in business activities from which it may earn revenues and incur expenses, whose operating results are reviewed regularly by the entity’s chief operating decision makers.

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Executive Chairman and the management team (the chief operating decision makers) in assessing performance and in determining the allocation of resources. The Group has identified its operating segments as being Edna May, Cracow, Mt Rawdon and Pajingo mine sites, with Mt Carlton and Corporate combined for reporting purposes.

(d) Revenue recognition

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

Metal Sales

Revenue from sales of refined metals is recognised when the significant risks and rewards of ownership have passed to the buyer and can be reliably measured, which means the following:

The product is in a form suitable for delivery and no further processing is required by or on behalf of the consolidated entity;
The quantity and quality (grade) of the product can be determined with reasonable accuracy;
The quantity and quality (grade) of the product can be determined with reasonable accuracy;
The product has been dispatched to the customer and is no longer under the physical control of the consolidated entity;
The selling price can be measured reliably;

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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It is probable that the economic benefits associated with the transaction will flow to the consolidated entity; and
The costs incurred, or expected to be incurred, in respect of the transaction can be measured reliably.

As a result of the above policy generally revenue is recognised at time of shipment. Where metal is delivered into the physical gold delivery contract with Macquarie Bank Limited (‘Macquarie’) revenue is recognised at the time of the metal transfer into to the Macquarie metals account. Refined bullion at the mint awaiting metal transfer to Macquarie’s account is treated as inventory as significant risks and rewards have not passed to the buyer.

Interest Income

Interest income is recognised based on the control of the right to receive the interest payment as it accrues in profit and loss using the effective interest method.

(e) 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 national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences 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.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

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

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax balances attributable to amounts recognised directly in other comprehensive income or equity are also recognised directly in other comprehensive income or equity.

Tax Consolidation Legislation

Evolution and its wholly owned Australian controlled entities have implemented the tax consolidation legislation. As a consequence these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements.

Evolution Mining Limited is the head entity of the tax consolidated group and each member of the group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its own right. In addition to its own current and deferred tax amounts, Evolution Mining Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.

The entities have also entered into a tax funding agreement under which the wholly owned entities fully compensate Evolution Mining Limited for any current tax payable assumed and are compensated Evolution Mining Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Evolution Mining Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities' financial statements.

The amounts receivable/payable under the tax funding agreement is due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts receivable from or payable to other entities in the group.

Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly owned tax consolidated entities.

(f) Leases

Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other short-term and long-term payables. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the asset’s useful life and the life of the mine.

Leases where a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

(g) Impairment of assets

Goodwill is not amortised and is tested for impairment annually or more frequently if events or changes in circumstances indicate that goodwill may be impaired. At each reporting date, the Group reviews the carrying amounts of its tangible and other intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash in-flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately.

(h) Cash and cash equivalents

For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value, and bank overdrafts.

(i) Trade and other receivables

Receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written-off as incurred.

(j) Inventories

Gold in solution form, gold dore, refined gold bullion, stockpiled ore, concentrates and work in progress are physically measured or estimated and valued at the lower of cost and net realisable value. Cost represents the weighted average cost and includes direct costs and an appropriate portion of fixed and variable production overhead expenditure, including depreciation and amortisation, incurred in converting materials into finished goods.

Materials and supplies are valued at the lower of cost and net realisable value. Any provision for obsolescence is determined by reference to specific stock items identified. A regular and ongoing review is undertaken to establish the extent of surplus items and a provision is made for any potential loss on their disposal.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(k) Investments and other financial assets

Classification

The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at each reporting date. The Group may choose to reclassify the financial assets depending on change in intentions and circumstances

(i) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held-fortrading unless they are designated as hedges.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are included in trade and other receivables in the statement of financial position.

(iii) Available-for-sale financial assets

Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.

Recognition and derecognition

Regular purchases and sales of financial assets are recognised on trade-date, which is the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss is initially recognised at fair value and transaction costs are expensed to profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are included in profit or loss as gains and losses from investment securities.

Subsequent measurement

Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.

Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in profit or loss within other income or other expenses in the period in which they arise. Changes in the fair value of securities classified as Available for Sale are recognised in the other comprehensive income.

Dividend income from financial assets at fair value through profit or loss is recognised in profit or loss as part of revenue when the Group’s right to receive payments is established.

Fair value

The fair values of quoted investments are based on last trade prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.

Impairment

The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered as an indicator that the securities are impaired. If any such

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss. Impairment losses recognised in profit or loss on equity instruments classified as available-for-sale are not reversed through the income statement.

(l) 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 traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the last trade price. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.

(m) Mine development and exploration

(i) Mine development

In open pit mining operations, it is necessary to remove overburden and other waste materials to access ore from which minerals can be extracted economically. The process of mining overburden and waste materials is referred to as stripping. During the development of a mine (or pit), before production commences, stripping costs are capitalised as mine development.

During the production stage of some pits, further development of the pit may require a phase of unusually high overburden removal activity that is similar in nature to pre-production pit development. This typically occurs when ‘cutbacks’ are made to gain access to a specific section of the ore body. The costs of such unusually high overburden removal activity are also capitalised as mine development.

Mine development costs are amortised on a units of production basis over the life of the pit to which they relate. In applying the units of production method, amortisation is calculated using the expected total contained ounces within the pit to achieve a consistent amortisation rate per ounce. To achieve this, the amortisation rate is based on the ratio of total pit development costs (incurred and anticipated) over the expected total contained ounces.

Change in policy from 1 July 2011

A voluntary change in accounting policy on mine development has been applied from 1 July 2011 to align the accounting treatment across the new operations within the Group. Previously, all costs associated with open pit ‘cut-back’ activity were treated as deferred mining expenditure rather than as a mine development asset. This change has resulted in an increased cost of goods sold including higher depreciation and amortisation charge, with a net impact of $17.111 million reduction in the profit before tax for the year. The impact on the prior period has not been determined as it is impractical to determine the effect of this change in policy on prior periods.

(ii) Exploration and evaluation expenditure

Exploration and evaluation activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation activity includes:

researching and analysing historical exploration data
gathering exploration data through topographical, geochemical and geophysical studies
exploratory drilling, trenching and sampling
determining and examining the volume and grade of the resource
surveying transportation and infrastructure requirements
conducting market and finance studies.

Early stage exploration expenditure on new areas of interest are expensed as incurred. Exploration and evaluation expenditure is capitalised in relation to areas of interest in or around producing mines or where management believes the costs are recoverable.

Exploration expenditure for each area of interest is carried forward as an asset provided the rights to tenure of the area of interest are current and one of the following conditions is met:

the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; and
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

An impairment review is performed, either individually or at the cash-generating unit level, when there are indicators that the carrying amount of the assets may exceed their recoverable amounts. To the extent that this occurs, the excess is

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fully provided against, in the financial year in which this is determined. Exploration and evaluation assets are reassessed on a regular basis and these costs are carried forward provided that at least one of the conditions outlined above is met.

Administration costs that are not directly attributable to a specific exploration area are charged to the income statement. Expenditure is transferred to mine development assets once the work completed to date supports the future development of the property and such development receives appropriate approvals.

(n) Deferred mining expenditure

The Group incurs costs of removing overburden and other waste during the production phase of a pit. Other than unusually high overburden removal in cutback campaigns (referred to in Note 1(m) above), these costs are deferred where this is the most appropriate basis for matching the costs against the related economic benefits and the effect is material. This is generally the case where there are fluctuations in stripping costs over the life of a pit.

The amount of stripping costs expensed or deferred is based on the stripping ratio which is determined by dividing the tonnage of waste mined (excluding any waste associated with mine development) by the quantity of ore mined. Stripping costs incurred in the period are deferred as other assets to the extent that the current period stripping ratio exceeds the life of pit ratio. Such deferred costs are then expensed in subsequent periods to the extent that the current period stripping ratio falls short of the life of pit stripping ratio.

The impact of changes in the estimated life of pit stripping ratios is accounted for prospectively from when the change is determined.

Deferred mining expenditure is recognised in other current assets.

(o) Property, plant and equipment

Land is carried at historical cost. All plant and equipment is stated at historical cost less depreciation. Historical cost is fair value of the item at acquisition date and includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Land is not depreciated. Depreciation of plant and equipment is calculated using the straight line method to allocate their cost, net of their residual values, over their estimated useful lives. The rates vary between 10% and 33% per annum.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss.

(p) Goodwill

Goodwill acquired in a business combination is initially measured at cost, being the excess of the consideration transferred over the fair value of the net identifiable assets acquired and liabilities assumed. After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Impairment is determined by comparing the carrying amount of goodwill in comparison to the value of relevant assets. Impairment losses recognised for goodwill are not subsequently reversed.

(q) Intangible Assets

Mining Tenements, Mining Rights and Mining Information

Mining tenements have a finite useful life and are carried at cost less, where applicable, any accumulated amortisation and accumulated impairment losses. The carrying values of mining tenements and mining rights are reviewed to ensure they are not in excess of their recoverable amounts. Amortisation of mining tenements and mining rights commences from the date when commercial production commences or in the case of the acquisitions, from the date of acquisition and is charged to the profit or loss. Mining tenements are amortised over the life of the mine using units of production basis in ounces.

Mining information has a finite useful life and is carried at cost less accumulated amortisation. Mining Information amortisation is recognised over the period that the information is expected to remain relevant.

The amortisation of the above intangibles is classified as a cost of sale.

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(r) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are paid on normal commercial terms.

(s) Borrowings

Borrowings are initially recognised at fair value, net of transaction and establishment costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income or other expenses.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(t) Borrowing costs

Borrowing costs incurred for the construction of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.

(u) Site restoration

Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the site in accordance with the requirements of the mining permits. Such costs are determined using estimates of future costs, current legal requirements and technology.

