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Annual Report 2012

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Broome
South Laverton
Leonora
Hedland
Karratha Kookynie
Menzies
Newman
Kalgoorlie
Coolgardie
Western
Australia
Geraldton
Kalgoorlie
Perth
Bunbury
Esperance
Albany
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2 AnnuAl RepoRt 2012

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ABout uS

Focus Minerals Ltd (ASX: FML) is one of the nation’s fastest growing gold producers, with operations in two of the largest gold producing regions in the Eastern Goldfields of Western Australia; the Kalgoorlie / Coolgardie region and the Laverton region, 250km to the north.

In FY12, the Focus Group delivered a 143% increase in gold production to 176,632oz to become the fifth largest Australian-focused gold producer on the Australian Stock Exchange.

With a Mineral Resource base of 4.3Moz of gold; 1,650km[2] of tenements; and four established operating centres, the Group has a strong production plan and a pipeline of exploration targets that will enable a continued expansion of Mineral Resources. Having achieved production scale through FY12, the Group is now focused on delivering sustained, profitable production, reducing costs, increasing the share price and building towards the payment of dividends.

	~~FY 2012 Highlights~~	~~4~~

	~~The Board & Management Team~~	~~6~~

	~~Chairman’s Report~~	~~8~~

	~~CEO’s Operations Review~~	~~10~~

	~~Corporate Governance~~	~~20~~

	~~Corporate Directory~~	~~28~~

	~~Directors’ Report~~	~~29~~

	~~Auditors Independence Declaration~~	~~41~~

	~~Financial Statements~~	~~42~~

	~~Directors’ Declaration~~	~~85~~

	~~Independent Auditors Report~~	~~86~~

	~~Shareholder Information~~	~~89~~

	~~Tenement Report~~	~~91~~

AnnuAl RepoRt 2012 3

FY 2012 HIGHlIGHtS

n Group gold production increased 143% to 176,632oz .
n Revenue increased 151% to $258.3M.
n Gross Profit increased 101% to $55.6M.
n Completed takeover of Crescent Gold Ltd, creating a major gold production and exploration company with a 4.3Moz[1] Mineral Resource and 1,650 km[2] of tenements.
n The takeover of Crescent Gold Ltd transformed Focus Minerals into a multi-mine producer with four mines in two centres.
n FY12 Net Profit After Tax (excluding takeover costs) increased by 36% from $7.6M to $10.4M.
n Initiated the Value Enhancement Program (“VEP”), aimed at delivering sustainable cost savings at Coolgardie and Laverton operations.

n New leadership team in place to drive growth and profitability. n Invested $17M into the development of the Laverton operations opening up three new operating areas to turnaround production. n Laverton operations posted a $3.8M profit for the 9 months of Focus’ involvement versus a loss of -$51M for the full year 2011. n Developed two new production centres in Coolgardie, increasing quarterly gold production by 37% (Jun Q 2011 Vs. Jun Q 2012). n Three Mile Hill plant poured its 1,000th gold bar under Focus’ operation.

n Achieved exploration success in expanding the Apollo Ore Reserve in Laverton as well as expanding the surface Mineral Resource base around the Tindals Mining Centre in Coolgardie

n Identified new gold camp at Treasure Island discovering a new 4km long mineralised system.

[1] Assuming 100% ownership of the Laverton Gold Project. Focus has an interest of 81.57% in this asset.

AnnuAl RepoRt 2012

Production Growth

Revenue Growth

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

Production Growth (ounces) Revenue Growth ($M)
200,000 200,000
150,000
150,000
100,000
100,000 50,000
50,000
50,000
50,000
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Coolgardie Laverton Revenue ($M)
Gold production
increased Revenue increased
44% 56%
CAGR last 4 years CAGR last 4 years
143% 151%
to 176,357oz to $258.3M
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Operating Profit Growth

Resource Growth

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

Resource Growth
5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000-
1,500,000
1,000,000
500,000
Jan 08 Jan 09 Jan 10 Jan 11 Jan 12
Coolgardie Laverton
23%
CAGR last 4 years
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----- Start of picture text -----

Operating Profit
60
50
40
30
20
10
0
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Operating Profit
Operating profit
increased
25%
CAGR last 4 years
101%
to $55.6M
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Reserve Growth

Margin Growth

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Reserve Growth
Gross AUD$ Margin
700,000 $25
600,000
$20
500,000
$15
400,000
300,000
- $10
200,000
$5
100,000
$-
FY 2009 FY 2010 FY 2011 FY 2012 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12
Coolgardie Laverton Gross Margin Linear (Gross margin)
61%
CAGR last 4 years
Millions
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CAGR (Compounded Annual Growth Rate)

AnnuAl RepoRt 2012

An Experienced Board

During FY12 Focus has been building for the future. It has integrated two major gold operations and assembled a team of highly experienced leaders to drive the future growth and profitability of the business.

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

Don taig, non-executive Chairman • Founding chairman
• Held MD & CEO roles with major food groups
• Formerly with CRA and Metals Exploration Ltd
Bruce McComish, Non-Executive Director • Appointed Apr 2011
• Former CFO of National Australia Bank
• Former CFO of North Ltd
• Spent 18 years with Unilever
Phil Lockyer, Non-Executive Director • Appointed Dec 2005
• 40 years experience as a mining engineer inc. 20 years
with WMC - GM of Western Australian operations
• Director of St Barbara (ASX:SBM)
Gerry Fahey, Non-Executive Director • Appointed Apr 2011
• +37 years’ experience as a geologist through Europe,
Africa, Asia and Australia inc. 10 years with Delta Gold
as Chief Mine Geologist
• Director of resource industry consultants CSA Global
Pty Ltd
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6 AnnuAl RepoRt 2012

A Talented Team

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The talent and experience of the executive management team is driving growth and operational efficiencies across the business.

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Campbell Baird, CEO • Joined Dec 2008
• Former General Manager at Altona Resources
• Highly experienced mining engineer; 5 years with SRK Consulting
• Worked internationally on projects including: Oyu Tolgoi (Mongolia);
Kylyahti (Finland), and for Iron Ore Company of Canada
Mark Hine, COO • Appointed Jan 2012
• +30 years’ operating experience.
• Former CEO Golden West Resources
• Former Executive General Manager Mining at Macmahon
• Former General Manager for Pasminco
Paul Fromson, CFO • Joined Apr 2012
• +30 years experience, including 18 years with ASX listed resource
companies
• Former CFO & Company Secretary at Bauxite Resources Ltd
Dean Goodwin, • Appointed Jan 2012
Head of Geology • +25 years experience in exploration geology – including Intrepid,
Redoubtable & Santa Anna gold deposits at Lake Lefroy with WMC
• Former Managing Director of Barra Resources Ltd
Barend Knoetze, • Joined Apr 2009
Coolgardie Operations • 20 years experience in mineral processing and refining.
Registered Manager
Jim Cotton, • Joined May 2012
Laverton Operations • 30 years’ experience.
Registered Manager • Former General Manager for Golden Stallion Resources
Peter Ganza, • Joined Feb 2012
Head of Tech Services • Mining engineer with nearly 20 years’ experience.
• Former Manager Under Ground Mining at Barrick
Marianne Dravnieks, • Joined Oct 2011
Head of Human Resources • 25 years resource experience inc. Perilya & Alcoa
• Previously State Human Resource Manager for Lion
Neil Le Febvre, Investor • Joined Jan 2011
Relations Manager • 20 years’ experience
• Former Group Marketing Director for ThinkSmart Ltd
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AnnuAl RepoRt 2012

Chairman’s Report

DeAR SHAReHolDeR

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I am pleased to present to you Focus Minerals’ Annual Report for the 2012 financial year (“FY12”).

Focus Minerals is now an established gold producer and explorer poised to deliver between 40,000-50,000oz of gold a quarter from our mining operations at Laverton and Coolgardie in the Eastern Goldfields region of Western Australia.

In FY12, Focus Minerals’ full-year revenue jumped 151% to $258.3 million and gross profit doubled to $55.6 million from the previous corresponding period.

The year was certainly another transformative one for the company, driven by the completion of the acquisition of Crescent Gold to create a mining business with a 4.3Moz gold Mineral Resource.

Gold production in FY12 rose 143% to 176,632oz helped by a turnaround in the performance of the Laverton operations that were acquired with the all-scrip takeover of Crescent Gold in October 2011.

