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ASX RELEASE

For Immediate Release 15 October 2010

2010 Annual Report, Notice of Annual General Meeting and Proxy Form

Attached are electronic copies of the Monax Mining Limited 2010 Annual Report, Notice of Annual General Meeting and Proxy Form which are being mailed to shareholders today.

Yours faithfully

Virginia Suttell Company Secretary

Annual Report 2010

MonAx Mining LiMited

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2 2010 Monax Mining Limited Annual Report
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2010 Monax Mining Limited Annual Report

Report Contents

Chairman’s Report	4
Managing Director’s Report	5
Tenement Locations	6
Tenement Status	7
Review of Operations	9
Punt Hill	12
Melton	14
Waddikee	16
Cape York	20
Percyvale	24
Glossary of Terms	28
Corporate Governance Statement	32
Directors’ Report	36
Statement of Comprehensive Income	40
Statement of Financial Income	52
Statement of Changes in Equity	53
Statement of Cash Flows	54
Notes to the Financial Statements	55
Directors’ Declaration	56
Independent Auditor’s Report	90
Shareholder Information	91
Corporate Directory	94

Annual general Meeting

The 2010 Annual General Meeting will be held at Business SA, 136 Greenhill Road Unley, South Australia on 17th November 2010 commencing at 11:00am.

A formal notice is mailed to shareholders with the distribution of this report.

ABN 96 110 336 733

2010 Monax Mining Limited Annual Report

Chairman’s Report

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Dear Fellow Shareholders

I present to you the sixth annual report of Monax Mining Limited (‘Monax’) for the 2009-10 financial year. I am pleased to present shareholders with the new strategic focus, which demonstrates that Monax has a clear vision and is working towards creating more value for shareholders.

The Monax Board has made several important decisions during the year to reduce the Company’s exposure to financial risks whilst maintaining exploration expenditure on key projects. Monax has cut back its exploration portfolio in South Australia to the key Punt Hill copper-gold, Melton copper-gold and Waddikee manganese-iron projects. Monax has also chosen to bring in strategic partners to assist with funding the Punt Hill and Waddikee projects to reduce the Company’s exposure to uncertain capital markets.

The Australian minerals sector has suffered from a softening in mining investment with a resultant decrease in mineral exploration. A good indication of the weakness of the capital markets for junior exploration companies has been the dramatic reduction in new public listings over the last 18 months. The recent uncertainty created by the proposed Resources Super Profits Tax and its successor the Mineral Resources Rent Tax also negatively impacted upon the industry and as a final resolution of this issue has not yet been made, the market has not improved dramatically.

The signing of a major joint venture with Antofagasta Minerals S.A. for the Company’s flagship Punt Hill project is a major coup. To date, Monax has spent ~$5 million on exploration on this project, with results demonstrating the potential for the area to contain a significant copper-gold deposit similar to Carrapateena.

Antofagasta is a large Chilean-based copper mining company with interests also in transport and water distribution. During 2009, Antofagasta produced 442,500 tonnes of copper concentrate with production expected to increase to 700,000 tonnes in 2011. Antofagasta has embarked on a strategy of corporate growth via increasing its exploration portfolio worldwide. The joint venture with Monax on the Punt Hill project not only highlights the prospectivity of the project, but also the quality of the exploration data generated by Monax. Your Board is delighted to have a company of the quality of Antofagasta to assist with funding exploration and potential development of the Punt Hill project.

Monax also has a strategic partner on the Waddikee manganese and iron project, OM (Manganese) Ltd, a wholly owned subsidiary of OM Holdings Limited (ASX:OMH). OMH is a Singapore based metals trading and manganese mining company which owns and operates the Bootu Creek mine in the Northern Territory. OMH funded exploration on the Waddikee project has comprised mapping, sampling and drilling. The drilling program has focused on the Jamieson Tank Prospect, which represents only a minor part of the prospective stratigraphy within the project area. The drilling program reported multiple horizons of manganese grading >14% manganese as well as zones of significant iron mineralisation.

The Melton copper-gold project located on Yorke Peninsula in South Australia is a 50:50 joint venture with Marmota Energy Limited (ASX:MEU). Melton is located along the northern extension of the Pine Point Fault Zone which hosts the Rex Minerals Limited (ASX:RXM) Hillside copper-gold discovery. Results from the maiden drilling program at Melton were similar in tenure to the initial drill results from Hillside and further geophysical work has provided better data for planned drilling in early 2011.

Monax’s decision to explore for bauxite in northern Queensland is a significant change in commodity and geographical focus, but initial exploration is returning promising results and the Board welcomes the push into a perceived growth commodity. Monax believes Cape York is one of the best addresses for bauxite and the opportunity to obtain a tenement position via option agreements also provide Monax with a relatively low cost and low risk entry into the bauxite space.

Monax continues to be exposed to uranium via its strategic holding in Marmota Energy Limited. Marmota has concentrated its exploration efforts at the highly promising Junction Dam project, located 18 kilometres east of the Honeymoon Uranium Mine.

I thank the small but dedicated staff of Monax and Groundhog Services Pty Ltd (our joint services company with Marmota) and my fellow Directors, who provided commitment to the company.

Finally I’d like to thank all of our shareholders for their continuing support and your Board will be working hard to create shareholder value in the upcoming year.

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Robert M Kennedy CHAIRMAN

2010 Monax Mining Limited Annual Report

Managing director’s Report

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In my first twelve months as Managing Director, I have taken the Company through a change in strategic exploration focus. Whilst maintaining the focus on the key South Australian projects including Punt Hill, Melton and Waddikee, new projects in northern Queensland have been added to the exploration portfolio.

A review of Monax’s extensive tenement position in South Australia resulted in the development of a clearer focus for the Company. Thus, a number of tenements, including Dingo Hill, Kolendo and the western Eyre Peninsula greenstone-focused tenements have been relinquished as part of this review. Similarly, the Kangaroo Island project has potential for further zinc-lead-silver resources, and Monax will divest this project by either joint venture or outright sale.

During 2009-2010, Monax attracted two significant joint venture partners to drive exploration on two key South Australian projects. In September 2010, the Company announced the exciting joint venture with Chilean based copper producer Antofagasta PLC for Punt Hill. Antofagasta is a major copper producer and Punt Hill represents their first significant investment into Australia. Punt Hill is located near Carrapateena, the last major copper discovery on the northern Gawler Craton, and the strategic partnership with Antofagasta is seen as a major endorsement in the potential of the Punt Hill project for a significant discovery.

The recognition that the drilling by Monax has outlined a significant copper skarn system at Punt Hill greatly interested Antofagasta (previous drilling at the Groundhog Prospect reported 159m @ 0.47% Cu, 5.3g/t Ag, 0.12g/t Au, 0.48% Zn and 0.12% Pb in drillhole GHDD6). The recent addition of the Yeltacowie tenement, immediately west of Carrapateena, has increased Monax’s tenement to approximately 1200 square kilometres within this highly prospective copper-gold district.

During the year, Monax signed a farmin agreement with manganese producer OM (Manganese) Ltd, a wholly owned subsidiary of OM Holdings Limited (ASX:OMH) for manganese and iron on the Waddikee project. The Waddikee project is located on central Eyre Peninsula and drilling during the year reported good intersections of manganese and iron.

The maiden drilling program conducted at the Melton copper-gold project in early-mid 2010 intersected encouraging copper values. The Melton project is a 50:50 joint venture with Marmota Energy Limited (ASX:MEU) with Marmota managing the project. Monax considers the initial results similar to the initial drilling results from Rex Minerals’ Hillside project. Further drilling on Melton is planned for early 2011, after assessment of the recently acquired detailed magnetic data over the Miranda anomaly.

Monax commenced exploration on the Cape York bauxite project in late August 2010. The Company believes that this project has significant potential in a promising growth commodity, with China expected to increase its demand for bauxite over the next decade. Cape York is a recognised Australian bauxite address and initial exploration has outlined areas of good quality bauxite. I am very excited about this project which has the potential to build a strong position for Monax in the future.

The 2009/2010 financial year and beyond has seen Monax secure its exploration portfolio and the strategic joint ventures has allowed Monax to preserve its cash position whilst continuing with exploration on high priority projects including Punt Hill and Waddikee. Monax is currently contributing 50% to the highly prospective Melton project and funding 100% of the bauxite exploration. This strategy greatly increases the Company’s exploration profile whilst reducing its risk profile.

I would like to take this opportunity to thank the staff and Board of Monax Mining Limited for their continuing efforts toward the next significant discovery. I also thank Shareholders for their support and I look forward to the Company’s future exploration programs.

Gary Ferris MANAGING DIRECTOR

2010 Monax Mining Limited Annual Report

tenement Locations

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2010 Monax Mining Limited Annual Report

tenement Status

as at 24 August 2010

South Australia

South Australia as at 24 August 2010
Project	Tenement	Status	Area (km2)	Area Type	Details
Ambrosia	EL 4510	75% Monax; 25% Marmosa P/L	854	km2	JV with Marmota Energy
Parndana	ELA 105/10	Subsequent application	100	km2
Eureka Bluff	EL 3458	Granted	312	km2	JV with Marmota Energy
Waddikee	ELA 74/10	Subsequent application	1004	km2
Punt Hill	EL 3457	Granted	887	km2
Mulgathing	EL 3684	Granted	258	km2	JV with Marmota Energy
Kimono Tank	EL 3685	Granted	234	km2	JV with Marmota Energy
Coonarie	EL 3907	Granted	628	km2	JV with Marmota Energy
Melton	EL 3911	Granted	28	km2	JV with Marmota Energy
North Melton	EL 4000	Granted	137	km2	JV with Marmota Energy
Western River	EL 4154	Granted	40	km2
Mt Boothby North	EL 4413	Granted	145	km2
Bomb Alley	EL 4458	Granted	75	km2
Western River Cove	EL 4530	Granted	69	km2
Yeltacowie	EL 4548	Granted	390	km2
Minburra Plain	ELA 184/10	Application	463	km2

Queensland

Queensland
Project	Tenement	Status	Area (km2)	Area Type	Details
Pretender Creek C	EPM 16963	Granted	98	sub blocks	Option agreement Delminco
Pretender Creek D	EPM 16964	Granted	50	sub blocks	Option agreement Delminco
Kendall River	EPM 17005	Granted	100	sub blocks	Option agreement Delminco
Archer River	EPM 17006	Granted	100	sub blocks	Option agreement Delminco
Pretender Creek E	EPM 17715	Granted	96	sub blocks	Option agreement Delminco
Napranum	EPM 17835	Application	21	sub blocks	Option agreement Callabonna
Aurukun North West	EPM 17836	Application	60	sub blocks	Option agreement Callabonna
Mission River	EPM 17843	Application	57	sub blocks	Option agreement Callabonna
Pretender Creek	EPM 18304	Application	76	sub blocks
Holroyd River South	EPM 18403	Application	94	sub blocks
Holroyd River North	EPM 18404	Application	95	sub blocks
Mt Hogan	EPM 18610	Competing application	64	sub blocks
Gilberton	EPM 18617	Competing application	40	sub blocks
Kenilworth	EPM 18741	Application	99	sub blocks
Vickars	ML 30220	Application	45	hectares
Four Gees #1	ML 30221	Application	48	hectares
Four Gees #2	ML 30222	Application	46	hectares
Comstock	ML 30223	Application	46	hectares
Mt Hogan #2	ML 30224	Application	45	hectares
Mt Hogan #1	ML 30225	Application	47	hectares
Union	ML 3366	Granted	23	hectares	Option agreement Allyn Zabel
Percy West	ML 30199	Granted	32	hectares	Option agreement Allyn Zabel
Josephine	ML 30139	Granted	6	hectares	Option agreement Allyn Zabel
Homeward Bound	ML 30103	Granted	2	hectares	Option agreement Allyn Zabel

2010 Monax Mining Limited Annual Report

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2010 Monax Mining Limited Annual Report

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2010 Monax Mining Limited Annual Report

operations Report

Figure 1 Location of Monax’s key projects

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during the current year, Monax Mining Limited (Monax) has undertaken a strategic review of its tenement portfolio and developed a new and bolder exploration strategy that will place the Company in a strong position for the future.

Monax has reduced its tenement position in South Australia to concentrate on the iron oxide copper-gold projects at Punt Hill and Melton and the manganese and iron project at Waddikee. Monax has also changed its exploration focus to include gold projects at Percyvale in northern Queensland and the important commodity, bauxite in the well known Cape York bauxite region.

Exploration highlights for the year include encouraging manganese and iron intersections from drilling at Waddikee and copper mineralisation during the maiden drilling program at the Melton project. Figure 1 shows the location of Monax’s key projects.

2010 Monax Mining Limited Annual Report

operations Report

Punt Hill Copper-gold Project

Infill gravity survey completed, defining two new targets.
Discrete modelling of gravity data on the Gopher target indicates basement is between 250-450m deep.
New tenement granted, contiguous with Punt Hill, (EL 4548 – Yeltacowie) and located 15km west of Carrapateena.
Option agreement signed in September 2010 with Antofagasta Minerals S.A., a wholly owned subsidiary of Antofagasta PLC.

Melton Copper-gold Project

Joint venture agreement signed with Marmota Energy Limited for iron-oxide copper-gold (IOCG) exploration on the Melton project.
Detailed aeromagnetic and ground gravity surveys completed, outlining five targets.
Maiden drilling program completed comprising seven holes for 3400m. Best results were reported from the Miranda anomaly where 21m @ 0.11% Cu was intersected in hole MIRDD01 (451-472m).

Waddikee Manganese/iron Project

Farmin agreement signed with OM (Manganese) Limited, a wholly owned subsidiary of OM Holdings Limited (ASX:OMH) for manganese and iron.
Detailed auger soil sampling at Jamieson Tank Prospect provided encouraging results, with the highest assay returning 12% Mn.
RC and aircore drilling confirms the presence of at least 5 separate horizons with best intersections of 10m @ 17.5% Mn (including 2m @ 26.7% Mn), 4m @ 17.4% Mn, 3m @ 21.2% Mn and 3m @ 19.8% Mn.
Highly encouraging iron results with up to 23m @ 32% Fe (including 14m @ 35.1% Fe), 7m @ 31.3% Fe and 10m @ 28% Fe reported from drilling program.
Regional auger sampling program undertaken to test regional manganese targets.

Cape York Bauxite Project

Option deal signed with Delminco Pty Ltd for five tenements in the Cape York bauxite province, covering approximately 1358km[2] .
Option deal signed with Callabonna Uranium Ltd for three tenements located near existing bauxite Rio Tinto and Chalco mines near Weipa and Aurukun, covering 385 km[2] .
Three additional tenements applied for, covering approximately 644km[2] .

Percyvale gold Project

Option deal signed over four granted mining leases in the Percyvale area within the Etheridge Goldfield, northern Queensland.
Applications for six gold mining leases covering known areas of gold mineralisation.

The information in the Annual Report that relates to Exploration results, Mineral Resources, Ore Reserves or targets is based on information compiled by Mr G M Ferris, who is a Member of the Australian Institute of Mining and Metallurgy. Mr Ferris is employed full time by the Company as Managing Director and, has a minimum of five years relevant experience in the style of mineralisation and type of deposit under consideration and qualifies as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Ferris consents to the inclusion of the information in this report in the form and context in which it appears.

2010 Monax Mining Limited Annual Report

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2010 Monax Mining Limited Annual Report

Punt Hill Copper-gold Project

Punt Hill is located approximately 25km south of Carrapateena where drilling by Teck Australia Pty Ltd has outlined the Carrapateena copper-gold deposit. Punt Hill is located within the iron oxide copper-gold (IOCG) province of the eastern Gawler Craton, which also contains the Olympic Dam and Prominent Hill deposits and the newly discovered Hillside Prospect.

Previous drilling by Monax has defined a large mineralised system at the Groundhog Prospect with the best results including:

159m @ 0.47% Cu, 0.12 g/t Au, 5.3 g/t Ag, 0.48% Zn & 0.12% Pb (from 846m); including 17m @ 1.1% Cu, 8.5 g/t Ag & 1.2% Zn from 853m – drill hole GHDD6
122m @ 0.47% Cu, 0.1 g/t Au, 6.6 g/t Ag & 0.38% Zn from 840m; including 15m @ 0.96% Cu, 0.13 g/t Au, 10.5 g/t Ag & 0.52% Zn from 840m – drill hole GHDD4
126m @ 0.4% Cu from 837m; including 14m @ 0.7% Cu from 846m, 14m @ 1.0% Cu, 0.25 g/t Au & 4.5 g/t Ag from 940m – drill hole GHDD1

During the previous year, Monax completed a detailed infill gravity survey on a 250m x 250m grid, comprising of 1142 stations. From the preliminary data, two prominent gravity anomalies have been identified and named the ‘Gopher’ and ‘Otcheck’ Prospects (Figure 2).

The Gopher anomaly is located approximately 15km northwest of the Groundhog Prospect, representing a discrete gravity target that differs from the prominent gravity ridge seen within the Groundhog area (Figure 2). The Gopher anomaly is approximately 1.5km in length and drilling at the Flickertail target to the north has demonstrated the basement rocks are shallower within this part of the Punt Hill tenement. Modelling of the gravity data has shown that the interpreted depth to the gravity target is between 240-450m below the surface.

The Otcheck anomaly is located approximately 6km northwest of the Prairie Dog Prospect. Hole PDDD2 reported 152m @ 0.32% zinc from 856m including a 1m intersection of 7.58% copper and 10 g/t silver at 880m.

The two new targets at Punt Hill are considered to be highly prospective for shallower IOCG style mineralisation.

Monax has increased its tenement position in this highly prospective part of the Gawler Craton with the granting of EL 4548 (Yeltacowie). EL 4548 is contiguous with Punt Hill to the north and west of Carrapateena (Figure 2). Only two basement drill holes are reported from the new tenement and both holes show the basement is approximately 368-375m below the surface, with both holes intersecting felsic volcanic, interpreted to represent the Gawler Range Volcanics. At the Groundhog Prospect, mineralisation is associated with the Gawler Range Volcanics and the model for IOCG style mineralisation on the Gawler Craton is associated with the Gawler Range Volcanic event at approximately 1590 million years ago.

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Figure 2 Location of Punt Hill project showing location of new EL 4548, new gravity targets on EL 3457 and existing Monax drill holes on EL 3457 (background regional gravity data)

In September 2010, Monax announced it had signed an option agreement over the Punt Hill copper-gold project tenements with a major international copper mining company, Antofagasta PLC (“Antofagasta”), through its wholly-owned subsidiary Antofagasta Minerals S.A.

Antofagasta is a Chilean based copper mining company listed on the London Stock Exchange which owns and operates three copper mines in Chile. Antofagasta produced 442,500 tonnes of copper in 2009 and is forecasting an increase in production to 700,000 tonnes in 2011, ranking it as one of the top 10 copper producers in the world. Antofagasta is looking to grow its portfolio and currently has exploration and evaluation programs in North America, Latin America, Africa and Asia. The Punt Hill farm-in agreement represents Antofagasta’s first investment within Australia.

Under the Agreement, Antofagasta can earn a 51% interest in the Punt Hill project by expending US$4 million over 4 years. Once Antofagasta has obtained this 51% interest, Monax has the ability to remain at 49% by co-funding exploration or development costs, or can elect to have its interest diluted. Antofagasta can earn a further 19% equity in the project by expending a further US$5 million on exploration and development of the project tenements. If a development decision is made, Antofagasta will pay Monax a success fee of US$10 million.

2010 Monax Mining Limited Annual Report

2010 Monax Mining Limited Annual Report

Melton Copper-gold Project

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Figure 3 Location of the Melton project.

The Melton project is located on the northern Yorke Peninsula and contains a 15km section of the highly prospective Pine Point Fault Zone (PPFZ – see Figure 3). Drilling at the Rex Minerals’ (ASX:RXM), Hillside deposit has highlighted the correlation between magnetite and copper mineralisation. Rex Minerals recently announced an inferred resource of 100 million tonnes @ 0.7% copper and 0.2 g/t gold for a total of 700,000 tonnes of contained copper metal and 650,000 ounces of gold. Initial exploration under the Monax/Marmota joint venture comprised a regional high resolution aeromagnetic survey, that defined five potential magnetic anomalies within the project area. The three easternmost anomalies were considered as high priority targets - Miranda, North White Cliffs and Melton (Figure 4). Detailed gravity surveys were completed over the three priority magnetic targets to assist with defining drilling targets.

The maiden drilling program, conducted during February - May 2010, comprised seven holes for a total of 3378.4 metres with four holes completed on the Miranda target, two holes at North White Cliffs and one hole on the Melton target. Basement rocks were intersected at ~200m depth on the Miranda target, whilst the basement was deeper at the North White Cliffs and Melton targets.

Drill holes MIRDD01 and MIRDD04 at the Miranda target intersected a zone of low-grade copper mineralisation associated with an amphibole-magnetite-pyrite-chalcopyrite alteration system. The alteration system is interpreted to be related to the intrusion of an extensive mafic body into the metasedimentary host rocks. The best intersections include:

21m @ 0.11% Cu (hole MIRDD01 from 451m)
4m @ 0.15% Cu (hole MIRDD04 from 432m)
4m @ 0.12% Cu (hole MIRDD04 from 463m)
3m @ 0.26% Cu (hole MIRDD04 from 487m)

The association of the observed copper mineralisation to the gabbro intrusion is similar to Hillside where Rex Minerals report that the gabbro is a potential heat/fluid source. Only a small section of the Miranda target was tested by the drilling, with the Miranda magnetic feature being up to 2km in length (Figure 5). Future exploration will comprise downhole EM surveys on MIRDD01 and MIRDD04 drill holes at Miranda in the search for zones of sulphide mineralisation, and a detailed heli-mag survey over the Miranda anomaly to better define the structure and zones of higher magnetic intensity which may represent zones of mineralisation.

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Figure 4 Reprocessed magnetic data showing location of three high priority magnetic targets on the Melton Project.

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Figure 5 Location of drill holes on the Miranda anomaly.

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2010 Monax Mining Limited Annual Report

Waddikee Manganese Project

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Figure 6 Location of the Waddikee project. kilometres
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Waddikee is located on central Eyre Peninsula, approximately 10km from the township of Kimba (Figure 6) and contains potentially significant resources of manganese. The Eyre Peninsula hosts significant iron deposits in the Middleback Ranges, including Iron Duke, currently mined by OneSteel, as well as emerging iron deposits at Wilgerup (Centrex Metals), Warramboo (Iron Road), Wilcherry Hill (Ironclad) and Gum Flat (Lincoln Minerals).

Manganese is a non-substitutable component of the steel making process and it acts as the glue to harden iron, to make it less brittle and remove impurities. Demand for manganese supplies remains high, in line with projected iron ore demand for steel production.

In August 2009, Monax announced it had signed a farmin agreement with OM (Manganese) Limited (OMM), a wholly owned subsidiary of OM Holdings Limited (ASX:OMH) for the exploration of manganese and iron on Monax’s Waddikee tenement (EL 3357).