Costs of site restoration are recognised in full at present value as a non-current liability. An equivalent amount is capitalised as part of the cost of the asset when an obligation arises to decommission or restore a site to a certain condition after abandonment as a result of bringing the assets to its present location. The capitalised cost is amortised over the life of the project and the provision is accreted periodically as the discounting of the liability unwinds. The unwinding of the discount is recorded as interest expense.

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

(v) Royalties

Western Australian State government royalties and other royalties payable under existing agreements are payable on production and are therefore recognised on delivery of gold dore to the refinery. Queensland State government royalties are payable on a revenue basis and therefore recognised at the time of revenue recognition.

(w) Employee benefits

(i) Wages and salaries, annual leave and other employee benefits

Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave, and long service leave.

Liabilities arising in respect of wages and salaries, annual leave and any other short-term employee benefits are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the market yield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, are used.

(ii) Share based payments

The Group provides benefits to its employees (including key management personnel) in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions). The Group provides awards to its employees and directors through the Company’s Employee Share Option and Performance Rights Plan. Shares and options may also be issued directly to other parties.

Vesting conditions that are linked to the price of shares of the Company (market conditions) are taken into account when determining the fair value of equity settled transactions. Other vesting conditions such as service conditions are

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excluded from the measurement of fair value but are considered in estimating the number of investments that may ultimately vest.

The cost of these equity-settled transactions 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 using a Black Scholes model. A Monte Carlo simulation in conjunction with the Black Scholes model is applied to take into account any market conditions associated with an award.

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 (the vesting period), ending on the date on which the relevant employees become fully entitled to the award (the vesting date).

At each subsequent reporting date until vesting, the cumulative charge to the statement of comprehensive income is the product of:

(a) The grant date fair value of the award.
(b) The current best estimate of the number of awards that will vest, taking into account such factors as the likelihood of employee turnover during the vesting period and the likelihood of non-market performance conditions being met.
(c) The expired portion of the vesting period.

The charge to the statement of comprehensive income for the period is the cumulative amount as calculated above less the amounts already charged in previous periods. There is a corresponding entry to equity.

Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards vest than were originally anticipated to do so. Any award subject to a market condition or non-vesting condition is considered to vest irrespective of whether or not that market condition or non-vesting is fulfilled, provided that all other conditions are satisfied.

If a non-vesting condition is within the control of the Company or the participant, the failure to satisfy the condition is treated as a cancellation. If a non-vesting condition within the control of neither the Group, Company nor employee is not satisfied during the vesting period, any expense for the award not previously recognised is recognised over the remaining vesting period, unless the award is forfeited.

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. An additional expense is recognised for any modification that increases the total fair value of the sharebased 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.

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

(x) Issued capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(y) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

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(z) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

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

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.

(aa) Rounding of amounts

All amounts are presented in Australian dollars, unless otherwise noted. The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the Directors’ report and the financial report are rounded off to the nearest thousand dollars, unless otherwise stated.

(bb) New standards and interpretations not yet adopted

The Group did not adopt any new and/or revised Accounting Standards, Amendments and Interpretations from 1 July 2011 which had an effect on the financial position or performance of the Group.

The Group has not elected to early adopt any other new standards, amendments or interpretations that are issued but are not yet effective. Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2012 reporting periods. The Group’s assessment of the impact of these new standards and interpretations is set out below.

‑ AASB 9 Financial Instruments, AASB 2009 11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (effective from 1 January 2013*)

AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2013* but is available for early adoption. When adopted, the standard will affect in particular the Group’s accounting for its available-for-sale financial assets, since AASB 9 only permits the recognition of fair value gains and losses in other comprehensive income if they relate to equity investments that are not held for trading.

There will be no impact on the Group’s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the Group does not have any such liabilities. The derecognition rules have been transferred from AASB 139 Financial Instruments: Recognition and Measurement and have not been changed. The Group has not yet decided when to adopt AASB 9.

In December 2011, the IASB delayed the application date of IFRS 9 to 1 January 2015. The AASB is expected to make an equivalent amendment to AASB 9 shortly.

AASB 10 Consolidated Financial Statements

AASB 10 replaces all of the guidance on control and consolidation in AASB 127 Consolidated and Separate Financial Statements, and Interpretation 12 Consolidation – Special Purpose Entities. The core principle that a consolidated entity presents a parent and its subsidiaries as if they are a single economic entity remains unchanged, as do the mechanics of consolidation. However, the standard introduces a single definition of control that applies to all entities. It focuses on the need to have both power and rights or exposure to variable returns. Power is the current ability to direct the activities that significantly influence returns. Returns must vary and can be positive, negative or both. Control exists when the investor can use its power to affect the amount of its returns. There is also new guidance on participating and protective rights and on agent/principal relationships. While the Group does not expect the new standard to have a significant impact on its composition, it has yet to perform a detailed analysis of the new guidance in the context of its various investees that may or may not be controlled under the new rules.

AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 (effective 1 January 2013)

AASB 13 was released in September 2011. It explains how to measure fair value and aims to enhance fair value disclosures. The Group has yet to determine which, if any, of its current measurement techniques will have to change as a result of the new guidance. It is therefore not possible to state the impact, if any, of the new rules on any of the amounts recognised in the financial statements. However, application of the new standard will impact the type of

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information disclosed in the notes to the financial statements. The Group does not intend to adopt the new standard before its operative date, which means that it would be first applied in the annual reporting period ending 30 June 2014.

AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements (effective 1 July 2013)

On 30 June 2010 the AASB officially introduced a revised differential reporting framework in Australia. Under this framework, a two-tier differential reporting regime applies to all entities that prepare general purpose financial statements. As Evolution is listed on the ASX, it is therefore not eligible to adopt the new Australian Accounting Standards – Reduced Disclosure Requirements. As a consequence, the two standards will have no impact on the financial statements of the entity.

AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income(effective 1 July 2012)

In September 2011, the AASB made an amendment to AASB 101 Presentation of Financial Statements which requires entities to separate items presented in other comprehensive income into two groups, based on whether they may be recycled to profit or loss in the future. This will not affect the measurement of any of the items recognised in the balance sheet or the profit or loss in the current period. The Group intends to adopt the new standard from 1 July 2012.

AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements (effective 1 July 2013)

In July 2011 the AASB decided to remove the individual key management personnel (KMP) disclosure requirements from AASB 124 Related Party Disclosures, to achieve consistency with the international equivalent standard and remove a duplication of the requirements with the Corporations Act 2001. While this will reduce the disclosures that are currently required in the notes to the financial statements, it will not affect any of the amounts recognised in the financial statements. The amendments apply from 1 July 2013 and cannot be adopted early. The Corporations Act requirements in relation to remuneration reports will remain unchanged for now, but these requirements are currently subject to review and may also be revised in the near future.

AASB Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine and AASB 2011-12 Amendments to Australian Accounting Standards arising from Interpretation 20 (effective 1 January 2013)

Interpretation 20 sets out the accounting for overburden waste removal (stripping) costs in the production phase of a mine. It states that these costs can only be recognised as an asset if they can be attributed to an identifiable component of the ore body, the costs relating to the improved access to that component can be measured reliably and it is probable that future economic benefits associated with the stripping activity (improved access to the orebody) will flow to the entity. The Group has not yet undertaken a review of its existing stripping cost assets in light of the requirements of the interpretation and hence is unable to quantify the effect, if any, on the amounts recognised in the financial statements.

(cc) Parent entity financial information

The financial information for the parent entity Evolution Mining Limited, disclosed in Note 31 has been prepared on the same basis as the consolidated financial statement.

2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of Australian Accounting Standards, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The judgments, estimates and assumptions that management has made in the process of applying the Group’s accounting policies and that have the most significant effects on the amounts recognised in the financial statements are discussed below.

(i) Determination of mineral resources and ore reserves

The Group estimates its Mineral Resources and Ore Reserves in accordance with the Australian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC Code’). The information on mineral resources and ore reserves is prepared by or under the supervision of Competent Persons as defined in the JORC Code. The amounts presented are based on the Mineral Resources and Ore Reserves determined under the JORC Code.

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There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of estimation which may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated. Such changes in reserves could impact on depreciation and amortisation rates, asset carrying values and provisions for decommissioning and restoration.

(ii) Fair values of assets and liabilities on acquisition

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill.

(iii) Estimation for the provision for rehabilitation and dismantling

Provision for rehabilitation and dismantling property, plant and equipment is estimated taking into consideration facts and circumstances available at the balance sheet date. This estimate is based on the expenditure required to undertake the rehabilitation and dismantling, taking into consideration time value of money.

(iv) Recovery of deferred tax assets

Deferred tax assets are recognised for tax losses and deductible temporary differences to the extent management considers that it is probable that future taxable profits will be available to utilise those tax losses and temporary differences.

(v) Impairment of property, plant and equipment and capitalised mine development expenditure

The Group reviews for impairment of property, plant and equipment, in accordance with its accounting policy. The recoverable amount of these assets has been determined based on the higher of the assets’ fair value less costs to sell and value in use. These calculations require the use of estimates and judgements.

The future recoverability of capitalised mine development expenditure is dependent on a number of factors, including the level of proved, probable, mineral resources and ore reserves, future technological changes which could impact the cost of mining, future legal changes (including changes to environment restoration obligations) and changes to commodity prices. To the extent that capitalised mine development expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

3. FINANCIAL RISK MANAGEMENT

The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group has not used derivative financial instruments such as interest rate swaps to hedge interest rate risk exposures given the low level of borrowings in the consolidated statement of financial position. The Group uses different methods to measure different types of risk to which it is exposed, the main risk being commodity price risk of gold and silver sold.