The results achieved during this latest period clearly show how far we have come in a short time.

Turnaround of Laverton Operations

Focus has overcome significant challenges to bring the Laverton operations to the level of performance that you see today. Laverton operations required increased working capital until steady-state operations were established which saw Focus inject $17m in working capital over the last 9 months into the Laverton operations. This was all funded internally from existing cash balances.

The management team has been vindicated in the decision to acquire the Laverton operations, largely through the application of their hard work and technical expertise, and

this will benefit all shareholders. Laverton has given us part of the scale we believe the business needs.

Prior to Focus Minerals taking control of Laverton, that operation had lost $51 million over its previous year. In the nine months since Focus took control, I’m pleased to advise that Laverton has turned to a net profit of $3.8 million and is now a vital part of Focus’ ongoing growth story.

Expansion of Coolgardie

Our Coolgardie operations have also received a great deal of investment spending. During the year, we ramped up two new production centres at Coolgardie: the Tindals Open Pits and The Mount underground. On a like-for-like basis in the June Quarter, gold production in Coolgardie increased 37% reflecting the impact of these new operations albeit that The Mount has been slower than anticipated and at slightly lower grade than predicted.

The development of Coolgardie has been impressive, and it has created a far more flexible operation. The introduction of the two new centres has reduced the reliance on historical low grade stocks and in turn has seen head grade through the mill improve by 17%.

We are now starting the new Greenfields open pit centre, which will provide the base load for the group’s Three Mile Hill processing plant for the next two years.

Focus on Costs

As the business has invested heavily into building its operations, it has also turned its focus to operating costs. In the second half of fiscal 2012, Focus initiated an internal Value Enhancement Program, resulting in cost reduction initiatives at both Laverton and Coolgardie.

These cost savings are expected to positively impact group cash operating costs in the first-half of FY13. The initiatives included improved contractor efficiencies, improved power contracts, lab savings and reagent and consumable savings and overall mining cost reductions. Thus far we will have removed annualised costs of $10 million, with a second

8 AnnuAl RepoRt 2012

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phase review designed to make permanent and step down changes to the operating cost base, but may also require some capital investment to do so. This study will begin showing tangible benefits from January 2013 onwards.

with a robust balance sheet, capable of unlocking the potential of our large tenement holdings and resource base and laying the foundation for Focus to become a significant gold producer.

$225 Million Placement with Shandong Gold

As you will be well aware, your Board is recommending to you for approval (subject to no superior proposal arising and an independent expert opining that the transaction is reasonable) the transaction that has been negotiated between Shandong Gold and Focus Minerals, wherein Focus will raise approximately $225m in return for a 51% interest in it, as announced to the ASX on 20 September 2012.

For some time we had been seeking a like-minded, strategic industry investor who could bring both funding and industry expertise to our operations. The development of the Group’s new Strategic Plan really added a new dimension to this search.

The Strategic Plan is based purely on our existing 4.3Moz Mineral Resource base across Coolgardie and Laverton and enables the business, through technical work, to build production significantly. This would generate significant free cash flow. Importantly the Strategic Plan does not include any exploration upside so there is a clear opportunity to significantly grow this potential on success.

What became very clear for the Board through the development of this Strategic Plan was the company now had two choices: To either continue the “steady as you go” pace of development based on known cash means or to structure the business so as to enable it to unlock the Company’s growth potential at an accelerated pace and at a period of time of high gold prices.

We are promoting the Shandong Gold transaction to you because we believe this will deliver the best value for shareholders going forward and in an accelerated manner. As our operations currently stand they will not produce enough free cash to enable this Plan to be implemented in a swift and tangible way.

By now you will also have received a separate letter from me explaining the rationale the Board went through in arriving at this recommendation to you. In addition, you will also have the Independent Expert’s Report to help you form your views. I urge you to take an overall view of the transaction and for you to consider giving your positive support to the transaction, either by sending in your signed proxy forms when received with the Notice of Meeting, or attending in person for the purpose.

On behalf of the Board, I would like to thank our hard working management team, staff and shareholders for their support in what has been an evolutionary year. I also wish to thank sincerely my Board colleagues for their counsel throughout the year. I look forward to us being able to take the next important step upon your approval of the Placement to Shandong Gold.

Donald Taig

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Chairman

The investment by Shandong Gold enables us to achieve that goal. It will make Focus Minerals a vastly stronger company

AnnuAl RepoRt 2012 9

CEO’s Operations Review

Focus has transformed itself comprehensively during the past financial year. As we’ve developed two new mines in our established Coolgardie operations and set about turning around the production fortunes of Laverton, the Company has moved rapidly and with purpose to cement itself as one of the leading gold producers by volume in Australia.

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During FY12 the Focus Group produced 176,632oz of gold from four operating mines, a 143% increase on the previous year.

Such a turnaround has not been without its challenges and growing pains, which has included a short term increase in cash costs as significant investment in mine development was undertaken, but we have now built the foundations for a strong and profitable future.

I am immensely proud of the operating teams that have achieved this. Many of the staff have been with us for some time, through thick and thin, and we’ve also shaped a new leadership team over the course of the financial year who are set to lead us forward.

We were particularly saddened by the untimely death of John Bergin from illness, who had been with us and a big supporter of the Company, from the start of production.

One area the business has been particularly focused on is improving operational efficiencies. We are achieving this twofold:

Firstly through improved planning and execution that is being delivered operationally. Our Chief Operating Officer Mark Hine and our Head of Technical Services Peter Ganza are driving their teams to deliver the most efficient operating

plans that can be achieved. This is most evident in Laverton where improved planning has seen a $400/oz drop in cash operating costs in the nine months since we took control.

This is a great start but there is still a long way to go. Better planning in Laverton is enabling us to focus on assets where we believe the company can deliver demonstrably lower cost profiles through mining areas such as Burtville. Through the latter half of the financial year we have been able to commence drilling at Burtville and have quickly grown the Mineral Resource base. We are now looking to bring this low strip ratio project area into the production plan.

Secondly we are driving efficiencies through cost control. Focus’ new Chief Financial Officer Paul Fromson, and our respective Laverton and Coolgardie Registered Managers are also really kicking some goals here with their teams. Coolgardie most notably has applied some fresh thinking to some everyday challenges at the Three Mile Hill processing plant which is seeing savings in reagent consumption, electricity and has introduced some innovative thinking to extend the life of high wear and tear parts such as jaw crusher liners.

Alongside operational improvements, safety remains the number one focus for our operations. We’ve demonstrated our commitment to safety very visibly during the year, implementing a number of safety intervention “shut downs” across our operations to keep the focus on safety to the fore. With the coming together of the Laverton and Coolgardie operations we’ve also appointed a Group Safety Manager to develop standards between the two sites.

FY12 has been about establishing the foundations for delivering stable, profitable production. We have achieved critical mass and are now well positioned to deliver on this in the coming financial year.

10 AnnuAl RepoRt 2012

Laverton (FML: 81.57%)

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Highlights

In October 2011 Focus completed the acquisition of Crescent Gold Limited and the Laverton Gold Operations.

Completed takeover in October 2011
Invested $17M into the development of the Laverton operations opening up 3 new operating areas to turnaround production
Turned around operations to produce 86,673oz of gold for the financial year
Already reduced cash operating costs to approx. $1,203/oz from $1,544/oz at takeover
Delivering sustainable operating cost savings across the operations
Funded turnaround internally from cash balances

pRoDuCt

The Laverton operations had been previously starved of funds and were an underperforming asset. Focus completed the takeover for $59M in scrip and over the remaining nine months of the financial year injected $17M in working capital to transform the operating fortunes of Laverton and deliver 86,673oz of gold for the financial year.

The transformation of the operations was all funded internally from Focus Group cash balances and saw a number of operating changes undertaken.

Initially the business increased the digging fleet from two to four, opening up three new operating areas across the tenement holdings: The Apollo complex situated on the highly prospective Chatterbox Shear; The Fish/Lord Byron area; and Mary Mac Hill located on the Central Shear close to the centre of Laverton.

