WESTONIA MINES LIMITED ANNUAL REPORT 2004

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Chairman's Report	2
The Mission	3
The Westonia Gold Project	4
Milestones	4
Resources & Reserves	5
Development Report	8
Going Underground	12
Potential Project Enhancements	15
Base Metals & Regional Exploration	17
Safety, Environmental & Social Aspects	18
Financial Report	19

MR JACK READ $1911 - 2004$

The Company records with sorrow the passing of Mr John Edmund Read. Jack was a founding investor in and director of Westonia Mines Limited and its predecessors, retiring from the Board in 2000.

While Jack's career began in underground mining at Mount Magnet, a work injury prompted his retirement from that field and the initiation of a successful accountancy bismess at Merredin. But mining was in his blood and he pegged leases over the old Edna-May, or Westonia, goldfield in the early 1950's. In one manner or another he had a direct connection with tenements at Westonia eversince. That 50 year involvement may well be unique in Australian's mining history

He had an unswerving behef in the future of the field even during the difficult days of the nuteties when it was generally thought to have been worked our and when capital for new gold imning ventures was scarce. Jack championed alternative concepts for deriving cash flow from the various innerals at Westonia during that time and, with the other founding shareholders, kept providing the finances to keep the tenements in good standing.

His enthusiasm and his visits to the drill rigs into his 93rd year are sadly missed.

DIRECTORS

Pieter W Greeff Andrew | Drummond Murray G Pollock Chris P Melloy David M Macoboy

Non-executive Chairman Managing Director Non-executive Director Non-executive Director Non-executive Director

COMPANY SECRETARY

John A Hannaford / Mark A Churchward

SENIOR MANAGEMENT

lan J Kerr Mark A Churchward Alan J Hutchcox Syd Morete Aneta Monk

Chief Financial Officer Project Co-ordinator Geologist Office Manager

WESTONIA

NIT

MAGE TO A SHORT PARTIES

Project Manager

REGISTERED & PRINCIPAL OFFICE

Level 1, 9 Havelock Street West Perth WA 6005 Tel: $(618)$ $9321.3088$ Fax: $(618)$ 9321 8804 email [email protected]

SHARE REGISTRY

Security Transfer Registrars Pty Ltd 770 Canning Highway Applectoss WA 6153 Tel: (618) 9315 2333 Fax: (618) 9315 2233 email: [email protected]

AUDITORS

Ord Partners Level 2, 47 Colm Street West Perth WA 6005

STOCK EXCHANGE LISTING

Securities in Westonia Mines Limited are listed on: Australian Stock Exchange Limited Home Branch - Perth ASX Code - WEZ, WEZO

WEBSITE

www.westomannines.com.air

MR PIETER GREEFF CHAIRMAN

CHAIRMAN'S REPORT

Dear Shareholder

I am again pleased to report that during the last 12 months no employee or contractor was injured while at work. The Board and management believe that it is possible to provide a safe working environment for all employees as we explore, develop and mine: the welfare and safety of all employees as we conduct our business remain a top priority.

Last year we indicated that the Bankable Feasibility Study (BFS) would be finalised during the first quarter of 2004. This was attained, and a number of issues impacted on its completion. The main factor was the question of the real grade of the resource. I am pleased to report that following extensive testwork and statistical analysis we have been able to announce an increase in the grade, tonnes and contained ounces (+30%) of the Company's resource base.

During the year the Company was fortunate to be able to purchase the mothballed Big Bell mill. It has been well maintained and can process about 2.5 Mtpa.

That BFS now forms the basis for negotiations on debt project finance. As we all are only too aware, life can be unpredictable in the mining industry and, as I write, the Company is dealing with some additional challenges. On the one hand, the independent estimates of our resources and reserve have risen strongly. On the other, historically high oil prices and the present resources boom in Western Australia have recently driven up construction and mining costs. In similar contrasting vein, the inability to complete a full drilling evaluation of Westonia until the old pit is dewatered and mining has been started means that there are artificially conservative elements in the cost and mining design parameters which the Company is presenting to the banks. We expect these remaining issues to be resolved during the remainder of the coming year.

The Big Pit Drilling Initiative of late 2003 was very successful in demonstrating continuity of the mineralized system below the feasibility pit. All other things being equal, one may anticipate a larger pit in the fullness of time and mineralization intersected below that pit may become underground ore.

I thank my fellow Directors, the management and staff for their efforts this year. I trust that I will shortly be able to advise details of the project financing package and I will be inviting your participation in the equity component of it.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Pieter Greeff

THE MISSION

The Company aims to:

· Recognise and exploit the full potential of the Westonia field
Maximise economic return for shareholders ٠
Establish a long-life operation producing over 100,000oz per year from open cut and underground $\ddot{\phantom{0}}$ ore sources
· Discover and develop other gold deposits in the Westonia Greenstone Belt
Explore for nickel and other base metal deposits in that Belt $\bullet$ .
$\bullet$ Adopt best practice standards in all technical, business and social areas, particularly in regard to the safety and health of its employees, in corporate governance and in care for the environment

ME ANTHEW THUMMIND NASA ING PINECTON

MILESTONES

2003
August	Further nickel sulphides drill intersected at the mine site.
September	The Deeps Initiative drilling encounters significant gold intersections to 650 m depth.
	Conflicting resource estimates lead to a decision to adopt a higher throughput rate/lesser headgrade development model.
October	Commitment to the Big Pit Initiative drilling programme to boost reserves and mine life.
November	Finalized purchase of the large Big Bell processing plant.
November – December	Encouraging drill intersections from the Big Pit Initiative programme.
December	Notice of Intent approval received from government.
2004
January	Resources lifted 14% to over 1.0 M ounces.
	Share Purchase Plan raises \$2.0M for working capital.
April	Bankable Feasibility Study ('BFS') completed and details announced.
	Resources and reserves announced to be conservative and new studies begin.
	Increased potential for gold and nickel occurrences in the Company's regional tenements was determined.
May	Debt financing negotiations begin.
July	New estimates increase contained gold in resources by 27% and in reserves by 13% compared to BFS.
August	New pit design on expanded resources increases contained gold in reserves by 30% compared to BFS.

RESOURCES AND RESERVES

The Company's position has improved strongly throughout the year. All resources and reserves have been estimated by independent consultants. A 0.7 g/t cut-off and a gold price of AUD375 have been used throughout for resources: reserves are estimated using a 0.6 g/t cut-off.

2003

In the 2003 Annual Report, the Company stated that different geostatistical techniques by two groups of independent consultants had caused uncertainty as to the resource position. At 1.4 g/t, the grade was lower than had previously been estimated and contained ounces to 300 m depth varied between 790,000 ounces and 910,000 ounces.

At this lower grade, a higher throughput operation was required than had previously been planned $-$ say, $2.5$ Mipa instead of 1.5 Mipa. The Company was able to secure an agreement with the owners of the Big Bell processing plant and it was parchased in November for \$2.55M. This enabled the Company to work towards increasing its reserve position and it committed to its successful Big Pit Initiative drilling programme which was carried out before the end of 2003.

It involved the drilling of 10,800 m of RC and diamond drilling in 43 holes. Except where drill access was impossible, in conjunction with previous drilling it allowed a sufficient drill density for resources at Indicated level of confidence to be estimated to a depth of 300 m. The better drill intersections are presented in the Table.

Hole No.	From (m)	To $(m)$	Width (m)	Grade (g/t)
. WDD 104	150	220	70	$3.2^{\circ}$
1.1.1 WDD 108	166	188	22	12.6
$\sim$ $\sim$ $\sim$ WDD 109	182	242	60	2.9
$\cdots$ WDD 111	186	202	16	6.4
1.1.1 WDD 113	A A A A A A A A 198	. 214	16	4.0
WDD 128	304	312	8	8.9
$\mathbf{r}_1$ WDD 131	162	172	10	7.4
$\overline{\cdots}$ WDD 132	*Printed* *TALLAND* 174	1.1.1.1 . 210	. . . 36	3.0 ₁
. WDD 133	. . New Street, Street 162	. 228	. 66	4.1
$\overline{a}$ WDD 137	90.	114	. 24	3.5
$\mathbf{r}$ WDD 141	. 116	1.1.1.1 148	. 32	2.1
WDD 143	. 256	1.1.1.1 276	. 20	6.0

FEBRUARY 2004

New resources were estimated by the Company's independent geostatistical consultants, Hellman and Schofield ('H&S') as follows;

Projekt TAGE .		INDICATED			INFERRED			TOTAL
.	TONNAGE (M)	GRADE (G/T)	OUNCES (1000)	TONNAGE (M)	GRADE (373)	OUNCES (900)	TONNAGE (M)	GRADE (O/3)	OUNCES (1001)
$\mathcal{L}{\mathcal{F}{\mathcal{G}}}$ . 0.7 g/t $\sim 10$ the company cut-off	18.9	$1,33$ .	$340\,$ .	The Corp. :5.4 C	1.34.	$230\,$	24,3	$1,33$ .	1040
Percentage increase (decrease) оп 2003 $\alpha$ , $\alpha$ , $\beta$ $\ddotsc$ estimates and the common community of the	144. 272,562 $\mathcal{O}(\log_{10}$ $\cdots$ The color from a control	(5) $\alpha \rightarrow \alpha \beta$ $\cdots$ $\sim$ $\sim$ The company the contract of the contract of the	: 37. $\sim$ . $\sim$ The company's the company of the pro-	(24) $\cdots$ The Co free and a series	. . (4) The Corp. March 2020	$(27)$ . $\sim$ . . Arrest Advertisers Providence	$-20.$ $\sim$ The Care The company's	$\langle 5 \rangle$ ALC The Card Marine Card	14 Chairman Marina Card

The Big Pit Initiative had defined additional Indicated status resources for less than \$4.00/oz, and all category resources for under \$6.00/oz.

BFS, MARCH 2004

The January resource was used to define reserves within the BFS pit which were estimated as 12.8 Mt at 1.3 g/t for recovered gold of 520,000 ozs, including 40,000 ozs from 2.4 Mt of old oxide stockpiles. That pit had a further 1.1 Mt @ 1.3 g/t in the Inferred resource category for a potential further 45,000 ozs.

JULY 2004

For about a year, Westonia Mines' management had had concerns about the estimates of grade in its resources and reserves. In its resource estimation process for the BFS, H&S pointed out that Westonia's drill grades were around 20% higher than those resulting from previous assaying techniques. In conjunction with H&S, an extensive comparative assaying programme was undertaken and it confirmed that H&S observation. They were able to determine a factoring increase of the old assay. database and a new resource was estimated and announced as:

Indicated 23.1 Mt @ 1.41 g/t

Inferred 7.3 Mt @ 1.35 g/t.

30.4 Mt @ 1.39 g/t for 1.36 M ozs Total

AUGUST 2004

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The improved grade and resource enabled a new pit design to be optimized. It contained a Probable Reserve of 15.6 Mt @ 1.37 g/t for a contained 687,000 ozs. That pit also contains an Inferred Resource of 1.4 Mt @ 1.42 g/t for 64,000 ozs.

	Resource (ozs)	Increase ${\% }$	Reserve (ozs)	Increase $(\%)$
$ $ July – August $\therefore$ 2004	$-1,360,000$ $\sim$ $\sim$ $\sim$	$-1.48$ . The set of $\sim$	$\sim$ 687,000 $\sim$	$\mathbb{Z}$ : 76 $\mathbb{Z}$ : 100 $\mathbb{Z}$
BFS	1,070,000	16	529,000	56
Prospectus	919,000		390,000*
$\star$ 0.9 g/t cut-off.	.

DEVELOPMENT REPORT

The Company completed its BFS on its wholly owned Westonia Gold Project in the Central Wheatbelt of Western Australia. The Project involves construction of a conventional 2.2-2.5 million tonne per annum gold treatment plant sourcing ore initially from an open pit. The target parameters sought by the Company for the Project are a minimum of 6 years operating life and good potential to increase mine life from a deepening of the open pit and/or resumption of underground mining. The BFS was prepared and co-ordinated by Westonia Mines Limited using appropriate industry consulting groups.

The Westonia mine has previously produced 643,000 ozs, or 21 tonnes, of gold during two underground mining phases and during a subsequent open cut operation on predominantly oxidised ore.

The Project is based on Proven and Probable Reserves. The August 2004 Project model contains 687,000 ounces of gold, based on Indicated resources only, which will be mined over a 7 year. operation.

The Company has purchased the Big Bell processing plant from Harmony Big Bell Gold Operations Pty Ltd. It is capable of treating 2.2 Mtpa of Westonia fresh rock plus an additional 0.3 Mtpa of oxidised ore. The average recovery is expected to be 90.4%. The proposed process design for the Project is based on the reconfiguration and relocation of the plant which is currently under Westonia's care and maintenance at Cue.

The Company intends to recover about 100,000 ozs/year by a conventional CIL process. This production will rank Westonia among the top half-dozen Australian producers from a single pit.