Under the terms set out in the agreement, OMM has the right to earn a 60% interest in all ferrous minerals (manganese and iron ore) by funding expenditure to the value of $2 million over a 4 year period. OMM must expend a minimum of $250,000 in the first year before the right to withdraw. During the farm-in period, Monax will remain exploration operator according to the program and budget mutually agreed between both parties.

Monax retains the right to all non-ferrous minerals within the tenement, giving OMM the first right of refusal.

Upon OMM earning its farm-in interest, OMM and Monax will enter into a joint venture agreement (JVA). Under the terms set out in the JVA, Monax may elect to contribute in proportion to its 40% interest, or transfer a further 20% interest to OMM by OMM funding a further $2 million of expenditure. Once OMM makes a decision to mine, Monax may elect to contribute in proportion to its remaining participating interest, or relinquish its interest and withdraw from the JVA in exchange for a net revenue free on board (FOB) royalty at a rate of 1% for each 10% of participating interest retained at the time of OMM’s decision to mine.

Initial exploration as part of the OMM farmin agreement commenced in late 2009 and comprised detailed geological mapping, ground magnetic surveying, coupled with an orientation geochemical sampling program at the Jamieson Tank Prospect (Figure 7). This detailed exploration gave greater confidence in the understanding and extent of manganese mineralisation, resulting in a targeted RC drilling program undertaken during May 2010.

2010 Monax Mining Limited Annual Report

Waddikee Manganese Project

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Figure 7 Location of Monax drilling at Jamieson Tank prospect, Waddikee project.

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Plate 1 Drill hole samples from JTRC069 which intersected 10m @ 17.5% Mn (2636m) including 2m @ 26.7% Mn (26-28m).

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Plate 2 Drill samples from JTRC054 which reported 23m @ 32% Fe (2-25m) and 8m @ 25.9% Fe (31-39m).

2010 Monax Mining Limited Annual Report

Waddikee Manganese Project

Detailed geological mapping at Jamieson Tank revealed five separate manganese horizons, including two new horizons not previously distinguished. The manganese appears to have a strong stratigraphic relationship with ironstone and chert, which is demonstrated in the high resolution ground magnetic data. This information gives Monax further assurance that the manganese horizons continue along strike under cover, extending the zone of interest at the Jamieson Tank Prospect.

An orientation geochemical sampling program was undertaken to investigate the best sampling media for detecting manganese mineralisation under cover. Results revealed that bulk soil samples showed the best correlation to rock chip sampling in areas of known manganese mineralisation, and will be an important tool in ongoing exploration for manganese under sand cover. Rock chip samples returned values of up to 46% Mn with low deleterious elements.

A significant area of the Jamieson Tank Prospect is covered by a veneer of sand, blanketing the older basement rocks, which contain the manganese mineralisation. Fifteen auger soil sample traverses were completed along strike from the identified manganese horizons, aimed at evaluating their continuity under cover.

In the fifteen traverses, 685 auger soil samples were taken at ten metre intervals along each traverse, with a number of samples yielding manganese results well above background levels. The highest assay returned was 12% Mn. In places, the penetration depth of this sampling technique was limited, primarily due to hard calcrete and clay in the soil profile, however the results obtained give a higher degree of confidence that the manganese is continuous along strike under cover.

Following on from the auger sampling program, an RC/air core drilling program comprising 83 holes totalling 4565 metres was completed in May 2010. A total of 905 samples were analysed. The highest individual 1m sample for manganese was 31.13% Mn (hole JTRC117, 9-10m) and for iron was 49.43% Fe (hole JTRC054 18-19m).

Manganese Results

The recent drilling results complement the initial drilling results which included 2m @ 34% Mn in drill hole JTRC034. From earlier beneficiation testing undertaken in 2008, Monax believes that beneficiation is likely to significantly upgrade the manganese with the removal of iron and silica. Monax has previously reported beneficiation success at Waddikee with two samples reporting significant increases in grade with beneficiation:

JTRC034 (14-21m ) – initial Mn grade of 18.7% Mn was upgraded to 34.7% Mn (88.2% recovery); and
JTRC036 (8-13m) – initial grade of 20.3% Mn was upgraded to 42.5% Mn (80.96% recovery)

Figure 7 shows the location of the 2010 drilling program at Jamieson Tank Prospect highlighting holes reporting >14% manganese.

iron Results

The drilling program was targeting manganese reported from the recent auger and geological mapping programs, not the iron-rich horizons observed within the regional magnetic data. As part of the drilling program however, selected intervals were assayed for their iron content. The best results include:

23m @ 32.0% Fe (JTRC054 2-25m) and 8m @ 25.9% Fe (JTRC054 31–39m–see Plate 2)
6m @ 37.2% Fe (JTRC118 17-23m)
10m @ 34.2% Fe (JTRC053 3-13m)
7m @ 31.3% Fe (JTRC067 11-18m)
9m @ 30.4% Fe (JTRC079 26-35m)
8m @ 29.5% Fe (JTRC105 15-23m)
10m @ 28.0% Fe (JTRC065 22-32m)
5m @ 27.3% Fe (JTRC053 19-24m)
5m @ 28.1% Fe (JTRC068 38-43m)

Previous drilling by Monax in 2008 at the Pollinga Prospect reported 44m @ 34.6% Fe (PRC0001).

The drilling program was undertaken on traverses 200m apart, with a view to testing the highly encouraging auger sampling results.

Manganese was intersected in a significant number of holes with the best intersections being:

10m @ 17.5% Mn (JTRC069 26-36m) including
2m @ 26.7% Mn (26-28m – see Plate 1)
7m @ 17.1% Mn (JTRC121 22-29m)
5m @ 19.2% Mn (JTRC119 14-19m)
4m @ 17.4% Mn (JTRC053 15-19m)
3m @ 19.8% Mn (JTRC057 18-21m)
3m @ 17.7% Mn (JTRC057 30-33m)
3m @ 21.2% Mn (JTRC067 28-31m)
3m @ 18.2% Mn (JTRC089 22-25m)
3m @ 18.3% Mn (JTRC095 33-35m)

2010 Monax Mining Limited Annual Report

HeAdeR

Cape York Bauxite Project

2010 Monax Mining Limited Annual Report

Cape York Bauxite Project

Bauxite is a weathering product formed near the landsurface in the Cape York province and is the primary source material for the production of aluminium metal. It is formed by the chemical weathering of a variety of rock types including volcanics, granites and quartz rich sedimentary rocks, usually within a tropical environment. Bauxite is a naturally occurring material from which alumina (Al2O3) and aluminium metal are produced.

Australia is currently a major producer of bauxite with significant bauxite deposits located on Cape York, Gove (Northern Territory) and in the Darling Range (Western Australia). Currently, approximately 40 million tonnes of bauxite is extracted annually in Australia.

Bauxite is considered a growth commodity due to its versatility. Aluminium metal is light, extremely strong, an excellent conductor of heat and electricity, durable, flexible, corrosionresistant and 100 percent recyclable. Bauxite has a wide range of uses including in automobiles, planes, food/drink cans, construction, cement, chemicals and home appliances and is the second most used metal after steel.

Bauxite occurs throughout the Cape York Peninsula within bauxitic lateritic weathering profiles preserved as topographic highs between major drainage divides. Exploration for bauxite has shown that these topographic highs are also characterised by anomalous radiometric responses greatly assisting in exploration for potential bauxite resources.

Monax currently has access to eleven tenements covering an area of approximately 2272km[2] (Table 1). Monax has signed Option Agreements with Callabonna Uranium Ltd for three tenements located in the area and with Delminco Pty Ltd for five tenements located near the township of Coen (Figure 8). Monax has also applied for three tenements which adjoin the Delminco tenements. Monax has divided the project into two areas, the Aurukun-Weipa Project and the Pretender Creek Project. Under the terms of the Option Agreements, Monax has the opportunity to purchase 100% of both packages of tenements after 12 (Delminco Option Agreement) and 24 months (Callabonna Option Agreement) respectively.

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Figure 8 Location of Monax tenements on Cape York Peninsula (Callabonna Uranium and Delminco tenements are under Option Agreements)

Tenement	Tenement Name	Project Area	Tenement Holder	Sub-blocks	Area (km2)
EPM 17835	Napranum	Aurukun	Callabonna Uranium Ltd	21	58
EPM 17836	Aurukun North West	Aurukun	Callabonna Uranium Ltd	60	168
EPM 17843	Mission River	Aurukun	Callabonna Uranium Ltd	57	159
EPM 16963	Pretender Creek C	Pretender Creek	Delminco Pty Ltd	98	274
EPM 16964	Pretender Creek D	Pretender Creek	Delminco Pty Ltd	50	140
EPM 17005	Kendall River B	Pretender Creek	Delminco Pty Ltd	100	280
EPM 17006	Archer River	Pretender Creek	Delminco Pty Ltd	100	280
EPM 17715	Pretender Creek E	Pretender Creek	Delminco Pty Ltd	96	269
EPM 18304	Pretender Creek	Pretender Creek	Monax Mining Ltd	41	115
EPM 18403	Holroyd River South	Pretender Creek	Monax Mining Ltd	94	263
EPM 18404	Holroyd River North	Pretender Creek	Monax Mining Ltd	95	266

Table 1 Tenement details for Monax Cape York Bauxite Project

2010 Monax Mining Limited Annual Report

Cape York Bauxite Project

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Plate 3 Roadside bauxite pit on EPM 17836.

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Plate 4 Detailed view of bauxite “pisolites” within roadside pit shown above.

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Plate 5 Pisolitic bauxite from EPM 18304 which assays 40% Al2O3

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Figure 9 Location of Monax’s tenements in the Aurukun-Weipa area (background = regional geology showing zones of mapped bauxite).

2010 Monax Mining Limited Annual Report

Cape York Bauxite Project

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Figure 10 Location of Pretender Creek project showing zones of interpreted bauxite

Aurukun-Weipa Project

The Aurukun Project comprises three tenements located in the Aurukun-Weipa area close to existing mines and mining developments. These three tenements comprise approximately 385 km[2] and have areas of mapped bauxite. Examination of satellite imagery clearly shows the presence of areas of elevated topography which elsewhere on the Cape York Peninsula are known to host bauxite mineralisation.

All three tenements contain areas of mapped bauxite. EPM 17836 located NE of the township of Aurukun contains approximately 84km[2] of mapped bauxite (Figure 9) and one drill hole reported 1m @ 41% Al2O3 and just over 1m @ >51% Al2O3 (CRA drill hole 87). Plate 3 shows a roadside borrow pit within EPM 17836 developed in bauxite and Plate 4 shows a detailed view of the characteristic bauxite pisolites.

The two tenements located northeast of Weipa (EPM 17843 and 17835) contain approximately 48.5km[2] of mapped bauxite (Figure 9). Monax is planning an aircore/auger drilling program to sample bauxite from these areas in late 2010.

Pretender Creek Project

Monax has access to eight tenements covering an area of 1887km[2] in the Pretender Creek area, located approximately 160km southeast of Aurukun (Figure 10). This project is located outside of the main current bauxite producing area located in the Aurukun and Weipa area, but does contain known bauxite. Exploration by CRA Exploration in the 1970’s discovered two small bauxite deposits at Merapah, which are currently held by Gulf Alumina Pty Ltd. CRA Exploration defined three separate bauxite zones containing 16.6 million tonnes ore with a gross bauxite inferred resource of 128 million tonnes estimated (source Gulf Alumina website gulfalumina.com.au). The bauxite has an average alumina content of 52% and reactive silica of 8-12%.

Monax’s tenements contain extensive areas of topographic highs which are clearly seen on satellite imagery. Figure 10 shows Monax’s tenement position and areas of potential bauxite interpreted from satellite imagery and radiometric data. Plate 5 shows a sample of bauxite with characteristic bauxite pisolites from the EPM 18304 area, that assayed 40% Al2O3 (collected by previous tenement holder).

2010 Monax Mining Limited Annual Report

HeAdeR

Percyvale gold Project

2010 Monax Mining Limited Annual Report

Percyvale gold Project

The Percyvale project is located within the Georgetown Inlier, which is the largest and southernmost of the four main Precambrian inliers in northeastern Australia. The Georgetown Inlier comprises predominantly Mesoproterozoic sediments, basalts and granites and minor volcanics. The Percyvale area has been a gold producer since the late 1800’s and was the site of the last major gold rush in Queensland in 1907. The Kidston Mine located approximately 60km from Percyvale produced 111,782kg of gold and 60,487kg of silver between 1985-2001. Kidston was a large tonnage low-grade deposit.

Monax considers the Mt Hogan and Gilberton areas as very prospective and under-explored for large concealed gold deposits. The abundance of historical gold mines and prospects suggests a large fertile gold system within the region, which has been the focus of small mining operations. Of considerable importance to Monax is that the projects are granted mining leases and thus can be developed more quickly if economic deposits are defined.

A review of historical exploration provides the following observations about the potential of the area to host large gold systems:

The area contains major structures evident within the aeromagnetic data including the Gilberton Fault and the Robertson Fault Zones.
The aeromagnetic data and geology indicates large intrusive complexes within the region.
Possible correlation between northeast trending PermoCarboniferous igneous intrusions and gold mineralisation.

In March 2010, Monax announced it had signed an Option Deal over four granted gold mining leases in the Percyvale area. Details of the four leases are presented below:

• Possible correlation between northeast trending Permo- Carboniferous igneous intrusions and gold mineralisation. In March 2010, Monax announced it had signed an Option Deal over four granted gold mining leases in the Percyvale area. Details of the four leases are presented below:	• Possible correlation between northeast trending Permo- Carboniferous igneous intrusions and gold mineralisation. In March 2010, Monax announced it had signed an Option Deal over four granted gold mining leases in the Percyvale area. Details of the four leases are presented below:	• Possible correlation between northeast trending Permo- Carboniferous igneous intrusions and gold mineralisation. In March 2010, Monax announced it had signed an Option Deal over four granted gold mining leases in the Percyvale area. Details of the four leases are presented below:	• Possible correlation between northeast trending Permo- Carboniferous igneous intrusions and gold mineralisation. In March 2010, Monax announced it had signed an Option Deal over four granted gold mining leases in the Percyvale area. Details of the four leases are presented below:
Lease No. Name Expiry Date Size (hectares)
ML 3366	Union	31 July 2016	23.6
ML 30199	Percy West	30 June 2016	32.0
ML 30139	Josephine	31 Oct 2014	6.36
ML 30103	Homeward Bound	30 Sept 2013	2.63

ML 3366 – Union

ML 3366 is located approximately 10km northwest of Percyvale Homestead (Figure 11) and was historically the largest mine in the region. The Union Lease covers three lines of lode, the Union, Cranky Dick and Walkers, with only the Union reef worked to any great extent. The Union Mine was developed to a depth of 152m with an historical sample from a stope reporting 96.5 oz/t gold.

The records show total production of 4,173 tonnes of ore producing 4,729oz of bullion gold and 195oz gold, 8,216oz silver and 59.7 tonnes of copper. Recent exploration by Kidston Gold Mines Ltd comprised costeaning and drilling targeting oxide ore for the gold plant at the Kidston Gold Mine.

Previous rock chip sampling reported some spectacular results including:

184 g/t Au, 973 g/t Ag & 22.4% Cu
114 g/t Au, 845 g/t Ag & 15.8% Cu
167 g/t Au & 1730 g/t Ag
88.1 g/t Au, 1970 g/t Ag & 12.3% Cu
63.7 g/t Au, 1110 g/t Ag & 28.8% Cu.

Monax is planning to test the Cranky Dick and Walkers reefs as well as following up on rich ore from previous drilling. The Company plans to undertake a small program of induced polarisation (IP) to define potential sulphide rich zones within the eastern part of the Lease.

Rock chip sampling by Monax on the Cranky Dick line of lode reported gold up to 28.4 g/t (see Table 2).

ML 30199 – Percy West

ML 30199 is located approximately 5.5km southwest of Percyvale Homestead (Figure 11). Mineralisation is hosted by quartz veins within a highly altered rhyolite intruded into granodiorite. Previous rock chip sampling reported gold up to 608 g/t.

Existing drilling by Eltin Minerals showed that the mineralisation is located at the contact between the rhyolite and the granodiorite and that alteration and mineralisation within this contact zone can potentially be up to 20m wide. The best results from Eltin Minerals’ drilling program include:

5m @ 1.0 g/t Au in hole PW1
3m @ 2.2 g/t Au in hole PW6
2m @ 4.4 g/t Au in hole PW8

2010 Monax Mining Limited Annual Report

Percyvale gold Project

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

780 000mE 800 000mE
7 900 000mN
Q U E E N S L A N D
Percyvale
EPM 18610 Ballynure
7 880 000mN
Mount Hogan
EPM 18610
EPM 18617
Glenmore
Gilberton
Main road
7 860 000mN Perryvale Track
Town
Homestead
Creek, river
Monax EL
0 10 km Monax lease under option
Monax Mining Lease Application
QLD02
----- End of picture text -----

Figure 11 EPM Application areas, Monax Mining Lease Applications (small blue areas) and Mining Leases under Option Agreement to Monax (red areas) in the Percyvale area, northern Queensland.

ML 30103 – Homeward Bound

ML 30103 is located approximately 13km west-southwest of Percyvale Homestead (Figure 11) and covers an area of old workings. The ore at Homeward Bound was very rich, averaging 6.39 oz/t in the oxide zone and 4.82 oz/t in the upper sulphide zone. The ore was also rich in silver (69.7 oz/t), copper (up to 7%) and lead (up to 5%), within the upper sulphide zone. The workings are scattered over 1km in length. Between 18901903, a total of 159.5 tonnes of ore yielded 1015.68 ozs of gold (grade of 6.36 oz/t).

Limited rock chip sampling of mullock from the old mine reported gold up to 71.7 g/t, silver up to 1258 g/t, copper up to 17%, zinc up to 15.5% and lead up to 3.9% (see Table 2). The polymetallic character of the ore suggests that the ore body will be responsive to electrical geophysical testing, and Monax is planning an IP survey to define further zones of mineralisation at depth.

ML 30139 – Josephine

ML 30139 is located approximately 9km south-southwest from Percyvale Homestead and covers an outcropping gossan. Previous rock chip sampling reported gold between 0.53 to 10.5 g/t, with samples also reporting anomalous copper (up to 1.2%), lead (up to 0.8%) and silver (59 g/t max).

Rock chip sampling of costeans reported gold up to 119 g/t, silver up to 830 g/t, copper up to 5.6% and lead up to 11.4% (see Table 2).

Under the terms of the Percyvale Gold Option Agreement, Monax has paid a non-refundable Option Fee of $16,000 to the lease holder, allowing Monax nine months to explore the leases. At the completion of the nine month Option period, if Monax wishes to purchase the Mining Leases outright, Monax will pay the following:

wishes to purchase the Mining the following:	Leases outright, Monax will pay
Name	Purchase Price
Union ML	$220,000 (plus GST)
Percy West ML	$80,000 (plus GST)
Josephine ML	$40,000 (plus GST)
Homeward Bound ML	$40,000 (plus GST)

2010 Monax Mining Limited Annual Report

Percyvale gold Project

Site	ML	Sample No.	Au (ppm)	Au-Rp1
Jos 01	Josephine	95689	1.77	404 5.62 5.98 0.36
Jos 01	Josephine	95690	26.21	232 5.05 0.91 0.07
Jos 01	Josephine	95691	119.73	40.54 390 0.88 0.79 0.05
Jos 01	Josephine	95692	20.9	71 0.59 0.92 0.14
Jos 02	Josephine	95693	0.2	5 0.05 0.09 0.01
Jos 03	Josephine	95694	1.02	830 0.64 11.19 0.03
Jos 03	Josephine	95695	1.23	20 0.14 0.85 0.18
Jos 04	Josephine	95696	0.14	2 0.01 0.03 0.01
Jos 04	Josephine	95698	1.35	134 0.20 11.43 0.03
Jos 05	Josephine	95697	0.22	26 0.15 1.72 0.02
Jos 06	Josephine	95699	0.12	3 0.08 0.04 0.00
Jos 07	Josephine	95700	0.02	0.03 0.02 0.01
Jos 08	Josephine	295001	0.23	63 0.29 0.30 0.01
Jos 08	Josephine	295002	0.1	33 0.11 0.57 0.19
Hb 01	Homeward Bound	295016	71.78	64.13 1258 17.08 1.12 6.76
Hb 01	Homeward Bound	295017	71.47	72.44 524 7.70 0.14 0.09
Hb 01	Homeward Bound	295018	12.19	11.74 703 5.33 3.93 15.52
Vic 01	Vicars	295019	0.05	4 0.03 0.03 0.02
Vic 02	Vicars	295020	0.17	12 0.14 0.03 0.09
Vic 03	Vicars	295021	4.19	21 0.24 0.07 0.01
Vic 04	Vicars	295022	1.55	192 0.16 0.71 0.12
Un 01	Union	295023	18.75	18.08 7 0.02 0.01 0.00
Un 02	Union	295024	13.79	13.57 10 0.02 0.04 0.00
Un 03	Union	295025	7.73	7.83 7 0.04 0.02 0.00
Un 04	Union	295026	0.4	9 0.02 0.03 0.01
Un 05	Union	295027	28.41	2 0.01 0.01 0.00

Table 2 Rock chip sampling results – Percyvale Mining Leases

Monax applied for a further six Mining leases (see Table below) and two Exploration Permits Minerals (EPM) within the Percyvale and Gilberton areas. The EPM’s were in moratorium in early 2010 and are currently a competitive application with up to six other companies applying for each area. The location of the mining lease and EPM applications is shown on Figure 11 .

Lease No.	Name	Size (hectares)
ML 30220	Vickars	45.8
ML 30221	Four Gees No. 1	45.5
ML 30222	Four Gees No. 2	46.6
ML 30223	Comstock	46.0
ML 30224	Mt Hogan No. 2	45.3
ML 30225	Mt Hogan No. 1	47.0

2010 Monax Mining Limited Annual Report

glossary of terms

Ag Symbol for the element silver.

Air mag survey Airborne survey measuring the strength of the Earth’s magnetic field along equally spaced lines.

Alteration A geological term indicating change in the mineralogical composition of rocks often brought about by pressure changes, contact with hydrothermal fluids and weathering processes.

Amphibolite Metamorphic rock composed of amphibole and plagioclase, often from the alteration of basic igneous rocks.

Anomaly A departure from the norm usually determined by systematic measurement across an area. In mineral exploration it is generally applied to geochemical or geophysical values above or below the norm.

Archaean An interval of geological time before about 2.5 billion years ago.

Au Symbol for the element gold.

Basalt A volcanic rock formed from lava and rich in calcium, magnesium and iron minerals, but relatively low silica.

Basement Much older rocks underlying younger rocks. In the Gawler Craton area, the basement is usually the cratonic rocks.

Base metal A metal commonly used in industry by itself rather than in an alloy eg. copper, lead, zinc.