Gold

MINING METHOD Open Pit

opeRAtInG AReAS Multiple large scale open pits

pRoCeSSInG

Ore Processing Agreement with Barrick Australia to process through 3.5Mtpa Granny Smith mill

1.45Mtpa Barnicoat Mill (on care and maintenance)

FY2011 pRoDuCtIon

This investment initiated a strong turnaround in production. The business increased from mining 200,000 tonnes per quarter to in excess of 500,000 tonnes per quarter to produce circa 25,000oz of gold per quarter.

Operationally, Focus has also been able to leverage its technical expertise to deliver improved planning and development work across the Laverton operations through the year, quickly reducing the cash operating costs in Laverton from of $1,540/oz at the time of the takeover to $1,203/oz by the completion of FY12.

86,673oz of gold

MINERAL RESOURCE

29.2Mt @ 2.2g/t for 2.1Moz

oRe ReSeRVe

4.8Mt @ 2.1g/t for 331,000oz

TENEMENTS AREA

1,200 sq km

Having enabled the business to get back on its feet, the operation has now bedded down, improving contractor efficiencies and consolidated on two digging fleets to sustain development. During FY13 there will be a strong focus on exploration to continue to unlock production opportunities across the operations and there will be a strong development focus on the Burtville area.

ReVenue

$112M

WORKFORCE

Approx. 160 staff including employees and contractors

AnnuAl RepoRt 2012

Why Laverton Was A Key Acquisition

Laverton is the second largest gold producing district in Australia, and the acquisition of the Crescent Gold operations enabled Focus to achieve significant scale more than doubling its production and resource base as well as tripling its landholding and reserves.

The Laverton district hosts three world class deposits situated along strike from Focus’ operations: The 8Moz Wallaby mine; 10Moz Sunrise Dam & 3Moz Granny Smith.

The acquisition of the Laverton operations has given Focus access to over 1,200km[2] of additional tenements in prime gold producing country, with over 110km of known mineralised shears running through its tenements of which less than 50km has been drilled to date and where drilling has been undertaken, only 2% of holes have been of a depth greater than 100m.

Processing in Laverton is currently undertaken via an Ore Processing Agreement with Barrick Australia at the Granny Smith Mill. This is a 3.5Mtpa processing plant for which

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Focus provides approximately two thirds of its annual mill feed at circa 2Mtpa.

As a part of the takeover, Focus also acquired the 1.45Mtpa Barnicoat plant which sits central to the majority of the Laverton operations. Barnicoat was refurbished in 2008 and was kept on care and maintenance by Crescent. Focus has already undertaken a number of scoping studies to assess the opportunities for recommissioning and or expanding the mill.

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Barnicoat Mill in Laverton: currently on care & maintenance.

AnnuAl RepoRt 2012

Coolgardie (FML 100%)

Highlights

Ramped up 2 new mines: Tindals Open Pits and The Mount underground
Transitioned operations from 1 to 3 operating mines
Increased quarterly gold production by 37% (June Quarter 2012 on PCP)
Produced 24% more gold on an annual basis
Processing head grade increased 17%
Reduced reliance on processing low grade stock
Recoveries through Three Mile Hill plant improved 3%
Reagent costs savings equivalent to $1.2M pa

pRoDuCt

Gold

MINING METHOD Open Pit and Underground

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The Coolgardie operations have undergone a major transformation through FY12 reducing its reliance on the Tindals Underground Mine and low grade stock piles, to establish two new mining centres: The Mount underground and the Tindals Open Pits, and increase total gold production by 24%.

On a like for like basis for the June Quarter, production in Coolgardie was up 37% as the new operations ramped up through the course of the year to now account for nearly 60% of Coolgardie’s monthly mined tonnes.

The new Tindals Open pits have performed exceptionally well despite the impact to operations at the start of the financial year when they were affected by a significant rain event. The Empress pit was mined to completion through the course of the year, and both the Big Blow and Dreadnought pits continued to develop. The Dreadnought pit in particular is proving to be an exciting mining centre, with the discovery of a number of new structures running through the project area and the business currently evaluating the opportunities for a far larger pit development. Contribution from surface mining at Tindals will continue to increase as the business continues to expand the current Tindals surface Mineral Resource of 11.9Mt @ 2.1g/t.

opeRAtInG AReAS

Tindals Open Pits Tindals Underground The Mount Underground Greenfields*

pRoCeSSInG

Focus’ 1.2Mtpa Three Mile Hill production point

FY2011 pRoDuCtIon

89,959oz of gold

ReSouRCeS

29.9Mt @ 2.3g/t for 2.2Moz

ReSeRVeS

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2.8Mt @ 2.0g/t for 183,000oz

TENEMENTS AREA

450 sq km

ReVenue

$146M

WORKFORCE

Approx 220 staff including employees and contractors

*Development of the Greenfields open pit scheduled to commence in the December Quarter 2012

The Mount underground operation, 80km to the south of Focus’ Three Mile Hill processing plant has also steadily developed through the year providing high-grade narrow vein mining. Under a new management team, the focus at The Mount has been in optimising grade and costs control, with the recent implementation of the resue mining method to minimise dilution. This in turn has seen a 30% increase in development grades going to the mill.

AnnuAl RepoRt 2012 13

Coolgardie

Focus’ Three Mile Hill plant has continued to perform exceptionally well since its refurbishment in 2009 and recoveries have improved 3% for the year. The introduction of the two new centres in Coolgardie has reduced the reliance on historical low grade stocks and in turn has seen head grade though the mill improve by 17%. This combined with a focus on operational improvements has seen milling costs per tonne reduce approximately 30% since the start of the year. Major savings have been made in the second half of the year in reagent consumption (equivalent to an annualised cost saving of circa $1.2M) and a new power contract scheme is set to save the operation circa $1M in power through FY13.

During FY13, Focus will commence the development of the Greenfields pit which sits adjacent to the Three Mile Hill plant to become the new base-load for the plant with the completion of the current phase of production from the Tindals Underground operation. Greenfields has an Ore Reserve of 1.0Mt @ 1.9g/t containing 60,000oz at a strip ratio of 5:1.

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AnnuAl RepoRt 2012

exploration

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Focus has the potential to significantly grow its resource base on targeted exploration.

The Opportunity

Focus has a current Mineral Resource base of 4.3Moz and over 1,650 km[2] of tenements across three of Australia’s best exploration addresses: Laverton, Coolgardie and the Treasure Island Gold Project on the salt lakes of Kambalda.

shallow and limited, with less than 2% of drill holes going beyond 100m depth, and large gaps in drilling adjacent to known resources. Of the 110km of strike, less than 50km has been drilled to-date. During FY13 Focus is increasing its commitment to exploration across the Laverton project area where it believes Mineral Resource ounces have the potential to be added quickly.

Coolgardie

Laverton

In Laverton, Focus has a landholding of 1,200km[2] surrounding four world class deposits: Wallaby, Sunrise Dam, Lancefield & Granny Smith which have produced in excess of 20Moz’s of gold.

The Laverton operations have a Mineral Resource of 29.2Mt @ 2.2g/t for 2.1Moz. There are six major regional gold producing structures running through the tenements with 110km of strike. However, historical drilling has been

Focus has a strong track record of discovery and resource expansion in Coolgardie. The Company is the largest landholder in the Coolgardie gold belt and has added over 850,000oz in Mineral Resource over the last four years whilst mining over 200,000oz of gold. The majority of exploration has been focused on just 2% of the Coolgardie landholding around the Tindals Mining Centre.

In total, Focus has a Mineral Resource in Coolgardie of 29.9Mt @ 2.3g/t for 2.2Moz and the goldfield is continuing

AnnuAl RepoRt 2012

exploration

to yield excellent results. The Tindals underground has delivered 5,000oz per vertical metre (100,000oz per level) and exploration is still finding significant gold at surface. During FY13 Focus has prioritised six targets in the Coolgardie area to focus on expanding the resource base outside of the Tindals Mining Centre.

Treasure Island

Treasure Island is a 100% owned, world class greenfields exploration project to the south of the 15Moz St Ives gold camp near Kambalda.

The Treasure Island Gold Project comprises 226 km[2] of tenements across the dry salt lake, Lake Cowan, and sits on the southern tip of the Boulder-Lefroy fault, the largest gold producing system in Australia.

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of aircore and diamond drilling programs. These have identified two major mineralised structures running through the project area; one adjacent to Treasure Island, the second approximately 3km to the east across the salt lake.