Oxide ore will be about 13% of mill feed and will be mined and milled at a 0.6 g/t cut-off. Transitional and Fresh Edna May Gneiss ("EMG") ore will be mined at a 0.6 g/t cut-off, with mill feed having a 0.8-0.9 g/t cut-off and the lower grade material being stockpiled for later treatment. Sub-ore grades will be stockpiled in case there is a future gold price rise.

The initial operation will be based on a deepening of the open cut, predominantly on fresh or hard rock. A smaller portion of oxidised ore therein will be augmented by treatment of some low grade oxide dumps produced by the previous operator. The Company aims to move to an underground operation in due course.

The nature of the distribution of mineralization leads to potential to substantially increase mine life and total gold output should there be a future AUD gold price rise.

The pit has been designed in two stages for the following reasons:

Facilitate access to ore with a reasonable prestrip
Allow initial access on hanging wall which enables further exploration/definition drilling around the key Edna May Gneiss/footwall boundary
Improve project cash flow-

WESTORET A MINES HAUTEN - ANNE HOME RENORT 2001

Allow confirmation of geotechnical parameters during the mining of the Stage I Pit for application to the Stage II Pit

Mining will occur over six years and the final pit will be 850 m long by 450 m wide and 210 m deep.

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WESTONIA PROJECT LAYOUT

The Westoma Gold Project will require development of facilities at four major locations.

Fire treatment plant, including site buildings and services and account of the matter of
The tailings dam and evaporation ponds
The mine service area W
· Westonia township

Mine processing and storage designs have been strongly cognisant of environmental factors. Tailings and storage facilities and evaporation ponds have been planned to be sited away from the immediate mine area so as to reduce environmental impact.

Electricity will be supplied from the State grid via an existing 22 kV power line connecting Carrabin Substation and Westoma Town. This line will be upgraded from near Westonia township to the proposed mine site substation.

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Cash costs will be finalized when the mining, construction, electricity and camp tenders are awarded. In the BFS, Life of Mine cash costs were estimated at \$420/02. At a spot price of AUD 575/02, and with an appropriate level of flat forward hedging, the Company was looking to a pre-tax operating. margin of around \$200/oz

However, at the time of writing this Report, the resources boom and historically high oil prices are putting upwards pressure on all capital and operating cost areas. The Company is looking at various ways to offset these increases. It is the Board's intention to commit to construction and mining when there is a satisfactory margin so as to reward Shareholders adequately.

TESTONIA NINFS DI ANT AT INI HILL

CAPITAL COST ESTIMATE SUMMARY (USING PRE-TENDER RECEIPT PRICES)

Area	SM
Construction Overheads and Plant Relocation	4.3
Treatment Plant Construction	14.7
Site Infrastructure	4.9
Off-Site Infrastructure	0.9
EPCM	3.0
Contingency	2.8
Sub-total (Treatment Plant & Infrastructure)	30.5
Owners Costs, Including Pre-Strip Mining	10,2
Total Construction Capital	40.7
Working Capital	2.6
TOTAL CAPITAL REQUIRED	\$43.3

Overall construction will be 11 months from Project commencement to first gold pour. A further three months will be required to complete mill commissioning and ramping up to full production.

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GOING UNDERGROUND

Underground production is the key to mine longevity and enhanced project value. Westonia Mines aims to prove underground mining viability as soon as is practicable. There are twin reasons:

(a) project economics should be strongly enhanced by parallel open cut and underground gold production streams

(b) underground mining will be more profitable when carried out in conjunction with parallel production from the open cut

The host rock of the mineralization persists to at least 720 m vertical depth with gold grades of greater than an ounce to the tonne being intersected thus far to 700 m. The Company's extensive drilling, the resource estimate to 300 m, and the historic production together indicate that the mineralized system contains about 5,000 ounces per vertical metre - for a contained five million ounces should it persist to 1,000 m depth at that intensity.

This system underpins Westonia's aspiration to be a long term producer via an expanded pit and a parallel underground operation.

Historic underground mining has been of generally narrower rich reefs at a rate of about 1,800 ozs/ vertical metre to recover 360,000 ozs at 19.6 g/t. The Company would aim to mine also the broader, and overall lower grade, mineralized zones which surround the richer reefs and has modelled 2,500 ozs/vertical metre and a recovery of 7.0 g/t as being a reasonably attainable target.

That conceptual underground operation over a 12 year life would produce about 875,000 ozs at over 70,000 ozs/year. Total gold production from Westonia, with the underground mining beginning after Year 3 of the open cut, would total 1.6 M ozs. The Project's gold output is indicated in the Figure below.

MODEL FOR OPEN CUT AND POTENTIAL UNDERGROUND OPERATIONS

TO WESTONIA MINES TRAFFIC ANNUAL REPORT 200

The 3D model illustrates some of the Company's drill intersections on a profile down to the deepest. hole on site (WDD 078, drilled to 835 m). Holes WDD 096 and 097 were drilled during the year as part of the Company's Deeps Initiative.

The Company has a production-size decline already in place to a vertical depth of 264 m. It will allow early access to mineralization below or along strike of the planned open pit, as shown on the Long Section. The decline has a replacement value of about \$8 million.

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ANOTHER LEPOLE

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LONG SECTION

The following table presents drill intersections at depths of less than 320 m and which are not captured
by present pit designs. They are of interest for a renewed underground operation, and are shown on the long section figure. $\,$

Hole No.	From (m)	To (m)	Interval (m)	Au $(g/t)$	Approx. Depth*
WDD038	152	170	19.0	5.6
WDD037	178	183	5.0	15.7
WDD062	204	209	5.0	20.6
WDD128	304	. 312	8.0	8.9
WDD029	209	. 219	10.0	14.8
WDD049	263	274	11.0	8.0
WDD053	251	. 261	10.0	16.2
WDD974	212	220	8.0	9.2
WDD143	256	. 276	10.0	6.0
WDD080	291.25	$\overline{\phantom{a}}$ 308	16.8	4.7
WUD011	72.95	$\overline{a}$ 90.78	17.8	7.4	160
WUD025	48.77	$\overline{a}$ 55.77	1.1.1.1 7.0	$\cdots$ $\sim$ 9.1	200
WUD031	. 41.25	. 52	. . 10.7	8.9	210
WUD053	98.5	$\overline{\phantom{a}}$ 107.5	9.0	9.7	260
WUD056	$\mathbf{8}$	. 12.12	. . 4.1	$\cdots$ 34.6	260
WUD039	86.44	. 88.44	2.0	94.4	210
	* Underground holes are sub-horizontal

WESTONIA MINES' PLANT AT BIG BELL

WENT ON WARRENTED ANNUAL REAR REAL OWN

POTENTIAL PROJECT ENHANCEMENTS

The Company is fortunate to wholly own one of Western Australia's major gold deposits. Prior to resumption of mining underground, and assuming all other economic factors remain constant, Westonia Mines sees upside potential for the open cut operation.

INFERRED RESOURCE CONVERSION

The present pit design contains 1.1 Mt grading 1.7 g/t for a contained 60,000 ozs in the Inferred resources category. When the old pit is dewatered and access regained, it will be possible to drill out at relatively low cost those Inferred resources to an intensity sufficient for definition of Indicated category resources. The latter would then be additional reserve and would enhance project economics and longevity.

PIT EXPANSIONS

Conversion of Inferred resources will lift the average value of the mineralization within the pit and this may enable a deepening of it.

Additionally, Westonia differs from almost all Western Australian gold deposits in that gold is contained in a stockwork, rather than just in lodes, and there is a large amount of low grade material between the main mineralized zones. Westonia is particularly sensitive to gold price because of this. For each 0.1 g/t for which the mine cut-off can be lowered, Westonia can produce an approximate additional 100,000 ozs.

NEW DISCOVERIES

The Company owns most of the very lightly explored Westonia Greenstone Belt.

Gold deposits in Western Australia tend to cluster and to date there has only been production from the main Edna May area. It can statistically be expected that further ore bodies will be found and developed in due course.

The Greenfinch area, which lies immediately WSW of the planned pit, has been only lightly drilled to date with holes generally being of only 50 m depth and on drill traverses 100 m or 200 m apart. The figure shows the drilling distribution and the better hole assays as shown in the following table. The gneissic host at Greenfinch seems to be statistically as intensely mineralized as is the EMG.

GREENFINCH DRILLING RESULTS

. The Contract Contract Contract Hole No.	77. L. . From	77. 7 .	TELL . Metres	Gold Assay
1.11 WRC 304	77. The company's the	755 L. L. L. *The members of the members*	77. The Secret Street	77. .
$\overline{\phantom{a}}$ $\mathcal{H}_{\mathcal{F},\mathcal{F},\mathcal{F}}$ WRC 685	The County of the *A.A.A.A.A.A.A.* 29	77. 79.	The Country Country .	755 S. Lewis .
STAR WRC 686	79. L. L. 77	The color 700000000	77. Telester Product	The collect Notes to the state
1.11 WRC 689	77. .	The County . 38	Transler	TELL
$\overline{\phantom{a}}$ $\overline{\phantom{a}}$ WRC 692	77. the service service	772 Corp. 75. .	77. The American Street Street	79. *Printing*
$\overline{\phantom{a}}$ 1.1.1 WR C 697	77. . 48	$\cdots$ $\sim$ 52 (FOH)	77. .	*Printing* .

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WESTONIA MINES LIMITED'S TENEMENTY

BASE METAL & REGIONAL EXPLORATION

NICKEL AND OTHER BASE METALS

Following from last year's initial discovery of sulphide nickel (hole WRC 994, 16 m @ 1.8% Ni), further occurrences were found in drilling near the mine site. As the sulphides are finely disseminated, they do not exhibit an Electromagnetic response and so direct near-minesite targets cannot be discerned geophysically. However the general potential of the ultramafic and mafic sequences in the Westonia Greenstone Belt is considered to be enhanced and the Company has continued its exploration efforts for base metals.

Work was progressed in the Jilbadjie area with MAGLAG geochemistry providing nickel targets for follow-up. Drilling of an EM target at West Westonia was unsuccessful. Examination of old reports revealed targets near Bodallin.

GOLD

During the year, work was concentrated at Westonia. However, soil gold surveys at Dick's Reward, the Begley Graben and at Jilbadiie all justify follow-up. All available historic data was collected and analysed. Post-mineralization pegmatite intrusions and younger transported units conceal much of the target greenstone belt and this factor largely accounts for the industry's lack of exploration success to date. Nonetheless, numerous targets have been generated and will be pursued by the Company.

GREENSTONE BELTS, YILGARN MINERAL FIELD

SAFETY, ENVIRONMENTAL & SOCIAL ASPECTS

The Company has policies on the following and they can be viewed on its website:

Safety and Health $\ddot{\phantom{1}}$
Environment $\ddot{\phantom{1}}$
Employee and Community Relations

During the year and since the Company's incorporation in 1998, none of its employees or contractors has suffered a lost-time injury. The Company strives at all times to maintain that record.

On the environmental side, the lone objection to the Department of Environmental Protection's positive assessment of the Company's Notice of Intent was dismissed. Through CALM and the King's Park Botanic Gardens and Parks Authority, tissue culture cloning of the Declared Rare Flora, Eremophila resinosa, has been achieved. These plants are now at a translocation site successfully established on the main Mining Lease.

In conjunction with the Shire of Westonia, a seedling nursery for native vegetation has been established in the township. It will enable the growth of locally adapted species for the mine rehabilitation.

A renewed mining operation will be a significant employer of the local population and will provide opportunities for local business. The Company looks forward to an ever-stronger contribution to the social fabric of the district.

Westonia Mines Limited again wishes to record its appreciation of the strong support that has been given to its development proposals by the Westonia Shire Council and its Executive and employees, and by the district community. The mine and processing design work benefitted greatly from their input. Every effort has been made to respond to concerns and to minimise the impact of mine redevelopment.

PLANTING OUT EREMOPHILA RESINOSA AT THE MINE SITE

WELL-WELFORD ATMOSPHENT HE ANNUAL PRESENT

$\begin{array}{ll} \textbf{FINANCIAL} & \textbf{REDOR} \textbf{T} \ \textbf{for the year {\tiny FERRED 30 JUNE 2004}} \end{array}$

WESTONIA MINES LIMITED AND CONTROLLED ENTITIES ABN 74 084 669 036

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Directors' Report	21
Corporate Governance Statement	24
Statements of Financial Performance	27
Statements of Financial Position	28
Statements of Cashflows	29
Notes to the Financial Statements	30
Directors' Declaration	46
Auditors' Report	47
Additional Information	49

DIRECTORS' REPORT

The Directors have pleasure in presenting their report together with the consolidated financial statements of Westonia Mines Limited ("Westonia" or "the Company") for the year ended 30 June 2004.

∭g∲⊗øasee

DIRECTORS

The names of the Directors of the Company in office at any time during or since the end of the year are:

Pieter W Greeff (59) $-$ Non-Executive Chairman

Mr Greeff is a mining engineer with 36 years experience in Australia and overseas based with major international mining companies, in the gold, base metal and coal sectors.