Basin A depression often due to subsidence in which rock materials are laid down, eg. lava, sediments.

Bauxite The principal ore of aluminium. A mixture of aluminium oxides and hydroxides that form from intense chemical weathering of a soil in tropical environments.

Bedrock Solid or lithified rock.

Bornite A brownish-bronze, lustrous copper ore with the composition Cu5FeS4 that tarnishes to purple when exposed to air.

Breccia Coarse-grained rock composed of angular clasts. Brecciation is the shattering of rocks into such clasts.

Calcrete A surficial calcareous layer formed in the soil or near surface sediments.

Cambrian The earliest period of the Palaeozoic Era, spanning from approximately 545 million to 490 million years ago.

Carbonaceous Usually applied to a sedimentary rock containing carbon (often as plant matter) as detrital material.

Carbonate Rocks composed of carbonates of calcium, iron or magnesium eg. limestone, dolomite.

Chalcopyrite A yellow mineral, essentially CuFeS2, that is an important ore of copper.

Chemical metasediment A metamorphosed sediment that was originally formed by chemical precipitation.

Chemical weathering The breaking down of surface rock material by solution or chemical alteration. Common alteration processes are oxidation and hydrolysis.

Chlorite A dark mica mineral.

Cover Surficial sediments mantling older rocks and part of the regolith.

Cr Symbol for the element chromium.

Craton A large, tectonically stable part of the Earth’s crust eg. Gawler Craton, Yilgarn Craton.

Crust Outermost layer of the Earth.

Cu Symbol for the element copper.

Demagnetisation Reduction in remnant magnetisation.

Diamond core/drilling Drilling with a diamond impregnated drill bit used to recover continuous core.

Dilatant Increase in volume while maintaining shape or expansion along faults.

Diorite A group of plutonic rocks, intermediate in composition between acid and basic rocks, commonly composed of dark coloured amphibole, acid plagioclase, pyroxene and small amounts of quartz.

Dolomite A carbonate mineral composed mainly of calcium and magnesium, often containing iron. The term is commonly applied to the carbonate rock dominated by these minerals.

Domain A region where the geological fabric, in particular the magnetic fabric, is distinctive from surrounding regions.

Directors The board of directors of the Company.

EL Exploration Licence granted by a Government Department (PIRSA) for mineral exploration.

ELA Exploration Licence Application made by a company to a Government Department (PIRSA) for mineral exploration.

Electromagnetic survey (EM) An exploration technique, involving a survey carried out along equally spaced lines that measures changes in the Earth’s magnetic field at different times after the application of an electrical field. May identify anomalies where the rocks are conductive (such as some ore bodies) that present drill targets.

Epidote Yellow green hydrated iron, aluminium, calcium silicate - often a result of metamorphism or hydrothermal alteration.

Epigenetic A mineral deposit younger than the enclosing rock.

Epithermal Usually applied to a hydrothermal mineral formed in a temperature range 50-200ºC within about the upper kilometre of the Earth’s crust.

EPM Exploration Permit Minerals – Application or granted tenement from the Queensland Department of Mines and Energy.

Extrusive An igneous rock that has been erupted onto the Earth’s surface.

Fault A fracture in rocks in which rock on one side has moved relative to rock on the other.

Fe Symbol for the element iron.

Felsic Light coloured igneous rocks rich in silica.

Ferricrete Surficial layer cemented with iron oxide.

2010 Monax Mining Limited Annual Report

glossary of terms

Flow front In this context, the front of a lava flow.

Gabbro A coarse-grained, basic, igneous rock, resulting from the slow crystallisation of magmas of basaltic composition.

Garnet A red brown crystalline silicate mineral found in metamorphic rocks.

Geochemical survey An exploration technique involving a systematic survey of the variation of chemical elements in rocks or regolith in an area and often producing anomalies that present drill targets.

Geophysical survey An exploration technique involving a systematic survey of the variation in the physical properties of the rocks or regolith (eg. electrical resistivity/conductivity, magnetism, gravity) to help in understanding the geology or defining drill targets in an area.

GIS Geographic Information Systems is a technology used to view and analyse data from a geographic perspective. GIS links location to information and layers that information to give a better understanding of how it interrelates. Maps of the underlying geographic information can be constructed and used as “windows into the database” to support queries, analysis, and editing of the information.

Gneiss A banded metamorphic rock in which crystalline rock is interspersed with flaky micaceous minerals.

Gossan An iron-rich, weathered product overlying a sulphide deposit.

Granite A plutonic felsic igneous rock composed of quartz, feldspar and mica.

Graphitic Rocks rich in graphite.

Gravity survey A geophysical survey technique in which the force of gravity is systematically measured over an area, often producing anomalies, which may present drill targets.

Hematite A mineral composed mainly of ferric iron oxide and the main component of iron ore.

Hydrothermal The process by which hot, water-rich solutions transfer materials or alter rocks within the Earth’s crust.

Igneous Rocks formed by crystallisation from molten materials.

Intrusive rocks An igneous rock that was intruded whilst molten into the Earth’s crust eg. dyke, pluton, sill.

IOCG Iron-oxide copper-gold.

IP (Induced Polarisation) survey A geophysical technique carried out by passing a pulsating electrical current through the ground and measuring the effect of rocks and minerals in its path and locating anomalies that may present drill targets. Often used to detect the presence of metallic sulphides.

Iron formation A sedimentary rock containing significant iron as oxide, carbonate or silicate.

Lignitic Usually applied to a carbonaceous sedimentary rock containing abundant organic matter, approaching low grade coal often as lenses and thin beds. Typical of sediments laid down on floodplains and deltas.

Lineament A major linear feature in the Earth’s crust (eg. a major fault) and often associated with mineral deposits.

Lode gold Gold contained within definite boundaries such as a vein.

Mafic A dark coloured rock composed of ferro-magnesian minerals.

Magma Molten rock and mineral materials.

Magnetite Iron oxide mineral with a formula generally Fe3O4.

Manganese A silver coloured metal usually occurring as the mineral pyrolusite (MnO2), which is the principal ore of manganese.

Mesoproterozoic An interval of geological time in the Proterozoic extending from 1.6 to 1.0 billion years ago.

Mesozoic A period of geological time extending from 251 million to 65 million years ago and known as the age of the reptiles.

Metagreywacke A metamorphosed, poorly sorted sandstone containing rock fragments, often in a clay-rich matrix.

Metamorphism Changes to rocks generally brought about by heat and pressure within the Earth’s crust resulting in rocks such as schist and gneiss.

Metasediment Metamorphosed sedimentary rock in which the original texture is well preserved.

Neoproterozoic An interval of geological time in the Proterozoic extending from 1.0 billion to 545 million years ago.

Ni Symbol for the element nickel.

Orogenic Forming during an orogeny or mountain building phase.

Palaeochannel An ancient river channel now filled with sediment and preserved in the geological record; commonly of Tertiary age on the Gawler Craton.

Palaeoproterozoic The older part of the Proterozoic extending from 2.5 billion to 1.6 billion years ago.

Pb Symbol for the element lead.

Pelitic metasediment A metamorphosed mud-rich or argillaceous sediment.

Percussion drilling Drilling carried out by hammering a pneumatically driven drill bit into the rock.

PIRSA The Department of Primary Industries and Resources South Australia, the geological survey and regulatory authority in SA.

Pisolitic A rock made up of pea-like rounded grains, commonly in ferricrete, laterite and bauxite.

PPM An abbreviation for parts per million.

Precambrian All of geological time preceding the Cambrian (>545 million years ago).

Proterozoic The latest part of the Precambrian spanning approximately 2.5 billion to 550 million years ago.

2010 Monax Mining Limited Annual Report

glossary of terms

Proximal source In the context of mineralising fluids it implies the source of the fluids is nearby.

Pyrite The mineral iron sulphide, often associated with copper and gold.

Quartz A very common mineral, silicon oxide (SiO2).

Quaternary The second period of the Cainozoic that encompasses the last 1.8 million years and includes the Pleistocene and Holocene.

Radiogenic A term used to refer to a product of radioactive processes eg. heat, lead. In this context the term is used to refer to a granite containing radioactive material (uranium).

Radiometric survey An (airborne) exploration survey technique in which measurements are made of the ambient radiation from the Earth’s surface.

REE Rare Earth Elements.

Regolith Layer of weathered rock and surficial sediment overlying fresh rock.

Remote sensing The study of the Earth’s surface and its materials, using such means as photography, spectroscopy and radar by aeroplanes and satellites eg. LANDSAT.

Resource A well-defined estimate of mineralisation.

Roll front uranium Uranium accumulated at the interface between uranium-bearing oxygen-rich groundwater and a reducing aquifer host.

Schist A metamorphic rock characterised by partings along planes of medium-grained platy micaceous minerals.

Structural corridor A linear zone due to earth movements.

Suite In this context, a group of comagmatic rocks.

Sulphide Mineral consisting of a chemical combination of sulphur with a metal(s).

Synorogenic Forming at the same time as mountain building.

Syntectonic Forming at the same time as any tectonic activity such as faulting and folding.

TEM An exploration technique that measures the changes in the local natural electromagnetic field at depth in response to changes in the Earth’s magnetic field, producing a map of conductance with depth. This aids in determining the local conductive zones in the rocks such as that due to mineralisation.

Tertiary A geological period extending from 65 million years ago to about 1.8 million years ago.

U Symbol for the element uranium.

Ultramafic Igneous rock composed essentially of iron and magnesium.

Vein Mineral or metal deposited along a fracture eg. lode gold.

VHMS Volcanic hosted massive sulphide that is hosted in the volcanic rock not produced by the volcanism.

Volcanism/volcanic Volcanic activity/rock or feature formed by volcanic activity.

Zn Symbol for the element zinc.

Sericite A fibrous muscovite often resulting from the alteration of feldspar.

Shear zone A linear zone such as a fault in which rocks have been deformed.

Siltstone A fine-grained sedimentary rock composed of silt.

Skarn A coarse-grained metamorphic rock formed by the contact metamorphism of carbonate rocks. Skarn typically contains garnet, pyroxene, epidote and wollastonite.

Solid geology In this case, the bedrock, excluding cover sediments, that has been interpreted from geophysical information.

Sn Symbol for the element tin.

Sphalerite The mineral zinc-iron sulphide, the principal ore of zinc.

Stratabound In this context refers to mineralisation confined to particular sedimentary strata.

Stratiform A stratabound deposit/ore deposited along with the enclosing sediments.

Stratigraphy The science of the description, classification, dating, correlation and interpretation of depositional environments of sedimentary rocks.

Structurally controlled Strongly related to a structure in the Earth’s crust such as a fault.

2010 Monax Mining Limited Annual Report

Corporate governance Statement

Corporate governance Statement

2010 Monax Mining Limited Annual Report

Corporate governance Statement

The following statement sets out a summary of the Company’s corporate governance practices that were in place during the financial year and how those practices relate to the revised Corporate Governance Principles and Recommendations issued by the Australian Stock Exchange Corporate Governance Council (“ASX Recommendations”).

These recommendations are not intended to be prescriptions to be followed by all ASX listed companies, but rather guidelines designed to produce an effective, quality and integrity outcome. The Corporate Governance Council has recognised that a “one size fits all” approach to Corporate Governance is not required. Instead, it states aspirations of best practice for optimising corporate performance and accountability in the interests of shareholders and the broader economy. A company may consider that a recommendation is inappropriate to its particular circumstances and has flexibility not to adopt it and explain why.

In ensuring a high standard of ethical behaviour and accountability, the Board has included in its corporate governance policies those matters contained in the ASX Recommendations where applicable. However, the Board also recognises that full adoption of the above ASX Recommendations may not be practical nor provide the optimal result given the particular circumstances and structure of the Company. The Board is, nevertheless, committed to ensuring that appropriate Corporate Governance practices are in place for the proper direction and management of the Company. This statement outlines the main Corporate Governance practices of the Company disclosed under the ASX Recommendations, including those that comply with best practice and which unless otherwise disclosed, were in place during the whole of the financial year ended 30 June 2010.

Principle 1 Lay solid foundations for management and oversight

Recommendation 1.1 Recommendation followed

The Board is governed by the Corporations Act 2001, ASX Listing Rules and a formal constitution adopted by the Company in 2004.

The role of the Board is to provide leadership and direction to management and to agree with management the aims, strategies and policies of the Company for the protection and enhancement of long-term shareholder value.

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

The Board has an established framework for the management of the entity including a system of internal control, a business risk management process and appropriate ethical standards. In fulfilling its responsibilities, the Board is supported by an Audit and Corporate Governance Committee, to deal with internal control, ethical standards and financial reporting and a Remuneration and Nomination Committee to monitor the composition of the Board and review the compensation of the Company’s Executive Directors and senior management with the overall objective of motivating and appropriately rewarding performance.

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

Recommendation 1.2 and 1.3 Recommendations followed

The Remuneration and Nomination Committee meets at least annually and the recommendations are made in line with the Company’s present circumstances and goals to ensure maximum shareholder benefits from the attraction and retention of a high quality Board and senior management team. The Remuneration and Nomination Committee met during the financial year to review the performance of and recommend appropriate remuneration for Executive Directors and senior management including any equity participation by such Executive Directors and senior management. The Board evaluates the performance of the Managing Director and Company Secretary on a regular basis and encourages continuing professional development.

2010 Monax Mining Limited Annual Report

Corporate governance Statement

Principle 2 Structure the board to add value

Recommendation 2.1 Recommendation followed

The composition of the Board consists of five directors of whom four, including the Chairman, are non-executives. Messrs Kennedy, Nelson and Davis are Independent Directors. Dr Alley is not independent due to his previous role as Executive Director. In addition, two alternate directors were appointed during the previous year for Messrs Nelson and Davis and the appointment ceased in June 2010.

The Board is of the opinion that the current structure of the Board is appropriate given the size and nature of the Company. The Board considers that all Directors bring an independent judgement to bear on Board decisions and that the Board’s expertise and experience adds considerable value to the Company.

Recommendation 2.2 Recommendation followed

The Chairman, Mr Kennedy is an Independent Director.

Recommendation 2.3 – Recommendation followed

Mr Kennedy’s role as Chairman of the Board is separate from that of the Managing Director who is responsible for the day to day management of the Company and is in compliance with the ASX Recommendation that these roles not be exercised by the same individual.

Recommendation 2.4 Recommendation followed

Recommendation 2.6 Recommendation followed

The names of the directors of the Company and terms in office at the date of this Statement together with their skills, experience, expertise and financial interests in the Company are set out in the Directors’ Report section of this report.

Messrs Kennedy, Nelson and Davis are considered to be independent.

The Company has no relationships with any of the independent directors which the company believes would compromise the independence of these directors.

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

Formal deeds were entered into by the Company with directors in May 2005 whereby all directors, with the consent of the Chairman, are entitled to take such legal advice as they require at any time and from time to time on any matter concerning or in relation to their rights, duties and obligations as directors in relation to the affairs of the Company.

An assessment of the Board’s overall performance and its own succession plan is conducted on an informal basis and was done so during the year by the Chairman.

The Company has an established Remuneration and Nomination Committee currently consisting of two independent Directors, Messrs Nelson and Kennedy. Mr Nelson acts as Chairman of this committee (refer also to Principle 8 below).

Recommendation 2.5 Recommendation not followed

The Board recognises that as a result of the Company’s size and the stage of the entity’s life as a publicly listed junior exploration company, the assessment of the Board’s overall performance and its own succession plan is conducted on an informal basis. Whilst this is at variance with the ASX Recommendations, for the financial year ended June 2010, the Directors consider that at the date of this report an appropriate and adequate process for the evaluation of Directors is in place.

2010 Monax Mining Limited Annual Report

Corporate governance Statement

Principle 3 Promote ethical and responsible decision making

Recommendation 3.1 Recommendation followed

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

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

All Directors have signed deeds with the Company which require them to comply with all the obligations of a director under the Corporations Act 2001. Directors also are required to provide the Company with details of all securities registered in the Director’s name or an entity in which the Director has a relevant interest within the meaning of section 9 of the Corporations Act 2001 and details of all contracts, other than contracts to which the Company is a party, to which the Director is a party or under which the Director is entitled to a benefit, and that confer a right to call for or deliver shares in the Company and the nature of the Director’s interest under the contract.

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

Recommendation 3.2 Recommendation followed

Directors, officers and employees are not permitted to trade in securities of the Company and have an obligation not to inform at any time whilst in possession of price sensitive information not readily available to the market. Section 1043A of the Corporations Act 2001 also prohibits the acquisition and disposal of securities where a person possesses information that is not generally available and which may reasonably be expected to have a material effect on the price of the securities if the information was generally available. A securities trading policy has been established and all employees and Directors are obliged to comply.

Principle 4 Safeguard integrity in financial reporting

Recommendation 4.1 Recommendation followed

Monax was not a Company required by ASX Listing Rule 12.7 to have an Audit Committee during the year although it is an ASX Recommendation. Notwithstanding the Listing Rule requirement, an Audit and Corporate Governance Committee was set up prior to the Company’s ASX listing in 2005 to oversee corporate governance, internal controls, ethical standards, financial reporting, and external accounting and compliance procedures.

The main responsibilities of the Audit and Corporate Governance Committee include:

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

Recommendation 4.2 Recommendation not followed

The Audit and Corporate Governance Committee currently consists of two Independent Board directors, Messrs Davis and Kennedy, and is chaired by Mr Davis.

The Board believes that given the size of the Company and the stage of the entity’s life as a publicly listed junior exploration company and the current Board structure, the establishment of an audit committee in line with ASX Recommendation 4.2 as recommended by ASX Recommendation 4.3 cannot be justified by the perceived benefits of doing so. The existing composition of the Audit and Corporate Governance Committee is such that review and authorisation of the integrity of the Company’s financial reporting and the independence of the external auditor is via the exercise of independent and informed judgement.

Recommendation 4.3 Recommendation followed

During the year the Board has adopted a formal Charter for the Audit and Corporate Governance Committee. The Charter details the Audit Committee’s role and responsibilities, composition and membership requirement.

Recommendation 4.4 Recommendation followed

Mr Kennedy is a qualified Chartered Accountant. Details of these Directors’ qualifications and attendance at meetings are set out in the Directors’ Report section of this report.

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

Recommendation 3.3 Recommendation followed

A summary of the Company’s Code of Conduct and Share Trading Policy can be found at www.monaxmining.com.au.

2010 Monax Mining Limited Annual Report

Corporate governance Statement

Principle 5 Make timely and balanced disclosure

Recommendation 5.1 and 5.2 Recommendations not followed

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

Due to the size of the Company and the stage of life of the entity as a publicly listed junior exploration company, the Board does not believe a formal policy for continuous disclosure is required. However, a summary describing how the Company will ensure its compliance with continuous disclosure requirements is posted on the Company’s website www.monaxmining.com.au.

Principle 6 Respect the rights of shareholders

Recommendation 6.1 and 6.2 Recommendations not followed

The Board aims to ensure that shareholders are informed of all major developments affecting the Company’s state of affairs. In accordance with the ASX Recommendations, information is communicated to shareholders as follows:

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

The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the Company’s strategy and goals. Important issues are presented to the shareholders as single resolutions. The external auditor of the Company is also invited to the Annual General Meeting of shareholders and is available to answer any questions concerning the conduct, preparation and content of the auditor’s report. Pursuant to section 249K of the Corporations Act 2001 the external auditor is provided with a copy of the notice of meeting and related communications received by shareholders.

Due to the size of the Company and the stage of life of the entity as a publicly listed junior exploration company, the Board does not believe a formal policy for shareholder communication is required. However, a summary describing how the Company will communicate with its shareholders is posted on the Company’s website www.monaxmining.com.au.

Principle 7 Recognise and manage risks

Recommendation 7.1, 7.2 and 7.4 Recommendations not followed

The Board recognises that there are inherent risks associated with the Company’s operations including mineral exploration and mining, environmental, heritage and native title, legal and other operational risks. The Board endeavours to mitigate such risks by continually reviewing the activities of the Company in order to identify key business and operational risks and ensuring that they are appropriately assessed and managed. No formal report in relation to the Company’s management of its material business risks is presented to the Board.

Due to the size of the Company and the stage of life of the entity as a publicly listed junior exploration company, and the inherent risks associated with the industry it operates in, the Board does not believe formal policies for oversight and management of risk are required. The Board with the assistance of the Audit and Corporate Governance Committee conducts a formal review of the risk profile of the Company annually and monitors risk informally throughout the year. A summary describing how the Company manages risk by procedures established at Board and executive level can be found posted on the Company’s website www.monaxmining.com.au.

Recommendation 7.3 Recommendation followed

In accordance with ASX Recommendation 7.3 the Chief Executive Officer and Chief Financial Officer are required to provide assurances that the written declarations under s295A of the Corporations Act are founded on a sound framework of risk management and internal control and that the framework is operating effectively in all material respects in relation to financial reporting risks. Both the Chief Executive Officer and Chief Financial Officer provide said assurances at the time the s295A declarations are provided to the Board.

2010 Monax Mining Limited Annual Report

Corporate governance Statement

Principle 8 Remunerate fairly and responsibly

Recommendation 8.1 Recommendation followed

The Company established a Remuneration and Nomination Committee to monitor the composition of the Board and review the compensation of the Company’s Executive Directors and senior management with the overall objective of motivating and appropriately rewarding performance. The Committee makes recommendations to the Board who is ultimately responsible for the Company’s remuneration policy.

The Remuneration and Nomination Committee currently consists of two Independent Directors, Messrs Nelson and Kennedy. Mr Nelson acts as Chairman of this committee. Details of the number of and attendance at Committee meetings can be found in the Directors’ Report.

The Board believes that given the size of the Company and the stage of the entity’s life as a publicly listed junior exploration company that the cost of establishing a formal remuneration and nomination committee charter cannot be justified by the perceived benefits of doing so.

Recommendation 8.2 and 8.3 Recommendations followed

In accordance with ASX Recommendation 8.2 the Company’s remuneration practices are set out as follows.

The Company’s Constitution specifies that the total amount of remuneration of non-executive directors shall be fixed from time to time by a general meeting. The current maximum aggregate remuneration of non-executive directors has been set at $300,000 per annum. Directors may apportion any amount up to this maximum amount amongst the non-executive directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in performing their duties as directors.

Non-executive director remuneration is by way of fees and statutory superannuation contributions. Non-executive directors do not participate in schemes designed for remuneration of executives nor do they receive options or bonus payments and are not provided with retirement benefits other than salary sacrifice and statutory superannuation.

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

The Company’s remuneration structure is based on a number of factors including the particular experience and performance of the individual in meeting key objectives of the Company. The Remuneration and Nomination Committee is responsible for assessing relevant employment market conditions and achieving the overall, long term objective of maximising shareholder benefits, through the retention of high quality personnel.

During the year, the Company engaged the services of an external remuneration consultant to conduct a review of and benchmark remuneration for Non-executive and Executive Directors and key management personnel.