Mapping and surface sampling at Treasure Island has yielded surface gold samples in excess of 50g/t and since Focus took full control of the project in FY11 it has undertaken a number

The project is exhibiting strong similarities to 15Moz St Ives deposit to the north and will remain a focus for greenfields exploration through FY13.

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AnnuAl RepoRt 2012

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Achievements

During FY12, Focus has achieved significant exploration success across its three key exploration project areas:

Laverton

Apollo – Focused exploration on the Apollo deposit on the Chatterbox Shear enabled Focus to add approximately 100,000oz of Mineral Resource at Apollo after the takeover of Crescent Gold. The mining and technical team were able to transition Apollo into production during the December Quarter 2011.
Burtville – Burtville has been a high-priority target for the group, exhibiting a large mineralised footprint and having a history of low-strip production. During FY12, Focus achieved a 140% increase in Mineral Resource at Burtville to 235,000oz and completed the technical work required to enable Burtville to be slated for development in the first quarter of Calender 2013.

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Coolgardie

Tindals Surface - Grown Mineral Resource to 11.9Mt @ 2.1g/t for 809,000oz. Continued drilling success expanding Undaunted prospect.
Greenfields - Drilling & technical work through FY12 has enabled Focus to bring the Greenfields pit back into production with a major cutback planned for the December Quarter 2012.
Greater Coolgardie – A strong development pipeline is emerging outside Tindals centre with Focus achieving exploration success at the Bayleys North, Patricia Jean and CNX deposits which are all within a 10km distance of the Three Mile Hill Plant.

Treasure Island

Diamond and aircore drilling at Treasure Island has identified two major mineralised structures running through the project area; one adjacent to Treasure Island, the second approximately 3km to the east across the salt lake.

AnnuAl RepoRt 2012

Resources

Measured Resources
Indicated Resources
Inferred Resources
Total Resources
Tonnes
Grade Au
Tonnes
Grade Au
Tonnes
Grade Au
Tonnes
Grade Au
‘000t
g/t
Ounces
‘000t
g/t
Ounces
‘000t
g/t
Ounces
‘000t
g/t
Ounces

COOLGARDIE GOLD PROJECT
Tindals Project
416
4.6
62,000
10,777
2.4
837,000
3,409
2.3
251,000
14,602
2.4
1,150,000
Mount Project
131
7.8
33,000
588
5.2
98,000
576
5.5
97,000
1,295
5.5
228,000
Lindsays-Bayleys Project
4,350
1.7
238,000
3,562
2.0
233,000
7,912
1.9
471,000
Three Mile Hill Project
2,446
1.6
123,000
1,174
1.5
57,000
3,620
1.5
180,000
Norris Project
2,440
2.2
169,000
2,440
2.2
169,000
Total Coolgardie
547
5.4
95,000
18,161
2.2
1,296,000
11,161
2.2
807,000
29,869
2.3
2,198,000
LAVERTON GOLD PROJECT
Barnicoat Project
390
1.7
21,000
2,486
1.7
135,000
3,378
1.3
137,000
6,254
1.5
293,000
Burtville Project
1,573
1.3
65,000
4,146
1.3
170,000
5,719
1.3
235,000
Central Laverton Project
41
1.5
2,000
2,768
1.8
164,000
825
1.8
48,000
3,634
1.8
214,000
Chatterbox Project
948
2.4
72,000
3,967
2.1
273,000
3,186
2.2
227,000
8,101
2.2
572,000
Jasper Hills Project
370
1.8
22,000
1,455
1.8
82,000
843
2.1
58,000
2,668
1.9
162,000
Lancefeld Project
2,109
6.4
436,000
713
7.0
160,000
2,822
6.6
596,000
Total Laverton
1,749
2.1
117,000
14,358
2.5
1,155,000
13,091
1.9
800,000
29,198
2.2
2,072,000
TOTAL COMBINED
RESOURCES
2,296
2.9
212,000
32,519
2.3
2,451,000
24,252
2.1
1,607,000
59,067
2.2
4,270,000
Mineral Resources for the Laverton Gold Project are owned by Focus Minerals (Laverton) Limited. Focus owns 81.57% of this subsidiary company.
Competent Person’s Statement
The information in this announcement that relates to Exploration Results and Minerals Resources is based on information compiled by Dr Garry Adams who is a member of the Australian
Institute of Geoscientists. Dr Adams is employed by Focus Minerals and has suffcient experience that is relevant to the style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent Person as defned in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves”. Dr Adams consents to the inclusion in this announcement of the matters based on the information compiled by him in the form and context in which it appears.
Reserves

18 AnnuAl RepoRt 2012

Reserves

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	Proven Reserves	Proven Reserves	Proven Reserves	Probable Reserves	Probable Reserves	Probable Reserves		Total Reserves	Total Reserves
	Tonnes	Grade		Tonnes	Grade		Tonnes Grade Au
	‘000t	Aug/t	Ounces	‘000t	Aug/t	Ounces	‘000t	g/t	Ounces
COOLGARDIE GOLD PROJECT
Tindals Project	43	4.9	7,000	1,111	2.4	86,000	1,154	2.5	93,000
Mount Project				126	4.2	17,000	126	4.2	17,000
Lindsays-Bayleys Project							0	0.0	0
Three Mile Hill Project				999	1.9	60,000	999	1.9	60,000
Stocks							551	0.7	13,000
Total Coolgardie	43	4.9	7,000	2,236	2.3	163,000	2,830	2.0	183,000
LAVERTON GOLD PROJECT
Barnicoat Project				589	2.2	41,000	589	2.2	41,000
Burtville Project				1,044	1.4	46,000	1,044	1.4	46,000
Central Laverton Project				825	1.3	34,000	825	1.3	34,000
Chatterbox Project	547	2.1	37,000	167	2.6	14,000	714	2.2	51,000
Jasper Hills Project				331	2.4	26,000	331	2.4	26,000
Lancefeld Project				680	4.9	108,000	680	4.9	108,000
Stocks							628	1.3	25,000
Total Laverton	547	2.1	37,000	3,636	2.3	269,000	4,811	2.1	331,000
TOTAL COMBINED
RESERVES	590	4.9	44,000	5,872	2.3	432,000	7,641	2.1	514,000

Ore Reserves identified above for the Laverton Gold Project are owned by Focus Minerals (Laverton) Limited. Focus owns 81.57% of this subsidiary company.

Competent Person’s Statement

The information in this announcement that relates to Ore Reserves is based on information compiled by Mr Peter Ganza, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Ganza is a full time employee of Focus Minerals and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Ganza consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

AnnuAl RepoRt 2012

CORPORATE GOVERNANCE STATEMENT

IntRoDuCtIon

This statement outlines the main corporate governance practices that were in place for the financial year. The Company’s corporate governance practices comply with the ASX Corporate Governance Council recommendations unless otherwise stated. Where the Company’s corporate governance practices depart from a recommendation the Company has disclosed the departure together with a reason for the adoption of its own practice.

PRINCIPLE 1: LAyING SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Role and Responsibilities of the Board

The Board is responsible for ensuring that the Company is managed in a manner which protects and enhances the interests of its shareholders and takes into account the interest of all stakeholders. This includes setting the strategic directions for the company, establishing goals for management and monitoring the achievement of these goals.

A summary of the key responsibilities of the Board include:

Strategy – Providing strategic guidance for the Group, including contributing to the development of and approving the corporate strategy.
Financial performance – Approving budgets, monitoring management and performance.
Financial reporting and audits - Monitoring financial performance including approval of the annual and half year financial reports and liaison with the external auditors through the Audit Committee.
Leadership selection and performance - Appointment, performance assessment and removal of Chief Executive Officer. Ratifying the appointment and/or removal of other senior management including Company Secretary and other Board members through the Appointments Committee.
Remuneration – Management of the remuneration and reward systems and structures for senior management and staff through the Remuneration Committee.
Risk management – Ensuring appropriate risk management systems and internal controls are in place, and
Relationships with exchanges, regulators and continuous disclosure – Ensuring the capital markets are kept informed of all relevant and material matters ensuring effective communication with shareholders and stakeholders.

The Board has delegated to executive management responsibility for developing in the first instance:

Strategy - Assisting in developing and implementing corporate strategies and making recommendations where necessary;
Leadership selection and performance - selecting a short list of final candidate management and staff and proposing terms of appointment and evaluating performance;
Budgets - Developing the annual budget and managing day-to-day operations within budget;
Risk management – Maintaining risk management frameworks with periodic review by the Risk Committee: and
Communication - Keeping the Board, shareholders and market informed of material events.