Risk management is carried out at a corporate level under policies approved by the Board of Directors. Management identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The board provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, gold price risk and use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

The Group holds the following financial instruments:

Financial Assets Cash and cash equivalents Trade and other receivables Available for sale investments Financial liabilities Trade and other payables Interest bearing liabilities	30 June 2012 30 June 2011 $’000 $’000 141,784 30,051 26,459 3,407 3,714 784
	171,957 34,242
	110,440 19,496 35,845 44,753
	146,285 64,249

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a) Market Risk

Currency Risk

The Group’s exposure to currency risk is limited to the impact of currency fluctuations on some of the input costs e.g. diesel, steel etc. At the balance date the Group holds no financial assets or liabilities which are exposed to foreign currency risk.

Commodity Price Risk

The Group is currently exposed to the risk of fluctuations in prevailing market commodity prices on the gold and silver currently produced from the Pajingo, Cracow, Mt Rawdon and Edna May gold mine. The Group has in place physical gold delivery contracts covering sales of 224,177 ozs of gold at a price of A$1,573 per ounce to be delivered over a period of approximately 4 years (refer to Note 27, 2011: 286,336 ozs).

Interest Rate Risk

The Group’s interest rate risk arises from cash on hand invested in term deposits and borrowings. Short term deposits of $112.150 million (2011: Nil) are placed with investment grade banks in Australia for time frames to ensure an appropriate balance between liquidity and interest rate earned. Borrowings of $31.5 million (2011: $47.5 million) incur interest at a variable rate and the Group has not entered into interest rate swap contracts or similar derivative financial instruments to hedge the fluctuations in interest rates given the size and maturity of the borrowings. An increase/decrease of variable interest rates of 0.25% will result in an increase/ decrease $78,750 in interest expense relating to debt and $244,000 in interest income relating to term deposits.

b) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers and investment securities. At the balance sheet date there were no significant concentrations of credit risk given customers and banks have investment grade credit ratings.

c) Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Prudent liquidity risk management implies maintaining sufficient cash and term deposits, 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.

Maturities of financial liabilities

The following are the Group’s contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

The amounts disclosed in the tables below have been drawn up based on the undiscounted cash flows (including both interest and principal cash flows expected) using contractual maturities and the earliest date on which the Group can be required to pay financial liabilities.

Less than 1 year 1-2 years 2-5 years Over 5 years 110,440 - - 3,232 3,092 632 - 18,518 13,773 2,029 -	Total contractual cash flows 110,440 6,956 34,320	Carrying amount 110,440 6,646 31,500
132,190 16,865 2,661 -	151,716	148,586
19,496 - - - 309 467 - - 19,456 18,518 13,773 -	19,496 776 51,748	19,496 684 47,522
39,261 18,985 13,773 -	72,020	67,702

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d) Fair value measurements

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices), and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table presents the Group’s assets measured and recognised at fair value at 30 June 2012 and 30 June 2011:

A$’000 Available for sale financial assets Options in Monto Minerals Shares available for sale Total financial assets held at fair value	30 June 2012 30 June 2011 Level 1 Level 2 Total Level 1 Level 2 Total - 210 210 - - - 3,504 - 3,504 784 - 784
	3,504 210 3,714 784 - 784

The shares in Monto Minerals and Renaissance Minerals are listed on the Australian Securities Exchange and recorded at fair value with reference to the listed price at balance sheet date. The options in Monto Minerals are recorded by using Black-Scholes valuation model to determine the fair value of the options with reference to the strike price of the options, volatility and term. An increase/decrease of 5% in the share price of the listed investments will result in an increase/decrease of $175,200 (2011: $39,000) through fair value reserves for the listed shares.

The carrying amounts of trade receivables and payables are assumed to approximate their fair values due to their short ‑ term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. The fair value of current borrowings approximates the carrying amount, as the impact of discounting is not significant.

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4. SEGMENT INFORMATION

Description of segments

The Group’s operations are all conducted in the mining industry in Australia.

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Executive Chairman and the senior leadership team (the chief operating decision makers) in assessing performance and in determining the allocation of resources. The presentation of segment information has changed from the previous period as a result of changes in management and the new structure of the larger Evolution Group.

The Group’s four operational mine sites and Corporate are each treated as individual operating segment. Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.

Corporate includes the Mt Carlton asset under construction that was acquired as part of the Conquest acquisition. The remainder of Corporate includes transaction costs related to the merger and asset acquisitions, share-based payment expenses and other corporate expenditures supporting the business during the year.

Year ended 30 June 2012

Edna May Cracow Pajingo Mt Rawdon Exploration Corporate/ Mt Carlton $’000 $’000 $’000 $’000 $’000 $’000 Segment revenue 121,816 129,306 102,186 116,176 - - Adjusted EBITDA 45,378 64,704 40,726 74,581 (5,482) (30,651) Reconciliation of profit before income tax: Depreciation and amortisation Costs related to business combinations Fair value re-measurement of previously held interest in the Cracow gold mine Interest income Finance costs Other income Profit before income tax* Capital additions (44,582) (24,396) (44,510) (34,172) (28,288) (102,286)	Edna May Cracow Pajingo Mt Rawdon Exploration Corporate/ Mt Carlton $’000 $’000 $’000 $’000 $’000 $’000	Total $’000
		469,484 189,257 (94,012) (28,518) 2,757 5,633 (9,368) 735
		66,483

		(278,234)

*EBITDA has been calculated excluding the costs relating to business combinations.

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Year ended 30 June 2011 (Restated)

Edna May Cracow Pajingo Mt Rawdon Exploration Corporate/ Mt Carlton $’000 $’000 $’000 $’000 $’000 $’000 Segment revenue 77,900 43,970 - - - - Adjusted EBITDA 17,049 11,859 - - - - Reconciliation of profit before income tax: Depreciation and amortisation Costs related to business combinations Interest income Finance costs Profit before income tax* Capital additions (2,844) (24,897) - - - -	Edna May Cracow Pajingo Mt Rawdon Exploration Corporate/ Mt Carlton $’000 $’000 $’000 $’000 $’000 $’000	Total $’000
		121,870 28,908 (20,352) (974) 1,626 (5,253)
		3,955
		(27,741)

*EBITDA has been calculated excluding the costs relating to business combinations.

5. PROFIT BEFORE TAX

Profit before income tax includes the following specific items:

Cost of sales Mine operating costs Depreciation and amortisation Royalty and other selling costs Other Corporate administration costs Depreciation and amortisation Operating lease payments Employee wages and salaries Contractor, consultants and advisory expense Other administrative Finance costs Finance leases Bank guarantee fees Amortisation of debt establishment costs Unwinding of discount on provisions Interest expense	30 June 2012 30 June 2011 $’000 $’000 221,601 74,380 93,603 20,275 22,493 4,851 - 2,251
	337,697 101,757
	409 77 614 215 13,548 2,258 10,351 - 3,840 5,816
	28,762 8,366
	552 25 508 - 1,152 869 1,940 - 5,216 4,359
	9,368 5,253

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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6. INCOME TAX

a) Income tax expense:

a) Income tax expense:
	30 June 2012	30 June 2011
	$’000	$’000
Current Tax	(3,175)	-
Deferred tax	32,345	3,864
Adjustments for current tax	-	2,394
Total income tax expense	29,170	6,258
b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax	66,483	3,955
Tax at the Australian tax rate of 30% (2011: 30%)	19,945	1,186
Tax effect of amounts which are not deductible/(taxable) in calculating taxable
income:
Tax losses written off	8,051	-
Other	1,174	5,072
	29,170	6,258

b) Numerical reconciliation of income tax expense to prima facie tax payable

c) Recognised deferred tax balances

Trade and other receivables Inventories Exploration and evaluation expenditure Property, plant and equipment Mine development Intangible assets Employee benefits Provisions Other Deferred tax balances from temporary differences Tax loss carry-forwards Tax assets/ (liabilities) Recovered in 12 months Recovered in more than 12 months	30 June 2012 30 June 2011 $’000 $’000 - - 74 (1,561) (11,569) - (6,067) (2,327) (9,905) - (3,265) - 1,329 - 2,113 3,090 4,920 2,339
	(22,370) 1,541 11,659 6,290
	(10,711) 7,831
	(22,370) 1,541 11,659 6,290
	(10,711) 7,831

d) Movement in deferred tax balances during the year

Inventories Exploration and evaluation expenditure Property, plant and equipment Mine development Intangible assets Employee benefits Provisions Other Tax losses carried forward Deferred tax assets/ (liabilities)	Balance 1 July 2011 (Restated) Recognised in profit or loss Recognised in business combination Balance 30 June 2012 $’000 $’000 $’000 $’000 (1,561) 1,635 - 74 - (11,569) - (11,569) (2,327) 460 (4,200) (6,067) - (18,005) 8,100 (9,905) - (3,265) - (3,265) - (58) 1,387 1,329 3,090 (976) - 2,113 2,339 (2,761) 5,342 4,920 6,290 5,369 - 11,659
	7,831 (29,170) 10,629 (10,711)

Inventories
Exploration and evaluation expenditure
Property, plant and equipment
Mine development
Intangible assets
Employee benefits
Provisions
Other
Tax losses carried forward
Deferred tax assets/ (liabilities)

Balance
1 July 2011
(Restated)
Recognised
in profit or
loss
Recognised
in business
combination
Balance
30 June 2012
$’000
$’000
$’000
$’000
(1,561)
1,635
-
74
-
(11,569)
-
(11,569)
(2,327)
460
(4,200)
(6,067)
-
(18,005)
8,100
(9,905)
-
(3,265)
-
(3,265)
-
(58)
1,387
1,329
3,090
(976)
-
2,113
2,339
(2,761)
5,342
4,920
6,290
5,369
-
11,659

7,831
(29,170)
10,629
(10,711)

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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7. TRADE AND OTHER RECEIVABLES

	30 June 2012	30 June 2011
	$’000	$’000
Trade receivables	18,292	-
GST refundable	6,692	438
Accrued interest income	74	-
Prepayment and other receivables	2,881	2,281
	27,939	2,719
No trade receivables were past due or impaired as at 30 June 2012 (2011: Nil).
8. INVENTORIES
	30 June 2012	30 June 2011
	$’000	$’000
Current
Stores	10,474	5,203
Ore	15,658	5,650
Bullion and Gold in circuit	9,012	7,246
	35,144	18,099
Non-Current
Stores	4,308	-
	4,308	-
9. OTHER CURRENT ASSETS
	30 June 2012	30 June 2011
	$’000	$’000
Deferred stripping costs	10,886	1,255
Other	3,420	-
	14,306	1,255
10. OTHER FINANCIAL ASSETS
	30 June 2012	30 June 2011
	$’000	$’000
Non-current
Available-for-sale investments carried at fair value
Shares in Renaissance Minerals Limited	504	784
Shares in Monto Minerals Limited	3,000	-
Options in Monto Minerals Limited	210	-
	3,714	784

The 150,000,000 Monto options are exercisable at 3 cents on or before 30 June 2014.