The Company does not presently emphasise payment for results through the provision of cash bonus schemes or other incentive payments based on key performance indicators of Monax given the nature of the Company’s business as a publicly listed mineral exploration entity and the current status of its activities. However the Board may approve the payment of cash bonuses from time to time in order to reward individual executive performance in achieving key objectives as considered appropriate by the Board.

The Company also has an Employee Share Option Plan approved by shareholders that enables the Board to offer eligible employees options to acquire ordinary fully paid shares in the Company. Under the terms of the Plan, options to acquire ordinary fully paid shares may be offered to the Company’s eligible employees at no cost unless otherwise determined by the Board in accordance with the terms and conditions of the Plan. The objective of the Plan is to align the interests of employees and shareholders by providing employees of the Company with the opportunity to participate in the equity of the Company as an incentive to achieve greater success and profitability for the Company and to maximise the long term performance of the Company. The non-executive directors are not eligible to participate in the Plan. Details of options issued to employees during the 2010 financial year together with details of the terms of the Plan are disclosed in the Remuneration Report section of the Directors’ Report.

Details of options issued to employees during or since the end of the financial year including to the Managing Director are set out in the Remuneration Report section of the Directors’ Report.

The employment conditions of the Managing Director are formalised in a contract of employment. The Managing Director’s contract may be terminated at any time by mutual agreement or without notice in instances of serious misconduct.

Further details of Directors’ and Executives’/Officers’ remuneration, superannuation and retirement payments are set out in the Remuneration Report section of the Directors’ Report.

2010 Financial Report

Monax Mining Limited

2010 Monax Mining Limited Annual Report

directors’ Report

The Directors present their report together with the financial report of Monax Mining Limited – consolidated entity (‘Group’) and controlled entities for the year ended 30 June 2010 and the auditor’s report thereon.

The Directors of Monax Mining Limited (‘the Company’) at any time during or since the end of the financial year are as set out below. Details of Directors’ qualifications, experience and special responsibilities are as follows.

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Robert Michael Kennedy Reginald George Nelson

Mr Robert Michael Kennedy ASAit, grad. dip (Systems Analysis), FCA, ACiS, Life member AiM, FAiCd.

Non-executive Chairman. Mr Kennedy is a chartered accountant and consultant to Kennedy & Co, Chartered Accountants, a firm he founded. He joined Monax Mining Limited in August 2004 as Non-executive Chairman. Chairman of Beach Energy Limited (since 1995 and a Director since 1991), Flinders Mines Limited (since 2001), Ramelius Resources Limited (since 1995), Maximus Resources Limited (since 2004), Eromanga Uranium Limited (since 2006), Marmota Energy Limited (since 2006) and Somerton Energy Limited (since 2010). His special responsibilities include membership of the Audit and Corporate Governance Committee and the Remuneration and Nomination Committee. Mr Kennedy brings to the Board his expertise in finance and management consultancy and extensive experience as chairman and non-executive director of a range of listed public companies including in the resource sector. Mr Kennedy leads the development of strategies for the development and future growth of the Company.

Interest in Shares and Options – 4,464,488 ordinary shares of Monax Mining Limited and options to acquire a further 558,062 shares. 3,568,093 ordinary shares of Marmota Energy Limited and options to acquire a further 1,350,000 ordinary shares.

Mr Reginald george nelson BSc, Hon Life Member Society of exploration geophysicists, FAusiMM, FAiCd.

Non-executive Director. Board member since 3 August 2004. Mr Nelson is an exploration geophysicist with experience spanning four decades in most aspects of the petroleum and minerals industries. He was awarded honorary Life Membership of the Society of Exploration Geophysicists in 1989 and the Prime Minister’s Centenary Medal in 2002 for services to mining. He has wide experience in technical, corporate and government affairs. He was Chairman of the Australian Petroleum Production and Exploration Association (APPEA) from 2004 to 2006 and is a Director of the APPEA Executive Committee and remains a member of its Council. He was recently awarded the Reg Sprigg Medal for outstanding contribution to the oil and gas industry at the 2009 APPEA Conference in Darwin.

Special responsibilities include membership of the Remuneration and Nomination Committee.

Other listed company directorships are: Managing Director of Beach Energy Limited (since 1992) and Director of Anzon Australia Limited (between 2004 and December 2005), Ramelius Resources Limited (since 1995), Marmota Energy Limited (since 2007) and Sundance Energy Australia Limited (since 2010).

Interest in Shares and Options – 2,145,659 ordinary shares of Monax Mining Limited. 1,154,285 ordinary shares of Marmota Energy Limited and options to acquire a further 450,000 ordinary shares.

Mr glenn Stuart davis LLB, Bec

Non-executive Director. Board member since 3 August 2004. Mr Davis is a solicitor and partner of DMAW Lawyers, a firm he founded. Mr Davis brings to the Board his expertise in the execution of large legal and commercial transactions and his expertise and experience in corporate activity regulated by the Corporations Act and ASX Ltd. He also has specialist skills and knowledge about the resources industry.

Special responsibilities include membership of the Audit and Corporate Governance Committee.

Other listed company directorships are: Deputy Chairman of Beach Energy Limited (since June 2009 and a Director since July 2007) and Director of Marmota Energy Limited (since 2007).

Interest in Shares and Options – 2,775,455 ordinary shares of Monax Mining Limited. 2,950,001 ordinary shares of Marmota Energy Limited and options to acquire a further 1,350,000 ordinary shares.

dr neville Foster Alley Phd., PSM

Non-executive Director. Board member since 27 January 2005. Dr Alley is an internationally known earth science researcher and was awarded the Verco Medal for his contribution and leadership in the earth sciences and the Public Service Medal (PSM) in 2005 for outstanding contribution to geology and minerals industry. He has extensive experience at senior levels in Government in Canada and as Director, Minerals, MESA and PIRSA and has a high level understanding of Government policy, regulation and legislation. He made a significant contribution in setting the SA Government’s strategies for reinvigorating the minerals industry and led the development of

2010 Monax Mining Limited Annual Report

directors’ Report

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Glenn Stuart Davis

Neville Foster Alley

Government initiatives such as TEISA and PACE. Dr Alley has worked closely with Aboriginal people and the community in developing a higher profile for the resources industry.

Other listed company directorships are: InterMet Resources Limited (since 2004 until August 2008), Beach Energy Limited (since July 2007) and Marmota Energy Limited (since 2007) and is a Visiting Research Fellow, School of Earth and Environmental Sciences, The University of Adelaide.

Interest in Shares and Options – 3,108,919 ordinary shares of Monax Mining Limited. 2,727,858 ordinary shares of Marmota Energy Limited and options to acquire a further 1,350,000 ordinary shares.

Mr gary Michael Ferris BSc (Hons), AusiMM.,gAiCd

Managing Director. Board member since 1 September 2009. Mr Ferris is a geologist with more than 18 years experience in exploration and management and holds an Honours Degree in Geology from the University of Adelaide and a Masters Degree from the Centre for Ore Deposits and Exploration Studies, University of Tasmania.

Mr Ferris brings extensive experience in adding to the value of Monax’s asset base and the execution of effective exploration programs.

Mr Ferris was formerly Managing Director of InterMet Resources Limited until August 2008.

Interest in Shares and Options – Options to acquire 3,000,000 shares of Monax Mining Limited.

Mr Michael Peter Schwarz BSc (Hons), Aig

Managing Director. Board member since 29 September 2005 until 31 August 2009. A former leader of Primary Industries and Resources SA’s (PIRSA) Gawler Craton program. He has led research projects with the SA Government, Geoscience Australia and various universities into the geological evolution and mineralisation of the Gawler Craton. He has a high level of IT skills, an excellent knowledge of mineralisation models and modern geological concepts and is highly energetic, innovative and leading edge in his approach to mineral exploration.

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Gary Michael Ferris

Mr ewan John Vickery LLB

Alternate Director for Reginald George Nelson (appointed 19 March 2009 ceased 25 June 2010). Mr Vickery is a corporate and business lawyer with over 30 years experience in private practice in Adelaide. He has acted as an advisor to companies on a variety of corporate and business issues including capital and corporate restructuring, native title and land access issues, and as a lead native title advisor and negotiator for numerous mining and petroleum companies. Mr Vickery is a Director of Flinders Mines Limited (since 2001), Maximus Resources Limited (since 2004) and Eromanga Uranium (since 2006).

Interest in Shares and Options – 55,300 ordinary shares of Monax Mining Limited. 200,000 ordinary shares of Marmota Energy Limited ordinary shares.

Mr ian Roy Witton SAit, FCPA, FAiCd

Alternate Director for Glenn Stuart Davis (appointed 13 March 2009 ceased 24 June 2010) Mr Witton is an independent non-executive director and has been a director for 25 years. Originally trained as an auditor, he was subsequently CEO and later Managing Director for 27 years of a licensed investment dealer developing and managing investment funds, savings, loans and a retirement village. He is also a director of a pharmacy and optical company and a public charitable trust fund. His principal experience is in funds and investment management, strategic development, risk management and corporate governance. Mr Witton is an Alternate Director of Eromanga Uranium Limited (since March 2009 ceased 30 September 2009).

Interest in Shares and Options – 98,923 ordinary shares of Monax Mining Limited and options to acquire a further 12,366 shares. 57,857 ordinary shares of Marmota Energy Limited.

Interest in Shares and Options – 1,650,000 ordinary shares of Monax Mining Limited. 3,040,001 ordinary shares of Marmota Energy Limited and options to acquire a further 1,520,000 ordinary shares.

2010 Monax Mining Limited Annual Report

directors’ Report

directors’ Meetings

The Company held 22 meetings of Directors (including committees of Directors) during the financial year. The number of Directors’ meetings and number of meetings attended by each of the Directors of the Company (including committees of Directors) during the financial year were as follows:

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

Directors Directors’ meetings Audit and corporate Remuneration and Due diligence
governance committee nomination committee committee meetings
meetings meetings
Eligible Attended Eligible to Attended Eligible to Attended Eligible to Attended
to attend attend attend attend
Robert Michael Kennedy 11 11 3 3 4 4 - -
Reginald George Nelson 11 10 - - 4 4 - -
Glenn Stuart Davis 11 10 3 3 - - - -
Neville Foster Alley 11 10 - - - - 4 4
Gary Michael Ferris 9 9 - - - - - -
Michael Peter Schwarz 2 1 - - - - - -
Ewan John Vickery 1 1 - - - - - -
Ian Roy Witton 1 1 - - - - - -
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Messrs Kennedy and Davis are members of the Audit and Corporate Governance Committee and Messrs Nelson and Kennedy are members of the Remuneration and Nomination Committee.

Messrs Vickery and Witton were present in meetings in the capacity of Alternate Directors.

Company Secretary

The following person held the position of Company Secretary at the end of the financial year.

Virginia Katherine Suttell B.Comm.,ACA.,GAICD.,GradDipACG. Appointed Company Secretary and Chief Financial Officer on 21 November 2007. She is a Chartered Accountant with 17 years experience working in public practice and commerce.

Principal activities

The company’s principal activity is minerals exploration.

2010 Monax Mining Limited Annual Report

directors’ Report

Review and results of operations

The 2009-10 financial year has seen Monax make some significant changes to its exploration portfolio. Monax has reduced its South Australian tenement position and has started to build a north Queensland tenement position.

Monax entered into a farmin agreement with manganese producer OM (Manganese) Ltd, a wholly owned subsidiary of OM Holdings Limited (ASX:OMH) for manganese and iron on the Waddikee project. Exploration undertaken under the farmin agreement comprised detailed mapping, ground magnetic surveys, soil sampling and drilling. Further detailed gravity was undertaken at the Punt Hill project with two new gravity targets identified at the Gopher and Otcheck prospects. Monax also applied for a new tenement which adjoins Punt Hill. Monax entered into a joint venture with Marmota Energy Limited (ASX:MEU) over the Melton copper-gold project. Exploration on the project comprised a high resolution aeromagnetic survey, detailed ground gravity survey and drilling. Further exploration on the Kangaroo Island project included a detailed heli-mag survey over the Bonaventura and Dewrang base metal prospects and an Induced Polarisation survey over both areas in an attempt to define further drilling targets.

The Company entered into an Option Agreement over four granted gold mining leases in the Percyvale area, northern Queensland and has applied for a further six mining leases and two competitive tenement applications in the Percyvale area. A new project located on the Cape York region in far northern Queensland targeting bauxite commenced during the year with the Company entering into two option agreements covering eight tenements. In addition, Monax has applied for a further three tenements and exploration commenced during August 2010.

The year saw Monax Mining Limited undertaking capital raisings in the form of a Share Purchase Plan, a Rights Issue and Placements to successfully raise $5,745,468 net of costs. In addition, $3,861,330 net of costs was raised by Marmota Energy Limited via a Share Purchase Plan and Placement.

Marmota Energy Limited continued to explore on its key project Junction Dam. At Junction Dam a phase 2 drilling program was completed with further exciting high grades returned from extension drilling. The drilling also increased the strike length of the zone of mineralisation at this Saffron prospect to two kilometres. Marmota achieved its full earn in on this project.

Results

During the year, the Group continued exploration activities at its tenements, total cash expenditure on exploration and evaluation activities totalled $3,774,066.

The consolidated loss of the consolidated group after providing for income tax and minority equity interests amounted to $3,188,254 (2009: $393,265).

dividends

No dividends have been paid or provided by the Company since the end of the previous financial year.

State of affairs

There have been no significant changes in the state of affairs of the Company during the year.

events subsequent to balance date

On 18 August 2010, Marmota Energy Limited completed the acquisition of the Wynbring uranium project and tenement from Fission Energy Limited and Tasman Resources Limited. Consideration was $350,000 and the issue of 500,000 ordinary shares, escrowed for a period of twelve months.

On 31 August 2010, Monax Mining Limited entered into an agreement with Antofagasta Minerals S.A. for exploration over the Punt Hill project (EL 3457 and EL 4548). Antofagasta Minerals S.A. can earn up to 70% of the mineral and other rights held by Monax Mining Limited by expending US $9 million over a 6 year period. On a decision to mine, Antofagasta will pay Monax Mining Limited US $10 million.

Other than the matters above, there has not arisen in the interval between 30 June 2010 and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future years.

Likely developments

Further information about likely developments in the operations of the Company and the expected results of those operations in future years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Company.

2010 Monax Mining Limited Annual Report

directors’ Report

environmental regulation and performance statement

The Company’s operations are subject to significant environmental regulations under both Commonwealth and South Australian legislation in relation to discharge of hazardous waste and materials arising from any mining activities and development conducted by the Company on any of its tenements. To date the Company has only carried out exploration activities and there have been no known breaches of any environmental obligations.

Indemnification and insurance of officers

Indemnification

The Company is required to indemnify the Directors and other officers of the company against any liabilities incurred by the Directors and officers that may arise from their position as Directors and officers of the Company. No costs were incurred during the year pursuant to this indemnity.

The Company has entered into deeds of indemnity with each Director whereby, to the extent permitted by the Corporations Act 2001, the Company agreed to indemnify each Director against all loss and liability incurred as an officer of the Company, including all liability in defending any relevant proceedings.

Insurance premiums

Since the end of the previous year the Company has paid insurance premiums in respect of Directors’ and officers’ liability and legal expenses insurance contracts.

The terms of the policies prohibit disclosure of details of the amount of the insurance cover, the nature thereof and the premium paid.

options

At the date of this report unissued ordinary shares of Monax Mining Limited under option are:

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

Expiry date Exercise price Number of options Vested Unvested Amount paid/
payable by recipient
($)
13/02/2012 $0.666 150,000 150,000 - -
18/07/2013 $0.246 215,000 215,000 - -
13/12/2013 $0.0517 10,000 10,000 - -
31/07/2012 $0.10 3,000,000 3,000,000 - -
30/11/2011 $0.15 18,309,654 18,309,654 - -
05/03/2015 $0.0917 400,000 400,000 - -
----- End of picture text -----*

All options may be exercised at any time before expiry. Option holders will receive one ordinary share in the capital of the Company for each option exercised.

These options do not entitle the holder to participate in any share issue of the Company or any other body corporate.

There were no amounts unpaid on shares issued.

Proceedings on behalf of the Company

No person has applied to the Court for leave to bring proceedings on behalf of the Company or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. The Company was not a party to any such proceedings during the year.

2010 Monax Mining Limited Annual Report

directors’ Report

non-audit services

There were no non-audit services provided by the external auditors during the year ended 30 June 2010.

Auditor of the Company

The auditor of the Company for the financial year was Grant Thornton.

Auditor’s independence declaration

The auditor’s independence declaration as required by section 307C of the Corporations Act 2001 for the year ended 30 June 2010 is set out immediately following the end of the Directors’ report.

Remuneration Report – Audited

Remuneration policy

The remuneration policy of Monax Mining Limited has been designed to align key management personnel objectives with shareholder and business objectives by providing a fixed remuneration component and offering other incentives based on performance in achieving key objectives as approved by the Board. The Board of Monax Mining Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best key management personnel to run and manage the Company, as well as create goal congruence between directors, executives and shareholders.

The Company’s policy for determining the nature and amounts of emoluments of board members and other key management personnel of the Company is as follows.

The Company’s Constitution specifies that the total amount of remuneration of Non-executive Directors shall be fixed from time to time by a general meeting. The current maximum aggregate remuneration of Non-executive Directors of Monax Mining Limited has been set at $300,000 per annum. The current maximum aggregate remuneration of Non-executive Directors of Marmota Energy Limited has been set at $400,000 per annum. Directors may apportion any amount up to this maximum amount amongst the Non-executive Directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in performing their duties as Directors. The remuneration of the Managing Director is determined by the Nonexecutive Directors on the Remuneration and Nomination Committee and approved by the Board as part of the terms and conditions of his employment which are subject to review from time to time. The remuneration of other executive officers and employees is determined by the Managing Director subject to the approval of the Board.

Non-executive Director remuneration is by way of fees and statutory superannuation contributions. Non-executive Directors do not participate in schemes designed for remuneration of executives nor do they receive options or bonus payments and are not provided with retirement benefits other than salary sacrifice and statutory superannuation.

The Company does not presently emphasise payment for results through the provision of cash bonus schemes or other incentive payments based on key performance indicators of Monax given the nature of the Company’s business as a mineral exploration entity and the current status of its activities. However the Board may approve the payment of cash bonuses from time to time in order to reward individual executive performance in achieving key objectives as considered appropriate by the Board.

The employment conditions of the Managing Director, Mr Ferris and the Managing Director – Marmota Energy Limited, Mr Calandro are formalised in contracts of employment. The base salary as set out in the employment contract is reviewed annually. The Managing Directors’ contracts may be terminated at any time by mutual agreement. The Company may terminate these contracts without notice in instances of serious misconduct. Ms Suttell is employed by Groundhog Services Partnership to act as Chief Financial Officer and Company Secretary of Monax Mining Limited and Marmota Energy Limited. The employment conditions are set out in a contract of employment and include a three month notice period. Mr Ferris was appointed 1 September 2009 and employment conditions include a three month notice period.

2010 Monax Mining Limited Annual Report

directors’ Report

Remuneration Report – Audited cont

Shares issued on exercise of remuneration options

No shares were issued to Directors as a result of the exercise of remuneration options during the financial year.

Directors’ interests in shares and options

Directors’ relevant interests in shares and options of the Company are disclosed in Note 5 to the accounts.

Remuneration of Directors and key management personnel

This report details the nature and amount of remuneration for each key management person of the consolidated entity and for the executives receiving the highest remuneration.

(a) Directors and key management personnel

The names and positions held by Directors and key management personnel of the consolidated entity during the whole of the financial year are:

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Director Position
Mr RM Kennedy Chairman – Non-executive
Mr RG Nelson Director – Non-executive
Mr GS Davis Director – Non-executive
Dr NF Alley Director – Executive
Mr GM Ferris Managing Director – Executive (from 1 September 2009)
Mr MP Schwarz Managing Director – Executive (resigned 31 August 2009)
Mr EJ Vickery Alternate Director (ceased 25 June 2010)
Mr IR Witton Alternate Director (ceased 24 June 2010)
Key management personnel
Mr DJ Calandro Managing Director – Marmota Energy Limited
Ms VK Suttell Chief Financial Officer / Company Secretary
----- End of picture text -----*

Dr Neville Alley was an Executive Director of Marmota Energy Limited during the financial year.

2010 Monax Mining Limited Annual Report

directors’ Report

(b) Directors’ remuneration

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2010 primary Directors’ Salary, fees Non cash Cash Super con- Long Options Total Proportion
benefits fees and leave items bonus tributions service $ $ of remu-
$ $ $ $ $ leave neration
$ relating to
perfor-
mance
2010 primary benefits
- - - - - -
Mr RM Kennedy [1] 140,826 12,674 153,500
Mr RG Nelson [1] 80,504 - - - 7,246 - - 87,750 -
Mr GS Davis [1,2] 87,750 - - - - - - 87,750 -
- - - - -
Dr NF Alley [1] 40,826 66,667 24,207 131,700
Mr GM Ferris - 187,949 - 4,000 12,051 - 183,000 387,000 1.0%
Mr MP Schwarz - 32,872 4,718 - 2,410 - - 40,000 -
- - - - - - -
Mr EJ Vickery [3] 2,000 2,000
Mr IR Witton [3] 2,000 - - - - - - 2,000 -
353,906 287,488 4,718 4,000 58,588 - 183,000 891,700 0.4%
2009 primary benefits
- - - - - -
Mr RM Kennedy [1] 134,863 12,137 147,000
Mr RG Nelson [1] 77,064 - - - 6,936 - - 84,000 -
Mr GS Davis [1,2] 84,000 - - - - - - 84,000 -
- - - - -
Dr NF Alley [1] 33,715 104,359 12,427 150,501
Mr MP Schwarz - 200,741 25,514 1,000 13,745 - 7,250 248,250 3.3%
- - - - - - -
Mr EJ Vickery [3] 5,000 5,000
Mr IR Witton [3] 5,000 - - - - - - 5,000 -
339,642 305,100 25,514 1,000 45,245 - 7,250 723,751 1.0%
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Directors’ remuneration disclosed is a consolidated remuneration for Monax Mining Limited and Marmota Energy Limited.
Director’s fees for Mr Davis are paid to a related entity of the Director.
Messrs Vickery and Witton received remuneration for their services as alternate directors.

The Directors conclude that there are no other executives requiring disclosure other than those listed.

2010 Monax Mining Limited Annual Report

directors’ Report

Remuneration Report – Audited cont

(c) Key management personnel remuneration

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Key management personnel Salary, fees Non cash Cash Super con- Long Options Total Proportion
excluding Directors and leave items bonus tributions service $ $ of remu-
$ $ $ $ leave neration
$ relating to
perfor-
mance
2010 primary benefits
Mr DJ Calandro 205,264 30,275 12,500 14,461 - - 262,500 4.8%
Ms VK Suttell 156,269 - 4,000 13,846 - 19,600 193,715 12.1%
361,533 30,275 16,500 28,307 - 19,600 456,215 7.9%
2009 primary benefits
Mr DJ Calandro 196,163 30,092 1,000 13,745 - 9,500 250,500 4.2%
Ms VK Suttell 147,000 - 1,000 13,320 - 18,275 179,595 10.7%
343,163 30,092 2,000 27,065 - 27,775 430,095 6.9%
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*Mr Calandro was appointed Managing Director of Marmota Energy Limited on 9 July 2007.