AnnuAl RepoRt 2012

CORPORATE GOVERNANCE STATEMENT

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PRINCIPLE 2: STRUCTURING THE BOARD TO ADD VALUE

Composition of the Board

The names, skills, experiences and period of office of the Directors of the Company in office at the date of this Statement are set out in the Director’s Report.

The composition of the Board is determined so as to provide the Company with a broad base of industry, business, technical, financial and corporate skills and experience considered necessary to represent shareholders and fulfill the business objectives of the Company.

The Board composition is determined with reference to the following principles:

Persons nominated as Non-executive Directors shall be expected to have qualifications, experience and expertise of benefit to the Company and to bring an independent view to the Board’s deliberations.
All Non-executive Directors are expected to voluntarily review their membership of the Board from time-to time taking into account length of service, age, qualifications and expertise relevant to the Company’s then current policy together with the other criteria considered desirable for composition of a balanced board and the overall interest of the Company. The Board participates in Australian Institute of Company Directors courses from time to time on topics relevant to the Company and the framework within it operates
The number of Directors is maintained at a level which will enable effective spreading of workload and efficient decision making.
The Company considers that the Board should have at least three Directors (minimum required under the Company’s Constitution) and all are independent Directors. Since April 2011 the Board has comprised four Directors who are independent.
The Chairman is elected by the Board based on candidate’s suitability for the position.
The roles of Chairperson and Managing Director/Chief Executive Officer are not to be held by the same individual.

The Board has accepted that an independent Director is one who:

Does not hold an executive position (Non-executive Director):
is not a substantial shareholder of the Company or an officer of, or otherwise associated, directly or indirectly, with a substantial shareholder of the Company;
has not ,within the last 3 years, been employed in an executive capacity by the Company or another group member, or been a Director after ceasing to hold any such employment;
is not a principal of a professional adviser to the Company or another group member;
is not a significant consultant, supplier or customer of the Company or another group member, or an officer of or otherwise associated, directly, with a significant consultant, supplier or customer;
has no significant contractual relationship with the Company or another group member other than as Director of that company;
is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company; and
has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.

AnnuAl RepoRt 2012

CORPORATE GOVERNANCE STATEMENT

Of the current board members, Mr. Don Taig, Mr Phillip Lockyer, Mr Gerry Fahey and Mr Bruce McComish are considered to meet the criteria as Independent Non Executive Directors. Before each monthly formal Board meeting, the Directors meet with the Chairman to raise any matters that they have observed through their interaction with Executive Management through their committee activities, which they feel may have not been adequately addressed prior to the current meeting. The Chairman undertakes to discuss the issue with the Company’s CEO and the resolution of the matter is reported back to the Board as soon as possible thereafter.

Independent Professional Advice and Access to Company Information

Each Director has the right of access to all relevant Company information and to the Company’s executives. Each Director is entitled to seek independent advice at the Company’s expense to assist them to carry out their responsibilities, however, prior approval of the Chairman is required which is not unreasonably withheld. A copy of advice received by the Director is made available to other members of the Board.

Appointments Committee / Appointment of new Directors

During April 2011, the Board expanded the role of the Remuneration Committee to also include the role of an Appointments Committee.

From that date, the Remuneration and Appointments Committee comprises all Board members with Mr Phillip Lockyer as Committee Chairman.

The Committee’s role is to review and determine the composition of the Board and senior executive management to ensure the Board and management has the appropriate mix of expertise and experience. This review is to be conducted on an annual basis.

Where a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the services of a new director with particular skills, the Committee will determine the selection criteria for the position based on the skills deemed necessary for the Board to best fulfill its responsibilities and then appoint the most suitable candidate. Any Director appointment since the last Annual General Meeting must be nominated for re-election at the next Annual General Meeting.

Full details of all Directors are provided to shareholders in this annual report and on the Company’s website.

Performance of Directors and Chief Executive Officer

The performance of all Directors is reviewed annually.

The Remuneration and Appointments Committee will conduct an annual review of the Board composition and performance of the Board as a whole, the Chief Executive Officer, Company Secretary and senior executives. This review includes:

Determining the appropriate balance of skills and experience required to suit the Company’s current and future strategies;
Comparing the above requirements against the skills and experience of current Directors and executives;
Assessing the independence of each Director;
Measuring the contribution and performance of each Director;

AnnuAl RepoRt 2012

CORPORATE GOVERNANCE STATEMENT

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Assessing any education requirements or opportunities; and
Recommending any changes to Board procedures, Committees or the Board composition.

Such a review was undertaken during the year ended 30 June 2012. Directors being reviewed were asked to leave the meeting during the review process.

Performance of Senior Executives

Prior to the formation of the Remuneration and Appointments Committee, the Board meets twice during the year to review the performance of senior executives. This review includes:

The performance of the senior executive in supplying the board with information in a form, timeframe and quality that enables the Board to effectively discharge its duties;
Feedback from other senior executives
Any particular concerns regarding the senior executive: and
Remuneration objectives

This review was undertaken during the year ended 30 June 2012.

Term of office

Under the Company’s Constitution, the minimum number of directors is three. Each Director must not hold office (without re-election) past the third Annual General Meeting of their appointment or three years following that Director’s last election. At each Annual General Meeting one third of the directors or a minimum of one Director (excluding the Managing Director) must resign, with Directors resigning by rotation based on their date of appointment. Directors resigning by rotation may offer themselves for re-election. The re-appointment of Directors is not automatic.

PRINCIPLE 3: PROMOTION OF ETHICAL AND RESPONSIBLE DECISION –MAKING

Code of Conduct

The Company has developed a Code of Conduct (the Code) which has been fully endorsed by the Board and applies to all directors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism and the practices necessary to maintain confidence in the Company’s integrity.

The Code of Conduct embraces the values of:

Integrity
Excellence
Commercial Discipline
Culture of the Company

The Board encourages all stakeholders to report unlawful/unethical behavior with protection for those who report potential violations in good faith.

AnnuAl RepoRt 2012

CORPORATE GOVERNANCE STATEMENT

Trading in Focus Minerals Securities by Directors, Officers and Employees

The Board has established a Share Trading Policy addressing dealings by Directors, officers and employees and other potential insiders in buying and selling the Company’s securities.

The Company’s Share Trading Policy is released to the ASX and is also available on the Company’s website.

In Summary the Share Trading Policy restricts dealing in the Company’s securities by Directors, officers, management, consultants and employees and prohibits trading in the Company’s shares, options and other securities in the following circumstances:

If they are in possession of undisclosed price-sensitive information; and
Speculative trading for a short term gain.

The Directors have also given undertakings to inform the Company Secretary of any trading in shares by Directors which must also be notified to the ASX.

The Code and the Company’s Share Trading Policy are discussed with each new employee as part of their induction training.

The Code requires employees who are aware of unethical practices within the Company or breaches of the Company’s Share Trading Policy to report these to the Company Secretary, Chief Executive Officer or Chairman. This can be done anonymously.

The Directors are satisfied that the Company has complied with its policies on ethical standards, including trading in its securities.

Conflict of Interest

In accordance with the Corporations Act 2001 and the Company’s Constitution, Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the company. Where the Board believes a significant conflict exists, the Director concerned does not receive the relevant Board papers and is not present at the Board meeting whilst the item is considered. Details of Director related entity transactions with the Company and Group are set out in the related parties note in the financial statements. Prior to the commencement of all Board meetings the Chairman requires Board members to raise any items of continuous disclosure that a director or officer deems necessary. If there is any doubt, the participants are asked to raise the matter for a resolution.

PRINCIPLE 4: SAFEGUARDING INTEGRITy IN FINANCIAL REPORTING

Audit and Business Risks Committee - Membership and Conduct

From 18 April 2011 until the date of this Report the composition of the Audit and Business Risk Committee was:

Mr Bruce McComish as Committee Chairman, and
Mr Donald Taig, the company’s Chairman.

AnnuAl RepoRt 2012

CORPORATE GOVERNANCE STATEMENT

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The Audit and Business Risk Committee meets regularly with the external auditors to discuss audit outcomes and the Company’s financial statements. Each board member has access to the external auditor at any time and the external auditor has access to each individual board member.