11. OTHER NON-CURRENT ASSETS

Tenement security bonds Administration and office bonds	30 June 2012 30 June 2011 $’000 $’000 73 760 49 104
	122 864

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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12. PROPERTY, PLANT AND EQUIPMENT

30 June 2012 Cost Accumulated depreciation and impairment Net carrying amount Reconciliation of movement for the year Carrying amount at the beginning of the year Additions Amounts acquired in a business combination Transfers to Mine development and Exploration Other adjustments relating to business combination Reclassifications Disposals Depreciation Impairment Carrying amount at the end of the year Carrying amount of lease assets Carrying amount of assets under construction 30 June 2011 Cost Accumulated depreciation and impairment Net carrying amount Reconciliation of movement for the year Carrying amount at the beginning of the year Additions Amounts acquired in a business combination Transfers from Mine development Borrowing costs capitalised Reclassifications Depreciation Impairment Carrying amount at the end of the year Carrying amount of lease assets Carrying amount of assets under construction	Freehold Land Plant and equipment Total $’000 $’000 $’000 9,261 291,117 300,378 - (35,299) (35,299) 9,261 255,818 265,079 465 102,901 103,367 6,536 55,890 62,426 2,260 117,767 120,027 - (688) (688) - 851 851 - - - - (1,348) (1,349) - (19,555) (19,555) - - - 9,261 255,818 265,079 - 8,544 8,544 - 27,376 27,376 - 35,920 35,920 Freehold Land Plant and equipment Total $’000 $’000 $’000 465 118,991 119,456 - (16,089) (16,089)
	465 102,902 103,367
	390 84,616 85,006 54 20,837 20,891 - - - - 4,687 4,687 - 1,921 1,921 21 (21) - - (9,138) (9,138) - - -
	465 102,902 103,367
	- 683 683 - - -
	- 683 159,476

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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13. MINE DEVELOPMENT AND EXPLORATION

30 June 2012 Cost Accumulated depreciation and impairment Net carrying amount Reconciliation of movement for the year Carrying amount at the beginning of the year Additions Amounts acquired in a business combination Transfers from Property, plant and equipment Other Adjustments relating to Business Combination (a) Reclassifications Disposals Depreciation and amortisation Impairment Carrying amount at the end of the year	Mines under construction Producing mines Exploration and evaluation Total $’000 $’000 $’000 $’000 247,380 530,198 91,479 869,056 - (97,459) (12,910) (110,369)
	247,380 432,738 78,569 758,687
	- 60,526 - 60,526 99,140 88,379 28,288 215,807 148,240 363,751 46,172 558,163 - 28 660 688 - 1,243 (293) 950 - (7,256) 7,256 - - - (2,991) (2,991) (73,933) (524) (74,457) - - -
	247,380 432,738 78,569 758,687

(a) The other adjustments relate to the fair value adjustment on the previously held 30% interest in the Cracow gold project.

30 June 2011 Cost Accumulated depreciation and impairment Net carrying amount Reconciliation of movement for the year Carrying amount at the beginning of the year Additions Amounts acquired in a business combination Transfers to Property, plant and equipment Borrowing costs capitalised Reclassifications Disposals and obsolete items Depreciation and amortisation Impairment Carrying amount at the end of the year	Mines under construction Producing mines Exploration and evaluation Total $’000 $’000 $’000 $’000 - 68,919 - 68,919 - (8,393) - (8,393)
	- 60,526 - 60,526
	- 68,919 - 68,919 - 6,850 - 6,850 - - - - - (4,687) - (4,687) - - - - - - - - - - - - - (10,556) - (10,556) - - - -
	- 60,526 - 60,526

The amortisation of pre-production stripping costs is recorded as a cost of sale under depreciation and amortisation. The ultimate recoupment of costs carried forward for exploration and evaluation expenditure phases is dependent on the successful development and commercial exploitation, or alternatively, the sale of the respective areas.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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14. GOODWILL

Goodwill at cost	30 June 2012 30 June 2011 $’000 $’000
	18,365 -

Given the nature of goodwill, its carrying amount is assessed for impairment on an annual basis relative to the value of relevant assets. No impairment has been recognised for goodwill for the year ended 30 June 2012 (2011: $Nil).

15. TRADE AND OTHER PAYABLES

Trade creditors Other creditors and accruals	30 June 2012 30 June 2011 $’000 $’000 39,669 18,256 70,771 1,240
	110,440 19,496

Note: Other creditors and accruals include significant capital accruals related to Mt Carlton project and stamp duty costs relating to the business combinations.

16. PROVISIONS

Current Employee entitlements Non-current provisions Long Service Leave Rehabilitation provision Reconciliations of carrying amount movements of non-current provisions Carrying amount at the beginning of the year Charges during the year Amounts acquired in a business bi ti Write-back of unused provisions Unwinding of discount Change in provision assumptions Carrying amount at the end of the year		30 June 2012 30 June 2011 $’000 $’000 8,550 1,716
		524 501 46,959 4,339
		47,483 4,840
		Rehabilitation provision Long Service Leave Total $’000 $’000 $’000 4,339 501 4,840 (610) - (610) 22,360 661 23,021 - (369) (369) 1,940 - 1,940 18,930 (269) 18,661
		46,959 524 47,483

The Group makes full provision for the future cost of rehabilitating mine sites and related production facilities on a discounted basis at the time of developing the mines and installing and using those facilities. The rehabilitation provision represents the present value of rehabilitation costs related to the Group’s mine sites. The nature of these costs includes dismantling and removing structures, rehabilitating mines and tailings dams, dismantling operating facilities, closure of plant and waste sites, and restoration, reclamation and re-vegetation of affected areas.

For the purposes of providing for the rehabilitation obligation at all mines it has been assumed rehabilitation costs will be incurred at the end of the mine’s useful life. The timing of this obligation is likely to change depending on a number of factors which may impact mine life including the identified reserve and resource, gold prices and costs of production which all impact the economic viability of the projects.

Provisions have been determined with reference to the Group’s internal estimates and consultation with the Department of Environment and Resource Management. As noted in this report the Twin Hills project is currently on a care and maintenance program. A provision has been made to cover disturbance to date. Consultation is currently in process with the Department of Environment and Resource Management to reduce the environmental bond required at this site, in line with management’s assessment of the rehabilitation provision required. Provision estimates are reviewed regularly to

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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take into account any material changes to assumptions. However actual rehabilitation costs will ultimately depend upon future market prices for the necessary decommissioning works required which will reflect market conditions at the relevant time.

17. INTEREST BEARING LIABILITIES

17. INTEREST BEARING LIABILITIES
Current Bank loan Less: Borrowing costs Finance lease liabilities Non-Current Bank loan Less: Borrowing costs Finance lease liabilities	30 June 2012 30 June 2011 $’000 $’000 16,500 16,000 (1,151) (1,152) 3,043 285
	18,392 15,133
	15,000 31,522 (1,150) (2,301) 3,604 399
	17,454 29,620

The Edna May loan facility is secured by:

A fixed and floating charge over all assets and undertakings of Edna May Operations Pty Ltd. Total net assets of Edna May are $138.4 million.
A mortgage over the Edna May Gold Operations tenements; and
A fixed charge over Edna May’s proceeds account and gold account held with Macquarie.

Macquarie has placed covenants over the bank loan based on production levels and operating costs. The Group has complied with these covenants or in certain cases Macquarie has waived compliance during the year.

18. ISSUED CAPITAL

Issued capital comprises 707,105,713 fully paid ordinary shares (30 June 2011: 178,095,822) Movement in issued shares for the period Opening balance for the year Shares issued for merger Shares issued for asset acquisition Placement of shares Shares issued on exercise of options Compensation payments to option holders Shares issued on conversion of performance rights Costs associated with the issue of shares Closing balance for the year	30 June 2012 $’000 30 June 2011 $’000
	1,045,751 185,465 30 June 2012 30 June 2011 No. $’000 No. $’000
	178,095,822 185,465 162,749,311 162,613 180,401,006 311,733 - - 231,082,631 390,299 - - 105,144,047 152,459 15,121,448 23,438 11,356,207 10,887 225,063 248 - - - (8) 1,026,000 - - - - (5,091) - (826)

	707,105,713 1,045,751 178,095,822 185,465

During the period, the Company issued 180,401,006 fully paid ordinary shares after the scheme of arrangement became effective between Conquest Mining Limited and its shareholders.

The Company also issued 231,082,631 fully paid ordinary shares in exchange for the asset acquisition from Newcrest Mining Limited. The Company also issued 105,144,047 fully paid ordinary shares at $1.45 per share in November 2011 under the Company’s accelerated renounceable entitlement offer.