Mr Greeff was appointed as Director on 27 February 2001.

Andrew J Drummond (53) - Managing Director

Mr Drummond is a geologist with 32 years experience in the exploration, mining and mineral consultancy industries. This has included directorships and managing directorships of several listed and non-listed public companies.

Mr Drummond was appointed as Director on 8 October 1998. Murray G Pollock (56) - Non-Executive Director.

Mr Pollock is a businessman with over 30 years experience in the mineral services industry, principally in drilling. He is an investor and consultant to several companies on drilling and mine management services.

Mr Pollock was appointed as Director on 21 October 2000.

Chris P Melloy (49) - Non-Executive Director

Mr Melloy is an Executive Director of Lion Manager, the company responsible for the operation of Lion Selection Group, He has 26 years experience in the mining industry in both operations and finance, including mine planning, operating and senior mine management roles, as well as mining analysis and research in the stock broking industry. Mr Melloy was appointed as Director on 2 April 2002.

David M Macoboy (55) - Non-Executive Director

Mr Macoboy is currently a Director of Consolidated Minerals Ltd and Monarch Resources Ltd. He has previously held senior management positions or directorships with Portman Mining Ltd, Australian Capital Equity, Merrill Lynch and Challenge Bank. Mr Macoboy was appointed as Director on 1 August 2003.

PRINCIPAL ACTIVITIES

The principal activities of the economic entity during the financial year were:

mineral exploration including the commissioning of a feasibility study into re-development of mining operations at Westonia;
acquisition of mining tenements in the extended Westonia area; and
acting as trustee of the Westonia Mines Unit Trust until the Trust assets were vested on 29 June 2004.
There were no significant changes in the nature of the economic entity's principal activities during the financial year.

REVIEW OF OPERATIONS

The Company's principal objective is to re-commence mining operations at its Westonia Gold Project in Western Australia. In pursuit of this objective the Company achieved the following significant milestones during the financial year ended 30 June 2004:

Westonia Gold Project

The economic entity has completed its Bankable Feasibility Study ("BFS") into the re-development of mining operations at the Westonia project. The BFS showed a probable ore reserve within an optimal pit shell of 12.8 million tonnes at 1.29 $g/t$ for a contained 577,000 ounces calculated at a 0.7 g/t cutoff, which includes 47,000 ounces in oxide stockpiles. The feasibility study indicated that the project was economically sound at a gold price of A\$575 per ounce.

On 19 August 2004, the Company announced a revised probable ore reserve arising from a new pit design of 15.6 million tonnes at 1.37 g/t for a total of 734,000 contained ounces of gold, including that in the oxide stockpiles. This represented an increase of 30% compared to the BFS, using the same assumption as to gold prices.

The Company will use the revised estimates as a basis for financing development of the project in the coming year.

Westonia Deeps Initiative.

During the year the Company continued exploration activities on its Westonia Deeps Project designed to evaluate the potential for long term. underground mining.

Regional Exploration

The Company commenced evaluation of its regional tenement package during the year conducting an evaluation of prior exploration as well as soil geochemical testwork. This has generated a number of targets prospective for nickel and gold, which will be followed up in the coming year.

WESTONIA MINES LIMITED, ANNUAL REPORT 2004

DIRECTORS' REPORT

Financial

The Company raised a total of \$2,005,000 from the issue of 5,012 million shares at 40.0 cents pursuant to a Share Purchase Plan dated 15 December 2003.

The Company had a total of \$1,464,535 in cash reserves on hand at 30 June 2004.

On 29 June 2004, the assets and undertakings of the Westonia Mines Unit Trust were vested resulting in Westonia Mines Limited achieving direct ownership of all mining tenements and development assets. This process has greatly simplified the ownership structure.

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CHANGES TO STATE OF AFFAIRS

There have been no changes to the state of affairs of the Company other than as noted in "The Westonia Gold Project" section of this Annual Report.

RESULT OF OPERATIONS

The consolidated operating loss after income tax for the year ended 30 June 2004 was \$1,011,124 (2003; loss \$567,551).

LIKELY DEVELOPMENTS

The Company anticipates raising sufficient funding (both debt and equity) to finance construction of a treatment plant during the coming year. This will enable the re-commencement of mining operations at Westonia during the subsequent financial year.

DIVIDENDS

In respect of the financial year ended 30 June 2004, the Directors have not recommended the payment of a dividend.

ENVIRONMENTAL REGULATION

The consolidated entity is committed to achieving a high standard of environmental performance. The Board is responsible for regular monitoring of environmental exposures and compliance with environmental regulations. The consolidated entity complied with its environmental performance obligations at all times during the period.

AUDIT COMMITTEE

The Company established an Audit Committee during the financial year comprising two Non-executive Directors. The Audit Committee met twice during the year. Its business was at all times during the period conducted in accordance with the principles set out in the Corporate Governance Statement.

EVENTS SUBSEQUENT TO BALANCE DATE

At the date of this report, apart from the foregoing, the Directors are not aware of any other matter or circumstance not otherwise dealt with inthis report or the financial statements, that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial years other than the following: (a). On 20 August 2004, the Company amounced a private placement of 4 million shares at 25.0 cents each to raise \$1 million.

INDEMNIFICATION OF OFFICERS AND AUDITORS

The consolidated entity has not, during or since the financial period, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred by such an officer or auditor, excluding the effect of the Company's Directors' & Officers' Insurance policy.

OPTIONS

WESTONIA MINES LIMITED. ANNUAL REPORT 2004

During the financial year and up to the date of this report, the Company issued no options to Directors. At the date of this report the Company had the following options on issue:

- Expiry Date	Exercise Price	No. of Options
:14 September 2004	.30 cents	$-500,000$
31 May 2005	$-30$ cents	.800,000
31 May 2006.	.40 cents	700,000.
17 July 2006	36 cents	$-120,000$ .
17 July 2006 1	43 cents.	120,000
†17 July 2006	50 cents	$-120,000$
20 August 2006	20 cents	127,448,001
27 April 2007	36 cents	$-105,000$
~27 April 2007	42 cents	105,000
		30.018.001

DIRECTORS' REPORT

DIRECTORS' INTERESTS

The following table sets out the Directors' relevant interests in shares and options in the Company or a related body corporate as at the date of this report:

Director	Fully Paid Ordinary Shares	Listed Options	Unlisted Options
Pieter W Greeff	$-112.500$	- 33.333	750.000.
"Andrew J Drummond*. "."	2.934,398	983.542
The Agency of Murray G Pollock	$\sim$ 1000000000000000000000000000000000000	$<$ 100000000003,750,477 ( $\sim$ 0.100
Chris P Melloy	.	$\cdots$ $\cdots$ $\cdots$ $\cdots$ $\cdots$ $\cdots$ $23,333$	where the company of the company of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the co
"David M Macobov	100.000
	14.619.983	4.790.685	1.500.000

*A further 8.0 million shares and 2.7 million listed options are held by adult members of Mr Drummond's family.

DIRECTORS' MEETINGS.

Of the nine Directors' meetings held during the year ended 30 June 2004 the details of Directors attending were as follows:

Director	No. of Meetings Held	No. of Meetings Attended
Pieter W Greeff	승 시시 오시 자리 사람 수.
	Andrew J Drummond Murray G Pollock
Murray G $\operatorname{Pollogck}$
Chris P-Melloy	. See een een een een een een stag (Sammannammanna Salisanning)
David M Macoboy

In addition three circular resolutions were passed during the financial year.

DIRECTORS' AND EXECUTIVES' REMUNERATION

The Directors and Executives are remunerated based on the provision of services provided to the Company for executive management and for their services as Directors and Executive Officers. Remuneration levels are set with reference to industry and market conditions having regard to the size, nature and volume of operations and overall market capitalisation of the Company. Non-Executive Directors' fees are determined by the Company in general meeting, and other consulting services are set as described in the Corporate Governance Statement. ................................... elección de u li

Details of remuneration provided to Directors and Executives during the year ended 30 June 2004 are as follows:

.	Consulting Services		Motor		Directors'
	/Salaries	Superannuation	Vehicles	Options.	Fees	Total

Directors
Andrew J Drummond	.196	16,218				.203.982
Pieter W Greeff		2,250			$-25,000$	27,250
Murray G Pollock		1.800			70,000	21,800
Chris P Melloy*					20,000	$-20,000$ :
David M Macoboy					18,333	19.983.
Executive
'Ian Kerr	200,000	18,000	6,058	9,232		233,290
to control to the control	380,196	39,918	13,626	9,232	83,333	526,305

WESTONIA MINES LIMITED ANNUAL REPORT 2004

*Director's fees in respect of Mr Melloy were paid to Lion Manager, a company with which he has a beneficial interest.

Options Granted to Directors and Senior Executives

Options granted to Directors and senior executives have been disclosed in Note 25 to the financial report.

Signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations Act 2001.

On behalf of the Directors,

Andrew J Drummond

Director

Dated at Perth on this 22nd day of September 2004.

CORPORATE GOVERNANCE

INTRODUCTION

WESTONIA MINES LIMITED. ANNUAL REPORT 2004

The Company has adopted systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised below.

吸收适应

The following additional information about the Company's corporate governance practices is in the process of being set out on the Company's. website at www.westoniamines.com.au.

Corporate governance disclosures and explanations;
Statement of Board and Management functions;
Summary of code of conduct for Directors and key Executives;
Summary of policy on securities trading;
Audit Committee Charter:
Summary of arrangements regarding communication with and participation of shareholders, and
Corporate Code of Conduct.

EXPLANATIONS FOR DEPARTURES FROM BEST PRACTICE RECOMMENDATIONS

During the year ended 30 June 2004, the Company has complied with each of the Ten Essential Corporate Governance Principles! and the corresponding Best Practice Recommendations as published by the ASX Corporate Governance Council other than in relation to the matters specified below:

Reference	Reference	Notification of Departure	Explanation for Departure
		Formalisation and disclosure of the functions reserved to the Board and those delegated to management occurred subsequent to the end of the financial year.	Subsequent to the end of the financial year, the Company achieved compliance. Prior to this time the functions were delegated as now disclosed but without formalisation and disclosure.
	1.1B	Formal letters of appointment have been distributed to Directors subsequent to the end of the financial year.	Prior to the distribution of letters to Directors, Directors' appointments were made in accordance with requirements at the time of their appointment. The requirement for appointment letters is new and the Company is now in compliance.
	2.1	Mr Pieter Greeff, Non-Executive Chairman and Mr David Macoboy, Non-Executive Director are independent in accordance with the test in box 2,1 of the best practice recommendations as published by the ASX Corporate Governance Council ("Independence Test"), However the Company does not have a majority of independent Directors, with two of the five Board members being independent.	The Board considers that the current composition of the Board is adequate for the Company's size and operations, and includes an appropriate mix of skills and expertise, relevant to the Company's business of mineral exploration,
	.2.4	A separate nomination committee has not been formed.	The Board considers that the selection and appointment of Directors should be the responsibility of the full. Board and that no benefits or efficiencies are to be gained by delegating this function to a separate committee. Subsequent to the end of the financial year, the Board has been in the process of reviewing a Nomination Committee Charter which will formalise the functions of the Board when considering those matters and issues that would have otherwise been considered by a nomination committee.
	3.1	Subsequent to the end of the financial year, a code of conduct has been adopted.	Although prior to the end of the financial year there was no formal code of conduct, the Board is of the view that the conduct of each Board member and key executive was at all times consistent with the formal code of conduct adopted since the end of the financial year.
4.3		The Audit Committee comprises of David Macoboy as Chairman, Murray Pollock and the Company Secretary, who acts as the secretary to the Audit Committee. Therefore the composition of the Company's Audit Committee was less than the minimum three member composition required under best practice recommendation 4.3.As Mr Pollock is not an	The Board considers that the current structure of the Audit Committee is appropriate given the current size and structure of the Company. The members of the Audit Committee possess the requisite financial expertise and industry experience necessary to effectively carry out the Audit Committee's mandate
		independent Director, the audit committee also did not. comprise. of a majority of independent Directors,

CORPORATE GOVERNANCE

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EXPLANATIONS FOR DEPARTURES FROM BEST PRACTICE RECOMMENDATIONS - continued

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Reference	Notification of Departure	Explanation for Departure
5.1	Draft policies and procedures, designed to ensure compliance with ASX Listing Rule disclosure - requirements and accountability for compliance, have been distributed to Directors subsequent to the end of the financial year.	Informal procedures were in place prior to the end of the financial year, which have been formulated into draft policies and procedures subsequent to the end of the financial year, -
6.1	A formal communications policy was adopted subsequent to the end of the financial year.	Although there were no written policies or procedures, the Managing Director's objectives included ensuring that the Company communicated and actively promoted shareholder involvement in the Company This included making information available on the Company's website. The policy has been documented and disclosed subsequent to the end of the financial year.
	Previously the Board has not formalised policies on risk oversight and management.	The Company has developed a framework for risk management which covers financial, operational and organisational risks. During the second half of the Reporting Period, members of the Board participated in a risk management seminar and workshop. The Board intends to develop the risk management strategies developed from this exercise into a comprehensive risk management policy and procedure which will be appropriate for the Company's business. The Company therefore expects to be in compliance with best practice recommendation 7.1 in the 2004/2005 financial year.
	The process for evaluation of the Board, individual Directors and key executives was not disclosed during the financial year.	The process was not disclosed, however a review of the functioning of the Board in general did occur by way of an informal review by the Chairman on a six monthly basis. In addition, the Chairman conducted a review of the Managing Director during the financial year by reference to various objectives which had been set in the previous year. The Board proposes to adopt a formal, policy during the 2004/2005 financial year.
	The Company's remuneration policy was not disclosed during the financial year,	Although the policy was not formalised during the financial year, subsequent to the end of the financial year, the Board has been in the process of reviewing a draft- policy.
9.2	A separate remuneration committee has not been formed.	The full Board determined the level of remuneration for Directors and executives based on the provision of services to the Company for executive management and for their services as Directors. Remuneration levels were set with reference to industry and market conditions and with regard to the size, nature and volume of operations and overall market capitalisation of the Company,
	A formal code of conduct was adopted subsequent to the end of the financial year	Prior to the adoption of its formal code of conduct, the Board considers that its practices were the equivalent to the formal code of conduct.

	entided "Corporate Governance"	¹ A copy of the Ten Essential Corporate Governance Principles and Best Practic Recommendations are in the process of being set out on the Company's website under the section

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CORPORATE GOVERNANCE

IDENTIFICATION OF INDEPENDENT DIRECTORS

The independent Directors of the Company are Mr Pieter Greeff, Chairman, and Mr David Macoboy, Non-executive Director.