The Audit and Business Risk Committee reviews the appointment of the external auditor at least annually reviewing the external auditor in terms of their independence and performance in relation to the adequacy of the scope and quality of the annual statutory audit and half –year review and the fees charged.

The Chief Executive Officer and the Chief Financial Officer make a statement to the Audit and Business Risk Committee that the Company’s financial reports present a true and fair view in all material respects of the Company’s financial condition and operational results and are in accordance with the relevant accounting standards.

The Committee also meets periodically (but no less than twice a year) with the Occupational Health and Safety operatives of the Company to review the Company’s adherence to its health and safety objectives. During this financial year, the Committee required of management to implement by no later than June 2013, AS 4801. This is a local standard, and relates to an occupational health and safety management system. It enables an organisation to control its risks and improve its performance in health and safety. The standard provides a systematic approach to identifying hazards, and then either eliminating or reducing the identified risks of the hazards.

The Chief Operating officer and the CEO review the OH&S performance on a monthly basis with the Board and any safety issues are advised to the Committee and Board members, if and as they arise.

The Audit and Business Risk Committee is structured so that it:

Has a formal charter;
Consists only of Non-executive Directors
Chaired by an independent Chair, who is not Chair of the Board; and
has at least two members.

PRINCIPLE 5: MAKING TIMELy AND BALANCED DISCLOSURE

Market Disclosure Policies

All Directors, executives and staff are required to abide with all various legal requirements and ASX obligations in relation to disclosure of information to the market. This includes specific compliance with the continuous disclosure requirements of the ASX Listing Rules.

The Company Secretary has been appointed the person responsible for overseeing and co-coordinating disclosure of information to the ASX as well as communicating with the ASX. The Company complies with its continuous disclosure obligations.

AnnuAl RepoRt 2012

CORPORATE GOVERNANCE STATEMENT

PRINCIPLE 6: RESPECTING THE RIGHTS OF SHAREHOLDERS

The Board places significant importance on effective communication with shareholders.

Information is communicated to shareholders through the distribution of the annual and half yearly financial reports, quarterly reports on activities and cashflows, announcements through the ASX and the media, on the company’s web site and through the Chairman’s address at the annual general meeting including webcasts of the Annual General Meeting and periodic written communications. General meetings, including Annual General Meetings, are held on a rotational basis in Perth and Kalgoorlie/ Coolgardie to encourage regional shareholder participation at general meetings.

In addition, news announcements and other information are sent by email to all persons who have requested their name to be added to the Company’s email list. If requested, the Company will provide general information by email, facsimile or post.

While the Company has no formal communication policy in place for the benefit of shareholders, the Company provides continuous communication which ensures shareholders and the markets are adequately informed of the Company’s activities.

The Company, wherever practicable, takes advantage of new technologies that provide greater opportunities for more effective communications with shareholders.

PRINCIPLE 7: RECOGNISING AND MANAGING RISK

The Board has expanded the scope of the Audit Committee to include monitoring the Company’s business risks. The management of business risks also addresses asset, operational, regulatory compliance, personal health, safety and environmental risks.

The members of the Audit and Business Risk Committee are detailed in Principle 4 above.

The Audit and Business Risk Committee monitors the performance of risk management and internal control systems and reports to the Board on the extent to which it believes the risks are being managed and the adequacy and comprehensiveness of risk reporting from management.

The Board delegates day-to-day management of risk to the Chief Executive Officer, who is responsible for identifying, assessing, monitoring and managing risks. The Chief Executive Officer is also responsible for updating the Company’s material business risks to reflect any material changes, with the approval of the Board.

In accordance with section 295A of the Corporations Act the Chief Executive Officer and the Chief Financial Officer also provide a declaration to the Board and have assured the Board that such a declaration is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial risk.

Technical and Operations Committee

In 2011 the Board established the Technical and Operations Committee to review and monitor the tehcnical reporting, compliance and operational requirments of the Company’s exploration, mining and processing operations.

AnnuAl RepoRt 2012

CORPORATE GOVERNANCE STATEMENT

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The composition of the Technical and Operations Committee is:

Mr Gerry Fahey as Committee Chairman, and
Mr Phillip Lockyer, Non Executive Director.

The Technical and Operations Committee monitors the resource and reserve modelling systems and controls in determining the Company’s reportable resource and reserves in compliance with the “Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves” (JORC Code).

Additionally, the Committee reports to the Board on the extent to which it believes the risks are being managed and

management reporting on operational risks arising from the Company’s mining, processing and exploration activities. Mr Fahey is a member of the JORC Committee which aids the Company’s understanding of requirements significantly.

PRINCIPLE 8: REMUNERATE FAIRLy AND RESPONSIBLy

Remuneration Committee

A Remuneration and Appointments Committee has been established to determine and review the remuneration of executives and Directors.

The Remuneration and Appointments Committee comprises all Board members with Mr Phillip Lockyer as Committee Chairman.

The maximum amount of remuneration available for all directors is fixed by shareholders in General Meeting and can only be varied by shareholders in similar manner. In determining the allocation of fees, the Board takes into account the time demands on each Director together with the responsibilities undertaken by them.

It is the Policy of the Board not to issue Directors Incentive shares or options. However, during the 2011, the Board introduced The Board Retirement Plan to recognise long term service by retiring Board members and taking into account that the Directors agreed to less than market stipends during the period that the Company transitioned from explorer to producer and this practice has continued. A full explanation of this approach is contained in the Remuneration Report section of this directors’ Report.

Payments to retiring Directors under the Plan are determined as follows:

0-3 years Board service – No retirement payment

3 – 5 years Board service – 25% of annual director fee.

5 – 8 years Board service – 50% of annual director fee.

More than 8 years Board service – 100% of annual director fee.

A full discussion of the company’s remuneration philosophy and framework and the remuneration received by Directors and executives in the current period is included in the remuneration report contained within the Directors’ Report.

AnnuAl RepoRt 2012

CORPORATE INFORMATION

ABN 56 005 470 799

DIReCtoRS

Donald Taig Phillip Lockyer Gerry Fahey Bruce McComish

Non-Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director

COMPANy SECRETARy

Paul Fromson

ReGISteReD AnD HeAD oFFICe Level 30 St Martin’s Tower 44 St George’s Terrace Perth WA 6000

PO Box Z5422 Perth WA 6831

Tel: +61 (0) 8 9215 7888 Fax: +61 (0) 8 9215 7889

SHARe ReGIStRY

Computershare Investor Services Pty Ltd Level 2 / Reserve Bank Building 45 St George’s Terrace Perth WA 600

Tel: +61 1300 557 010 Fax: +61 (0) 8 9323 2033

AuDItoR

Grant Thornton Audit Pty Ltd Level 1, 10 Kings Park Road West Perth WA 6005

Tel: +61 (0) 8 9480 2000 Fax: +61 (0) 8 9322 7787

SolICItoR

BANKERS

Investec Bank (Australia) Limited 2 Chifley Square Sydney NSW 2000

King and Wood Mallesons Level 50 Bourke Street Melbourne VIC 3000

Bank of Western Australia Limited 108 St George’s Terrace Perth WA 6000

STOCK EXCHANGE LISTING

Australian Stock Exchange (ASX) ASX Symbol: FML

National Australia Bank 100 St George’s Terrace Perth WA 600

AnnuAl RepoRt 2012

DIRECTORS’ REPORT

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The Directors present their report on the Group comprising of Focus Minerals Limited – the parent company (referred to as “the Company”) and its subsidiaries (together referred to as ‘the Group’ or ‘Focus’) at the end of, or during the financial year ended 30 June 2012.

DIReCtoRS

The directors of the Company at any time during or since the end of the financial year are:

Donald Taig (Chairman, Independent Non-Executive) Phillip Lockyer (Director, Independent Non-Executive) Gerry Fahey (Director, Independent Non-Executive) Bruce McComish (Director, Independent Non-Executive)

Details of directors’ qualifications, experience, special responsibilities and details of directorships of other listed companies can be found on pages 29 to 30.