The Company issued 11,356,207 fully paid ordinary shares on exercise of 5,018,319 listed options and 6,337,888 unlisted options. The Company issued 1,026,000 fully paid ordinary shares on conversion of performance rights under the Employee Share Option and Performance Rights Plan.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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Capital Management

Capital is defined as the equity of the Company. The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s focus has been to raise sufficient funds through equity to fund capital investment in the Mt Carlton project and exploration and evaluation activities.

The Group monitors its liquidity through regular cash flow forecasts.

19. RESERVES

Share based payment reserve

Option reserve comprises the consideration received for the issue of options over unissued ordinary shares of the Company and the fair value of options over unissued ordinary shares granted as employee remuneration until the options are exercised or expire.

Options over ordinary shares

Options on issue at beginning of year Cost of replacement options issued as consideration to Conquest option holders Share based payment expense recognised in equity as a cost of issuing shares Share based payment expense recognised in profit and loss Other Balance at the end of year	30 June 2012 $’000 30 June 2011 $’000 5,144 4,584 7,525 - - - 2,299 560 74
	15,042 5,144

At 30 June 2012 there were 13,726,474 options on issue (2011: 13,917,166). Refer to disclosure at Note 23 for further detail.

Fair Value revaluation reserve

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

Balance at beginning of year Change in fair value of available for sale listed securities Tax effect of change in fair value Balance at end of year	30 June 2012 30 June 2011 $’000 $’000 157 - (5,770) 224 - (67) (5,613) 157

These investments relates to 2,800,000 fully paid ordinary shares in Renaissance Minerals Limited, 300,000,000 fully paid ordinary shares in Monto Minerals Limited (“Monto”) and 150,000,000 options in Monto exercisable at 3 cents on or before 30 June 2014 . Refer to Note 10 for further detail with respect to the available for sale listed securities and unlisted options.

20. ACCUMULATED EARNINGS/ (LOSSES)

Movements in retained earnings are as follows:

Balance at the beginning of the year Net profit/ (loss) for the year Correction of error to retained earnings* Balance at the end of the year	30 June 2012 30 June 2011 $’000 $’000 (36,075) (28,469) 37,313 (2,303) - (5,303) 1,238 (36,075)

The opening balance as at 1 July 2010 has been restated for an error in the opening tax balances relating to property plant and equipment and other assets.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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21. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

For the purposes of the statement of cash flows, cash includes cash on hand and in banks, and money market investments readily convertible to cash within two working days, net of outstanding bank overdrafts.

(b) Reconciliation of cash and cash equivalents Reconciliation of cash balance comprises: Cash at bank Short term deposits Group’s share of cash held by joint venture (b) Reconciliation of profit/ (loss) to net cash inflow from operating activities: Profit/ (loss) for the year Add/(less) items classified as investing/financing activities: Depreciation and amortisation Share based payment Amortisation of borrowing costs Unwind of discount in provisions Fair value change on Cracow 30% holding Exploration assets written off during the period Interest paid and capitalised Interest expense capitalised as bank loan principal Proceeds from sale of gold capitalised Payments to suppliers and employees capitalised Change in assets and liabilities during the financial year: (Increase)/decrease in other receivables (Increase)/decrease in deferred mining expenditure (Increase)/decrease in inventories Increase/(decrease) in trade and other payables Increase/(decrease) in provisions Increase/(decrease) in deferred tax balance Net cash provided by operating activities	30 June 2012 30 June 2011 $’000 $’000 29,634 13,788 112,150 14,042 - 2,221
	141,784 30,051
	37,313 (2,303) 94,012 20,275 2,299 560 1,152 869 1,940 - (2,757) - 2,991 - 1,921 - 22 - (21,481) - 21,874 (22,347) (1,361) (8,756) - 6,665 (7,982) 27,577 3,799 3,086 431 29,109 5,835
	172,284 22,459

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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22. BUSINESS COMBINATIONS

On 15 June 2011, Evolution Mining Limited and Conquest Mining Limited announced that they had entered into a binding share purchase agreement to implement a transaction that would result in the creation of a leading growth-focused Australian gold company through an all-scrip merger of equals.

In a separate but inter-conditional transaction, Evolution Mining Limited acquired 100% of the Mt Rawdon Gold Project and 70% of the Cracow Gold Project from Newcrest Mining Limited. All regulatory approvals were obtained 17 October 2011. The scheme became effective and the asset acquisitions were completed on 2 November 2011.

Acquisition of Conquest Mining Limited and subsidiaries (‘Conquest’)

The acquisition date of the Conquest Group by Evolution was 17 October 2011.

Consideration comprised the issue of Evolution Mining fully paid ordinary shares to eligible Conquest shareholders and the replacement of certain Conquest Group options. The new shares were issued at a ratio of 0.3 new shares to 1 Conquest share.

A total of 180,401,006 fully paid ordinary shares were issued to Conquest shareholders as consideration. These shares were valued at $311.733 million based upon the closing share price on the date of acquisition. In addition, 11,324,738 Evolution options were issued as replacement options to Conquest option holders. These options were valued at $7.525 million at the date of acquisition using a Black Scholes model.

The fair value of the identifiable assets and liabilities of the Conquest Group as at the date of acquisition were:

Cash and cash equivalents Trade and other receivables Inventories Investments Property, plant and equipment Mine development and exploration Deferred tax asset Total Assets Trade and other payables Interest bearing liabilities Provisions Total Liabilities Net Assets Consideration issued and paid for the above transaction was as follows: Shares issued, at fair value Conquest replacement options issued Total consideration The cash inflow was as follows: Net cash acquired Net consolidated cash inflow	Acquisition date fair values $‘000 12,748 3,682 16,992 8,552 43,576 266,763 1,835
	354,148
	21,338 6,113 7,439
	34,890
	319,258
	$‘000 311,733 7,525 319,258 12,748 12,748

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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Conquest Mining Limited holds a 100% interest in the following companies:

CQT Gold Australia Pty Ltd	ACN 128 947 419
CQT Holdings Pty Limited	ACN 115 279 653
NQM Gold 2 Pty Limited	ACN 129 020 248
NQM Gold Pty Limited	ACN 126 817 043
Walker Resources Pty Limited	ACN 116 453 742
Baal Gammon Operations Pty Limited	ACN 125 765 451
NQM Exploration Pty Limited	ACN 125 728 154

Acquisition of the Mt Rawdon Gold Mine and 70% of the Cracow Gold Mine from Newcrest Mining Limited (Newcrest)

On 2 November 2011, being the acquisition date for the purpose of this financial report, Evolution acquired a 100% interest in the Mt Rawdon gold mine and the remaining 70% of interest in Cracow gold mine. Evolution previously held a 30% joint venture interest in the Cracow gold mine through its subsidiaries. The transactions were asset acquisitions however certain employees and other elements required to continue the operation of the mine were transferred with the assets acquired.

These transactions have been accounted for as business combinations in this financial report.

The total consideration transferred consisted of the issuing of 231,082,631 Evolution shares to a nominee of Newcrest. The fair value of shares issued was based upon the closing company share price on 2 November 2011.

The fair value of the identifiable assets and liabilities of the Cracow Gold Project (70% interest) and the Mt Rawdon gold project as at the date of acquisition were:

Trade and other receivables Inventories Property, plant and equipment Mine development and exploration Deferred tax asset Total Assets Trade and other payables Provisions Total Liabilities Fair value of net identifiable assets Add: Goodwill Net assets acquired	Acquisition date fair values $‘000 350 15,500 76,451 291,400 8,793
	392,494
	1,383 19,177
	20,560
	371,934
	18,365
	390,299

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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Consideration issued and paid for the above transaction was as follows:

Shares issued, at fair value Total consideration The net cash inflow from the above transaction was as follows: Net cash acquired Net consolidated cash inflow	$‘000 390,299
	390,299
	-
	-

On 2 November 2011, Evolution gained control of the Cracow gold mine as it increased its interest in the project from 30% to 100%. Evolution remeasured its 30% equity investment in Cracow resulting in a gain of $2.757 million which has been recognised as an income item separately disclosed as a line item in the Statement of Comprehensive Income. The acquisition-date fair value of the 30% equity interest in Cracow was $48.509 million.

Acquisition costs recognised with respect to the above business combinations were $28.518 million.

The acquired entities contributed operating revenue of $329.216 million and net profit before tax of $83.793 million to the Group for the period. If these acquisitions had occurred on 1 July 2011 consolidated operating revenue and consolidated profit before tax for the year ended 30 June 2012 would have increased by $105.707 million and $27.592 million respectively.

Goodwill was recognised as a result of the acquisition as follows:

Total consideration Less: fair value of net identifiable assets	$‘000 390,299 (371,934)
	18,365

Goodwill has been recognised in the above business combinations due to the synergies which result from the transaction. These benefits include the following:

The acquisitions allow Evolution to control 100% of the Cracow Gold Mine. The acquisition of the remaining interest will allow Evolution to better manage and prioritise exploration and development expenditure for the growth and sustainability of the mine.
The increased sized of the Group will allow for improved access to debt and equity markets.
Cost savings may eventuate from the elimination of duplicated corporate structures, improved procurement power and shared services functions.

23. SHARE BASED PAYMENTS

(a) Types of share based payment plans

Evolution has two option and performance rights plans in existence:

Employee Share Option and Performance Rights Plan (“ESOP”)

ESOPRP was established and approved at the Annual General Meeting on 23 November 2010, and amended on 19 October 2011. The plan permits the Company, at the discretion of the Directors, to grant both options and performance rights over unissued ordinary shares of the Company to eligible Directors and members of staff as specified in the plan rules.