** Ms Suttell was appointed as a Company Secretary and Chief Financial Officer on 21 November 2007. Until 30 June 2010, Ms Suttell was employed by Groundhog Services Pty Ltd to act as Company Secretary and Chief Financial Officer for Marmota Energy Limited and Monax Mining Limited. Effective 1 July 2010, Ms Suttell is employed by the Groundhog Services Partnership.

(d) Service agreements

During the financial year, Mr Ferris was appointed Managing Director of Monax Mining Limited. Pursuant to his service agreement, Mr Ferris is paid a total package of $240,000 per annum inclusive of superannuation guarantee contributions on an ongoing employment basis with a three month notice period. Mr Ferris was granted 3,000,000 options for ordinary shares with a fair market value of $183,000. There were neither post employment retirement benefits previously approved by members of the Company in a general meeting nor any paid to Directors of the Company. Mr Schwarz resigned as Managing Director effective 31 August 2009.

The Managing Director - Marmota Energy Limited was appointed in 2007 on an ongoing employment basis. The salary was reviewed in December 2009 and set at $260,000 per annum inclusive of superannuation guarantee contributions. There were neither post employment retirement or termination benefits previously approved by members of the Company in a general meeting nor any paid to Directors of the Company.

The Executive Director – Marmota Energy Limited was appointed in 2007. He was contracted for a term of one year expiring in December 2008. His contract was renewed for a further term of one year, expiring in December 2009. The salary was set at $87,200 per annum inclusive of superannuation contributions. Since expiry of his contract in December 2009, the Executive Director’s employment has continued on the same terms but including a four week notice period. There were neither post employment retirement or termination benefits previously approved by members of the Company in a general meeting nor any paid to Directors of the Company.

(e) Director related entities

Information of amounts paid to director related entities is set out in Note 23 to the financial statements.

2010 Monax Mining Limited Annual Report

directors’ Report

Remuneration Report – Audited cont

(f) Post-employment/retirement benefits

There were no post employment retirement benefits paid or payable to directors and key management personnel.

Options and rights granted

Apart from the options granted to directors in their capacity as employees of the Company under the Employee Share Option Plan as detailed below, no other options or rights were granted to directors or key management personnel of the company during the financial year.

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Grant details For the year ended 30 June 2010 Overall
Date No. Value Exercised Exercised Lapsed Lapsed Vested Vested Overall Lapsed
$ no. $ no. $ no. % unvested %
%
Key management (Note 1) (Note 2) (Note 3) (Note 4)
personnel
Monax Mining Limited
Mr M
Schwarz 13.04.2006 750,000 44,250 - - 750,000 44,250 750,000 100% - 100%
23.12.2008 250,000 7,250 - - 250,000 7,250 250,000 100% - 100%
Mr G Ferris 17.12.2009 3,000,000 183,000 - - - - 3,000,000 100% - -
Ms V
Suttell 18.07.2008 75,000 11,625 - - - - 75,000 100% - -
05.03.2010 175,000 14,875 - - - - 175,000 100% - -
4,250,000 261,000 - - 1,000,000 51,500 4,250,000
Marmota Energy Limited
Mr D
Calandro 23.12.2008 250,000 9,500 - - - - 250,000 100% - -
Ms V
Suttell 23.12.2008 175,000 6,650 175,000 7,000 - - - - - -
05.03.2010 75,000 4,725 - - - - 75,000 100% - -
500,000 20,875 175,000 7,000 - - 325,000
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Note 1 The value of options granted as remuneration and as shown in the above table has been determined in accordance with applicable accounting standards.

Note 2 All options exercised resulted in the issue of ordinary shares in Monax Mining Limited or Marmota Energy Limited on a 1:1 basis. All persons exercising options paid the relevant exercise price in its entirety.

Note 3 The value of options that has been exercised during the year as shown in the above table was determined as at the time of exercise.

Note 4 The value of options that has lapsed during the year due to vesting conditions not being satisfied has been determined at the time of their lapsing as if vesting conditions have been satisfied.

2010 Monax Mining Limited Annual Report

directors’ Report

Remuneration Report – Audited cont

Description of options/rights issued as remuneration

Details of the options granted as remuneration to those key management personnel listed in the previous table are as follows:

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Grant date Issuer Entitlement on exercise Dates Exercisable Value per Amount paid/
exercisable price option at grant payable by
date recipient
Monax Mining 1:1 Ordinary shares in Monax From issue date to
13.04.2006 Limited Mining Limited 12.04.2011 $0.26 $0.059 -
Monax Mining 1:1 Ordinary shares in Monax From issue date to
23.12.2008 Limited Mining Limited 23.12.2013 $0.0517 $0.029 -
Monax Mining 1:1 Ordinary shares in Monax From issue date to
18.07.2008 Limited Mining Limited 18.07.2013 $0.246 $0.155 -
Monax Mining 1:1 Ordinary shares in Monax From issue date to
05.03.2010 Limited Mining Limited 05.03.2015 $0.0917 $0.085 -
Marmota Energy 1:1 Ordinary shares in Marmota From issue date to
23.12.2008 Limited Energy Limited 23.12.2013 $0.04 $0.038 -
Marmota Energy 1:1 Ordinary shares in Marmota From issue date to
05.03.2010 Limited Energy Limited 05.03.2015 $0.1016 $0.063 -
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Option values at grant date were determined using the Black-Scholes valuation model.

The Report of Directors, incorporating the Remuneration Report is signed in accordance with a resolution of the Board of Directors:

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Robert Michael Kennedy

Director

Dated at Adelaide this 2[nd] day of September 2010.

2010 Monax Mining Limited Annual Report

Auditor’s independence declaration

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2010 Monax Mining Limited Annual Report

Statement of Comprehensive income

For the year ended 30 June 2010

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Note Consolidated
2010 2009
$ $
Other revenues 2 838,505 665,569
Total revenue 838,505 665,569
Administration expenses 3 596,154 369,068
Consultants 3 233,172 215,564
Depreciation 3 46,497 88,771
Employment expenses 3 992,133 814,740
Occupancy expenses 9,195 11,933
-
Loss on disposal of plant and equipment 13,167
Impairment of assets 3 2,289,402 -
-
Other expenses 104,830
Profit/(loss) before income tax expense (3,432,878) (847,674)
Income tax (expense)/benefit 4 (115,076) 302,536
Profit/(loss) after income tax expense (3,547,954) (545,138)
Profit/(loss) attributable to:
Members of the parent entity (3,188,254) (393,265)
Minority interests (359,700) (151,873)
- -
Other comprehensive income
Total comprehensive income for the period (3,547,954) (545,138)
Basic earnings per share (cents) 7 (2.75) (0.56)
Diluted earnings per share (cents) 7 (2.74) (0.56)
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The accompanying notes form part of these financial statements.

2010 Monax Mining Limited Annual Report

Statement of Financial Position

For the year ended 30 June 2010

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Note Consolidated
2010 2009
$ $
Current assets
Cash and cash equivalents 8 2,933,248 2,216,680
Trade and other receivables 9 641,115 564,779
Other current assets 10 54,739 51,742
Financial assets 11 11,500,000 7,460,890
Total current assets 15,129,102 10,294,091
Non-current assets
Plant and equipment 12 757,470 735,463
Exploration and evaluation expenditure 15 17,007,681 15,181,484
Total non-current assets 17,765,151 15,916,947
Total assets 32,894,253 26,211,038
Current liabilities
Trade and other payables 16 565,842 294,867
Short term provisions 17 81,471 75,355
Total current liabilities 647,313 370,222
Non-current liabilities
Capitalised lease incentive 65,782 86,789
Long term provisions 17 47,604 43,368
Total non-current liabilities 113,386 130,157
Total liabilities 760,699 500,379
Net assets 32,133,554 25,710,659
Equity
Issued capital 18 19,674,526 13,866,800
Reserves 598,080 378,955
Retained earnings (6,293,050) (3,150,747)
13,979,556 11,095,008
Minority interests 18,153,998 14,615,651
Total equity 32,133,554 25,710,659
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The accompanying notes form part of these financial statements.

2010 Monax Mining Limited Annual Report

Statement of Changes in equity

For the year ended 30 June 2010

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Retained Minority
Issued capital Reserves earnings interest Total
Consolidated Group $ $ $ $ $
Balance at 1 July 2008 13,872,313 314,840 (2,757,482) 14,743,774 26,173,445
Shares issued during the period
Transaction costs associated with the issue of shares (5,513) - - - (5,513)
(net of tax)
- -
Fair value of options issued to employees 64,115 23,750 87,865
- -
Total comprehensive income (393,265) (151,873) (545,138)
Balance at 30 June 2009 13,866,800 378,955 (3,150,747) 14,615,651 25,710,659
- - -
Proceeds from the issue of shares during the period 5,952,995 5,952,995
- - -
Movement in non-controlling interests 45,951 (45,951)
Proceeds from the issue of shares in subsidiaries - - - 3,918,798 3,918,798
(net of tax)
Transaction costs associated with the issue of shares (145,269) - - - (145,269)
(net of tax)
- -
Fair value of options issued to employees 219,125 25,200 244,325
- -
Total comprehensive income (3,188,254) (359,700) (3,547,954)
Balance at 30 June 2010 19,674,526 598,080 (6,293,050) 18,153,998 32,133,554
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The accompanying notes form part of these financial statements.

2010 Monax Mining Limited Annual Report

Statement of Cash Flows

For the year ended 30 June 2010

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Note Consolidated
2010 2009
$ $
Cash flows from operating activities
Cash receipts in the course of operations 132,499 75,000
Cash payments in the course of operations (1,895,020) (1,167,230)
Income tax rebate/refund 309,563 -
Interest received 589,667 918,518
Net cash provided by/(used in) operating activities 22(b) (863,291) (173,712)
Cash flows from investing activities
Payments for plant and equipment (198,763) (354,583)
Payments for exploration and evaluation assets (3,774,066) (4,853,836)
-
Security deposit (15,000)
Net cash provided by/(used in) investing activities (3,987,829) (5,208,419)
Cash flows from financing activities
Proceeds from issue of shares 5,952,995 -
-
Proceeds from issue of shares in subsidiaries (net of tax) 3,861,330
Payment of transaction costs associated with capital raising (207,527) (7,875)
Net cash provided by/(used in) financing activities 9,606,798 (7,875)
Net increase/(decrease) in cash held 4,755,678 (5,390,006)
Cash at the beginning of the financial year 9,677,570 15,067,576
Cash at the end of the financial year 22(a) 14,433,248 9,677,570
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The accompanying notes form part of these financial statements.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

The financial report includes the consolidated financial statements and notes of Monax Mining Limited and controlled entities (‘consolidated group’ or ‘Group’).

1 Statement of significant accounting policies

(a) Basis of preparation

This general purpose financial report has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standard Board (AASB) and the Corporation Act 2001.

The following report covers the consolidated entity, Monax Mining Limited, a listed public company, incorporated and domiciled in Australia.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated.

The financial report has been prepared on an accruals basis and is based on historical costs, modified where applicable, by the measurement at fair value of selected non current assets, financial assets and financial liabilities.

Third statement of financial position

Two comparative periods are presented for the statement of financial position when the Group:

i Applies an accounting policy retrospectively,
ii Makes a retrospective restatement of items in its financial statements, or
iii Reclassifies items in the financial statements.

The group has determined that only one comparative period for the statement of financial position was required for the current reporting period as the application of the new accounting standards have had no material impact on the previously presented primary financial statements that were presented in the prior year financial statements.

Adoption of new and revised accounting standards

In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for the current annual reporting period. The 2009 comparatives contained in these financial statements therefore differ from those published in the financial statements for the year ended 30 June 2009 as described below.

Significant effects on current, prior or future periods arising from the first-time application of the standards discussed above in respect of presentation, recognition and measurement of accounts are described in the following notes.

Adoption of AASB 8 Operating Segments

From 1 January 2009, operating segments are identified and segment information disclosed on the basis of internal reports provided to or received by the chief operating decision maker which for the group is the Board of Directors.

Adoption of AASB 101 Presentation of Financial Statements (revisions), AASB 2007-8 and 2007-10 Amendments arising from the revisions to AASB 101

The group has adopted the revisions to AASB 101 Presentation of Financial Statements in these financial statements which has resulted in the introduction of the statement of comprehensive income, changes to the statement of changes in equity, and other terminology changes.

(b) Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Monax Mining Limited (‘parent entity’) as at 30 June 2010 and the result of all subsidiaries for the year then ended. Monax Mining Limited and its subsidiaries together are referred to in this financial report as the Group or consolidated entity.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. All inter-group balances and transactions between entities in the consolidated group have been eliminated on consolidation. A list of controlled entities is contained in Note 13 to the financial statements.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Minority interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity interests held by persons outside the Group, are shown separately within the Equity section of the consolidated Statement of Financial Position and the consolidated Statement of Comprehensive Income.

Accounting policies of subsidiaries are consistent with those adopted by the parent entity.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

(c) income tax

The income tax expense (benefit) for the year comprises current income tax expense/(income) and deferred income tax (income).

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted at reporting date.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.

Current and deferred income tax (expense)/benefit is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

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

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

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the 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.

(d) Plant and equipment

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

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

Depreciation

All fixed assets are depreciated on a straight line basis over their useful lives to the economic entity commencing from the time the asset is held ready for use.

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

assets are:
Class of fxed asset	Depreciation rate
Plant and equipment	5% – 33%

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

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

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the Statement of Comprehensive Income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

(e) exploration and evaluation expenditure

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

Plant and equipment

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

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

1 Statement of significant accounting policies cont

(e) exploration and evaluation expenditure cont

Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the site in accordance with clauses of the mining permits. Such costs are determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.

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

(f) Leases

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

(g) Financial instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the provisions to the instrument. For financial assets this is equivalent to the date that the Group commits itself to either the purchase or sale of the asset.

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified ‘at fair value through the profit or loss’, in which case the costs are expensed to the profit and loss immediately.

Classification and subsequent measurement

Financial instruments are subsequently measured at either of fair value, amortised cost using the interest rate method or cost. Fair value represents the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties. Where available, quoted prices, in an active market are used to determine fair value.

The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments:

ii Financial Liabilities

Non-derivative financial liabilities are subsequently measured at amortised cost.

iii Available-for-sale financial assets Available-for-sale financial assets are non derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise the investments in the equity of other entities where there is neither a fixed maturity nor determinable payments.

Impairment

At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been impaired.

(h) impairment of assets

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

(i) Employee benefits

Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year are measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year are measured at the present value of the estimated future cash outflows to be made for those benefits. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows.

In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows.

Equity settled compensation

The Group operates equity settled share-based payment employee share option schemes. The fair value of options is ascertained using the Black-Scholes pricing model which incorporates all market vesting conditions.

i Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Loans and receivables are included in current assets except for those not expected to mature within 12 months after the end of the reporting period.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

(j) Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

(k) Cash and cash equivalents

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

(l) Revenue

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

All revenue is stated net of goods and services tax (GST).

(m) goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). 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 in the Statement of Financial Position inclusive of GST.

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 Statement of Cash Flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(n) interests in joint ventures

The Consolidated Group’s share of the assets, liabilities, reserves and expenses of joint venture operations are included in the appropriate items of the consolidated financial statements. Details of the Group’s interests are shown at Note 14.

(o) investments in associates

Associate companies are companies in which the group has significant influence through holding, directly or indirectly, 20% or more of the voting power of the company. Investments in associate companies are recognised in the financial statements by applying the equity method of accounting. The equity method of accounting recognises the initial investment at cost and adjusted thereafter for the Group’s share of post-acquisition reserves and profits/ (losses) of its associates.

(p) trade and other payables

Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the group during the period which remains unpaid. The balance is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability.

(q) earnings per share

i Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
ii Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect and other financing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(r) Comparative figures

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

(s) Critical accounting estimates and judgements

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

Key estimates – impairment

The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined.

The group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. While there are certain areas of interest from which no reserves have been extracted, the directors are of the continued belief that such expenditure should not be written off since feasibility studies in such areas have not yet concluded.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

1 Statement of significant accounting policies cont

(s) Critical accounting estimates and judgements cont

Key judgements- exploration and evaluation expenditure

(t) new accounting standards for application in future periods

The AASB has issued new and amended accounting standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against early adoption of these standards. A discussion of those future requirements and their impact on the Group follows:

AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing on or after 1 January 2011).

This standard removes the requirement for government related entities to disclose details of all transactions with the government and other government related entities and clarifies the definition of a related party to remove inconsistencies and simplify the structure of the standard. No changes are expected to materially affect the Group.

AASB 2009–4: Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 2 and AASB 138 and AASB Interpretations 9 & 16] (applicable for annual reporting periods commencing from 1 July 2009) and AASB 2009-5: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136 & 139] (applicable for annual reporting periods commencing from 1 January 2010).

These standards detail numerous non-urgent but necessary changes to accounting standards arising from the IASB’s annual improvements project. No changes are expected to materially affect the Group.

These standards are applicable retrospectively and amend the classification and measurement of financial assets. The Company has not yet determined the potential impact on the financial statements.

The changes made to accounting requirements include:

simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost;
allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument; and
reclassifying financial assets where there is a change in an entity’s business model as they are initially classified based on:
a. the objective of the entity’s business model for managing the financial assets; and
b. the characteristics of the contractual cash flows.

AASB 2009–8: Amendments to Australian Accounting Standards — Group Cash-settled Share-based Payment Transactions [AASB 2] (applicable for annual reporting periods commencing on or after 1 January 2010)

These amendments clarify the accounting for group cashsettled share-based payment transactions in the separate or individual financial statements of the entity receiving the goods or services when the entity has no obligation to settle the sharebased payment transaction. The amendments incorporate the requirements previously included in Interpretation 8 and Interpretation 11 and as a consequence, these two Interpretations are superseded by the amendments. These amendments are not expected to impact the Group.

AASB 2009–9: Amendments to Australian Accounting Standards — Additional Exemptions for First-time Adopters [AASB 1] (applicable for annual reporting periods commencing on or after 1 January 2010)

AASB 9: Financial Instruments and AASB 2009–11: Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12] (applicable for annual reporting periods commencing on or after 1 January 2013)

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

(t) new accounting standards for application in future periods cont

These amendments specify requirements for entities using the full cost method in place of the retrospective application of Australian Accounting Standards for oil and gas assets, and exempt entities with existing leasing contracts from reassessing the classification of those contracts in accordance with Interpretation 4 when the application of their previous accounting policies would have given the same outcome. These amendments are not expected to impact the Group.

AASB 2009–10: Amendments to Australian Accounting Standards — Classification of Rights Issues [AASB 132] (applicable for annual reporting periods commencing on or after 1 February 2010)

These amendments clarify that rights, options or warrants to acquire a fixed number of an entity’s own equity instruments for a fixed amount in any currency are equity instruments if the entity offers the rights, options or warrants pro-rata to all existing owners of the same class of its own non-derivative equity instruments. These amendments are not expected to impact the Group.

AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting periods commencing on or after 1 January 2011)

This standard makes a number of editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of International Financial Reporting Standards by the IASB. The standard also amends AASB 8 to require entities to exercise judgement in assessing whether a government and entities known to be under the control of that government are considered a single customer for the purposes of certain operating segment disclosures. These amendments are not expected to impact the Group.

AASB 2009–14: Amendments to Australian Interpretation — Prepayments of a Minimum Funding Requirement [AASB Interpretation 14] (applicable for annual reporting periods commencing on or after 1 January 2011)

This standard amends Interpretation 14 to address unintended consequences that can arise from the previous accounting requirements when an entity prepays future contributions into a defined benefit pension plan. This standard is not expected to impact the Group.

AASB Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments (applicable for annual reporting periods commencing on or after 1 July 2010)

This Interpretation deals with how a debtor would account for the extinguishment of a liability through the issue of equity instruments. The Interpretation states that the issue of equity should be treated as the consideration paid to extinguish the liability, and the equity instruments issued should be recognised at their fair value unless fair value cannot be measured reliably in which case they shall be measured at the fair value of the liability extinguished. The Interpretation deals with situations where either partial or full settlement of the liability has occurred. This Interpretation is not expected to impact the Group.

The Group does not anticipate the early adoption of any of the above Australian Accounting Standards.

(u) Authorisation for issue of financial statements

The financial statements were authorised for issue by the Board of Directors on 2 September 2010.

AASB 2009–13: Amendments to Australian Accounting Standards arising from Interpretation 19 [AASB 1] (applicable for annual reporting periods commencing on or after 1 July 2010)

This standard makes amendments to AASB 1 arising from the issue of Interpretation 19. The amendments allow a first-time adopter to apply the transitional provisions in Interpretation 19. This standard is not expected to impact the Group.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

2 Revenue from ordinary activities

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

Note Consolidated
2010 2009
$ $
Other revenues:
From operating activities
Interest received from other parties 705,642 665,569
Other revenue 132,863 -
Total revenue from ordinary activities 838,505 665,569
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3 Profit from ordinary activities before income tax expense has been determined after

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

Note Consolidated
2010 2009
$ $
Expenses
Administration expenses
ASX fees 80,905 31,163
Share registry fees 91,213 63,898
Insurance 69,614 59,537
Audit and other services 50,000 47,000
Other 304,422 167,470
596,154 369,068
Consulting expenses
Legal fees 26,056 68,699
Corporate consulting 178,080 100,000
Accounting and secretarial services 29,036 46,865
233,172 215,564
Depreciation expenses
Plant and equipment 46,497 88,771
Employment expenses
Salaries and wages 1,329,728 1,314,459
Directors’ fees 375,375 371,750
Superannuation 124,878 119,359
Provisions 10,353 (1,439)
Share-based payments 244,325 87,865
Other 71,071 104,874
Reallocation to exploration costs (1,163,597) (1,182,128)
992,133 814,740
-
Loss on sale of plant and equipment 13,167
-
Impairment of assets 2,289,402
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2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

4 income tax expense

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

Note Consolidated
2010 2009
$ $
The components of tax expense comprise:
Current income tax 4,649 304,914
Deferred income tax - -
Tax portion of capital raising costs (119,725) (2,378)
Income tax (expense)/benefit reported in the statement of comprehensive income (115,076) 302,536
The prima facie income tax on profit from ordinary activities before income tax is reconciled to the income tax as follows:
Prima facie income tax (expense)/benefit calculated at 30% on loss from ordinary activities 1,029,863 254,302
Deferred tax asset in respect of tax losses not brought to account (343,042) (254,302)
-
Impairment expense previously brought to account (686,821)
Research and development tax offset 9,962 304,914
-
Over provision in the prior year (5,313)
Tax portion of capital raising costs (119,725) (2,378)
Income tax (expense)/benefit attributable to loss from ordinary activities (115,076) 302,536
Income tax losses
Deferred tax asset arising from carried forward tax losses not recognised at reporting
date as the asset is not regarded as meeting the probable criteria
Tax losses at 30% 6,944,859 5,249,690
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2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

5 Remuneration of directors and key management personnel

Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member of the group’s key management personnel for the year ended 30 June 2010. The totals of remuneration paid to key management personnel during the year are as follows:

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

Consolidated
2010 2009
$ $
Short term employee benefits 1,058,420 1,046,511
Post employment benefits 86,895 72,310
- -
Other long term benefits
- -
Termination benefits
Share-based payments 202,600 35,025
1,347,915 1,153,846
----- End of picture text -----

Detailed remuneration disclosures are provided in the remuneration report.