INFORMATION ON DIRECTORS, OFFICERS AND SENIOR MANAGEMENT

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Directors Designation & Experience, Expertise & Qualifications Directorships of other ASX Special
Independence listed companies during responsibilities
Status the last three years during the year
Donald Taig Chairman Qualifications: B.Com, FAICD, FCPA • Nil • Member of the
Appointed on 21 Independent, Mr Taig is a Fellow of both the Australian Audit & Risk
March 2003 Non-Executive Institute of Company Directors and the Committee
Australian Society of Certified Practicing
Accountants. • Member of the
Mr Taig gained 11 years of experience within Remuneration
CRA Ltd.’s mining businesses and was a Committee
director of Metals Exploration Ltd. Mr Taig also
has significant senior management experience
particularly within the food industry where he
was Managing Director of Goodman Fielder’s
Australian Baking Division; Chief Executive
Officer of Bunge Cereal Foods; Managing
Director of Chiquita Brands South Pacific and
has been a director of a number of other public
and private companies in diverse industries.
Phillip Lockyer Director Qualifications: AWASM, DipMetal, MSC • Non-Executive Director • Chairman of the
Appointed on 7 Independent Mr Lockyer is a mining engineer and of Western Dessert Areas Remuneration
December 2005 Non-Executive metallurgist with more than 40 years technical Limited (Appointed June Committee
and management experience in nickel and 2010, ongoing) • Member of the
gold operations. His career includes 20 years • Non-Executive Director Technical and
with WMC Limited in Kambalda in various of Swick Mining Services Operations
roles including General Manager of Western Limited (Appointed June Committee
Australian operations. In addition he has 2010, ongoing)
held a number of other senior roles including • CGA Mining Limited
Director and General Manager of Operations (non-executive director:
for Resolute Ltd, and Director of Operations appointed January 2009
& Projects for Dominion Mining Ltd. He is • St Barbara Limited
currently chairman of the Minerals and Energy (non-executive director:
Research Foundation. appointed December
2006)
• Perilya Limited (non-
executive director:
resigned 2009 )
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AnnuAl RepoRt 2012

DIRECTORS’ REPORT

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Directors Designation & Experience, Expertise & Qualifications Directorships of other ASX Special
Independence listed companies during responsibilities
Status the last three years during the year
Gerry Fahey Director Qualifications: M.AIG, M.AusIMN Mr Fahey is Nil • Chairman of
Appointed on 18 Independent a geologist with 35 years’ experience. He was the Technical
April 2011 Non-executive chief geologist for Delta Gold between 1992- and Operations
2002 where he gained extensive resource, mine Committee
development and feasibility study experience
on projects including Kanowna Belle and
Sunrise in Australia and Ngezi Platinum in
Zimbabwe. Mr Fahey began his career as a
mine geologist in the Irish base-metals industry
on projects such as Tynagh, Avoca, and Tara
Mines (Navan) owned by Noranda and later
Outokumpu. On migrating to Australia in 1988,
he gained further operational experience in
Western Australia and the Northern Territory
(Whim Creek and Dominion Mining), prior to
joining Delta Gold. He formed FinOre Mining
Consultants in 2005, which merged with CSA
in 2006. Mr Fahey is a member of the Joint
Ore Reserve Committee (JORC) and a Board
Member (Federal Councillor) for the Australian
Institute of Geoscientists (AIG).
Bruce Director Qualifications: BCA(Hons), FCA, FCPA • Former Deputy Chairman Chairman of the
McComish Independent Mr McComish is the former chairman of of Living and Leisure Audit and Business
Appointed on 18 Non-executive stockbroking firm BBY. He has held senior Group (resigned 2012) Risk Committee
April 2011 management positions for a number of • Former Non-executive
Australian and international companies director of Signature
including the National Australia Bank, where Capital Investments Ltd
he served as Chief Financial Officer from 1994 (resigned 2012)
to 1998, and North Limited, where he was the
executive general manager of corporate affairs
from 1992-1994. Mr McComish worked for
Unilever Plc for 18 years in senior financial
positions around the world. He holds a
Bachelor of Commerce and Administration
from Victoria University of Wellington and is a
Qualified Accountant.
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SENIOR MANAGEMENT

Campbell Baird - Chief Executive Officer

Qualifications: B.Eng (Mining), Masters in International Finance

Appointed: 14 January 2009

Mr Baird is Chief Executive Officer of Focus Minerals. He has been a part of the team who, over the past three years, have transformed Focus from explorer to become a major gold producer. Prior to joining Focus, he was General Manager of Operations for four years at Altona Mining where he assisted in the development of the Kylyahti Copper Mine in Finland. He started his career at Western Mining Corporation at St Ives, then joined Plutonic at Mount Morgans (Laverton), he worked for North Limited at both North Parkes and at the Iron Ore Company of Canada, before joining SRK Consulting in 2000 where he spent 5 years working on some major global mining projects that are now under construction. These include the giant Oyu Tolgoi block cave copper mine in Mongolia, the argyle diamond mine block cave in Australia and the Goro Laterite

AnnuAl RepoRt 2012

DIRECTORS’ REPORT

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nickel project in new Calendonia. Campbell has a Bachelor of Engineering (Mining) from the University of New South Wales and a Masters of International Finance from Curtin University.

Mark Hine - Chief Operating Officer

Qualifications: B.Eng (Mining)

Appointed: 1 December 2011

Mr Hine was appointed to the role of Chief Operating Officer, for the Focus Minerals group in December 2011. Prior to that Mark commenced in May 2011 as the Chief Operating Officer for Focus Minerals (Laverton) Ltd – formerly Crescent Gold Ltd. Mark is a mining engineer who has more than 30 years’ operating experience. Most recently, he held positions of CEO Golden West Resources Ltd, Executive General Manager Mining at Macmahon Contractors Pty Ltd and General Manager for Pasminco Ltd at the Broken Hill / Elura Mines. He joined Crescent Gold as Chief Operating Officer in April 2011, before being appointed to the role across the group.

Paul Fromson – Chief Financial Officer and Company Secretary

Qualifications B. Com, CPA, ACIS, AICD Appointed 30 April 2012

Mr Fromson is a Certified Practising Accountant, a member of the Australian Institute of Company Directors and a Chartered Company Secretary with a broad range of finance, accounting, taxation and commercial experience. Since 1986 Mr. Fromson has held a number of senior finance roles including board positions and has over eighteen years’ experience with ASX listed resource companies including senior positions with a number of gold exploration companies. He has also worked for one of the previous part owners of the Boddington Gold Mine as their resident representative. Outside of the resources industry, Mr Fromson founded and managed his own successful taxation practice and was also a director of the Makit Hardware chain co-operative for four years. Mr Fromson’s most recent role was Chief Financial Officer and Company Secretary for an ASX listed company where he played a key role in several significant capital raisings and joint ventures with two large Chinese groups.

The details of the relevant interest in the Company of each director and officer are outlined in Note 24 to the financial statements.

Interests in the shares and options of the company and related bodies corporate

At the date of this report, the direct and indirect interests of directors in the shares and options of the Company were:

	Ordinary Shares	Options (Unlisted)
Donald Taig	11,963,259	-
Phillip Lockyer	594,523	-
Gerry Fahey	-	-
Bruce McComish	-	-

CApItAl StRuCtuRe

Ordinary shares

As at the date of this report, the Company had on issue 4,320,773,701 fully paid ordinary shares.

SHARe optIonS

Options Issued

There were no options issued in the 2012 financial year. In the prior year 33,500,000 share options were granted to senior management of the company in accordance with the Group’s Long term Incentive Scheme. Vesting criteria of the Scheme is subject to the Company achieving a Total Shareholder Return for the 12 month period prior to the applicable Vesting Date of at least within the 2nd quartile of Total Shareholder Returns for the Comparable Entities. Comparable Entities have been determined to be 12 gold producing companies listed on established stock exchanges and with operations predominately located within the Western Australian Eastern Goldfields region.

AnnuAl RepoRt 2012

DIRECTORS’ REPORT

Total Shareholder Return is defined as the change in capital value per share of an entity over a 12 month period, plus dividends per share, expressed as a plus or minus percentage of their opening value. The opening value date for the above options is 1 January 2011.

Subject to achieving the vesting criteria, the above options will vest on 31 December 2012.

Options Exercised

There were no options exercised during the financial year.

Options Lapsed

During the year a total of 10,000,000 options to acquire shares at an exercise price of 12.3 cents, 6,923,077 options to acquire shares at an exercise price of 7.5 cents and 6,923,077 options to acquire shares at an exercise price of 7.8 cents lapsed on cessation of employment.