STATEMENT CONCERNING AVAILABILITY OF INDEPENDENT PROFESSIONAL ADVICE

If a Director considers it necessary to obtain independent professional advice to properly discharge the responsibility of his/her-office as a Director then, provided the Director first obtains approval for incurring such expense from the chairperson, the Company will pay the reasonable expenses associated with obtaining such advice.

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NAMES OF NOMINATION COMMITTEE MEMBERS AND THEIR ATTENDANCE AT COMMITTEE MEETINGS

The Board did not meet formally as a nomination committee during the financial year. Any relevant matters, however, were discussed on an as required basis from time to time during regular meetings of the Board.

NAMES AND QUALIFICATIONS OF AUDIT COMMITTEE MEMBERS

The following Directors are members of the Audit Committee:

David Macoboy (Chairman and independent Director):

Mr Macoboy is a Certified Practising Accountant with many years experience in financial roles with various companies including producing mining companies. He is currently Finance Director of Consolidated Minerals Limited.

Murray Pollock (Non-independent and Non-executive Director):

Mr Pollock has established and managed several profitable private business concerns predominantly in the mining services industry Mr Pollock has been involved with several mining and exploration companies primarily as an investor.

NUMBER OF AUDIT COMMITTEE MEETINGS AND ATTENDEES.

During the financial year, the Audit Committee held two meetings. All members of the Audit Committee attended all meetings.

CONFIRMATION WHETHER PERFORMANCE EVALUATION OF THE BOARD AND ITS MEMBERS HAVE TAKEN PLACE AND HOW CONDUCTED.

During the year ended 30 June 2004, an evaluation of the Board and its members was carried out on an informal basis every six months by the Chairman during the regular Board meetings.

COMPANY'S REMUNERATION POLICIES

WESTONIA MINES LIMITED

ANNUAL REPORT

2004 26 Remuneration levels for executives are competitively set to attract the most qualified and experienced Directors and senior executive officers, in the context of prevailing market conditions.

Mr Andrew Drummond, Managing Director, receives a salary plus statutory superannuation and motor vehicle expenses, Mr Drummond's salary is. not related to the performance of the Company. The Company also has in place a Directors' and officers' option scheme which may be used to provide incentives to executive Directors in addition to their base remuneration.

Each of the Non-executive Directors receive a fixed fee for their services as Directors. Non-executive Directors' fees not exceeding an aggregate of \$200,000 per annum have been approved by the Company in a general meeting. Messrs Murray Pollock, Chris Melloy and David Macoboy, each being Non-executive Directors of the Company, receive Directors' fees of \$20,000. With respect to Mr Melloy, the Director's fees are paid to Lion Manager, the management company responsible for the operation of Lion Selection Group. Mr Pieter Greeff, Non-Executive Chairman, receives a. fixed fee of \$25,000. There is no direct link between remuneration paid to any of the Directors and corporate performance.

During the financial year, an evaluation of the remuneration levels of the Directors and Executives was carried out by the full Board. No Director participated in discussions regarding his own remuneration. ........

There are no termination or retirement benefits for Non-executive Directors (other than statutory superannuation).

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2004

		Consolidated		Company
		Year ended Year ended	Year ended	- Year ended
Note		30 June 2004 30 June 2003.	30 June 2004	30 June 2003
Revenue from ordinary activities	164,288	179,236	164,288	176,850.
Corporate expenses	(266, 616)	(120,988)	(266, 616)	(120, 239)
Occupancy expenses	(108, 646)	(111,038)	(108, 646)	(111,038)
Employee and consultant expenses	(339, 154)	(358,341)	(339, 154)	(358, 341)
Travel and accommodation expenses	(53, 835)	$-(48,971)$	(53, 836)	(48,971)
Exploration expenditure written off	(171, 592)	(29,559)	(171, 592)	(29.559)
Other expenses	(235,569)	(77, 890)	(222,096)	(73,305)
Loss from ordinary activities before income tax expense	(1,011,124)	(567,551)	(997,652)	(564, 603)
Income tax (expense) benefit relating to ordinary activities
Net loss attributable to members of the parent entity	(1,011,124)	(567, 551)	(997, 652)	(564, 603)
Total revenues, expenses and valuation adjustments attributable
to members of the parent entity and recognised directly in equity	(1,011,124)	(567, 551)	(997, 652)	(564, 603)
Total changes in equity other than those resulting from transactions
with owners as owners.	(1,011,124)	(567, 551)	(997, 652)	(564,603)
Basic (loss) per share (cents per share)	$-(1.03)$	(0.77)

Diluted (loss) per share (cents per share) ּ	(0.78)	(0.60)

WESTONIA MINES LIMITED ANNUAL REPORT 2004;

$27₁$

The Statements of Financial Performance are to be read in conjunction with the Notes to the Financial Statements.

STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2004 m m v 60 %

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			Consolidated		Company
			Year ended Year ended	Year ended	Year ended
	Note	S	30 June 2004. 30 June 2003. s	30 June 2004 S	30 June 2003 S
CURRENT ASSETS
Cash assets	J.	1,464,535	6,649,595	$-1,464,535$	6,610,429
Receivables.		88,285	149,025	88,283	3,115,434
$\mathrm{Other}$ .		370,437	10,000	370,439	13,244
TOTAL CURRENT ASSETS		1,923,257	6,808,620	1,923,257	9,739,107

NON-CURRENT ASSETS
Property, plant and equipment	10	2,740,966	$-123,902$	2,740,966	76,652
Mineral properties	11	6,723,966	3,437,559.	- 6,723,966	588,646
Intangible assets	12		26,608
TOTAL NON-CURRENT ASSETS		9,464,932	3,588,069	9,464,932	665,298
TOTAL ASSETS		11,388,189	10,396,689	11,388,189	10,404,405

CURRENT LIABILITIES
Payables	13.	223,010	204,695	223,010	204,695
Provisions		24,779	15,985	24,779	15,985
TOTAL CURRENT LIABILITIES		247,789	220,680	247,789	220,680
TOTAL LIABILITIES		247,789	220,680	247,789	220,680
NET ASSETS		11,140,400	10,176,009	11,140,400	10,183,725
EQUITY
Contributed equity		12,770,544.	$-10,795,029$ $-$	$-12,770,544 -$	$-10.795.029$
Accumulated losses		(1,630,144)	(619,020)	(1,630,144)	(611, 304)
TOTAL EQUITY		11,140,400	10,176,009	11,140,400	10,183,725

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The Statements of Financial Position are to be read in conjunction with the Notes to the Financial Statements.

WESTONIA MINES LIMITED. ANNUAL REPORT 2004

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STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 30 JUNE 2004

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		Consolidated			Company
		Year ended	Year ended	$\sim$ Year ended	Year ended
	Note	30 June 2004 30 June 2003		30 June 2004	30 June 2003
CASHFLOW FROM OPERATING ACTIVITIES
Payments to suppliers and employees		(825, 143)	(688.946)	(785, 977)	(711.528)
Interest received.		171,659	163,396	171,659	161,010
Net cash provided by (used in) operating activities	17(b)	(653, 484)	(525, 550)	(614,318)	(550, 518)

CASHFLOW FROM INVESTING ACTIVITIES
Payments for property plant and equipment		(2,665,672)	(130,511)	(2,665,672)	(88, 146)
Payments to acquire exploration projects			(423,582)
Payments for exploration activities		(3,258,849)	(1,602,139)	(3,258,849)	(407,570)
Payments for project development.		(249, 262)		(249, 262)
Proceeds from disposal of plant and equipment		-13,886		13,886
Payments for bonds		(347, 195)	(20,000)	(347, 195)
Net cash provided by (used in) investing activities		(6,507,092)	(2,176,232)	(6,507,092)	(495, 716)

CASHFLOW FROM FINANCING ACTIVITIES
Issue of shares		$2,075,516$ $9,465,334$		$-2,075,516$	9.465.334
Payments for share issue costs				$(100,000)$ $(481,312)$ $(100,000)$	(481,315)
Loans to subsidiary.					(1,327,357)
Net cash provided by (used in) financing activities		1,975,516	8,984,022	1,975,516	7,656,662
Net increase (decrease) in cash held		(5,185,060)	6,282,240	(5, 145, 894)	6,610,428
Cash at the beginning of the financial year		6,649,595	367,355	6,610429
Cash at the end of the financial year	17(a)	1,464,535	6,649,595	1,464,535	6,610,429

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WESTONIA MINES LIMITED ANNUAL REPORT 2004;

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The Statements of Cashflows are to be read in conjunction with the Notes to the Financial Statements.

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

This financial report is a general purpose financial report that has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Ad 2001. The financial report covers the economic entity of Westonia Mines Limited and controlled entities, and Westonia Mines Limited as an individual parent entity. Westonia Mines Limited is a company limited by shares, incorporated and domiciled in Australia. r.
Gwelet ivez

The financial report has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets. Costs are based on the fair values of the consideration given in exchange for assets. MARI MUARA KENDALAN MARAHAN SEKERANGAN. .
Tanah dia kaominina mpikambana amin'ny fivondronan-kaominin'i Amerika ao amin'ny fivondronan-kaominin'i Amerik

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

Principles of consolidation $(a)$

A controlled entity is any entity controlled by Westonia Mines Limited, Control exists where Westonia Mines Limited has the capacity to dominate the decision making in relation to the financial and operating policies of another entity so that the other entity operates with Westonia Mines. Limited to achieve the objectives of Westonia Mines Limited A list of controlled entities is contained in Note 23 to the Financial Statements. All inter-company balances and transactions between the entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation.

Where controlled entities have entered or left the economic entity during the year, their operating results have been included from the date control was obtained or until the date control ceased. .. San Maria (1976)
San Antiophysics (1976)

Outside interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report. (b) Income tax

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

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

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

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

$(c)$ Acquisition of assets

WESTONIA MINES LIMITED. ANNUAL REPORT 2004

All assets including property, plant and equipment are initially recorded at their cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributed to acquisition. When equity instruments are issued as consideration, their market value at the date of acquisition is used as fair value.

(d) Depreciation and amortisation

The depreciable amount of all fixed assets, including building and capitalised lease assets, but excluding freehold land, is depreciated / amortised over their useful lives to the economic entity. Plant and equipment are depreciated on a diminishing value basis over their useful economic lives. Intangible assets are amortised on a straight line basis. Assets are depreciated from the date of acquisition, or in respect of constructed assets, from the time an asset is completed and held ready for use. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until commercial production commences.

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The depreciation and amortisation rates used for each class of assets are:

the state of the contract of the state of the state of the state of the state of the state of the state of the	Depreciation/Amortisation Rate	Depreciation/Amortisation Ra
Class of Asset	2004	2003
	[ Plant and equipment $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $10\% - 33\%$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$
Office equipment (Consumer Section	$-10\% - 33\%$	$10\% - 33\%$
till bestået $-G$ oodwill $\ldots$	$\sim$ $\sim$ 10% $\rm{Mpc}$	$\sim 10\%$ . The second contract of $10\%$ ,
Motor vehicles	$\cdots \cdots \cdots 20\%$	http://www.com/communication/20%-
Mine machinery and equipment	10%	10%

Depreciation and amortisation rates are reviewed annually for appropriateness.