(a) directors and key management personnel

The names and positions held by Directors and key management personnel of the Company during the financial year are:

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2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

(b) directors and key management personnel equity remuneration, holdings and transactions

i Options provided as remuneration and shares issued on exercise of such options

Details of options provided as remuneration and shares issued on the exercise of such options together with the terms and condition of the options can be found in the remuneration report.

ii Share holdings

The number of shares in the company held during the financial year by each director of Monax Mining Limited and other key management personnel of the group, including their personal related parties, are set out below. There were no shares granted during the year as remuneration.

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

Shares in Monax Mining Limited Balance Received as Options Net change Balance Total held
1/07/09 remunera- exercised other [1] 30/06/10 in escrow
tion 30/06/10
Held by Directors in own name
- - - - - -
Mr RM Kennedy
Mr RG Nelson - - - - - -
Mr GS Davis 72,727 - - - 72,727 -
- - - - - -
Dr NF Alley
Mr GM Ferris - - - - - -
Mr M Schwarz - - - - - -
- - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - -
- - - -
72,727 72,727
Held by Directors’ personally related entities
- - -
Mr RM Kennedy 3,031,391 1,433,097 4,464,488
Mr RG Nelson 2,040,001 - - 105,658 2,145,659 -
Mr GS Davis 2,702,728 - - - 2,702,728 -
- - -
Dr NF Alley 3,056,090 52,829 3,108,919
Mr GM Ferris - - - - - -
Mr MP Schwarz 1,650,000 - - - 1,650,000 -
- - - -
Mr EJ Vickery 55,300 55,300
Mr IR Witton 21,363 - - 77,560 98,923 -
- - -
Total held by Directors 12,629,600 1,669,144 14,298,744
Key management personnel excluding Directors
Mr DJ Calandro - - - - - -
Ms VK Suttell 38,727 - - - 38,727 -
Total 12,668,327 - - 1,669,144 14,337,471 -
----- End of picture text -----

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

5 Remuneration of directors and key management personnel cont

(b) directors and key management personnel equity remuneration, holdings and transactions cont

==> picture [511 x 379] intentionally omitted <==

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

Shares in Monax Mining Limited Balance Received as Options Net change Balance Total held
1/07/08 remunera- exercised other [1] 30/06/09 in escrow
tion 30/06/09
Held by Directors in own name
- - - - - -
Mr RM Kennedy
Mr RG Nelson - - - - - -
Mr GS Davis 72,727 - - - 72,727 -
- - - - - -
Dr NF Alley
Mr M Schwarz - - - - - -
- - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - -
- - - -
72,727 72,727
Held by Directors’ personally related entities
- - - -
Mr RM Kennedy 3,031,391 3,031,391
Mr RG Nelson 2,040,001 - - - 2,040,001 -
Mr GS Davis 2,702,728 - - - 2,702,728 -
- - - -
Dr NF Alley 3,056,090 3,056,090
Mr MP Schwarz 1,650,000 - - - 1,650,000 -
- - - -
Mr EJ Vickery 55,300 55,300
Mr IR Witton 21,363 - - - 21,363 -
- - - -
Total held by Directors 12,629,600 12,629,600
Key management personnel excluding Directors
Mr DJ Calandro - - - - - -
Ms VK Suttell 38,727 - - - 38,727 -
Total 12,668,327 - - - 12,668,327 -
----- End of picture text -----

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

5 Remuneration of directors and key management personnel cont

(b) directors and key management personnel equity remuneration, holdings and transactions cont

iii Option holdings

The number of options over ordinary shares in the company held during the financial year by each director of Monax Mining Limited and any other key management personnel of the group, including their personal related parties are set out below.

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

Options in Monax Mining Option Balance Received Options Net change Balance Total Total
Limited class 1/07/09 as remun- exercised other [1] 30/06/10 vested exercisable
eration 30/06/10 30/06/10
Held by Directors in own name
- - - - - - -
Mr RM Kennedy
Mr RG Nelson - - - - - - -
Mr GS Davis - - - - - - -
- - - - - - -
Dr NF Alley
Mr GM Ferris - - - - - - -
Mr MP Schwarz - - - - - - -
- - - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - - -
- - - - - - -
Directors’ personally related entities
- - - - -
Mr RM Kennedy (e) 350,000 (350,000)
- - -
(k) 558,062 558,062 558,062 558,062
Mr RG Nelson (e) 350,000 - - (350,000) - - -
Mr GS Davis (e) 350,000 - - (350,000) - - -
- - - - -
Dr NF Alley (e) 400,000 (400,000)
Mr GM Ferris (i) - 3,000,000 - - 3,000,000 3,000,000 3,000,000
Mr MP Schwarz (f) 750,000 - - (750,000) - - -
- - - - -
(h) 250,000 (250,000)
- - - - - - -
Mr EJ Vickery
Mr IR Witton (k) - - - 12,366 12,366 12,366 12,366
-
Total held by Directors 2,450,000 3,000,000 (1,879,572) 3,570,428 3,570,428 3,570,428
Key management personnel
excluding Directors
Mr DJ Calandro - - - - - - -
Ms VK Suttell (g) 75,000 - - - 75,000 75,000 75,000
- - -
(j) 175,000 175,000 175,000 175,000
Total 2,525,000 3,175,000 - (1,879,572) 3,820,428 3,820,428 3,820,428
----- End of picture text -----

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

5 Remuneration of directors and key management personnel cont

(b) directors and key management personnel equity remuneration, holdings and transactions cont

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

Options in Monax Mining Option Balance Received Options Net change Balance Total Total
Limited class 1/07/08 as remun- exercised other [1] 30/06/09 vested exercisable
eration 30/06/09 30/06/09
Held by Directors in own name
- - - - - - -
Mr RM Kennedy
Mr RG Nelson - - - - - - -
Mr GS Davis - - - - - - -
- - - - - - -
Dr NF Alley
Mr MP Schwarz - - - - - - -
- - - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - - -
- - - - - - -
Directors’ personally related entities
- - - - -
Mr RM Kennedy (d) 350,000 (350,000)
- - -
(e) 350,000 350,000 350,000 350,000
Mr RG Nelson (d) 350,000 - - (350,000) - - -
- - -
(e) 350,000 350,000 350,000 350,000
Mr GS Davis (d) 350,000 - - (350,000) - - -
- - -
(e) 350,000 350,000 350,000 350,000
- - - - -
Dr NF Alley (d) 400,000 (400,000)
- - -
(e) 400,000 400,000 400,000 400,000
Mr MP Schwarz (f) 750,000 - - - 750,000 750,000 750,000
- - -
(h) 250,000 250,000 250,000 250,000
- - - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - - -
-
Total held by Directors 3,650,000 250,000 (1,450,000) 2,450,000 2,450,000 2,450,000
Key management personnel
excluding Directors
Mr DJ Calandro - - - - - - -
Ms VK Suttell (g) - 75,000 - - 75,000 75,000 75,000
Total 3,650,000 325,000 - (1,450,000) 2,525,000 2,525,000 2,525,000
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(d) Unlisted options exercisable at $0.30 by 30/06/2009
(e) Unlisted options exercisable at $0.40 by 30/06/2010
(f) Unlisted options exercisable at $0.26 by 12/04/2011
(g) Unlisted options exercisable at $0.246 by 18/07/2013
(h) Unlisted options exercisable at $0.0517 by 23/12/2013
(i) Unlisted options exercisable at $0.10 by 31/07/2012
(j) Unlisted options exercisable at $0.0917 by 05/03/2015
(k) Listed options exercisable at $0.15 by 30/11/2011
Net change other refers to shares purchased and/or sold during the financial year and shares no longer held by Directors or their related entities.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

5 Remuneration of directors and key management personnel cont

(b) directors and key management personnel equity remuneration, holdings and transactions cont

i Options provided as remuneration and shares issued on exercise of such options in controlled subsidiary Marmota Energy Limited

Details of options provided as remuneration and shares issued on the exercise of such options, together with the terms and conditions of the options can be found in the remuneration report.

ii Shareholdings

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

Shares in Marmota Energy Limited Balance Received as Options Net change Balance Total held
1/07/09 remunera- exercised other [1] 30/06/10 in escrow
tion 30/06/10
Held by Directors in own name
Mr RM Kennedy 1 - - - 1 -
Mr RG Nelson 1 - - - 1 -
Mr GS Davis 1 - - - 1 -
Dr NF Alley 1 - - - 1 -
Mr GM Ferris - - - - - -
Mr MP Schwarz 1 - - - 1 -
- - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - -
5 - - - 5 -
Held by Directors’ personally related entities
- - -
Mr RM Kennedy 3,146,666 421,426 3,568,092
Mr RG Nelson 940,000 - - 214,284 1,154,284 -
Mr GS Davis 2,950,000 - - - 2,950,000 -
- - -
Dr NF Alley 2,710,000 17,857 2,727,857
Mr GM Ferris - - - - - -
Mr MP Schwarz 3,040,000 - - - 3,040,000 -
- - - -
Mr EJ Vickery 200,000 200,000
Mr IR Witton 40,000 - - 17,857 57,857 -
- - -
Total held by Directors 13,026,671 671,424 13,698,095
Key management personnel excluding Directors
Mr DJ Calandro 2,080,000 - - - 2,080,000 -
Ms VK Suttell 30,000 - 175,000 - 205,000 -
Total 15,136,671 - 175,000 671,424 15,983,095 -
----- End of picture text -----

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

5 Remuneration of directors and key management personnel cont

(b) directors and key management personnel equity remuneration, holdings and transactions cont

==> picture [511 x 388] intentionally omitted <==

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

Shares in Marmota Energy Limited Balance Received as Options Net change Balance Total held
1/07/08 remunera- exercised other [1] 30/06/09 in escrow
tion 30/06/09
Held by Directors in own name
Mr RM Kennedy 1 - - - 1 -
Mr RG Nelson 1 - - - 1 -
Mr GS Davis 1 - - - 1 -
Dr NF Alley 1 - - - 1 -
Mr MP Schwarz 1 - - - 1 -
- - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - -
5 - - - 5 -
Held by Directors’ personally related entities
- - -
Mr RM Kennedy 3,146,666 3,146,666 2,740,000
Mr RG Nelson 940,000 - - - 940,000 900,000
Mr GS Davis 2,950,000 - - - 2,950,000 2,825,000
- - -
Dr NF Alley 2,710,000 2,710,000 2,700,000
Mr MP Schwarz 3,040,000 - - - 3,040,000 3,040,000
- - - -
Mr EJ Vickery 200,000 200,000
Mr IR Witton 40,000 - - - 40,000 -
- - -
Total held by Directors 13,026,671 13,026,671 12,205,000
Key management personnel
excluding Directors
Mr DJ Calandro 2,080,000 - - - 2,080,000 2,040,000
Ms VK Suttell 30,000 - - - 30,000 -
Total 15,136,671 - - - 15,136,671 14,245,000
----- End of picture text -----

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

5 Remuneration of directors and key management personnel cont

(b) directors and key management personnel equity remuneration, holdings and transactions cont

iii Option Holdings

==> picture [512 x 445] intentionally omitted <==

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

Options in Marmota Option Balance Received Options Net change Balance Total Total
Energy Limited class 1/07/09 as remun- exercised other [1] 30/06/10 vested exercisable
eration 30/06/10 30/06/10
Held by Directors in own name
- - - - - - -
Mr RM Kennedy
Mr RG Nelson - - - - - - -
Mr GS Davis - - - - - - -
- - - - - - -
Dr NF Alley
Mr GM Ferris - - - - - - -
Mr MP Schwarz - - - - - - -
- - - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - - -
- - - - - - -
Directors’ personally related entities
- - -
Mr RM Kennedy (a) 1,350,000 1,350,000 1,350,000 1,350,000
Mr RG Nelson (a) 450,000 - - - 450,000 450,000 450,000
Mr GS Davis (a) 1,350,000 - - - 1,350,000 1,350,000 1,350,000
- - -
Dr NF Alley (a) 1,350,000 1,350,000 1,350,000 1,350,000
Mr GM Ferris - - - - - - -
Mr MP Schwarz (a) 1,520,000 - - - 1,520,000 1,520,000 1,520,000
- - - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - - -
- - -
Total held by Directors 6,020,000 6,020,000 6,020,000 6,020,000
Key management personnel
excluding Directors
Mr DJ Calandro (a) 1,000,000 - - - 1,000,000 1,000,000 1,000,000
- - -
(b) 250,000 250,000 250,000 250,000
Ms VK Suttell (b) 175,000 - (175,000) - - - -
- - -
(c) 75,000 75,000 75,000 75,000
Total 7,445,000 75,000 (175,000) - 7,345,000 7,345,000 7,345,000
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2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

5 Remuneration of directors and key management personnel cont

(b) directors and key management personnel equity remuneration, holdings and transactions cont

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Options in Marmota Option Balance Received Options Net change Balance Total Total
Energy Limited class 1/07/08 as remun- exercised other [1] 30/06/10 vested exercisable
eration 30/06/10 30/06/10
Held by Directors in own name
- - - - - - -
Mr RM Kennedy
Mr RG Nelson - - - - - - -
Mr GS Davis - - - - - - -
- - - - - - -
Dr NF Alley
Mr MP Schwarz - - - - - - -
- - - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - - -
- - - - - - -
Directors’ personally related entities
- - - -
Mr RM Kennedy (a) 1,350,000 1,350,000 1,350,000
Mr RG Nelson (a) 450,000 - - - 450,000 450,000 -
Mr GS Davis (a) 1,350,000 - - - 1,350,000 1,350,000 -
- - - -
Dr NF Alley (a) 1,350,000 1,350,000 1,350,000
Mr MP Schwarz (a) 1,520,000 - - - 1,520,000 1,520,000 -
- - - - - - -
Mr EJ Vickery
Mr IR Witton - - - - - - -
- - - -
Total held by Directors 6,020,000 6,020,000 6,020,000
Key management personnel
excluding Directors
Mr DJ Calandro (a) 1,000,000 - - - 1,000,000 1,000,000 -
- - -
(b) 250,000 250,000 250,000 250,000
Ms VK Suttell (b) - 175,000 - - 175,000 175,000 175,000
Total 7,020,000 425,000 - - 7,445,000 7,445,000 425,000
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(a) Unlisted options exercisable at $0.40 by 11/07/2012
(b) Unlisted options exercisable at $0.04 by 23/12/2013
(c) Unlisted options exercisable at $0.1016 by 05/03/2015
Net change other refers to shares purchased and/or sold during the financial year and shares no longer held by Director related entities.

No options previously granted to Directors or Director related entities were exercised during the year.

Other key management personnel transactions

There have been no other transactions involving equity instruments other than those described in the tables above. For details of other transactions with key management personnel, refer to Note 23: Related parties.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

6 Auditor’s remuneration

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Consolidated
2010 2009
$ $
Audit services:
Auditors of the Company – Grant Thornton
Audit and review of the financial reports 50,000 47,000
50,000 47,000
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7 earnings per share

(a) Classification of securities

All ordinary shares have been included in basic earnings per share.

(b) Classification of securities as potential ordinary shares

2,500,000 unlisted options exercisable at $0.40 by 30/06/2010

750,000 unlisted options exercisable at $0.26 by 12/04/2011

450,000 unlisted options exercisable at $0.666 by 14/02/2012 365,000 unlisted options exercisable at $0.246 by 18/07/2013 260,000 unlisted options exercisable at $0.0517 by 23/12/2013

3,000,000 unlisted options exercisable at $0.10 by 31/07/2012 425,000 unlisted options exercisable at $0.0917 by 05/03/2015 18,309,658 listed options exercisable at $0.15 by 30/11/2011

(c) earnings used in the calculation of earnings per share

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Consolidated
2010 2009
$ $
Profit/(loss) after income tax expense and minority interest (3,188,254) (393,265)
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(d) Weighted average number of shares outstanding during the year used in calculating earnings per share

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Consolidated
2010 2009
no. no.
Number for basic earnings per share
Ordinary shares 116,140,759 70,647,057
Number for diluted earnings per share
Ordinary shares and options 116,265,401 70,647,057
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2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

8 Cash and cash equivalents

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Consolidated
2010 2009
$ $
Cash at bank 678,248 221,680
Deposits at call 2,255,000 1,995,000
2,933,248 2,216,680
Cash and cash equivalents comprise the following:
Monax Mining Limited 807,701 1,057,171
Marmota Energy Limited 1,947,192 985,588
Groundhog Services Pty Ltd 178,355 173,921
2,933,248 2,216,680
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Monax Mining Limited does not have direct access to cash assets held by Marmota Energy Limited and Groundhog Services Pty Ltd.

9 trade and other receivables

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Consolidated
2010 2009
$ $
Current
Trade debtors 129,133 -
Other debtors 511,982 564,779
641,115 564,779
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Other debtors represent accrued interest receivable, research and development tax offset receivable and GST refunds. Receivables are not considered past due and/or impaired.

10 other current assets

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Consolidated
2010 2009
$ $
Prepayments 54,739 51,742
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11 Financial assets

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Consolidated
2010 2009
$ $
Held-to-maturity investments
Fixed interest short term deposit 11,500,000 7,460,890
Financial assets comprise the following:
-
Monax Mining Limited 4,000,000
Marmota Energy Limited 7,500,000 7,460,890
- -
Groundhog Services Pty Ltd
11,500,000 7,460,890
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Monax Mining Limited does not have direct access to financial assets held by Marmota Energy Limited and Groundhog Services Pty Ltd.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

12 Plant and equipment

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Consolidated
2010 2009
$ $
Plant and equipment
At cost 1,202,049 1,002,926
Accumulated depreciation (444,579) (267,463)
Net book value 757,470 735,463
Reconciliations
Reconciliations of the carrying amounts for each class of plant and equipment are set out below:
Plant and equipment
Carrying amount at beginning of year 735,463 571,193
Additions 199,123 348,102
-
Disposals (21,332)
Accumulated depreciation (177,116) (162,500)
Carrying amount at end of year 757,470 735,463
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13 Controlled earnings

(a) Controlled entities consolidated

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Country of incorporation Percentage owned (%)
2010 2009
Parent entity:
Monax Mining Limited Australia - -
Subsidiaries of Monax Mining Limited:
Marmosa Pty Ltd Australia - -
Marmota Energy Limited Australia 24.01 29.8
Groundhog Services Pty Ltd Australia 64.9 64.9
Subsidiaries of Marmota Energy Limited:
Marmosa Pty Ltd Australia 100 100
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Marmota Energy Limited has been consolidated in these financial statements as four of the five directors of Marmota Energy Limited are directors of Monax Mining Limited, as such Monax Mining Limited is considered to control Marmota Energy Limited.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

14 interests in unincorporated joint ventures

Monax Mining Limited has the following interests in unincorporated joint ventures

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No State Agreement Name Parties Summary
1 SA Farm-in & Joint Venture Marmosa Pty Ltd MOX gives MSA exclusive right to conduct exploration for uranium on
Agreement (MSA) and Monax areas covered by Exploration Licences EL 3355, EL 3356, EL 3357, EL
Mining Limited (MOX) 3359, EL 3458, EL 3561, EL 3684, EL 3685 and EL 3775. Once MSA
has spent $4 million on exploration it will have earned 25% interest with
a further spend of $4 million required for an additional 25%.
2 SA Ambrosia Farm- Marmosa Pty Ltd MOX gives MSA the right to explore for all minerals in the area covered
in & Joint Venture (MSA) and Monax by Exploration Licence EL 4510 (formerly EL 3358). MSA has achieved
Agreement Mining Limited (MOX) its first $1 million earn in and now has a 25% interest with a further 25%
able to be earned.
3 SA Mineral Rights Transfer Marmosa Pty Ltd MSA transfers to MOX 100% of its interests in minerals other than
& Joint Venture (MSA) and Monax uranium and 30% of its interests in uranium for areas covered by the
Agreement Mining Limited (MOX) following Exploration Licences: EL 3907, EL 3908, EL 3909 and EL
3910. MSA and MOX enter into a joint venture to explore for uranium.
4 SA Farmin Agreement OM (Manganese) MOX gives OMM the exclusive right to conduct exploration for all
Limited (OMM) and minerals except uranium and non-ferrous minerals (subject to an
Monax Mining Limited election by OMM in accordance with the agreement) on area covered
(MOX) by Exploration Licence EL 3357. Once OMM has spent $2 million it will
have earned 60% interest. Minimum expenditure of $250,000 in the first
year must be spent before OMM can withdraw from the agreement and
the $4 million must be incurred within 4 years.
5 SA Junction Dam Uranium Teck Australia Pty Ltd, MEU will have the right to explore for uranium in the area covered by
Agreement PlatSearch NL and Exploration Licence EL 4509 (formerly EL 3328). During the financial
Eaglehawk year, MEU has achieved its 51% earn in by completing at least 2000m
Geological Consulting of drilling and expending an additional $300,000.
Pty Ltd (TPE) and
Marmota Energy
Limited (MEU)
6 SA Melton Joint Venture Monax Mining Limited MEU will have the right to explore for all minerals in the area covered by
(MOX) and Marmota Exploration Licences EL 4000 and EL 3911. During the year MEU has
Energy Limited (MEU) achieved its 50% earn in by expending $400,000.
7 USA Big Blue Joint Venture, Ramelius Resources MEU will have the right to earn 40% of the RMS 70% rights in the Big
Nevada Limited (RMS), Miranda Blue Gold Project in Nevada.
Gold Corporation
and Marmota Energy
Limited (MEU).
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15 exploration and evaluation expenditure

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Note Consolidated
2010 2009
$ $
Costs carried forward in respect of areas of interest in:
Exploration and evaluation phase (i) 17,007,681 15,181,484
Total exploration and evaluation expenditure 17,007,681 15,181,484
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The ultimate recoupment of costs carried forward for exploration phase is dependent on the successful development and commercial exploitation or sale of the respective areas.

i Reconciliation

A reconciliation of the carrying amount of exploration and/or evaluation phase expenditure is set out below.