Employees and Contractors Option Plan (“ECOP”)

An ECOP was established and approved at the Annual General Meeting on 27 November 2008. The plan permits the Company, at the discretion of the Directors, to grant options over unissued ordinary shares of the Company to eligible Directors, members of staff and contractors as specified in the plan rules. No further options will be issued under this plan.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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(b) Recognised share based payment expenses

	30 June 2012	30 June 2011
	$‘000	$‘000
Expense arising from equity settled share based
payment transactions recognised in profit and loss	2,299	560

During the year Evolution issued 11,324,738 unquoted options as consideration for the cancellation of outstanding options previously held by Conquest option holders. The options were issued at various exercise prises and expiry dates. All options were fully vested and no further service period was required for the replacement options. All replacement options were issued under the ESOP on equivalent terms and conditions as the original grant by Conquest. The options had a fair value of $7,525,000.

(c) Summary and movement of options on issue

The following table illustrates the number and weighted average exercise prices (WAEP) in Australian Dollars ($) of, and movements in, share options issued during the period:

Outstanding at the beginning of the year (1 July) Replacement options issued to Conquest option holders (i) Options granted to employees 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	30 June 2012 Number 30 June 2012 WAEP ($) 30 June 2011 Number 30 June 2011 WAEP ($) 13,917,166 1.01 13,481,411 0.98 11,324,738 1.88 - - - - 679,000 1.69 (11,356,207) 0.96 (225,063) 1.10 (159,223) 1.10 (18,182) 1.14
	13,726,474 1.77 13,917,166 1.01
	13,726,474 1.78 13,917,166 1.01

(i) The replacement options of 11,324,738 comprise the following:

	Number
Options issued under ECOP	488,651
Options issued under ESOP	8,586,087
Options issued outside of ECOP and ESOP:
Options acquired by Mr Klein from Southern Cross Equities	600,000
Options issued to Baker Steel Capital Managers	1,650,000
Total	11,324,738

The weighted average remaining contractual life of options outstanding at the end of the financial year was 3.0 years (2011: 2.8 years) with exercise prices ranging from $0.609 to $3.062. The weighted average fair value of options granted during the year was $0.664 (2011: $0.98).

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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The outstanding balance as at 30 June 2012 is represented by:

Options issued as part of the ECOP

613,641 options with an exercise price ranging from $0.609 to $0.829
886,369 options with an exercise price ranging from $1.049 to $1.269
676,306 options with an exercise price ranging from $1.472 to $1.936
85,071 options with an exercise price ranging from $2.072 to $2.412

Options issued as part of the ESOP

2,166,043 options with an exercise price ranging from $1.267 to $1.472
5,310,198 options with an exercise price ranging from $1.690 to $1.936
1,738,846 options with an exercise price ranging from $2.072 to $2.412

Options issued outside both the ECOP and ESOP

600,000 options with an exercise price of $3.062
1,650,000 options with an exercise price of $1.962

(d) Summary and movement of performance rights on issue as part of ESOP

The following table illustrates the number and weighted average exercise prices (WAEP) in Australian Dollars ($) of, and movements in, performance rights issued during the year:

Outstanding at the beginning of the period (1 July) Performance rights granted during the period Exercised during the period Lapsed during the period Forfeited during the year Outstanding at the end of the period Exercisable at the end of the period	30 June 2012 Number 30 June 2012 WAEP ($) 30 June 2011 Number 30 June 2011 WAEP ($) 1,151,000 - - - 3,668,344 - 1,151,000 - (1,026,000) - (125,000) - - - (87,586) - - -
	3,580,758 - 1,151,000 -
	- - - -

The weighted average fair value of performance rights granted during the year was $1.411 (2011: $1.31).

(e) Fair value determination

Performance rights

During the year, Evolution issued two equal tranches of performance rights which will be tested on 30 June 2013 and 30 June 2014. They have three performance components: a market-based TSR condition, and two non-market based conditions, being C1 condition and continued employment at the vesting date.

i) TSR Performance Right valuation

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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ii) C1 Performance Right valuation

The following tables list the inputs to the models used for the performance rights granted for the year:

	TSR Tranche 1	TSR Tranche 2	C1 Tranche 1	C1 Tranche 2
November 2011 rights issue
Spot price ($)	1.72	1.72	1.72	1.72
Risk-freerate (%)	3.13	3.15	3.13	3.15
Term (years)	1.6	2.6	1.6	2.6
Volatility	50%	50%	50%	50%

February/April 2012 rights issue
Spot price ($)	1.87	1.87	1.87	1.87
Risk-free rate (%)	3.32	3.21	3.32	3.21
Term (years)	1.4	2.4	1.4	2.4
Volatility	50%	50%	50%	50%

Conquest replacement options:

The fair value of the Conquest Mining replacement options was determined using a Black-Scholes model.

The following table lists the inputs to the models used to determine the fair value of the replacement options granted during the year:

	Replacement options issued
	to Conquest option holders
Grant Date	17 October 2011
Spot Price ($)	1.77
Risk-free rate (%)	3.7
Term (years)	Various
Volatility (%)	50%

The volatility above was determined with reference to historical volatility but also incorporates factors that management believes will impact the actual volatility of the Company’s shares in future periods.

24. EARNINGS PER SHARE

Basic earnings profit /(loss) per share (cents per share) Diluted earnings profit /(loss) per share (cents per share) Weighted average number of ordinary shares on issue used in the calculation of basic earnings per share Effect of dilution: Share options and performance rights Weighted average number of ordinary shares used in the calculation of diluted earnings per share	Year ended Year ended 30 June 2012 30 June 2011
	7.10 (1.37) 6.94 (1.37) 525,862,667 168,728,054 13,270,640 - 537,882,443 168,728,054

Basic earnings per share (‘EPS’) is calculated by dividing the net profit/(loss) after income tax attributable to members of the Company by the weighted average number of ordinary shares of the Company outstanding during the financial year. Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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25. RELATED PARTY TRANSACTIONS

Parent entity

The ultimate parent entity within the Group is Evolution Mining Limited.

The balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

(a) Equity interests in related parties

Equity interests in subsidiaries

Details of the percentage ownership of subsidiaries are disclosed in Note 22 to the financial statements.

(b) Transactions with Directors and KMP’s

KMP compensation

Details of KMP compensation are provided in the Remuneration Report of the Directors’ Report designated as audited.

Loans to Directors and senior management

There were no loans to Directors or senior management during the period.

(c) KMP Compensation

The aggregate compensation provided to Directors and KMP’s is set out below:

		Consolidated
	30 June 2012	30 June 2011
	$	$
Short-term benefits	$5,416,475	$2,791,032
Post-employment benefits	$228,347	$215,574
Termination benefits	$1,359,551	-
Share-basedpayments	$1,597,313	$414,624
Total	$8,601,686	$3,421,230

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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(d) Director and KMP’s equity holdings

(i) Fully paid ordinary shares of Evolution Mining Limited:

2012

	Balance at start	Received on	Net other change	Balance at end of
	of period or	exercise of		period or date of
	date of	options and		resignation
	appointment	performance
		rights
Directors
Jacob Klein (i)	-	-	5,590,000(ix)	5,590,000
Bruce McFadzean (ii)	171,619	175,682	61,288	408,589
Peter Maloney (iii)	1,379,579	-	-	1,379,579
Murray Pollock (iii)	1,839,492	-	-	1,839,492
Barry Sullivan (iii)	111,005	-	-	111,005
Graham Freestone	58,245	-	10,278	68,523
John Rowe	95,695	-	16,887	112,582
James Askew (i)	-	-	500,000(x)	500,000
Lawrie Conway (i) Paul Marks (i)	- -	- -	- 6,952,009(xi)	- 6,952,009
Peter Smith (i)	-	-	35,000	35,000
KMP’s
Erik Palmbachs (iv)	11,576	-	131,543	143,119
Stuart Pether (vi)	175,516	-	125,000	300,516
Paul Mason (v)	10,000	-	53,528	63,528
Aaron Colleran (i)	-	-	82,998	82,998
Adrian Pelliccia	-	-	94,117	94,117
Evan Elstein (i)	-	-	3,529	3,529
Mark Le Messurier (i)	-	-	22,176	22,176
Raelene Wyatt	-	-	-	-
Tim Churcher (vii)	-	-	-	-
John Fraser (viii)	-	-	-	-

(i) Employment commenced on 19 October 2011

(ii) Employment terminated on 25 January 2012

(iii) Employment terminated on 18 October 2011

(iv) Employment terminated on 29 February 2012

(v) Employment terminated on 27 January 2012

(vi) Employment terminated on 30 June 2012

(vii) Employment commenced on 24 October 2011

(viii) Resigned 23 December 2011

(ix) Includes 5,255,247 shares issued on 2 November 2011 pursuant to the Scheme of Arrangement with Conquest Mining Limited.

(x) Includes 484,097 shares issued on 2 November 2011 pursuant to the Scheme of Arrangement with Conquest Mining Limited.