(e) Going concern

The ability of the economic entity to continue operations and to meet its financial obligations, as and when incurred, is dependent upon the economic entity generating sufficient funds through its normal operations and/or in the successful conclusion of negotiations with financiers or equity investors for additional working capital, $\gamma_1, \ldots, \gamma_{m-1}, \ldots, \gamma_{m-1}$ $\varphi\approx\varphi_{\rm eq}=\varphi$

The Directors are of the opinion that, in view of their knowledge of the state of affairs of the economic entity and after taking into consideration the above, the accounts have been appropriately prepared on the concept of "a going concern basis".

(f) Goods and Services Tax ("GST")

Revenues, expenses and assets are recognised net of the amount of GST except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included,

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इ%र्व

The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position. Cash flows are included in the Statements of Cash Flows on a gross basis. The GST component of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(g) Exploration, evaluation and development expenditure

Exploration, evaluation and development costs are accumulated in respect of each separate area of interest.

Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development and exploitation of the area of interest, or where exploration and evaluation activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Development costs related to an area of interest are carried forward to the extent that they are expected to be recouped either through sale or. successful exploitation of the area of interest. ... rkala ja 11

When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated costs in respect of that area are written off in the financial period the decision is made.

(h) Goodwill

Goodwill represents the excess of the purchase consideration plus incidental costs over the fair value of the identifiable net assets acquired. (i) Recoverable amount of non-current assets valued on cost basis

The carrying amounts of non-current assets valued on the costs basis, other than exploration and evaluation expenditure carried forward (Note 1(g)) are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount of a noncurrent asset exceeds its recoverable amount, the asset is written down to the lower amount. The write-down is expensed in the reporting period in which it occurs.

In assessing recoverable amounts of non-current assets, the relevant cash flows have not been discounted to their present value, except where, specifically stated.

(j) Tax consolidation

Effective 1 July 2002, for the purposes of income taxation, the Company and its 100% owned controlled entities elected to form a tax consolidation group.

(k) Earnings Per Share ("EPS")

Basic EPS is calculated by dividing the net profit attributable to members of the parent entity for the reporting period, after excluding any costs of servicing equity, by the weighted average number of ordinary shares of the company, adjusted for any honus issue. Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs associated with dilutive potential ordinary shares and the effect on revenues and expenses of conversion to ordinary shares associated with dilutive potential ordinary shares, by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus issue.

International Financial Reporting Standards ("IFRS")

The Australian Accounting Standards Board ("AASB") is adopting IFRS for application to reporting periods beginning on or after 1 January 2005. The AASB will issue Australian equivalents to IFRS, and the Urgent Issues Group will issue abstracts corresponding to IASB interpretations originated by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee. The adoption of Australian equivalents to IFRS will be first reflected in the economic entity's financial statements for the half-year ending 31 December 2005 and the year ending 30 June 2006.

Entities complying with Australian equivalents to JFRS for the first time will be required to restate their comparative financial statements to amounts reflecting the application of IFRS to that comparative period. Most adjustments required on transition to IFRS will be made, retrospectively, against opening retained earnings as at 1 July 2004.

The Company has conducted a high level review of the likely impact of transition to Australian equivalents to JFRS. The review was conducted by external consultants and reported to the Audit Committee. The Chief Financial Officer has taken on the responsibility to manage the transition to the Australian equivalent of IFRS, including training staff where required and any internal changes necessary to gather all the required financial information.

WESTONIA NINES IN THEIRED ANNUAL HEROPY NEWS

As the Company has a 30 June year end, priority has been given to considering the preparation of an opening balance sheet in accordance with AASB equivalents to IFRS as at 1 July 2004. This will form the basis of accounting for Australian equivalents of IFRS in the future, and is required when the Company prepares its first fully IFRS compliant financial report for the year ended 30 June 2006. Set out below are the key areas where accounting policies will change and may have an impact on the financial report of the Company At this stage the Company has not been able to reliably quantify the impacts on the financial report.

Impairment of assets...

Under the Australian equivalent to IAS 36 Impairment of Assets the recoverable amount of an asset is determined as the higher of net selling price and value in use. This will result in a change in the economic entity's current accounting policy which determines the recoverable amount of an asset on the basis of discounted cash flows. Under the new policy it is likely that impairment of assets will be recognised sooner and that the amount of write-downs will be greater. Reliable estimation of the future financial effects of this change in accounting policy is impracticable because the conditions under which impairment will be assessed are not yet known.

2010年1月10日
1980年1月1日

Employee benefits

Under AASB 119 Employee Benefits, employer sponsors are required to recognise the net surplus or deficit in their employer sponsored defined benefit funds as an asset or hability, respectively. This will result in a change in the economic entity's current accounting policy which does not. currently recognise the net assets/liabilities of the defined benefit fund. Under the new policy, the Company will be required to recognise an asset of the defined benefit fund for the net surplus based on an actuarial calculation of the position of the fund. The initial adjustment on transition will be through retained earnings and subsequent adjustments will be to net profit or loss for the period. Reliable estimation of the future financial effects of this change in accounting policy is impracticable because the actuarial calculations have not yet been completed as at 30 June 2004.

Share based payments.

Under AASB 2 Share Based Payments, the Company will be required to determine the fair value of options issued to employees as remuneration and recognise an expense in the Statement of Financial Performance. This standard is not limited to options and also extends to other forms of equity based remuneration. It applies to all sha re-based payments issued after 7 November 2002 which have not vested as at 1 January 2005. Reliable estimation of the future financial effects of this change in accounting policy is impracticable as the details of future equity based remuneration plans are unknown.

Income taxes

WESTONIA MINES LIMITED.

ANNUAL REPORT 2004

Under the Australian equivalent to JAS 12 Income Taxes, the Company will be required to use a balance sheet liability method which focuses on the tax effects of transactions and other events that affect amounts recognised in either the Statement of Financial Position or a tax-based balance sheet. The most significant impact will be the recognition of a deferred tax liability in relation to the asset revaluation reserve. Previously, the capital gains tax effects of asset revaluations were not recognised. It is not expected that there will be any further material impact as a result of adoption of this standard.

Exploration and evaluation expenditure

Although not scheduled for adoption on 1 January 2005, as the standard is currently an exposure draft, the IFRS will be of relevance for future reporting periods. Currently entities can carry forward exploration expenditure on separately identifiable areas of interest to the extent that it is expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves. The IASB framework, however, requires probable economic benefits to flow to entities before assets can be recognised. The application of present value techniques will most likely lead to impairment write downs on tenements where a feasibility study has not been completed or where commercial production has not yet commenced.

NOTES TO THE FINANCIAL STATEMENTS

s is a

	Year ended 30 June 2004 S	Year ended 30 June 2003 S	- Year ended 30 June 2004 S	Year ended 30 June 2003 S
REVENUE
Revenue from operating activities:
· luterest .	164,288	179,236	164,288	176,850
LOSS FROM ORDINARY ACTIVITIES
Individually significant expenses included in profit from ordinary
activities before income tax expense:
Option fee written off on unexercised purchase of gold
processing plant	97,000		.97,000
(b) Net loss from ordinary activities before income tax has been arrived at after charging the following items:
Depreciation.	34,063	9,057	34,063	8,463
Amortisation and	29,934	3,326
Mineral exploration expenditure written off	171,592	29,559	171,592	29,559
Cost of investment in unit trust written off	13,143		13,143
INCOME TAX EXPENSE
(a) The prima facie tax payable (tax benefit) on the profit (loss) from ordinary activities before income tax is reconciled to the income tax expense as follows:
Prima facie tax payable (tax benefit) on the profit (loss) from ordinary activities before income tax at 30% Increase (decrease) in income tax (tax benefit) due to non	(303,338)	(170, 265)	(299,297)	(169,381)
assessable/non tax deductible items:
Legal fees	4,637	$-6,952$	4,637	6,952
Amortisation of goodwill	8,980	998
Entertainment	2,423		$-2,423$
FBT expense	3,496.		3,496.
Future income tax benefit not brought to account	283,802	162,315	288,741	162,429
Income tax expense (benefit) attributable to profit (loss) from ordinary activities
Future income tax benefit not taken to account
The potential future income tax benefit arising from tax losses
and timing differences has not been recognised as an asset because
recovery of tax losses is not virtually certain and recovery of timing
differences is not assured beyond reasonable doubt.
Tax losses carried forward	460,074	175,272	460,074	175,272
The benefit of future income tax benefit not brought to account will only be obtained if:
(a) the Company and consolidated entity derive future assessable income of a nature and an amount sufficient to enable the benefit from the deductions for the losses to be realised; and
(b) the Company and consolidated entity continue to comply with the conditions for deductibility imposed by tax law; and
no changes in tax legislation adversely affect the Company and consolidated entity realising the benefit from the deductions for the losses

HUURA

N)
S

$\sim$ .

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 . . . . . . 器旅 $(0.38 - 0)$

WESTONIA MINES LIMITED. ANNUAL REPORT 2004

$34$

		Consolidated
	-2004 Cents per share	2003 Cents per share
5. EARNINGS PER SHARE ("EPS")
Basic earnings (loss) per share	(1.03)	(0.77)
Diluted earnings (loss) per share	(0.78)	(0.60)
Basic earnings per share
The earnings (loss) and weighted average number of ordinary shares used in the calculation of
basic earnings (loss) per share are as follows:
	2004	2003
Loss(a)	(81,011,124) Number	(567, 551) Number
Weighted average number of ordinary shares	98,380,457	73,905,949

(a) Earnings used in the calculation of basic earnings (loss) per share reconciles to net profit
in the statement of financial performance as follows:	2004	2003
Net profit (loss)	$(\$1,011,124)$	(\$567,551)
Earnings (loss) used in the calcaulation of basic EPS	$(\$1,011,124)$	$(*567,551)$
Diluted earnings per share
The earnings (loss) and weighted average number of ordinary and potential ordinary shares
used in the calculation of diluted earnings per share are as follows:	2004	2003
Loss (a)	(31,011,124)	(8567,551)
	Number	Number
Weighted average number of ordinary shares and potential ordinary shares (b)	130,347,031	95,261,903

(a) Earnings used in the calculation of diluted earnings (loss) per share reconciles to net profit
in the statement of financial performance as follows:	2004	2003
Net.profit. (loss).	(1,011,124)	(8567, 551)
Earnings (loss) used in the calculation of diluted EPS	$(\$1,011,124)$	$(*567,551)$
(b) Weighted average number of ordinary shares used in the calculation of diluted earnings
per share reconciles to the weighted average number of ordinary shares used in the
calculation of basic earnings per share as follows:
	$-2004$ Number	2003 Number
Weighted average number of ordinary shares used in the calculation of basic EPS	98,380,45	73,905,949
	31,966,574	21,355,954

Options Weighted average number of ordinary shares and potential ordinary shares

manaziri
Tamaran
Maturan

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 limetativa koosaa aasaas

		Consolidated Year ended	Year ended	- Year ended	Company ~ Year ended
			30 June 2004. 30 June 2003.	30 June 2004	30 June 2003
		S	S	S	S
	6. REMUNERATION OF AUDITORS
	Amounts received or due and receivable by auditors for:
	Audit services	10,237	14,055	10,237	14,055
	Other services	1,000		1,000
		11,237	14,055	11,237	14,055
	7. CASH ASSETS
	Cash on hand	686	500	686	500
	Cash at bank	717,357	.672,575	717,357	.633,409
	Commercial bills receivable	746,492 1,464,535	5,976,520 6,649,595	746,492 1,464,535	5,976,520
	8. RECEIVABLES				6,610,429
	GST receivable.	58,275	113,965	58,275	22,415
	Westonia Mines Unit Trust				3,058,030
	Prepayments	14,224	8,698	14,224	8,698.
	Other	15,786	26,362	15,784	26,291
		88,285	149,025	88,283	3,115,434
9.	OTHER ASSETS
	Investments				$-13,244$
	Term and bond deposits receivable	370,437	10,000	370,437
		370,437	10,000	370,439	13,244
	10, PLANT AND EQUIPMENT
	Office furniture and equipment
	At cost	82,830	43,827	$-82,830$	40,827
	Less: Accumulated depreciation	(20, 994)	(7, 173)	(20, 994)	(5,205)
		61,836	36,654	61,836	35,622
	Computer software
	At cost	7,046	5,706	-7,046	5,706
	Less: Accumulated depreciation	(2,858)	(750) 4,956	(2,858) 4,188	(750) 4,956
	Motor vehicles	4,188
	At cost:	71,335	37,728	71,335	37,728
	- Less: Accumulated depreciation	(9,763)	(1,654)	(9,763)	(1,654)
		61,572	36,074	61,572	36,074
	Mine machinery and equipment
	At cost,	2,627,196	52,997	2,627,196
	Less: Accumulated depreciation	(13, 826)	(6,779)	(13, 826)
		2,613,370	46,218	2,613,370