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Carrying amount at beginning of year 15,181,484 10,894,087
Additional costs capitalised during the year 4,115,599 4,287,397
-
Impairment of exploration asset (2,289,402)
Carrying amount at end of year 17,007,681 15,181,484
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2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

16 trade and other payables

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Consolidated
2010 2009
$ $
Trade creditors 285,098 86,073
Other creditors and accruals 213,488 196,047
Amounts payable to Director related entities 67,256 12,747
565,842 294,867
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Details of amounts payable to Director related entities are detailed in Note 23.

17 Provisions

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Consolidated
2010 2009
$ $
Current
Employee benefits 81,471 75,355
Non-current
Employee benefits 47,604 43,368
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Provision for long service leave

A provision for long service leave has been recognised for employee benefits. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits has been included in Note 1 to this report.

18 issued capital

(a) ordinary shares

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Consolidated
2010 2009
$ $
Issued and paid-up share capital
148,053,668 (2009: 70,647,057) ordinary shares, fully paid 19,674,526 13,866,800
Balance at the beginning of year: 13,866,800 13,872,313
Shares issued during the year:
-
34,887,449 (2009: nil) shares issued to shareholders as part of a Share Purchase Plan and Placement at $0.075 2,616,558
-
36,619,158 (2009: nil) shares issued to shareholders as part of a Rights Issue and Placement at $0.075 2,746,437
-
5,900,000 (2009: nil) shares issued to shareholders as part of a Placement at $0.10 590,000
- -
4 (2009: nil) shares issued to option holders on the exercise of options at $0.15
Less transaction costs arising from issue of shares (net of tax) (145,269) (5,513)
Balance at end of year 19,674,526 13,866,800
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Holders of ordinary shares are entitled to receive 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 creditors and are fully entitled to any proceeds of liquidation.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

18 issued capital cont

(b) options

For information relating to the Monax Mining Limited Employee Share Option Plan including details of any options issued, exercised and lapsed during the financial year, refer to Note 19.

For information relating to share options issued to executive Directors during the financial year, refer to Note 5.

At 30 June 2010, there were 22,109,654 (30 June 2009: 4,325,000) unissued shares for which the following options were outstanding.

150,000 unlisted options exercisable at $0.666 by 14/12/2012

215,000 unlisted options exercisable at $0.246 by 18/07/2013

10,000 unlisted options exercisable at $0.0517 by 23/12/2013

3,000,000 unlisted options exercisable at $0.10 by 31/07/2012 425,000 unlisted options exercisable at $0.0917 by 05/03/2015

18,309,654 listed options exercisable at $0.15 by 30/11/2011

(c) Capital Management

Management effectively manages the group’s capital by assessing the group’s financial risks and adjusting its capital structure accordingly. These responses include share issues. There have been no changes in the strategy adopted by management to control the capital of the group since the prior year.

19 Share-based payments

The following share-based payment arrangements existed at 30 June 2010:

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2010 2009
Number of Weighted Number of Weighted
options average options average
exercise price exercise price
$ $
Monax Mining Limited
Outstanding at the beginning of the year 1,825,000 0.330 1,200,000 0.410
Granted – July 2008 - - 365,000 0.246
Granted – December 2008 - - 260,000 0.0517
Granted – December 2009 3,000,000 0.061 - -
Granted – March 2010 425,000 0.085 - -
Exercised - - - -
- - - -
Expired
- - -
Lapsed (1,450,000)
- -
Outstanding at year-end 3,800,000 1,825,000
- -
Exercisable at year-end 3,800,000 1,825,000
Marmota Energy Limited
Outstanding at the beginning of the year 625,000 0.040 - -
Granted – December 2008 - - 625,000 0.040
Granted – March 2010 400,000 0.102 - -
Exercised (335,000) - - -
- - - -
Expired
- -
Outstanding at year-end 690,000 625,000
- -
Exercisable at year-end 690,000 625,000
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2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

19 Share-based payments cont

On 5 March 2010, 425,000 share options were granted to employees under the Monax Mining Limited Employee Share Option Plan to take up ordinary shares at an exercise price of $0.0917 each. These options are exercisable on or before 5 March 2015.

On 17 December 2009, 3,000,000 share options were granted to Mr GM Ferris to take up ordinary shares at an exercise price of $0.10 each. The options are exercisable on or before 31 July 2012.

On 23 December 2008, 260,000 share options were granted to employees under the Monax Mining Limited Employee Share Option Plan to take up ordinary shares at an exercise price of $0.0517 each. These options are exercisable on or before 23 December 2013. During the year, 250,000 of these options lapsed.

On 18 July 2008, 365,000 share options were granted to employees under the Monax Mining Limited Employee Share Option Plan to take up ordinary shares at an exercise price of $0.246 each. These options are exercisable on or before 18 July 2013. During the year, 150,000 of these options lapsed.

On 15 February 2007, 450,000 share options were granted to employees under the Monax Mining Limited Employee Share Option Plan to take up ordinary shares at an exercise price of $0.666 each. These options are exercisable on or before 14 March 2012. During the year, 300,000 of these options lapsed.

On 24 August 2006, 100,000 share options were granted to employees under the Monax Mining Limited Employee Share Option Plan to take up ordinary shares at an exercise price of $0.182 each. These options are exercisable on or before 23 August 2011. These options have been exercised.

On 13 April 2006, 850,000 share options were granted to employees under the Monax Mining Limited Employee Share Option Plan to take up ordinary shares at an exercise price of $0.26 each. These options are exercisable on or before 12 April 2011. During the year, 750,000 of these options lapsed. 100,000 of these options have been exercised.

On 5 March 2010, 400,000 share options were granted to employees under the Marmota Energy Limited Employee Share Option Plan to take up ordinary shares at an exercise price of $0.1016 each. These options are exercisable on or before 5 March 2015.

On 23 December 2008, 625,000 share options were granted to employees under the Marmota Energy Limited Employee Share Option Plan to take up ordinary shares at an exercise price of $0.04 each. These options are exercisable on or before 23 December 2013. During the year, 335,000 of these options were exercised.

The options are non-transferable except as allowed under the Monax Mining Limited Employee Share Option Plan or the Marmota Energy Limited Employee Share Option Plan and are not quoted securities. At balance date, no share options had been exercised.

All options granted to executive directors and key management personnel are over ordinary shares in Monax Mining Limited or Marmota Energy Limited, which confer a right of one ordinary share for every option held.

The life of the options is based on the days remaining until expiry.

Included under employment expenses in the Statement of Comprehensive Income is $244,325 (2009: $87,865), and relates, in full, to equity-settled share-based payment transactions.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

19 Share-based payments cont

Options granted to Executive Directors and key management personnel as share-based payments are as follows:

Grant Date	Number
Monax Mining Limited
17 December 2009	3,000,000
5 March 2010	175,000
Marmota Energy Limited
23 December 2008	425,000
5 March 2010	75,000

The options hold no voting or dividends rights and are unlisted. The options lapse six months subsequent to the cessation of employment with the Group. There are no vesting conditions attached to the options.

The fair value of the options granted was calculated by using the Black-Scholes option pricing model applying the following inputs.

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March December December July February August April
2010 2009 2008 2008 2007 2006 2006
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March 2010 December 2009 December 2008 July 2008 February 2007 August 2006 April 2006	March 2010 December 2009 December 2008 July 2008 February 2007 August 2006 April 2006	March 2010 December 2009 December 2008 July 2008 February 2007 August 2006 April 2006	March 2010 December 2009 December 2008 July 2008 February 2007 August 2006 April 2006	March 2010 December 2009 December 2008 July 2008 February 2007 August 2006 April 2006	March 2010 December 2009 December 2008 July 2008 February 2007 August 2006 April 2006	March 2010 December 2009 December 2008 July 2008 February 2007 August 2006 April 2006	March 2010 December 2009 December 2008 July 2008 February 2007 August 2006 April 2006
Monax Mining Limited
Weighted average fair value (Black Scholes)	$0.085	$0.061	$0.029	$0.155	$0.545	$0.195	$0.059
Weighted average exercise price	$0.0917	$0.10	$0.05	$0.246	$0.666	$0.182	$0.26
Weighted average life of the option	1,825 days	956 days	1,825 days	1,825 days	1,825 days	1,825 days	1,825 days
Underlying share price	$0.10	$0.08	$0.03	$0.19	$0.83	$0.28	$0.24
Expected share price volatility	122%	151%	201%	117%	69.84%	66.86%	19.3%
Risk free interest rate	4.00%	3.75%	4.25%	7.25%	5.0%	5.0%	5.0%

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March December
2010 2008
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March 2010 December 2008	March 2010 December 2008	March 2010 December 2008
Marmota Energy Limited
Weighted average fair value	$0.063	$0.038
Weighted average exercise price	$0.1016	$0.04
Weighted average life of the option	1,825 days	1,825 days
Underlying share price	$0.09	$0.04
Expected share price volatility	90%	181%
Risk free interest rate	4%	4.25%

The life of the options is based on the days remaining until expiry.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

20 Financial risk management

The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable.

The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:

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Consolidated
2010 2009
$ $
Financial assets
Cash and cash equivalents 2,933,248 2,216,680
Held-to-maturity investments
Fixed interest securities 11,500,000 7,460,890
Loans and receivables 641,115 564,779
15,074,363 10,242,349
Financial liabilities
Trade and other payables 565,842 294,867
565,842 294,867
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Financial risk management policies

The Board of Directors are responsible for monitoring and managing financial risk exposures of the group.

Specific financial risk exposures and management

The main risks the group is exposed to includes liquidity risk, credit risk and interest rate risk.

(a) Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities.

The Group manages liquidity risk by monitoring forecast cash flows, only investing surplus cash with major financial institutions; and comparing the maturity profile of financial liabilities with the realisation profile of financial assets.

The Board meets on a regular basis to analyse financial risk exposure and evaluate treasury management strategies in the context of the most recent economic conditions and forecasts. The Board’s overall risk management strategy seeks to assist the consolidated group in managing its cash flows.

(b) interest rate risk

Exposure to interest rate risk arises on financial assets and liabilities recognised at reporting date whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.

The company has no long term financial liabilities upon which it pays interest. Cash is held in an interest yielding cheque account and on short term call deposit where the interest rate is both fixed and variable according to the financial asset.

Interest rate risk is managed with a mixture of fixed and floating rate cash deposits. At 30 June 2010 approximately 95.3% of group deposits are fixed. It is the policy of the group to keep between 90% and 100% of surplus cash in high yielding deposits. It has, where possible placed funds on deposit with financial institutions in order to receive the benefit of available government guarantees.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

20 Financial risk management cont

(c) Sensitivity analysis

Interest rate and price risk

The Group has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks. It should be noted that the company does not have borrowings and any impacts would be in relation to deposit yields on cash investments.

Interest rate sensitivity analysis

At 30 June 2010, the effect on loss and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

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Consolidated
2010 2009
$ $
Change in loss
Increase in interest rates by 2% 288,665 193,551
Decrease in interest rates by 2% (288,665) (193,551)
Change in equity
Increase in interest rates by 2% 288,665 193,551
Decrease in interest rates by 2% (288,665) (193,551)
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(d) Credit risk exposure

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.

The maximum exposure to credit risk on financial assets, excluding investments, of the entity which have been recognised in the Statement of Financial Position, is the carrying amount, net of any provision for doubtful debts.

No receivables are considered past due or impaired at balance date.

(e) Net fair values of financial assets and liabilities

Fair values are amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

The net fair values of financial assets and liabilities are determined by the entity on the following bases:

i Monetary financial assets and financial liabilities not readily traded in an organised financial market are carried at book value and where relevant adjusted for any changes in exchange rates.
ii Non-monetary financial assets and financial liabilities are recognised at their carrying values recognised in the Statement of Financial Position.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

21 Commitments and contingent liabilities

(a) exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the consolidated entity will be required to outlay in the year ending 30 June 2011 amounts of approximately $3,488,000 to meet minimum expenditure requirements pursuant to various joint venture requirements and those specified by the State Government of South Australia. These obligations are subject to renegotiation when application for a mining lease is made and at other times. These obligations are not provided for in the financial report.

Entity	Minimum expenditure obligations $
Monax Mining Limited	1,440,000
Marmota Energy Limited	2,048,000

(b) operating lease commitments

Effective 1 July 2008, Groundhog Services Pty Ltd provided company secretarial and financial services, tenement management, office administration, logistical support and office accommodation. Groundhog entered into a non-cancellable operating lease commencing in August 2008 for a five year period for office and warehouse accommodation.

Monax Mining Limited has committed to pay $25,000 upon granting of the tenements to Callabonna Uranium for the option to explore 3 tenements in North Queensland.

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Consolidated
2010 2009
$ $
Non-cancellable operating lease expense commitments
Future operating lease commitments not provided for in the financial statements and payable:
Within one year 191,536 161,686
One year or later and no later than five years 370,376 536,912
- -
Later than five years
561,912 698,598
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(c) Contingent liabilities

In 2007 Marmosa Pty Ltd was acquired by Marmota Energy Limited from Monax Mining Limited. Revenue SA considered stamp duty was payable on the basis that Marmosa Pty Ltd is a land rich company, rather than payable on the shares transferred. The action was defended and was settled for a payment of approximately $104,000 during the period.

As at 30 June 2010, there were no contingent liabilities.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

22 Notes to the statements of cash flows

(a) Cash at the end of the financial year consists of the following:

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Note Consolidated
2010 2009
$ $
Cash at bank and at call 8 2,933,248 2,216,680
Financial assets 11 11,500,000 7,460,890
14,433,248 9,677,570
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(b) Reconciliation of profit from ordinary activities after income tax to net cash provided by operating activities

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Consolidated
2010 2009
$ $
Profit/(loss) from ordinary activities after income tax (3,547,954) (545,138)
Add/(less) items classified as investing/financing activities
-
Stamp duty expense 104,830
Add/(less) non cash items
Depreciation 46,497 88,771
Share-based payments 244,325 87,865
-
Impairment of asset 2,289,402
Income tax expense/ (benefit) 115,076 (302,536)
-
Loss on sale of plant and equipment 13,167
Changes in operating assets and liabilities
(Increase)/decrease in prepayments (2,998) (18,425)
(Increase)/decrease in receivables (76,336) 471,062
(Decrease)/increase in accounts payable (43,958) 20,214
(Decrease)/increase in loans (2,527) 12,747
(Decrease)/increase in provisions 10,352 (1,439)
Net cash provided by/(used in) operating activities (863,291) (173,712)
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23 Related parties

Directors’ transactions with the Company

A number of Directors of the Company, or their Director related entities, held positions in other entities during the financial year that result in them having control or significant influence over the financial or operating policies of those entities.

The terms and conditions of the transactions with Directors and their Director related entities were no more favourable to the Directors and their Director related entities than those available, or which might reasonably be expected to be available, on similar transactions to Non-director related entities on an arm’s length basis.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

23 Related parties cont

The aggregate amounts recognised during the year (excluding re-imbursement of expenses incurred on behalf of the Company) relating to Directors and their Director related entities were as follows:

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Director Transaction Note Consolidated
2010 2009
$ $
Payments to an entity of which the Director is a partner in
GS Davis respect of legal fees 54,229 86,964
Payments to a Director related entity for rental of housing for
DJ Calandro accommodation for field operations. 8,818 -
-
RM Kennedy and RG Nelson Payments to a Director related entity for exploration. (i) 128,007
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i This amount relates to the exploration undertaken on behalf of Marmota Energy Limited for access and participation in projects in North America. Amounts receivable from and payable to Directors and their Director related entities at balance date arising from these transactions were as follows:

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Consolidated
2010 2009
$ $
Current receivables
Trade debtors - -
- -
Loan to subsidiary
- -
Current payables
Trade creditors - -
Amounts payable to Director related entities * 67,256 12,747
67,256 12,747
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Amounts payable to director related entities represents amounts payable to DMAW Lawyers for which Mr Davis is a partner and Ramelius Resources Limited for which Messrs Kennedy and Nelson are Directors.

24 operating segments

Segment information

Identification of reportable segments

The Consolidated entity has adopted AASB 8 Operating Segments with effect from 1 July 2009. AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The Consolidated entity has identified its operating segments to be Gawler Craton, Curnamona, Kangaroo Island, North Queensland and North America based on different geological regions and the similarity of assets within those regions. This is the basis on which internal reports are provided to the Board of Directors for assessing performance and determining the allocation of resources within the consolidated entity.

The Consolidated entity operates primarily in one business, namely the exploration of minerals.

Basis of accounting for purposes of reporting by operating segment

Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the group.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

24 operating segments cont

(a) Segment performance

Details of the performance of each of these operating segments for the financial years ended 30 June 2010 and 30 June 2009 are set out below:

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June 2010 Gawler Curnamona Kangaroo North North Total
Craton Island Queensland America
$ $ $ $ $ $
- - -
Segment revenue 97,348 35,515 132,863
Segment results
- - -
Gross segment result before depreciation, 97,348 35,515 132,863
amortisation and impairment
- - - - - -
Depreciation and amortisation
- - - -
Impairment (2,289,402) (2,289,402)
- -
97,348 35,515 (2,289,402) (2,156,539)
Interest income - - - - - 705,642
- - - - -
Other expenses (1,981,981)
Profit/(loss) before tax (3,432,878)
Income tax expense (115,076)
Net profit after tax (3,547,954)
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June 2009 Gawler Curnamona Kangaroo North North Total
Craton Island Queensland America
$ $ $ $ $ $
- - - - - -
Segment revenue
Segment results
- - - - - -
Gross segment result before depreciation,
amortisation and impairment
- - - - - -
Depreciation and amortisation
- - - - - -
Interest income 665,569
Other expenses (1,513,243)
Profit/(loss) before tax (847,674)
Income tax expense 302,536
Net profit after tax (545,138)
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2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

24 operating segments cont

(b) Segment assets

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June 2010 Gawler Curnamona Kangaroo North North Total
Craton Island Queensland America
$ $ $ $ $ $
-
Segment assets 14,935,450 1,805,309 138,915 128,007 17,007,681
Segment asset increases for the period:
Capital expenditure 2,275,452 1,312,582 260,643 138,915 128,007 4,115,599
- - - -
Impairment (2,289,402) (2,289,402)
2,275,452 1,312,582 (2,028,759) 138,915 128,007 1,826,197
Reconciliation of segment assets to group assets
Cash and cash equivalents 2,933,248
Trade and other receivables 641,115
Other current assets 54,739
Financial assets 11,500,000
Plant and equipment 757,470
Total consolidated assets 32,894,253
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June 2009 Gawler Curnamona Kangaroo North North Total
Craton Island Queensland America
$ $ $ $ $ $
- -
Segment assets 12,659,998 492,727 2,028,759 15,181,484
Segment asset increases for the period:
- -
Capital expenditure 3,632,680 41,698 613,019 4,287,397
- -
3,632,680 41,698 613,019 4,287,397
Reconciliation of segment assets to group assets
Cash and cash equivalents 2,216,680
Trade and other receivables 564,779
Other current assets 51,742
Financial assets 7,460,890
Plant and equipment 735,463
Total consolidated assets 26,211,038
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2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

24 operating segments cont

(c) Segment liabilities

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June 2010 Gawler Curnamona Kangaroo North North Total
Craton Island Queensland America
$ $ $ $ $ $
- -
Segment liabilities 58,325 254,118 65,901 378,344
Reconciliation of segment liabilities to group liabilities
Trade and other payables 187,498
Short term provisions 81,471
Capitalised lease incentive 65,782
Long term provisions 47,604
Total consolidated liabilities 760,699
June 2009 Gawler Curnamona Kangaroo North North Total
Craton Island Queensland America
$ $ $ $ $ $
- - - - - -
Segment liabilities
Reconciliation of segment liabilities to group liabilities
Trade and other payables 294,867
Short term provisions 75,355
Capitalised Lease Incentive 86,789
Long term provisions 43,368
Total consolidated liabilities 500,379
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25 events subsequent to balance date

Other than the matters noted above, there has not arisen in the interval any matters or circumstances, since the end of the financial year which significantly affected or could affect the operations of the Company, the results of those operations, or the state of the Company in future years.

26 Reserves

Share options reserve – the share options reserve records items recognised as expenses on valuation of employee share options.

2010 Monax Mining Limited Annual Report

notes to the Financial Statements

For the year ended 30 June 2010

27 Monax Mining Limited company information

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Consolidated
2010 2009
$ $
Parent entity
Assets
Current assets 5,318,516 1,516,375
Non-current assets 11,202,332 12,100,232
Total assets 16,520,848 13,616,607
Liabilities
Current liabilities 141,020 176,321
Non-current liabilities 654,329 667,036
Total liabilities 795,349 843,357
Equity
Issued capital 19,674,526 13,866,800
Retained earnings (4,547,106) (1,472,505)
Reserves
Share-based payments reserve 598,080 378,955
Total reserves 598,080 378,955
Financial performance
Profit/(loss) for the year (3,074,601) (5,459,517)
- -
Other comprehensive income
Total comprehensive income (3,074,601) (5,459,517)
Guarantees in relation to the debts of subsidiaries - -
- -
Contingent liabilities
Contractual commitments 25,000 -
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Monax Mining Limited has committed to pay $25,000 upon granting of the tenements to Callabonna Uranium for the option to explore 3 tenements in North Queensland.

28 Reserves

Share options reserve

The share options reserve records items recognised as expenses on valuation of employee share options.

29 Company details

The registered office of the Company is:

140 Greenhill Road

UNLEY SA 5061

The principal place of business is:

Unit I, 5 Butler Boulevard Burbridge Business Park ADELAIDE AIRPORT SA 5950

2010 Monax Mining Limited Annual Report

directors’ declaration

1 The Directors of Monax Mining Limited declare that:

(a) the financial statements and notes, as set out on pages 52 to 89, are in accordance with the Corporations Act 2001, and:
i giving a true and fair view of the financial position as at 30 June 2010 and of the performance for the year ended on that date of the consolidated entity; and
ii complying with Accounting Standards; and
iii Monax Mining Limited complies with International Financial Reporting Standards as described in Note 1.

(b) The Chief Executive Officer and Chief Financial Officer have declared that:

i The financial records of the Company for the financial year have been properly maintained in accordance with s286 of the Corporations Act 2001;
ii The financial statements and notes for the financial year comply with the accounting standards; and
iii The financial statements and notes for the financial year give a true and fair view;
(c) In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

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

Dated at Adelaide this 2[nd] day of September 2010.

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Robert Michael Kennedy Director

2010 Monax Mining Limited Annual Report

independent Auditor’s Report

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2010 Monax Mining Limited Annual Report

independent Auditor’s Report

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2010 Monax Mining Limited Annual Report

independent Auditor’s Report

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2010 Monax Mining Limited Annual Report

Shareholder information

Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below.

The information is current at 21 September 2010.

distribution of equity securities

Ordinary share capital

Fully paid ordinary shares are held by 1,922 individual shareholders.

Options

Options are held by 371 individual option holders.

Substantial shareholders

There are no substantial holding notices given to the Company.