(xi) Includes 6,676,147 shares issued on 2 November 2011 pursuant to the Scheme of Arrangement with Conquest Mining Limited.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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Fully paid ordinary shares for the previous financial year:

2011

	Balance at start of	Received on	Net other change	Balance at end of
	period or date of	exercise of options		period or date of
	appointment			resignation
Directors
Peter Maloney	1,379,579	-	-	1,379,579
Bruce McFadzean	97,369	-	74,250	171,619
John Rowe	95,695	-	-	95,695
Murray Pollock	1,839,492	-	-	1,839,492
Barry Sullivan	111,005	-	-	111,005
Graham Freestone	58,245	-	-	58,245
KMP’s
Erik Palmbachs	11,576	-	-	11,576
Stuart Pether	175,516	-	-	175,516
Paul Mason	10,000	-	-	10,000
Adrian Pelliccia	16,932	-	(16,932)	-
John Fraser	-	-	-	-
Graham Anderson	-	-	-	-
Leonard Math	-	-	-	-

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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(i) Options

The numbers of options over ordinary shares in the Company held during the financial year by each Director of Evolution Mining Limited and other KMP’s of the Group, including their personally related parties, are set out below:

2012

Balance at
start of
period
Granted as
compen-
sation
Exercised
Net other
change

At end of
period
Balance at
year end or
resignation
date
Balance
vested
Vested &
exercise-
able
Options
vested
during
period1

Directors
Jacob Klein
-
-
-
5,277,4353
Bruce McFadzean
1,284,774
-
-
(15,682)4
Peter Maloney
-
-
-
-
Murray Pollock
301,554
-
-
Barry Sullivan
45,458
-
-
-
Graham
Freestone
-
-
-
-
John Rowe
181,820
-
-
-
James Askew
-
-
-
488,6512
Lawrie Conway
-
-
-
-
Paul Marks
-
-
-
-
Peter Smith
-
-
-
-
KMP’s
Erik Palmbachs
337,276
-
-
-
Stuart Pether
579,548
-
-
-
Paul Mason
-
-
-
-
Aaron Colleran
-
-
-
1,080,000
Adrian Pelliccia
34,000
-
-
-
Tim Churcher
-
-
-
-
Mark Le
Messurier
-
-
-
450,000
Evan Elstein
-
-
-
105,000
Raelene Wyatt
Paul Mason
John Fraser
-
-
50,000
-
-
-
-
-
(50,000)
-
-
-

5,277,435
5,277,435
5,277,435
5,277,435
1,269,092
1,269,092
1,269,092
344,318
-
-
-
-
301,554
301,554
301,554
-
45,458
45,458
45,458
-
-
-
-
-
181,820
181,820
181,820
-
488,651
488,651
488,651
488,651
-
-
-
-
-
-
-
-
-
-
-
-
337,276
337,276
337,276
110,000
579,548
579,548
579,548
125,000
-
-
-
-
1,080,000
1,080,000
1,080,000
1,080,000
34,000
34,000
34,000
-
-
-
-
-
450,000
450,000
450,000
450,000
105,000
105,000
105,000
105,000
-
-
-
-
-
-
-
-
-
-
-
50,000

1 All options vested during the period pursuant to the formation of Evolution Mining Limited (then named Catalpa Resources Limited) following the merger with Conquest Mining Limited by a scheme of arrangement implemented on 2 November 2011.

2 488,651 options were issued as consideration for the cancellation of the outstanding options in Conquest Mining Limited following the merger of Evolution (then named Catalpa Resources Limited) and Conquest Mining Limited by a scheme of arrangement implemented on 2 November 2011.

3 4,677,435 options were issued as consideration for the cancellation of the outstanding options in Conquest Mining Limited following the merger of Evolution (then named Catalpa Resources Limited) and Conquest Mining Limited by a scheme of arrangement implemented on 2 November 2011. The balance of 600,000 options were acquired from Southern Cross Equities on an arms-length basis in June 2011. 4 The options expired on 31 October 2011.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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The numbers of options over ordinary shares in the Company held during the previous financial year by each of the Directors and other KMP’s of the Group, including their personally related parties, are set out below:

2011

Balance at start of period Granted as compen- sation Exercised Net other change	At end ofperiod Balance at year end or resignation date Balance vested Vested & exercise- able Options vested during period
Directors Peter Maloney - - - - Bruce McFadzean 924,774 360,000 - - John Rowe 181,820 - - - Murray Pollock 301,554 - - - Barry Sullivan 45,458 - - - Graham Freestone - - - -	- - - - 1,284,774 924,774 924,774 227,274 181,820 181,820 181,820 45,456 301,554 301,554 301,554 22,731 45,458 45,458 45,458 22,728 - - - -
KMP’s Erik Palmbachs 227,276 110,000 - - Stuart Pether 454,548 125,000 - - Adrian Pelliccia - 34,000 - - John Fraser - - - - Paul Mason Graham Anderson Leonard Math - - - - - - - - - - - -	337,276 227,276 227,276 56,819 579,548 454,548 454,548 113,637 34,000 - - - - - - - - - - - - - - - - - - -

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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(ii) Performance rights

The numbers of performance rights held during the financial year by each Director of Evolution Limited and other KMP’s of the Group, including their personally related parties, are set out below:

2012

Balance at start of period Granted as compen- sation Converted Net other change	At end ofperiod
	Balance at year end or resignation date Balance vested Vested & exercise -able Vested during period
Directors Jacob Klein - 803,279 - - Bruce McFadzean 160,000 532,787 160,000 - Peter Maloney - - - - Murray Pollock - - - - Barry Sullivan - - - - Graham Freestone - - - - John Rowe - - - - James Askew - - - - Lawrie Conway - - - - Paul Marks - - - - Peter Smith - - - -	803,279 - - - 532,787 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
KMP’s Erik Palmbachs 110,000 - 110,000 - Stuart Pether 125,000 - 125,000 - Paul Mason 44,000 - 44,000 - Aaron Colleran - 196,721 - - Adrian Pelliccia 80,000 88,525 80,000 - Tim Churcher - 163,665 - - Mark Le Messurier - 198,689 - - Evan Elstein - 88,525 - - Raelene Wyatt John Fraser - 110,000 81,967 - - 110,000 - -	- - - - - - - - - - - - 196,721 88,525 - - - 163,665 - - - 198,689 - - - 88,525 - - - 81,967 - - - - - - -

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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The numbers of performance rights held during the previous financial year by each of Directors and KMP’s of the Group, including their personally related parties, are set out below:

2011

Balance at start of period Granted as compen- sation Converted Net other change	At end ofperiod Balance at year end or resignation date Balance vested Vested & exercise- able Vested during period
Directors Peter Maloney - - - - Bruce McFadzean - 160,000 - - John Rowe - - - - Murray Pollock - - - - Barry Sullivan - - - - Graham Freestone - - - -	- - - - 160,000 - - - - - - - - - - - - - - - - - - -
KMP’s Erik Palmbachs - 110,000 - - Stuart Pether - 125,000 - - Adrian Pelliccia - 80,000 - - John Fraser - 110,000 - - Paul Mason - 44,000 - - Graham Anderson - - - - Leonard Math - - - -	110,000 - - - 125,000 - - - 80,000 - - - 110,000 - - - 44,000 - - - - - - - - - - -

All performance rights issued to Directors and Key Management Personnel were made in accordance with the provisions of the LTIP. Further details of the LTIP and of performance rights granted during the period are contained in the Directors Report and in Note 25.

(d) Transactions with other related parties

During the period, Newcrest became a related party by virtue of the shares issued to it as consideration for the acquisition of the Mt Rawdon and 70% of Cracow assets. Directors Fees were paid to Newcrest Mining Limited for the services of two non-executive Directors, Mr Lawrie Conway and Mr Peter Smith, in the amount of $135,277 (2011: Nil).

Newcrest also provided certain operational and financial services to the Company, following the acquisition from Newcrest of its 70% interest in the Cracow Gold Mine and the 100% interest in the Mt Rawdon Gold Mine on 2 November 2011 to assist with the transition and integration of these assets to the Company. Fees paid to Newcrest in the period in this regard amounted to $755,115 (2011: Nil)

Directors Fees in the amount of $68,333 was paid to International Mining and Finance Corp, a company of which Mr James Askew is a Director for services provided during the period (2011: Nil).

John Rowe and Associates, a company of which Mr John Rowe is a Director, provided external consultant services to Catalpa Resources during the prior year based on commercial rates and on an arm’s length basis. Total consultant fees paid to John Rowe and Associates during the financial year was nil. (2011:$14,000).

Directors Fees in the amount of $51,377 (2011: Nil) was paid John Rowe and Associates for services provided during the period.

GDA Corporate, a company of which Mr Graham Anderson is a Director and Leonard Math is an employee, provided company secretarial, accounting and other corporate services to Catalpa Resources Limited during the prior year. The amount paid for the period nil (2011:$42,000).

BJK Sullivan and Associates Pty Ltd, a company of which Mr Barry Sullivan is a Director, provided external consultant services to Catalpa Resources Limited during the prior year based on commercial rates and on an arm’s length basis. Total consultant fees paid to BJK Sullivan and Associates is nil (2011:$5,000).

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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26. AUDITOR’S REMUNERATION

During the year, the following fees were paid or payable for services provided by the auditor of the parent entity:

PwC Australia (a) Audit and other assurance services Audit and review of financial statements Other assurance services (b) Taxation services – tax compliance and advice (c) Other services – accounting advice and support Deloitte Touche Tohmatsu (a) Audit and other assurance services Audit and review of financial statements (c) Other services Proposed merger with Conquest Mining Limited Advice on corporate strategy Merger implementation assistance	30 June 2012 310,000 79,000 389,000 163,533 50,967 214,500 113,538 113,350 - 386,474 613,362	30 June 2011 - -
		-
		- -
		-
		98,425 26,000 84,983 -
		209,408

27. GOLD DELIVERY COMMITMENTS

As at 30 June 2012 Within one year Later than one year but not greater than five years As at 30 June 2011 Within one year Later than one year but not greater than five years	Gold for physical delivery Contracted sales price Value of committed sales (ounces) A$ $’000 66,589 1,573 104,744 157,588 1,573 247,886
	224,177 352,630
	Gold for physical delivery Contracted sales price Value of committed sales (ounces) A$ $’000 62,159 1,573 97,776 224,177 1,573 352,631
	286,336 450,407

The counterparty to the physical gold delivery contract is Macquarie Bank Limited (‘Macquarie’). The contracts are settled on a quarterly basis by physical delivery of gold per Macquarie’s instructions. The contracts are accounted for as sale contracts with revenue recognised once the gold has been delivered to Macquarie or its agent. The physical gold delivery contract is considered a contract to sell a non-financial item and is therefore out of the scope of AASB 139. As a result no derivatives are required to be recognised. The Company has no other gold sale commitments with respect to its current operations.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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28. CAPITAL AND LEASE COMMITMENTS

Exploration expenditure commitments

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

Not later than one year Later than one year but not later than five years Total	30 June 2012 30 June 2011 $’000 $’000 6,828 871 - 50
	6,828 921

Capital commitments

The Group has the following capital commitments in relation to capital projects at operating mines and the construction of the Mt Carlton project:

Not later than one year Later than one year but not later than five years Total	30 June 2012 30 June 2011 $’000 $’000 34,370 629 - -
	34,370 629

Non-cancellable operating lease expense commitments

The Group has the following operating lease commitments not provided for in the financial statements:

Not later than one year Later than one year but not later than five years Total Finance lease and hire purchase commitments Within one year Within two to five years Later than five years Total minimum lease payments Less amounts representing finance charges Present value of minimum lease payments Current portion Non-current portion	30 June 2012 30 June 2011 $’000 $’000 26,814 351 5,062 1,551
	31,876 1,902
	3,480 358 3,775 424 - - 7,255 782 (608) (98) 6,647 684 3,043 285 3,604 399 6,647 684

29. CONTINGENCIES

The Group has provided bank guarantees in favour of various government authorities and service providers with respect to site restoration, contractual obligations and premises at 30 June 2012. The total of these guarantees at 30 June 2012 was $30.130 million with various financial institutions.(30 June 2011: $5.10 million).