		2,740,966	123,902	2,740,966	76,652

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Medici

$\hat{x}$

$35₁$

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 $w \stackrel{\sim}{\Rightarrow} w$ $35 - 35$

		Consolidated Year ended Near ended	Year ended	Company Year ended
	\$	30 June 2004 30 June 2003	30 June 2004 S	30 June 2003 S
10. PLANT AND EQUIPMENT (continued)
Office furniture and equipment
Carrying amount at beginning of year.	36,654	1,147	35,622
Additions.	39,003	40,827	39,003	44,502
Unit Trust Assets transferred at fair value			1,032
Disposals.				(3,675)
Depreciation	(13, 821)	(5,320)	(13, 821)	(5,205)
Carrying amount at end of year	61,836	36,654	61,836	35,622
Computer software
Carrying amount at beginning of year	4,956		4,956
Additions.	1,340	5,706	.1,340.	5,706
Depreciation	(2,108)	(750)	(2,108)	(750)
Carrying amount at end of year	4,188	4,956	4,188	4,956

Motor vehicles
Carrying amount at beginning of year	$-36,074$		36,074
Additions	51,789	37,728	.51,789.	37,728
Disposals	(15,204)		(15,204)
Depreciation Carrying amount at end of year	(11,087) 61,572	(1,654) 36,074	(11,087) 61,572	(1,654) 36,074

Mine machinery and equipment
Carrying amount at beginning of year	46,218	4,122
Unit Trust Assets transferred at fair value			2,620,417
Additions	2,574,199	42,575
Depreciation	(7,047)	(479)	(7,047)
Carrying amount at end of year	2,613,370	46,218	2,613,370
	2,740,966	123,902	2,740,966	76,652
11. MINERAL PROPERTIES
Exploration and evaluation expenditure at cost:
Carrying amount at beginning of year.	3,437,559.	1,308,692	588,646
Incurred during the year -	3,457,999	2,158,426	342,171	618,205
Unit Trust exploration expenditure transferred at fair value			5,964,741
Written off during the year	(171, 592)	(29, 559)	(171, 592)	(29, 559)
Carrying amount at end of year (a)	6,723,966	3,437,559	6,723,966	588,646

dependent upon the discovery of commercially viable mineral and other natural resource deposits and their development and exploitation or alternatively their sale. The contribution of the contribution of the state of the contribution of the contribution of the contribution of the contribution of the contribution of the contribution of the con

The Company's title to certain mining tenements is subject to

WESTONIA MINES LIMITED. ANNUAL REPORT 2004

36,

Ministerial approval and may be subject to successful outcomes of Native Title issues (Note 20).

		Consolidated		Company
		Year ended Year ended	Year ended	Year ended
	s	30 June 2004 30 June 2003. \$	30 June 2004	30 June 2003 s
12. INTANGIBLE ASSETS
Goodwill on acquisition	33,262	33,262
Less: Accumulated amortisation	(33,262)	(6, 654)
		26,608
13. PAYABLES
Trade creditors.	157,281	117,581	157,281	117,581
Other creditors and accruals	65,729	87,114	65,729	87,114
	223,010	204,695	223,010	204,695
14. PROVISIONS
(a) Provision for employee entitlements	24,779	15,985	24,779	15,985
(b) Number of employees at the year end	3	$\overline{2}$	3	2

15. CONTRIBUTED EQUITY
Ordinary shares fully paid	12,770,544	10,795,029
Movements in share capital:
Carrying amount at the beginning of the year.	10,795,029	1,920,352
Issue of 25,000,000 shares pursuant to prospectus at \$0,20		5,000,000
Share issue costs	(100,000)	(625, 656)
Issue on exercise of options	65,515	1,333
Issue of 100,000 shares for acquisition of mining tenement		35,000
Issue of 12,400,000 shares at \$0.36 each pursuant to prospectus		4,464,000
Issue of 5,012,500 shares at \$0.40 each pursuant to Share Purchase Plan	2,010,000
Carrying amount at the end of the year	12,770,544	10,795,029
		Consolidated
	2004	2003
	Number	Number
Carrying amount at the beginning of the year	95,853,785	58,347,119
Issue pursuant to prospectus at \$0.20.		25,000,000
Issue for acquisition of mining tenement at \$0.35		100,000
Issue on exercise of options at \$0.20	$-327,567$	$-6,666$
Issue pursuant to prospectus at \$0,36 Issue pursuant to Share Purchase Plan at \$0.40		12,400,000
	5,012,500
Carrying amount at the end of the year.	101,193,852	95,853,785

1945년 동일
1945년 1월 1일 - 대한민국

Terms and Conditions.

Holders of ordinary shares are entitled to dividends as declared from time to time and are entitled to one vote per share at shareholders' meetings. In the event of winding up of the Company, ordinary shareholders rank after all shareholders and creditors and are fully entitled to any proceeds. of liquidation.

AGOZ TROODLE CLAIRED ANNULLED ANNULLED AND FEPORT 2004

$37$

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2004

15. CONTRIBUTED EQUITY ~ continued

Options The Company had on issue the following options as at 30 June 2004, issued to Directors, Employees and Contractors of the Company pursuant to the "Westonia Mines Limited Employees and Contractors Option Plan" ("ECOP"), (Note 18).

$\hat{g}_{\alpha,\beta}$

Exercise Price	Expiry Date
$-0.30 -$	$-31$ May 2005
$\pm 0.40$	31 May 2006
$-0.36$	$-17$ July 2006
0.43	17 July 2006
$0.50 -$	$17$ July 2006
-0.36	27 April 2007
0.42	27 April 2007

The Company had on issue the following options at 30 June 2004 issued independently of the ECOP:

Number	Tvpe	Exercise Price	Expiry Date
	$-27,448,001$ . Listed Bonus Options $\sim$ .	$\sim$
$-500.000$	Corporate Adviser Options	\$0.30	14 September 2004
	ga aang ay isay 1974 milyo na mpinganan	and the community of the community of the treaty

The movement in the Company's options on issue during the year is set out below:

Grant	Exercise	Expiry	Opening			Closing	the end of
Date	Price	Date	Balance	Issued	Exercised	Balance	the year
20 Aug. 02.	\$0.20.	20.Aug, 06.	27,775,568		(327,567)	27,448,001	27,448,001
20 Aug. 02	$$0.30$ .	14 Sept. 04	500,000			500,000	$-500,000$ .
'7 June 02 ·	\$0.30.	31 May 05	800,000			-800,000	800,000
$7 \text{ H}$ me $02$	\$0.40	31 May 06	700,000			-700.000	700,000
$17 \text{ luly } 03$	\$0.36.	17 July 06		120,000		120,000	.120,000
17 July 03	$$0.43$ .	17 July 06-		120,000-		.120,000	$120,000$ .
~47 July 03 ~	$$0.50$ .	17 July 06-		$120,000$ .		120,000	120,000 -
-27 April 04	$$0.36$ .	27 April 07		105,000		105.000	105,000
27 April 04 -	$$0,42$ .	27 April 07.		105,000		105,000	105,000
			29,775,568	570,000	(327, 567)	30,018,001	30,018,001

		Consolidated		Company
	30 June 2004			30 June 2003 30 June 2004 30 June 2003

6. ACCUMULATED LOSSES
Accumulated losses at the beginning of the financial year	(619,020)	$- (51,469)$	(611,304)	346,701)
Vesting of accumulated losses of Westonia Mines Unit Trust (a).			(21, 186)
Net loss attributable to members of the parent entity.	(1,011,124)	(567, 551)	(997, 652)	(564, 603)
Accumulated losses at the end of the financial year.	(1.630, 144)	(619,020)	(1,630,142)	(611, 304)

(a) On 29 June 2004, the assets and liabilities of the Westonia Mines Unit Trust ("WMUT") were vested, resulting in Westonia Mines Limited as holder of 100% of the units of WMUT acquiring 100% of the assets and liabilities and accumulated losses of WMUT.

ANNUAL REPORT 2004

WESTONIA MIMBS LIMITED.

	Year ended	Year ended	Year ended	Near ended
		30 June 2004 30 June 2003	30 June 2004 30 June 2003

17. CASHFLOW INFORMATION
$\sim$ (a) Reconciliation of cash
Cash at end of the financial year as shown in the Statements of
Cashflows is reconciled to the related items in the Statements of
Financial Position as follows:
Cash	$-1,464,535$	$-6.649.595$	1,464,535	6,610,429
(b) Reconciliation of cashflow from operations with profit (loss)
from ordinary activities after income tax;
Operating profit (loss) from ordinary activities after income tax	(1,011,124)	(567,551)	(997, 652)	(564, 603)
Non-cashflows from ordinary activities:
Depreciation	34,063	-9,057	34,063	8,463
Amortisation	16,791	3,326
Write-off of formation expenses		2,045		2,045
Loss on sale of property, plant and equipment	659	$-2,821$	659	2,821
Write-off exploration expenditure	171,592	29,559	171,592	29,559.

Changes in assets and liabilities, net of the effects of purchase
and disposal of subsidiaries:
(Increase) decrease in receivables	128,516	(16,656)	171,061	(58, 167)
-Increase (decrease) in payables .	6,019	11,849	6,019	29,364
Cash (used in) from operating activities	(653, 484)	(525,550)	(614, 258)	(550, 518)

543479478

18. EMPLOYEE BENEFITS

Employees and Contractors Option Plan ("ECOP")

An Employees and Contractors Option Plan ("ECOP") has been established, approved by the Board on 18 April 2002 and at the Annual General Meeting on 5 June 2002. 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.

The options, 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 group, the nature or terms of their employment or contract and the contribution they make to the Company group talah masa masa pada ang p as a whole. $\begin{array}{l} \gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha\beta}=\gamma_{\alpha$ $\sigma$ and $\sigma$ and $\sigma$ the Police and police the survey Perrant a galance

The options are issued for a specified period and each option 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 expire on the earlier of their expiry date or termination of the employee's employment.

Options do not vest until a specified period after granting and their exercise is conditional on the consolidated entity achieving certain performance hurdles. The service strength an
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There are no voting or dividend rights attached to the options. Voting rights will attach to the ordinary shares when the options have been exercised. The options cannot be transferred and will not be quoted on the ASX.

There are currently four Directors, one executive and six staff and contractors eligible for this scheme.

Summary of Options Over Unsecured Ordinary Shares

Details of options over unissued ordinary shares as at the beginning and ending of the reporting period, and movements during the year are set out in Note $15...$

WESTONIA MINES LIMITED ANNUAL REPORT 2004

No options have been exercised in relation to the ECOP during the financial year.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2004

19. FINANCIAL INSTRUMENTS

(a) Interest rate risk

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The economic entity's exposure to interest rate risk and the effective weighted average interest rate for classes of financial asset and financial liabilities are set out below:

避免条件

	Weighted
	average	Floating	Fixed interest	Non-interest
30 June 2004	interest rate.	interest rate Ş	rate Ş	bearing S	Total S
Financial Assets
Cash	3.80%	708,066	746,492	9,977	1,464,535
Receivables				88,285	$-88,285$
Other			333,657	36,780	370,437
		708,066	1,080,149	135,042	1,923,257
Financial Liabilities
Accounts payable			3,776	219,234	223,010
			3,776	219,234	223,010
Net financial assets (liabilities)		708,066	1,076,373	(84, 192)	1,700,247

	Weighted average	Floating	Fixed interest	Non-interest
30 June 2003	interest	interest rate	rate	bearing	Total
	rate	\$	s	S	S
Financial Assets
:Cash	4.68%	662,575	5,986,520	500	6,649,595
Receivables				149,025	149,025
Other			10,000		10,000
		662,575	5,996,520	149,525	6,808,620
Financial Liabilities
Accounts payable				204,695 204,695	204,695 204,695
Net financial assets (liabilities)		662,575	5,996,520	(55,170)	6,603,925

Reconciliation of net financial assets to net assets
		30 June 2004	30 June 2003 s
Net financial assets as above		\$ 1,700,247	.6,603,925
Non-financial assets and liabilities
Plant and equipment		2,740,966	$-123,902$
Other assets		6,723,966	3,437,559
Mineral properties			26,608
Provisions		(24, 779)	(15,985)
Net assets per balance sheet		11,140,400	10,176,009

(b) Net fair values of financial assets and liabilities

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The carrying amounts of all assets and liabilities approximate to fair value.

(c) Credit Risk

WESTONIA MINES LIMITED. ANNUAL REPORT 20034

The consolidated entity does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The carrying amount of financial assets recorded in the financial statements net of any provisions for losses, represents the consolidated entity's maximum exposure to credit risk.

20. CONTINGENT LIABILITIES

In June 1992, the High Court of Australia held in the Mabo case that the common law of Australia recognises a form of Native Title, The full impact that the Mabo decision may have on tenements held by the Company is not vet known. The Company is aware of Native Title claims that have been lodged with the National Native Title Tribunal ("the Tribunal") over several areas in Western Australia in which the Company holds interests. The Native Title claims have been accepted by the Tribunal for determination under section 63(1) of the Native Title Act 1993. (Commonwealth).