Voting rights

Fully paid ordinary shares

Subject to any rights or restrictions attached to any class of shares, at a meeting of members, on a show of hands, each member present (in person, by proxy, attorney or representative) has one vote and on a poll, each member present (in person, by proxy, attorney or representative) has one vote for each fully paid share they hold.

Distribution of equity security holders

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Category Holders of Holders of Holders of Holders Holders Holders Holders
ordinary 30/11/2011 13/02/2012 18/07/2013 23/12/2013 31/07/2012 5/03/2015
shares $0.15 $0.666 $0.246 $0.0517 $0.10 $0.0917
options options options options options options
1 – 1,000 271 64 - - - - -
1,001 – 5,000 357 115 - - - - -
5,001 – 10,000 261 51 - - - - -
10,001 – 100,000 803 111 - 3 1 - 2
100,001 and over 230 25 1 - - 1 2
Total Number of security
holders 1,922 366 1 3 1 1 4
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The number of shareholders holding less than a marketable parcel of ordinary shares is 789.

The number of option holders holding less than a marketable parcel of listed options is 284.

On market buy-back

There is no current on-market buy-back.

2010 Monax Mining Limited Annual Report

Shareholder information

twenty largest shareholders

The names of the 20 largest holders of fully paid ordinary shares constituting a class of quoted equity securities on the Australian Stock Exchange Limited including the number and percentage held by those holders at 21 September 2010 are as follows.

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Name Number of fully paid Percentage held
ordinary shares held %
Alexandra Resources Pty Ltd 4,933,333 3.33
Havilah Resources NL 4,916,667 3.32
Citicorp Nominees Pty Ltd 4,264,267 2.88
Triple Eight Gold Pty Ltd 4,021,734 2.72
National Nominees Limited 3,505,516 2.37
Mr Neville Foster Alley & Mrs Bronwen Dianne Ireland 3,022,727 2.04
Mr Rodolfo Antonio Messina Gomez 2,813,104 1.90
Mr Meng Zhai 2,703,058 1.83
Aloren (No 148) Pty Ltd 2,702,728 1.83
SA Capital Funds Management Limited 2,616,451 1.77
Mr Reg Nelson & Mrs Susan Nelson 2,082,829 1.41
Teckcorp Pty Ltd 1,850,000 1.25
N & R Smart Pty Ltd 1,815,000 1.23
Argil Pty Ltd 1,700,338 1.15
Mr Grant Julian Maddock 1,700,000 1.15
Town Group Pty Ltd 1,688,000 1.14
S A Digger Pty Ltd 1,500,000 1.01
ANZ Nominees Limited 1,459,307 0.99
Mr Neil Henry Scriven and Ms Robyn Julie McDonald 1,389,628 0.94
Mr Harry Santavas and Mrs Vicki Santavas 1,333,334 0.90
52,018,021 35.13
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2010 Monax Mining Limited Annual Report

Shareholder information

twenty largest option holders

The names of the 20 largest holders of options constituting a class of quoted equity securities on the Australian Stock Exchange Limited including the number and percentage held by those holders at 21 September 2010 are as follows.

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Name Number of fully paid Percentage held
ordinary shares held %
National Nominees Limited 4,666,667 25.49
Mr Matthew Burford 1,785,000 9.75
Global Nickel Investments Limited 791,000 4.32
SA Capital Funds Management Limited 750,000 4.10
Triple Eight Gold Pty Ltd 502,717 2.75
Colin John Hough 500,000 2.73
Mr Steven John Larkins and Mrs Ann Kathleen Larkins 500,000 2.73
Lawrence Crowe Consulting Pty Ltd 499,167 2.73
Mr Mladen Marusic 383,334 2.09
Mr Casey Joey Iddon 380,000 2.08
Petard Pty Ltd 360,000 1.97
Mr Allan Harvey Moffatt 314,293 1.72
Mr Mark Trinity Iddon 304,509 1.66
ARCO Four Investments Pty Ltd 293,082 1.60
M & K Korkidas Pty Ltd 175,000 0.96
Mr Peter Gebhardt and Mrs Carlene Gebhardt 173,082 0.95
Mr Harry Santavas and Mrs Vicki Santavas 166,667 0.91
Mr Stig Hakan Hellsing and Mrs Patricia Anne Hellsing 160,000 0.87
Mr Allan Harvey Moffatt and Mrs Suzann Maureen Moffatt 150,000 0.82
Mr Andrew Kenneth Bruce Mortimer 150,000 0.82
13,004,518 71.03
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Unquoted equity securities

Options

Details of options on issue which are unquoted are as follows.

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Expiry date Exercise price Number of options Number unquoted Number of holders
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13/02/2012	$0.666	150,000	150,000	1
13/07/2013	$0.246	215,000	215,000	3
23/12/2008	$0.0517	10,000	10,000	1
31/07/2012	$0.10	3,000,000	3,000,000	1
05/03/2015	$0.0917	425,000	425,000	4

2010 Monax Mining Limited Annual Report

Corporate directory

PRinCiPAL RegiSteRed oFFiCe

Monax Mining Limited

140 Greenhill Road UNLEY SA 5061 GPO Box 1373 ADELAIDE SA 5001 Telephone: (08) 8373 5588 Facsimile: (08) 8373 5917 Email: [email protected] Website: www.monaxmining.com.au

exPLoRAtion oFFiCe

Unit I, 5 Butler Boulevard Burbridge Business Park ADELAIDE AIRPORT SA 5950 Telephone: (08) 8375 3900 Facsimile: (08) 8375 3999

PoStAL AddReSS

PO Box 247 EXPORT PARK SA 5950

diReCtoRS And SenioR MAnAgeMent

ROBERT MICHAEL KENNEDY GARY MICHAEL FERRIS ASIT, Grad. Dip. (Systems Analysis) BSc (Hons), MSc, AusIMM FCA, ACIS, FAIM, FAlCD Managing Director Non-executive Chairman NEVILLE FOSTER ALLEY REGINALD GEORGE NELSON Phd, PSM BSc (MATHS), FAusIMM, FAICD Non-executive Director Non-executive Director GLENN STUART DAVIS VIRGINIA KATHERINE SUTTELL LLB, BEc BComm, ACA, GradDip ACG, GAICD Non-executive Director Company Secretary/Chief Financial Officer

StoCK exCHAnge Shares: MOX Options: MOXO Code Listed on Australian Stock Exchange Limited Home Exchange: Adelaide Level 19, 91 King William Street Adelaide SA 5000 SHARe RegiStRAR Location of Share Register Computershare Investor Services Pty Limited Level 5, 115 Grenfell Street ADELAIDE SA 5000 Telephone: 1300 556 161 (within Australia) +61 3 9415 4000 (outside Australia) Facsimile: +61 8 8236 2305 Email: [email protected]

AUditoRS Grant Thornton Chartered Accountants 67 Greenhill Road WAYVILLE SA 5034

LAWYeRS DMAW Lawyers Level 3, 80 King William Street ADELAIDE SA 5000

98 HeAdeR

2010 Monax Mining Limited Annual Report

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ABN 96 110 336 733

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Notice of Annual General Meeting 2010

Notice is hereby given that the Annual General Meeting of Monax Mining Limited (‘Company’) will be held at Enterprise House, 136 Greenhill Road Unley SA on Wednesday 17 November 2010 at 11:00 am (Adelaide time).

AGENDA

SPECIAL BUSINESS (continued)

ORDINARY BUSINESS

5. Retention Rights – Managing Director

1. Financial Report

To receive and consider the Company’s financial statements and independent audit report for the year ended 30 June 2010.

The Annual Financial Report is available at the website of the Company (www.monaxmining.com.au), under “News and Reports”, “Annual Reports”.

2. Adoption of Remuneration Report

To consider and put the following resolution to a non binding vote:

‘That the Remuneration Report required by section 300A of the Corporations Act 2001, as contained in the Company’s Directors’ Report for the year ended 30 June 2010 be adopted.’

3. Re-election of Mr RG Nelson as a Director

To consider, and if thought fit, pass the following resolution as an ordinary resolution:

‘That, Mr RG Nelson being a director of the Company who retires by rotation in accordance with clause 47.1.2 of the Company’s constitution, and being eligible, is re-elected as a director of the Company.’

SPECIAL BUSINESS

4. Ratification of April Placement

To consider, and if thought fit, pass the following resolution as an ordinary resolution:

‘That, approval be given under and for the purposes of ASX Listing Rule 7.4 and for all other purposes, for the issue of 5,900,000 ordinary shares in the capital of the Company on the terms described in the explanatory memorandum accompanying the notice convening this meeting.’

To consider, and if thought fit, pass the following resolution as an ordinary resolution:

‘That, approval be given for the purpose of ASX Listing Rule 10.11 and for all other purposes, to the issue of 1,500,000 retention rights to Gary Ferris, on the terms summarised in the explanatory memorandum accompanying the notice convening this meeting.’

6. Retention Rights – Company Secretary/CFO

To consider, and if thought fit, pass the following resolution as an ordinary resolution:

‘That, approval be given for the purpose of ASX Listing Rule 7.1 and for all other purposes, to the issue of 600,000 retention rights to Virginia Suttell, on the terms summarised in the explanatory memorandum accompanying the notice convening this meeting.’

OTHER BUSINESS

7. To transact any further business that may be lawfully brought forward.

Further information regarding the business to be transacted at the Annual General Meeting is set out in the explanatory memorandum accompanying the notice convening this meeting. This notice should be read in conjunction with the accompanying explanatory memorandum which forms part of this notice.

By Order of the Board

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Virginia Suttell Company Secretary Date: 13 October 2010

NOTES

A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote on the member’s behalf. If the member is entitled to cast two or more votes at the meeting, the member may appoint up to two proxies to attend and vote on the member’s behalf.

If a member appoints two proxies, each proxy must be appointed to represent a specified proportion or number of the member’s votes. Absent this specification, each proxy will need to exercise half the votes.

The Constitution of the Company provides that 10 shareholders present in person, by proxy, attorney or body corporate representative shall be a quorum for a general meeting of the Company.

Corporate representatives are requested to bring appropriate evidence of appointments as a representative in accordance with the Constitution of the Company. Attorneys are requested to bring a Power of Attorney pursuant to which they are appointed. Proof of identity will also be required for corporate representatives and attorneys.

A proxy need not be a member of the Company.

To appoint a proxy, a proxy form must be signed by the member or the member’s attorney duly authorised in writing. If the member is a corporation, the proxy form must be signed in accordance with section 127 of the Corporations Act 2001 (Cth).

To be effective, a proxy form (and, if it is signed by an attorney, the authority under which it is signed or a certified copy of the authority) must be received by the Company not later than 48 hours prior to the commencement of the meeting. Proxy form and authorities may be sent to Computershare Investor Services Pty Ltd, GPO Box 242, Melbourne VIC 3001, or in person to Computershare at Level 5, 115 Grenfell Street, Adelaide SA 5000, or by facsimile to Computershare on (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555 or to the Company on 61 8 8375 3999.

Members who forward their proxy forms by fax must make available the original executed form of the proxy for production at the meeting, if called upon to do so.

Custodian Voting – For Intermediary Online subscribers only (Custodians), please visit www.intermediaryonline.com to submit your voting intentions.

For the purpose of the meeting, shares in the Company will be taken to be held by those persons who are registered holders at close of business on Monday 15 November 2010. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the meeting.

ABN 96 110 336 733

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Explanatory Memorandum

Accompanying the Notice of Annual General Meeting to be held 17 November 2010

1. Financial Report

The Annual Financial Report together with the Directors’ Report and Auditor’s Report will be laid before the meeting in accordance with section 317 of the Corporations Act 2001 (Cth) (‘Corporations Act’). Members will be given the opportunity to ask questions or make comments about the management of the Company and may also ask questions of the Auditor’s representative relevant to the conduct of the audit and preparation and content of the Auditor’s Report.

2. Remuneration Report

In accordance with section 250R of the Corporations Act, the Company submits to shareholders for consideration and adoption by way of a non binding resolution its Remuneration Report for the year ended 30 June 2010. The Remuneration Report is a distinct section of the Directors’ Report that deals with the remuneration of Directors and Key Management Personnel of the Company and can be located on pages 45 to 50 in the 2010 Annual Report and also on the Company’s website at: www.monaxmining.com.au.

The Remuneration Report sets out the Company’s remuneration arrangements for its Directors, Officers and Senior Management. Shareholders will be given reasonable opportunity at the meeting to discuss the report.

The Directors recommend shareholders vote in favour of the resolution. The Chairman intends to vote undirected proxies in favour of the resolution.

3. Re-election of Mr RG Nelson as a Director

Mr Nelson offers himself for re-election by members at the meeting. A brief description of the candidate is as follows:

Mr Reginald George Nelson BSc, Hon Life Member Society of Exploration Geophysicists, FAusIMM, FAICD.

Non-executive Director. Board member since 3 August 2004.

Mr Nelson is an exploration geophysicist with experience spanning four decades in most aspects of the petroleum and minerals industries. He was awarded honorary Life Membership of the Society of Exploration Geophysicists in 1989 and the Prime Minister’s Centenary Medal in 2002 for services to mining. He has wide experience in technical, corporate and government affairs. He was Chairman of the Australian Petroleum Production and Exploration Association (APPEA) from 2004 to 2006 and is a Director of the APPEA Executive Committee and remains a member of its Council. He was recently awarded the Reg Sprigg Medal for outstanding contribution to the oil and gas industry at the 2009 APPEA Conference in Darwin.

Special responsibilities include membership of the Remuneration and Nomination Committee.

At the date of the Notice of Annual General Meeting, the Board of Directors of the Company comprises 5 Directors. Mr Nelson is required by the Company’s constitution to retire at the meeting. A retiring director is eligible for reelection.

The Directors (with Mr Nelson abstaining) recommend shareholders vote in favour of the resolutions. The Chairman intends to vote undirected proxies in favour of the resolution.

4. Ratification of previous issues of shares

Introduction

Listing Rule 7.1 provides that (subject to certain exceptions), prior approval of shareholders is required for an issue of securities if the securities will, when aggregated with the securities issued by the company during the previous 12 months, exceed 15% of the number of the shares on issue at the commencement of that 12 month period.

The issues of Shares detailed in Resolution 4 did not exceed the 15% limit referred to above.

Listing Rule 7.4 provides that where a company ratifies an issue of securities, the issue will be treated as having been made with approval for the purpose of Listing Rule 7.1, thereby refreshing the company’s 15% capacity and enabling it to issue further securities up to that limit.

Resolution 4 proposes the ratification and approval of the allotment and issue of Shares for the purpose of satisfying the requirements of Listing Rule 7.4.

April Placement

In accordance with Listing Rule 7.5, the following information is provided to shareholders in relation to Resolution 4:

on 14 April 2010, 5,900,000 Shares were issued without shareholder approval;
the Shares were issued at $0.10 each;
the Shares rank equally in all respects with the existing ordinary Shares on issue;

	Shares
Chalk Investments Pty Ltd Platinum S/F A/C>	250,000
House of Young Pty Ltd Young A/C>	250,000
Mr Vafa Vojdani	1,000,000
Mr Grant Julian Maddock	2,000,000
Teckcorp Pty Ltd Family A/C>	2,000,000
National Nominees Limited	400,000

funds raised will be used to fund exploration on the Company’s tenements.

Voting exclusion statement

The Company will disregard any votes cast in relation to Resolution 4 by any of the persons that were allotted shares referred to in Resolution 4 above and their associates. However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on a valid proxy form; and

(b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on a valid proxy form to vote as the proxy decides.

The Directors recommend shareholders vote in favour of the resolution. The Chairman intends to vote undirected proxies in favour of the resolution.

the Shares were issued to the following parties:

Resolution 5

Listing Rule 10.11 provides that a company must not issue or agree to issue securities to the following persons without shareholder approval:

The following information is provided under Listing Rule 7.3.

It is proposed that 600,000 retention rights will be issued to Virginia Suttell, the Company’s secretary and chief financial officer.
a related party, or
a person whose relationship with the company or a related party is, in ASX’s opinion, such that approval should be obtained.

Resolution 5 proposes approval for the purpose of Listing Rule 10.11 for the issue of retention rights to the Company’s managing director, Gary Ferris.,

If approval is given under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

The following information is provided under Listing Rule 10.13.

It is proposed that 1,500,000 retention rights will be issued to Gary Ferris, the Company’s managing director.
The Company will issue the retention rights within 1 month from the date of the meeting to which this explanatory memorandum relates.
The retention rights will be issued for free and on the terms summarised below.
No funds will be raised by the issue of the retention rights.

Resolution 6 – Retention Rights

The company proposes an issue of retention rights to its company secretary and chief financial officer, Virginia Suttell.

Without shareholder approval for the issue the retention rights would be counted in the 15% capital limit under Listing Rule 7.1.

Accordingly, approval is sought under Listing Rule 7.1 and for all other purposes for the issue of the retention rights.

The Company will issue the retention rights within 1 month from the date of the meeting to which this explanatory memorandum relates.
The retention rights will be issued for free and on the terms summarised below.
No funds will be raised by the issue of the retention rights.

Summary of terms of issue of the retention rights

Under the terms of issue of the retention rights, the rights will vest according to the following vesting schedule, provided the holder is still employed by the Company at the vesting date:

1/3 of the rights will vest on 1 July 2011;
1/3 of the rights will vest on 1 July 2012; and
1/3 of the rights will vest on 1 July 2013.

Holders cannot transfer any of the rights, or use them as security for a loan, or deal with them in any other way.

When the rights vest the holder will be issued with fully paid ordinary shares in the Company on the basis 1 right entitles the holder to 1 ordinary share. The holder does not pay anything for the shares. The conditions of the rights do not restrict the holder from transferring any of the shares acquired on vesting of the rights, or using them as security for a loan, or dealing with them in any other way.

If the holder ceases employment prior to the vesting of the rights the rights will be forfeited.

to vote undirected proxies in favour of the resolution.

However, if the holder ceases employment because of death, invalidity, bona fide redundancy or retirement (unless the retirement happens within 6 months of the date of grant of the rights) the rights will vest according to the vesting schedule. If the holder retires within 6 months of the date of grant of the rights the rights will be forfeited.

Retirement is defined, for the purpose of the retention rights, as ceasing employment with the Company when the holder is at least 55 years of age and has completed at least 10 years of service with the Company.

Voting exclusion statements

The Company will disregard any votes cast in relation to Resolution 5 by Gary Ferris and his associates.

The Company will disregard any votes cast in relation to Resolution 6 by Virginia Suttell and her associates.

However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on a valid proxy form; and

(b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on a valid proxy form to vote as the proxy decides.

The Directors (except Mr Ferris) recommend shareholders vote in favour of resolution 5. The Chairman intends to vote undirected proxies in favour of resolution 5. Mr Ferris does not make a recommendation regarding resolution 5 because he has an interest in the outcome.

The Directors recommend shareholders vote in favour of resolution 6. The Chairman intends

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Lodge your vote:

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By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 556 161 (outside Australia) +61 3 9415 4000

Proxy Form

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For your vote to be effective it must be received by 11:00am (Adelaide time) Monday 15 November 2010

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

Turn over to complete the form

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View your securityholder information, 24 hours a day, 7 days a week:

www.investorcentre.com

Review your securityholding

Update your securityholding

Your secure access information is:

SRN/HIN:

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

916CR_0_Sample_Proxy/000001/000001/i

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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes.

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Proxy Form

Please mark to indicate your directions

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Appoint a Proxy to Vote on Your Behalf

I/We being a member/s of Monax Mining Limited hereby appoint

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the Chairman of the meeting

OR

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PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of Monax Mining Limited to be held at Enterprise House, 136 Greenhill Road, Unley, SA, 5061 on Wednesday 17 November 2010 at 11:00am (Adelaide time) and at any adjournment of that meeting.

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PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

Items of Business

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ORDINARY BUSINESS

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2 Adoption of Remuneration Report
3 Re-election of Mr Reginald George Nelson as a Director

SPECIAL BUSINESS

4 Ratification of previous issue of shares
5 Issue of Retention Rights to Managing Director
6 Issue of Retention Rights to Company Secretary/Chief Financial Officer

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The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

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

Signature of Securityholder(s) This section must be completed.
Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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MO X

1 7 1 1 1 0 B

AI assistant

FireFly Metals Ltd. — Annual Report 2010

48548_rns_2010-10-14_7e1df88e-33ed-44f4-9f76-67c3a6e5286b.pdf

ASX RELEASE

2010 Annual Report, Notice of Annual General Meeting and Proxy Form

Annual Report 2010

Report Contents

Annual general Meeting

Chairman’s Report

Dear Fellow Shareholders

Managing director’s Report

tenement Locations

tenement Status

as at 24 August 2010

South Australia

Queensland

operations Report

during the current year, Monax Mining Limited (Monax) has undertaken a strategic review of its tenement portfolio and developed a new and bolder exploration strategy that will place the Company in a strong position for the future.

operations Report

Punt Hill Copper-gold Project

Melton Copper-gold Project

Waddikee Manganese/iron Project

Cape York Bauxite Project

Percyvale gold Project

Punt Hill Copper-gold Project

2010 Monax Mining Limited Annual Report

Melton Copper-gold Project

Waddikee Manganese Project

Waddikee Manganese Project

Waddikee Manganese Project

Manganese Results

iron Results

HeAdeR

Cape York Bauxite Project

Cape York Bauxite Project

Cape York Bauxite Project

Cape York Bauxite Project

Aurukun-Weipa Project

Pretender Creek Project

Percyvale gold Project

Percyvale gold Project

ML 3366 – Union

ML 30199 – Percy West

Percyvale gold Project

ML 30103 – Homeward Bound

ML 30139 – Josephine

Percyvale gold Project

glossary of terms

Ag Symbol for the element silver.

glossary of terms

glossary of terms

Corporate governance Statement

Corporate governance Statement

Principle 1 Lay solid foundations for management and oversight

Recommendation 1.1 Recommendation followed

Recommendation 1.2 and 1.3 Recommendations followed

Corporate governance Statement

Principle 2 Structure the board to add value

Recommendation 2.1 Recommendation followed

Recommendation 2.2 Recommendation followed

Recommendation 2.3 – Recommendation followed

Recommendation 2.4 Recommendation followed

Recommendation 2.6 Recommendation followed

Recommendation 2.5 Recommendation not followed

Corporate governance Statement

Principle 3 Promote ethical and responsible decision making

Recommendation 3.1 Recommendation followed

Recommendation 3.2 Recommendation followed

Principle 4 Safeguard integrity in financial reporting

Recommendation 4.1 Recommendation followed

Recommendation 4.2 Recommendation not followed

Recommendation 4.3 Recommendation followed

Recommendation 4.4 Recommendation followed

Recommendation 3.3 Recommendation followed

Corporate governance Statement

Principle 5 Make timely and balanced disclosure

Recommendation 5.1 and 5.2 Recommendations not followed

Principle 6 Respect the rights of shareholders

Recommendation 6.1 and 6.2 Recommendations not followed

Principle 7 Recognise and manage risks

FireFly Metals Ltd. Annual Report 2010