In addition to the above guarantees, Newcrest Mining Limited (‘Newcrest’) is holding $13.550 million in performance bonds relating to Cracow and Mt Rawdon operations on behalf of the Group (2011: $2.10 million). These bonding obligations will be transferred to Evolution once the asset sale agreements have been appropriately stamped by the Queensland Office of State Revenue.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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30. JOINTLY CONTROLLED OPERATION

The Cracow Gold Operations located in Queensland was a joint venture which the Group previously held 30% and acquired the remaining 70% from Newcrest on 2 November 2011 (refer to Note 22). Under this previous arrangement, each joint venture partner was responsible for selling their share of gold produced.

The Group’s interest, as a venturer, in assets employed in the Cracow Gold Operations is detailed below. The amounts are included in the consolidated financial statements under their respective asset categories as a result of the proportionate consolidation of the Cracow Gold Operations:

Share of joint venture operation’s assets and liabilities	30 June 2012	30 June 2011
	$‘000	$‘000
Current assets	-	5,929
Non-current assets	-	27,223
Total assets	-	33,152
Current liabilities	-	5,297
Non-current liabilities	-	572
Total liabilities	-	5,869
Net assets	-	27,283
Share of joint venture revenue, expenses and results
Interest revenue	82	57
Expenses	(13,968)	(26,888)
Loss before income tax	(13,886)	(26,831)

Each joint venture partner was responsible for selling their share of gold production, hence the joint venture did not generate any revenue from gold sales.

31. INFORMATION RELATING TO EVOLUTON MINING LIMITED (“THE PARENT ENTITY”)

Financial position of parent entity at year end Current assets Total assets Current liabilities Total liabilities Total equity of the parent entity comprising of: Share capital Reserves Accumulated losses Total equity Result of parent entity (Loss) of the parent entity Other comprehensive (loss)/ income Total comprehensive (loss) of the parent entity	30 June 2012 30 June 2011 $’000 $’000 135,912 1,807 996,434 158,679 30,265 1,962 80,641 10,974 1,045,751 185,465 14,845 5,301 (144,804) (43,061)
	915,792 147,705
	(82,671) (12,984) (5,770) 157
	(88,441) (12,827)

The parent company has entered into a deed of cross guarantee with its subsidiaries. The Group has provided bank guarantees, as detailed in Note 29 “Contingencies”.

32. EVENTS AFTER THE BALANCE SHEET DATE

On 25 June 2012, Evolution had agreed to acquire Holleton gold project, located south of its Edna May Gold Mine in Western Australia. Pursuant to the terms of the agreement, Evolution has subsequently issued 500,000 fully paid shares to Independence Group NL.

No other matter or circumstance has arisen since 30 June 2012 that has significantly affected, or may significantly affect, the operations of the Group, or the state of affairs of the Group and its controlled entities in subsequent periods.

EVOLUTION MINING LIMITED YEAR END FINANCIAL REPORT

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DIRECTORS’ DECLARATION

The Directors declare that:

(a) The financial report of the Consolidated Entity, and the additional disclosures included in the Directors’ report designated as audited are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2012
(ii) and of the Consolidated Entity’s performance for the year ended on that date;
(iii) complying with Accounting Standards and Corporations Regulations 2001;
(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) in the directors’ opinion, the financial statement and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board, as stated in Note 1 (a) to the financial statements.

This declaration has been made after receiving the declarations required to be made to Directors in accordance with section 295A of the Corporations Act 2001 for the financial year-ended 30 June 2012.

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Jacob Klein Executive Chairman

Graham Freestone

Lead Independent Director and Chair of the Audit Committee

Sydney 30 August 2012

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Independent auditor’s report to the members of Evolution Mining Limited

Report on the financial report

We have audited the accompanying financial report of Evolution Mining Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2012, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration for the Evolution Mining Limited group (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, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards.

Auditor’s responsibility

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

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

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

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

Independence

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

PricewaterhouseCoopers, ABN 52 780 433 757 Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

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Auditor’s opinion

In our opinion:

(a) the financial report of Evolution Mining Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(b) the financial report and notes also comply with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the remuneration report included in pages 11 to 25 of the directors’ report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion

In our opinion, the remuneration report of Evolution Mining Limited for the year ended 30 June 2012, complies with section 300A of the Corporations Act 2001 .

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PricewaterhouseCoopers

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Tim Goldsmith Partner

Sydney 30 August 2012

AI assistant

EVOLUTION MINING LIMITED — Annual Report 2012

64885_rns_2012-08-29_20060043-8586-4e61-8dde-33eac8f17192.pdf

APPENDIX 4E (Listing Rule 4.3A) EVOLUTION MINING LIMITED ACN 084 669 036 (formerly known as Catalpa Resources Limited) AND CONTROLLED ENTITIES YEAR END FINANCIAL REPORT For the year ended 30 June 2012

Results for Announcement to the Market

Explanation of Results

Evolution Mining Limited (formerly known as Catalpa Resources Limited) ABN 74 084 669 036

CORPORATE INFORMATION

ABN 74 084 669 036

Directors

Company Secretary

Evan Elstein

Registered Office

Postal Address

Share Register

Auditors

Internet Address

Stock Exchange Listing

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

TABLE OF CONTENTS

DIRECTORS

INFORMATION ON DIRECTORS

Jacob Klein, B Com Hons, ACA Executive Chairman Appointed 19 October 2011

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

James Askew, BE (Mining), MEngSci, FAusIMM, MCIMM, MSME (AIME) Non-Executive Director

Lawrie Conway B Bus, CPA

Non-Executive Director and Member of the Audit and Nomination and Remuneration Committees Appointed 19 October 2011

Graham Freestone, B Ec (Hons) Lead Independent Director and Chairman of the Audit Committee

Paul Marks, BEng (Chem), Mapp Fin Non-Executive Director and Member of the Audit Committee

John Rowe, BSc (Hons) ARSM, MAusIMM

Non–Executive Director and Chairman of Nomination and Remuneration Committee

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

Peter Smith, F Aus IMM, GAICD, MBA USQ Non-executive Director and Member of the Risk Committee

Peter Maloney, B Com MBA Non-Executive Chairman (Resigned 18 October 2011)

Bruce McFadzean, Dip Mining FAusIMM Managing Director & CEO (Resigned 25 January 2012)

Murray Pollock, MAICD

Non-Executive Director (Resigned 18 October 2011)

Barry Sullivan, BSc (Min), ARSM, F AusIMM, MAICD Non-Executive Director (Resigned 18 October 2011)

INFORMATION ON COMPANY SECRETARY

Evan Elstein, BCom (Accounting and Finance), ACA Company Secretary (Appointed 19 October 2011)

Erik Palmbachs, BBus (CPA), MSc (Min Econ), FCIS Joint Company Secretary and Chief Financial Officer (Resigned 18 October 2011)

Paul Mason, (BE ACA ACIS)

Joint Company Secretary and Financial Controller (Resigned 18 October 2011)

PRINCIPAL ACTIVITIES

DIVIDENDS

REVIEW OF OPERATIONS

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

SUBSEQUENT EVENTS

FUTURE DEVELOPMENTS

ENVIRONMENTAL REGULATIONS

PERFORMANCE OF EVOLUTION MINING LIMITED

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

DIRECTORS’ MEETINGS

DIRECTORS’ INTERESTS

REMUNERATION REPORT (AUDITED) INTRODUCTION

INDUSTRY CONTEXT

USE OF REMUNERATION CONSULTANTS

REMUNERATION STRATEGY

REMUNERATION POLICY

RELATIONSHIP BETWEEN THE REMUNERATION POLICY AND COMPANY PERFORMANCE

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

Employees and Contractors Option Plan (“ECOP”)

Options under ECOP

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

The Employee Share Option and Performance Right Plan (“ESOP”)

Options under ESOP

2012 Performance rights under ESOP

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

(i) TSR Performance

(ii) C1 Cash Costs Performance

(iii) Performance Right valuation

DIRECTOR AND KEY MANAGEMENT PERSONNEL DETAILS

REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL

YEAR ENDED 30 JUNE 2012

EVOLUTION MINING LIMITED DIRECTORS’ REPORT

YEAR ENDED 30 JUNE 2011

EXECUTIVE SERVICE AGREEMENTS

SHARE-BASED COMPENSATION & PERFORMANCE RIGHTS

SHARES UNDER OPTION

IMDEMNIFICATION OF OFFICERS AND AUDITORS

EVOLUTION MINING LIMITED Annual Report 2012