Notwithstanding the above, those of the Company's tenements which are the subject of the current feasibility study, were granted prior to Native Title legislation. Any compensation payable in relation to the effect of the grant of any of the tenements upon Native Title rights will be payable by the State of Western Australia. .....

The Company is responsible for the relocation of plant acquired during the period. An extension has been granted on the initial relocation date to 30 April 2005 at no additional cost to the Company As part of the purchase agreement; (i) the Company has provided a guarantee to the vendor to a total cost of \$250,000 payable to Big Bell Operations Pty Ltd in the event that the plant not be relocated. The guarantee is secured by a term deposit to the same amount, included in Other Assets - Receivables as at 30 June 2004; and (ii) in the event that the plant is relocated to Westonia, the Company has a commitment to pay an additional amount of \$100,000 to Interquip Ltd.

21. COMMITMENTS FOR EXPENDITURE

All of the Company's tenements are situated in the State of Western Australia.

In order to maintain an interest in the mining and exploration tenements in which the Company is involved the Company is committed to meet the conditions under which the tenements were granted and the obligations of any joint venture agreements. The timing and amount of exploration expenditure commitments and obligations of the Company are subject to the minimum expenditure commitments required as per the Mining Ad, as amended, and may vary significantly from the forecast based upon the results of the work performed which will determine the prospectivity of the relevant area of interest. والمحاربين

The obligations for the next financial year are expected to amount to \$384,150 (2003: \$391,580). No estimate has been given of expenditure commitments beyond 12 months as this is dependent on the Directors' ongoing assessment of operations and, in certain instances, Native Title negotiations.

		Consolidated	Company
	2004	2003	2004	2003

Non-cancellable operating lease exposure commitments
Future operating lease commitments not provided for in the financial
statements and payable:
Within one year .	74,800 1	:58,800	$-74.800$	.58,800.
One year or later and no later than five years	$-208,000$ .	$-277,600 -$	$-208,000$ .	277,600.
Later than five years -
	282,800	336,400	282,800	336,400

The consolidated entity leases property under non cancellable operating leases expiring from two to five years.

22. SUBSEQUENT EVENTS

On 20 August 2004, the Company announced the placement of 4 million shares at 25 cents each to raise \$1,000,000. Apart from the foregoing, there has not arisen any transaction or event of a material nature likely, in the opinion of Directors, to significantly affect the nature of the operations of the Company subsequent to the end of the financial period,

23. CONTROLLED ENTITIES

Investments in controlled entities
Equity Holding (%) Country
30 Јипе 2004 of incorporation	30 June 2003
Parent Entity;
Westonia Mines Limited Australia

Subsidiaries of Westonia Mines Limited:
Westonia Mines Minerals Pty Ltd Australia	ោះ ស្រ
Westonia Mines Unit Trust Australia	100

WESTONIA MINES LIMITED ANNUAL REPORT 2004

24. SEGMENT REPORTING

The Company and consolidated entity operate predominantly in one business and one geographical segment, being mineral exploration activities within Australia. Substantially, all of the consolidated entity's assets are deployed for this purpose.

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25. DIRECTOR AND EXECUTIVE DISCLOSURES

(a) Details of specified Directors and specified Executive

Specified Directors:

Pieter Greeff - Non-executive Chairman

Andrew Drummond Managing Director
Murray Pollock Non-executive Director Chris Melloy - Non-executive Director
David Macoboy Non-executive Director

Specified Executive:

Ian Kerr - Project Manager

(b) Remuneration policy

The Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors, and the executive team. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality -Board and executive team. Remuneration levels are competitively set to attract the most qualified and experienced candidates, taking into i President account prevailing market conditions and individual's experience and qualifications.

Each of the Non-executive Directors receives a fixed fee for their services as Directors. There is no direct link between remuneration paid to any of the Directors and corporate performance such as bonus payments for achievement of certain key performance indicators. The aggregate maximum remuneration for all Non-executive Directors approved by shareholders in General Meeting is fixed at \$200,000 per annum. Non-executive Directors' base fees are presently \$20,000 per annum and the Chairman \$25,000 per annum.

(c) Remuneration of specified Directors and specified Executives.

	Primary	Post		- Equity
	(Salary and	Employment	$-Motor$	(Options)
	fees)	(Superannuation)Vehicle			Total
Specified Directors:
Pieter Greeff-2003	25,000	2,250			.27,250
Pieter Greeff-2004	$-25,000$	2,250.			27,250
Andrew Drummond $-2003$	.165,830.	13,125	4,716.		.183,671
Andrew Drummond - 2004	180,196	16,218	7,568		203,982
Murray Pollock - 2003	-20,000-	$-1,800$			$-21,800$
Murray Pollock = 2004	20,000	1,800			$-21,800$
Chris Melloy - 2003 (ii)	20,000				20,000
Chris Melloy $-2004$ (ii)	20,000				20,000
David Macoboy - 2004	18,333	1,650			19,983
Total for specified Directors - 2003	230,830	17,175	4,716		252,721
Total for specified Directors $-2004$	263,529	21,918	7,568		293,015

Specified Executive:
-Јан Кегг — 2003	61,825	5,564	226		67,615
Ian Kerr – 2004.	200,000	18,000	6,058	9,232	233,290

(i) The value of options is calculated at the date of grant using a Black & Scholes option pricing model.

(ii) Director's fees in respect of Mr Melloy were paid to Lion Manager, a company with which he has a beneficial interest.

ANNUAL REPORT 2004

WESTONIA MINES LIMITED.

NOTES TO THE FINANCIAL STATEMEN

FOR THE YEAR ENDED 30 JUNE 2004

25. DIRECTOR AND EXECUTIVE DISCLOSURES - continued

(d) Options over equity instruments granted and vested as remuneration during the year

During the financial year the following options over equity instruments were provided as remuneration:
(i) on 17 July 2003, a total of 360,000 options were issued to contractors of the company, with an expiry date of 17 July 2006. These were split into three groups of 120,000 options exercisable at 36 cents, 43 cents and 50 cents respectively; and
(ii) on 27 April 2004, a total of 210,000 options were issued with an expiry date of 27 April 2007, 105,000 being exercisable at .36 cents each and 105,000 at 42 cents each. Superman

Under the Employee and Contractors Option Plan ("ECOP") (Note 18) the options were issued free of charge. Each option entitles the holder to subscribe for one fully paid ordinary share in the entity. in beginning and

The fair value of the options is calculated at the date of grant using a Black & Scholes model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed above is the portion of the fair value of the options allocated to this reporting period. a
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The following factors and assumptions were used in determining the fair value of options issued to Directors and specified Executives on grant date:

			Exercise	Frice of -		Kisk free
Grant date	Expiry date	Fair value per option	price	shares on grant date	Estimated volatility	interest rate	idend vield
27 April 2004	-april 1			.	.
27 April 2004	27 April 2007		\$0.42	30.Z.	50%	-25%.	0%

Estimated volatility approximates historic volatility. The estimated life of all options granted is three years. Each option entitles the holder to purchase one ordinary share in the Company. All options expire on the earlier of their expiry date or termination of the employee's employment. Options do not vest until two years after grant date and thereafter exercise is conditional on the consolidated entity achieving certain performance hurdles. The performance hurdle is a blend of the consolidated entity's and each relevant segment's result exceeding, by at least two percent, the three preceding years' average for listed peer entities (further details are available on the Company's website). In determining fair value, it has been assumed that service period requirements will be met and that performance hurdles have an eight percent probability of being met. No options have been granted since the end of the financial year.

WESTONIA MINES LIMITED. ANNUAL REPORT 2004

	Number granted	Number vested
Specified Directors:
Pieter Greeff.
Andrew Drummond
Murray Pollock
Chris Melloy
David Macoboy
Specified Executive:
Ian Kerr	150,000	150,000

--------------------------------------25. DIRECTOR AND EXECUTIVE DISCLOSURES - continued

WESTONIA MINES LIMITED. ANNUAL REPORT 2004

(e) Option holdings of specified Directors and specified Executive

The movements during the financial year in the number of options over ordinary shares issued under ECOP during the year are as follows:

				Vested and -
	Held at	Granted as	Held at	exercisable at
	1 July 2003	remuneration	30 June 2004	30 June 2084
Specified Directors:
Pieter Greeff $-31$ May 2005, 30 cents	400.000.		400,000	400,000
Pieter Greeff - 31 May 2006, 40 cents.	350,000		350,000	350,000
Andrew Drummond - 31 May 2005, 30 cents	400,000		-400,000.	400,000
Andrew Drummond - 31 May 2006, 40 cents	350,000		350,000	350,000
Murray Pollock
Chris Melloy ~
David Macoboy
Specified Executive:
Ian Kerr - 27 April 2007, 36 cents		75,000	75,000	-75,000-
Ian Kerr - 27 April 2007, 42 cents.		75,000	75,000	75,000
Total -	1,500,000	150,000	1,650,000	1,650,000

The movements during the reporting period in the number of options over ordinary shares in the Company, held directly, indirectly or beneficially by each specified Director and specified Executive including their personally-related entities (excluding ECOP plan issued options) are as follows: in sa kalendar ia.

				Vested and
	Held at	Other	Held at	exercisable at
	1 July 2003	changes (i)	30 June 2004	30 June 2084
Specified Directors:
Pieter Greeff	33,333		$-33,333$
Andrew Drummond	958,211	25,331	983,542
Murray Pollock	$-3,747,144$		3,747,144
Chris Melloy	$-23,333$		$-23,333$
Specified Executive:
- Ian Kerr
- Total .	4,762,021	25,331	4,787,352

(i) Other changes in option holdings have been entered into under terms and conditions no more favourable than those the entity would have adopted if dealing at arm's length.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2004

25. DIRECTOR AND EXECUTIVE DISCLOSURES - continued

(f) Shareholdings of specified Directors and specified Executives

The movement during the reporting period in the number of ordinary shares of the Company held directly, indirectly or beneficially, by each specified Director and specified Executive, including their personally related entities is as follows:

	Held at	Other	Held at
	1 July 2003	changes (i)	30 June 2084
Specified Directors:
Pieter Greeff	.100,000	12,500	$-112,500$
Andrew Drummond	2,884,740.		$-49,558$ 2,934,298
Murray Pollock	11,263,023	$-140,062$	11,403,085
Chris Melloy	$-70,000$		70,000
David Macoboy		$\sim 100,000$	100,000
Specified Executive:
lan Kerr
: Total	14,317,763	302,120	14,619,883

(i) Other changes in shareholdings have been entered into under terms and conditions no more favourable than those the entity would have adopted if dealing at arm's length,

(g) Other transactions and balances with specified Directors and Executives

During the year there were no transactions with specified Directors or their personally related entities.

26. NON-DIRECTOR RELATED PARTY DISCLOSURES

Ultimate Parent

Westonia Mines Limited is the ultimate parent company.

Wholly-owned group transactions

The controlled entity has made loans to Westonia Mines Unit Trust during the year. The trust assets and liabilities were vested on 29 June 2004. Westonia Mines Limited as trustee for the Westonia Mines Unit Trust was transferred all assets and liabilities of the Westonia Mines Unit Trust on the vesting date.

27. RELATED PARTY TRANSACTIONS

The Company paid \$20,000 to Lion Manager, the management company responsible for the operation of Lion Selection Group, for the services of Mr Chris Melloy as a Non-executive Director. Mr Melloy is an executive Director of Lion Manager. Lion Selection Group is a substantial shareholder in Westonia Mines Limited.

WESTONIA MINES LIMITED. ANNUAL REPORT 2004

$45$

Payments were made at commercial rates and on an arm's length basis.

DIRECTORS' DECLARATION

the course The Directors of Westoma Mines Limited hereby declare that:

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(a) the financial statements and notes of the Company and the consolidated entity are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company's and the consolidated entity's financial position as at 30 June 2004 and of their performance,

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as represented by the results of its operations and its cash flows, for the year ended on that date; and

(ii) complying with Accounting Standards and the Corporations Regulations; and

(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a Resolution of the Directors made pursuant to Section 295(2) of the Corporations Act 2001.

On behalf of the Directors:

Andrew J Drummond

Director

CIELINIT SHNIN VINCLSHA

ANNUAL REPORT 2004

Dated at Perth on this 22nd day of September 2004

INDEPENDENT AUDIT REPORT

To members of Westwin Mines Limited

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying motes to the financial statements, and the directors' declaration for both Westonia Mines Limited ("the company") and Westonia Mines Limited ("the consolidated entity"), for the year ented 30 June 2004 as set out on pages 10 to 33. The consuldated entity comprises buth the company and the entities it controlled during the year.

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

Audit approach

We conducted an independent audit in order to express an opinion to the members of the consolidated entity. Our andit was conducted in accordance with Australian Anditing Standards in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by fators such as the use of professional judgement, selective usting, the inherent limiations of internal control, and the availability of persuasive rather than. Therefore, an audit cannot guarantee that all material emelusive evidence. misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including constitute with Accounting Standards and other mandatory financial reporting woorcoments in Australia, a view which is consistent with tur understanding of the company's and the consolidated entity's financial position, and of their performanceas represented by the results of their operations and cash flows.

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

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

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

Independence

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

$O|R|D$ FARTNERS a nashridasana APPERSONALITY

Ian K Macpherson 毛皮

Robert W Parker 临流

Craig A Vivian ca

Level &, 47 Colin Street West Peach WA 1685

PO Box 359 West Perth WA 6872

[email protected] www.ordgroup.com.au

Westania Mines Limitad

Andii Opinion

In our opinion, the financial report of Westonia Mines Limited is in accordance with:

(a) the Corporations Act 2001, including:
(i) giving a true and fair view of the company's and consolidated entity's financial nosition as at 30 June 2004 and of their performance for the year cruled on that date; and

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(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2004; and
(b) other mandatory financial reporting requirements in Australia.

ORD PARTNERS

Chartered Accountants

lan Macpherson Purtner

Duted this 22nd day of September, 2004

Perth, WA

ADDITIONAL ASX INFORMATION

Schedule of Mineral Properties

$\mathbb{Q}(\hat{m}(\hat{r})\hat{r}(\hat{m}(\hat{r}))\hat{r}(\hat{r})\hat{r}(\hat{m}_{\hat{m}}(\hat{r}))\hat{r}(\hat{r},\hat{r}))$

Tenement No			Holder/
and type	Project	Area	Applicant	Shares Held	Status	Expiry Date
M77/88	WESTONIA MINE	235.4ha	WML	.100%	Granțed	27/01/08
M77/110.	WESTONIA MINE	`404,3ha⊥	WML	100%	Granted	13/05/08
M77/124	WESTONIA MINE	128.0ha	WML	100%	Granted	20/07/08
L77/18	WESTONIA MINE	6.4ha	WML	100%	Granted	27/01/08
ELA77/1165	BODALLIN	$36$ sb	WML	100%	Pending
P77/3001	WEST WESTONIA	121.4ha	WML	$100\%$ *	Granted	24/03/97
MLA77/827	WEST WESTONIA	121.4ha	WML	$100\%$ *	Pending
E77/898	DICKS REWARD	24sb	BUCKNELL	Option 100%*	Granted	(14/03/09)
E77/516	WESTONIA	46sb	WML	$100\%$ *	Granted	16/11/04
E77/990	WESTONIA	70sb.	WML	$100\%$	Granted	30/10/05
E77/1069.	WESTONIA	13sb.	WML	100%'	Granted	23/10/08
P77/3350	WESTONIA	78.Qha	WML	$100\%$ $^{\ast}$	Granted	23/04/05
P77/3351	WESTONIA	77.0ha	WML	$100\%$ ^*	Granted	23/04/05
E77/965	WESTONIA	165 _b	SOG	$100\%$ *	Granted	23/07/05
E77/572	TILBADGIE	26sb	WML/IMAGE	-65%	Granted	23/05/05
E77/1059 -	ILBADGIE	31sb	IMAGE	100%	Granted	11/02/09
ELA77/1132	HLBADGIE	23sb	IMAGE	100%	Pending

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Key to Tenement Type:

$\mathbb{E}$ . . tek Exploration Licence $\ensuremath{\text{ELA}}$ . $\gamma=-$ Exploration Licence Application $\mathbf{L}_\mathrm{a}$ $^{\circ}$ Miscellaneous Licence $\sim$ Prospecting Licence richte.
Sie in der Stein und Stein und der Stein und der Stein und der Stein und der Stein und der Stein und der Stein
Stein und der Stein und der Stein und der Stein und der Stein und der Stein und der Stein und der Stein $\mathbf{P}^{(\sim)}$ $\mathbf{M}$ . $\Box$ $\Box$ $\blacksquare$

: Mining Licence . $\text{MLA}$ $\ldots$ $\pm$ $\Box$ .
Mining Lease Application "Subject to royalties and/or other encambrances

Key to Parties:

$\text{WML}_{\mathbb{Z}_2}$ $\mathbb{Z}_2$ .

$\mbox{Buckncl}(-)$

$\text{SOG}_{\mathbb{Z}}(\mathbb{Z}) = 0$

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Westonia Mines Limited group

Mr Walter Bucknell

WESTONIA MINES LIMITED, ANUAL REPORT 2004

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ADDITIONAL ASX INFORMATION

Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report. The information was prepared based on share registry information processed up to 15 September 2004.

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	Fully Paid Ordinary Shares	Listed Options
Number of holders
Holders of less than a marketable parcel.
Percentage holdings by twenty largest holders	89.01%	92.14%

Number of holders in the following distribution categories:

	$\cdots$
	Fully Paid Ordinary Shares	Listed Options
$^{\circ}1,000$ .
$1,001$ $5.000 -$	137
$5,001 -$ 10,000	136
$(10,001 - 100,000)$
$[100, 001]$ and over
	557	248
		The Same

Twenty Largest Shareholders -- Fully Paid Shares

WESTONIA MINES LIMITED. ANNUAL REPORT 2004

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The names of the twenty largest shareholders are as follows:

Shareholder	Number of Shares	% 36.64
Lion Selection Group Ltd	38,546,500
Goldrich Holdings Pty Ltd	10,006,283	$-9.51$
Mrs Shay Margaret Drummond	.8,000,033	$-7.61$
Readço Management Pty Ltd	5,151,532	4.90
Westpac Custodian Nominees Limited	5,130,659	4.88
Pacific Inland Investment Pty Ltd	4,848,501	4.61
ANZ Nominees Limited	4,788,620	4.55
Zero Nominees Pty Ltd	4,000,000	3.80
J P Morgan Nominees Australia Limited	.3,246,912	3.09
Andrew Drummond & Associates Pty Ltd	2,814,640	2.68
Mr John Edmond Read .	1,938,235	$-1.84$
Jayleaf Holdings Pty Ltd	-1,296,349	1.23
Hooper Bailie Industries Pty Ltd	1,000,000	0.95
Wuudee Australia Pty Ltd	635,500	0.60
R. Q Stone Pty Ltd.	550,000	0.52
Auselect Limited	500,000	.0.48
Inmont Pty Ltd	412,500	0.39
Mr John Edmund Read	322,745	0.31
Wuudee Australia Pty Linnited	221,500	0.21
Mr Wiliam Caldow & Mrs Jeanette Caldow	218,765	0.21
	93,629,274	89.01

ADDITIONAL ASX INFORMATION

Twenty Largest Optionholders - Listed Option The names of the twenty largest optionholders are as follows:

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Shareholder	Listed Number of Options	%
Lion Selection Group Ltd	11,515,499	41.95
Goldrich Holdings Pty Ltd	$-3,333,344$	12,14
Mrs Shay Margaret Drummond	2,666,677	$-9.72$
Readco Management Pty Ltd	1,717,177	6.26
Pacific Inland Investment Pty Ltd	1,616,167	5,89
Andrew Drummond & Associates Pty Ltd.	938,213	3.42
Mr John Edmond Read	812,745	2.96
J P Morgan Nominees Australia Limited	416,666	1.52
Mint Asset Management Pty Ltd	336,999	1.23
Jayleaf Holdings Pty Ltd -	310,350	1.13
Mr John Edmund Read	274,248	$-1.00$
Westpac Custodian Nominees Limited	206.866	0.75
Yandal Investments Pty Ltd -	200,000	$-0.73$
Clairveaux Pty Ltd .	200,000	0.73
Bellmar Holdings Pty Ltd	186,000	0.68
Irrewarra Investments Pty Ltd	139,450	0.51
Immont Pty Ltd	133.333	0.49
Jayleaf Holdings Pty Ltd <pollock a="" c<="" investment="" td="">	103,450	0.38	103,450	0.38
Mr John Finnie Dodds	-97.382	0.35
Mr Kenneth Sheard	83,332	0.30
	25,287,898	92.14

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Substantial Shareholders

In accordance with Section 709(1) of the Corporations Act 2001, the Company had been notified of the following substantial shareholders: ....................................

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- Shareholder	Number of Shares
Lion Selection Group $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$ . $\frac{1}{2}$		na s
$10,006,283$ , we consider the constraint of $10,006,283$ , we consider the $9,54$ Goldrich Holdings Pty Ltd.
"Mrs Shav Margaret Drummond	8 AND 633

VOTING RIGHTS

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Ordinary Shares

On a show of hands every member present in person or by proxy or attorney or being a corporation by its authorised representative who is present in person or by proxy, shall have one vote for every fully paid ordinary share of which he is a holder.

Unlisted Options

During the year ended 30 June 2004, 210,000 unlisted options were issued. During the same period no options were converted into ordinary fully paid shares.

Listed Options

During the year ended 30 June 2004, no listed options were issued. During the same period 327,567 options were converted into ordinary fully paid shares.

Options have no voting rights until such options are exercised as fully paid ordinary shares.

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MARKET

THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK.

WESTONIA MINES LIMITED

AI assistant

EVOLUTION MINING LIMITED — Regulatory Filings 2004

64885_rns_2004-10-21_5bad1d7a-26d2-451f-8ec0-1ce6f1bb19a2.pdf

WESTONIA MINES LIMITED ANNUAL REPORT 2004

CONTENTS

DIRECTORS

COMPANY SECRETARY

SENIOR MANAGEMENT

REGISTERED & PRINCIPAL OFFICE

SHARE REGISTRY

AUDITORS

STOCK EXCHANGE LISTING

WEBSITE

CHAIRMAN'S REPORT

THE MISSION

MILESTONES

RESOURCES AND RESERVES

2003

FEBRUARY 2004

BFS, MARCH 2004

JULY 2004

AUGUST 2004

DEVELOPMENT REPORT

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CAPITAL COST ESTIMATE SUMMARY (USING PRE-TENDER RECEIPT PRICES)

GOING UNDERGROUND

POTENTIAL PROJECT ENHANCEMENTS

INFERRED RESOURCE CONVERSION

PIT EXPANSIONS

NEW DISCOVERIES

GREENFINCH DRILLING RESULTS

BASE METAL & REGIONAL EXPLORATION

NICKEL AND OTHER BASE METALS

GOLD

SAFETY, ENVIRONMENTAL & SOCIAL ASPECTS

$\begin{array}{ll} \textbf{FINANCIAL} & \textbf{REDOR} \textbf{T} \ \textbf{for the year {\tiny FERRED 30 JUNE 2004}} \end{array}$

DIRECTORS' REPORT

DIRECTORS

Pieter W Greeff (59) $-$ Non-Executive Chairman

Andrew J Drummond (53) - Managing Director

Mr Drummond was appointed as Director on 8 October 1998. Murray G Pollock (56) - Non-Executive Director.

Mr Pollock was appointed as Director on 21 October 2000.

David M Macoboy (55) - Non-Executive Director

PRINCIPAL ACTIVITIES

REVIEW OF OPERATIONS

Westonia Gold Project

Westonia Deeps Initiative.

Regional Exploration

DIRECTORS' REPORT

Financial

CHANGES TO STATE OF AFFAIRS

RESULT OF OPERATIONS

LIKELY DEVELOPMENTS

DIVIDENDS

ENVIRONMENTAL REGULATION

AUDIT COMMITTEE

EVENTS SUBSEQUENT TO BALANCE DATE

INDEMNIFICATION OF OFFICERS AND AUDITORS

OPTIONS

DIRECTORS' REPORT

DIRECTORS' INTERESTS

DIRECTORS' MEETINGS.

DIRECTORS' AND EXECUTIVES' REMUNERATION

Options Granted to Directors and Senior Executives

Andrew J Drummond

CORPORATE GOVERNANCE

INTRODUCTION

EXPLANATIONS FOR DEPARTURES FROM BEST PRACTICE RECOMMENDATIONS

CORPORATE GOVERNANCE

EXPLANATIONS FOR DEPARTURES FROM BEST PRACTICE RECOMMENDATIONS - continued

CORPORATE GOVERNANCE

IDENTIFICATION OF INDEPENDENT DIRECTORS

STATEMENT CONCERNING AVAILABILITY OF INDEPENDENT PROFESSIONAL ADVICE

NAMES OF NOMINATION COMMITTEE MEMBERS AND THEIR ATTENDANCE AT COMMITTEE MEETINGS

NAMES AND QUALIFICATIONS OF AUDIT COMMITTEE MEMBERS

NUMBER OF AUDIT COMMITTEE MEETINGS AND ATTENDEES.

CONFIRMATION WHETHER PERFORMANCE EVALUATION OF THE BOARD AND ITS MEMBERS HAVE TAKEN PLACE AND HOW CONDUCTED.

COMPANY'S REMUNERATION POLICIES

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2004

STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2004 m m v 60 %

EVOLUTION MINING LIMITED Regulatory Filings 2004