As at the date of this report, details of unissued ordinary shares under options are as follows:

Issuing Entity	Number of Options	Exercise Price
		Cents per Share	Expiry Date
Focus Minerals Ltd	14,116,923	7.50	31/12/2012
	14,116,923	7.80	31/12/2012
	23,500,000	12.30	30/06/2014
Total Options on issue	51,733,846

pRInCIpAl ACtIVItIeS

The principal activities of the entities within the consolidated entity during the year were gold, nickel and other base metal mining and exploration in Australia.

There were no significant changes in the nature of those activities during the year. The company did however expand its operations via the acquisition of Focus Minerals (Laverton) Ltd (formerly Crescent Gold Ltd). The operations of this entity are centred around Laverton Western Australian and are primarily in the gold sector.

REVIEW OF OPERATIONS

Highlights of operations during the period ended 30 June 2012 are as follows:

Mining

Coolgardie Operations

The Coolgardie operation has undergone a major transformation through FY 2012 reducing its reliance on the Tindals Underground Mine and low grade stock piles, to establish two new mining centres: The Mount underground and the Tindals Open Pits, and increase total gold production by 24%.

The new Tindals Open pits have performed exceptionally well with the Empress pit being mined to completion through the course of the year, and both the Big Blow and Dreadnought pits continuing to develop. The Dreadnought pit in particular is proving to be an exciting mining centre, with the discovery of a number of new structures running through the project area and the business currently evaluating the opportunities for a far larger pit development. Contribution from surface mining at Tindals will continue to increase as the business continues to expand the current Tindals surface Mineral Resource of 10Mt @ 2.3g/t.

Laverton Operations

The Laverton operations were acquired as the result of the acquisition of an 81.57% interest in Focus Minerals (Laverton) Ltd – formerly Crescent Gold Ltd. The operations consisted of a number of open pit operations feeding ore to the nearby Barrick Granny Smith mill under an ore purchase agreement.

AnnuAl RepoRt 2012

DIRECTORS’ REPORT

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Through this financial year Focus has injected $17M in working capital to transform the operating fortunes of Laverton and deliver 86,673oz of gold for the financial year. The transformation of the operations was all funded internally from Focus Group cash balances and saw a number of operating changes undertaken.

Early in the calendar year a significant development program was undertaken to ensure steady mill feed for the remainder of the year. Toward the middle of the year the company was able to complete the development work and progressively reduce its mining fleet. This has seen the Laverton operations simplified from four active pits and four diggers to currently one pit and two diggers. The significant spend on development work and subsequent reduction in mining fleet enabled the company to achieve a significant turnaround in cash costs at Laverton.

Exploration & Resource Development

During the period the Group spent a total of $20.1 million (2011: $23.9 million) on exploration activities.

Treasure Island Gold Project - Diamond and aircore drilling at Treasure Island has identified two major mineralised structures running through the project area; one adjacent to Treasure Island, the second approximately 3km to the east across the salt lake.

Greater Coolgardie – Exploration over the Greater Coolgardie area has seen a strong development pipeline beginning to emerge outside the Tindals Mining Centre with Focus achieving exploration success at the Bayleys North, Patricia Jean and CNX deposits which are all within a 10km distance of the Three Mile Hill Plant.

Tindals Mining Centre - Drilling & technical work through FY 2012 has enabled Focus to bring the Greenfields pit back into production with a major cutback planned for the December Quarter 2012.

Laverton - Exploration over the newly acquired Laverton area focused on the Apollo deposit on the Chatterbox shear where Focus achieved a 140% increase in Mineral Resources.

Corporate

The company completed its takeover bid for Focus Minerals (Laverton) Ltd – formerly Crescent Gold Ltd – and currently holds 81.57% of the company. There were 880,258,270 Focus Minerals Ltd shares issued to acquire 81.57% of the shares and all the outstanding options in Focus Minerals (Laverton) Ltd.

There were no other issues of capital during the year. A number of options lapsed due to cessation of employment of a number of staff. At period end the Group had a debt of $8m. During the financial year the company arranged a $10m facility with Investec Bank and drew down $8m to assist with funding development costs at its newly acquired Laverton operations.

At period end the Group had 4,000 ounces of gold forward selling.

Net cashflow generated from operations totalled $56.0 million (2011: $30.3 million).

Operating result for the year

Consolidated Net Profit for the year was $6.844 million (2011:$7.645 million). Consolidated Net Profit attributable to the owners of the Company was $6.151 million (2011: $7.645 million).

Significant changes in the state of affairs

In conjunction with the Review of Operations section above, the following are significant changes in the state of affairs of the consolidated entity to balance date:

	No of Shares	$’000
Issued shares at 30 June 2011	3,440,515,431	145,010
Issued during the period
Shares issued to acquire shares and options in Crescent Gold Ltd pursuant to a takeover	880,258,270	58,900
Issued shares at 30 June 2012	4,320,773,701	203,910

AnnuAl RepoRt 2012

DIRECTORS’ REPORT

Significant events after balance date

Proposed Placement to Shandong Gold International Mining Corporation Ltd.

On 20 September 2012 the company issued an announcement for a proposed placement of shares that would result in Shandong Gold owning up to 51% in the Company. The key points of the announcement are reproduced as follows:

“Focus Minerals Limited (“Focus”) [ASX: FML], an Australian gold producer and explorer, is pleased to announce that it has entered in to a Share Subscription Deed with Shandong Gold International Mining Corporation Ltd (“Shandong Gold”), under which Shandong Gold has agreed to subscribe for new fully paid ordinary Focus shares to raise approximately $225.0 million.

Shandong Gold, a subsidiary of one of China’s three largest gold producers by production, will subscribe for approximately 4.55 billion new fully paid ordinary Focus shares (“New Shares”) at 5 cents per New Share, to raise $225 million (“Placement”). The Placement represents a premium of:

13.6% to the closing price of Focus shares of 4.4 cents per share on 19 September 2012; and
28% to the 60 day VWAP of 3.9 cents per share for the period ending 19 September 2012.”

The placement will require shareholder approval and the unanimous recommendation of the Board based on an independent report that the transaction is reasonable and there being no superior transaction. The AGM is scheduled for 30 November to allow for sufficient time for the independent experts reports to be completed and a detailed Explanatory Memorandum to be compiled.

Other than as detailed above, there has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial periods.

Likely developments and expected results

The directors intend to continue mining operations at the Tindals Mining Centre and the Mount Mine. The Company will also progressively assist Focus Minerals (Laverton) Ltd (81.57% holding) to meet its production targets and financial budgets and expand exploration activities at Laverton. The Company will pursue opportunities to acquire 100% of the issued capital of Focus Minerals (Laverton) Ltd.

Active exploration programs will continue on the Group’s mining tenements, in particular, on a number of high priority targets within the Tindals Mining Centre, Greater Coolgardie Area and Laverton to increase existing gold reserves and expand near term production targets. Exploration activities will continue at the greenfields Lake Cowan - Treasure Island Gold Project.

Environmental Regulations

The Group’s operations hold licences issued by the relevant regulatory authorities. These licences specify the limits and regulate the management associated with the operations of the Company. At the date of this report the Company is not aware of any breach of those environmental regulations which apply to the Group’s operations. The Group continues to comply with its specified regulations.

Indemnification and Insurance of Directors and Officers

The company has paid premiums to insure the directors and officers of the Group against liabilities for costs and expenses incurred by them in defending legal proceedings arising out of their conduct while acting in the capacity of director or officer of the Group, other than conduct involving a wilful breach of duty in relation to the company.

REMUNERATION REPORT (AUDITED)

This report, prepared in accordance with the Corporations Act 2001, contains detailed information regarding the remuneration arrangements for the Directors and Senior Executives who are the ‘key management personnel’ (KMP) of Focus Minerals Ltd (“Company”) and the consolidated entity. The Board, in consultation with industry and proxy representatives, formed the view that the three most senior people in the organisation, being the Chief Executive Officer (CEO), Chief Operating Officer (COO) and the Chief Financial Officer (CFO)/Company Secretary are the only three executives who satisfy the “key management personnel” criteria. The tables disclosing remuneration for this year and comparatives only include these KMP as opposed to the prior year where the requirement was to disclose the five highest paid executives.

AnnuAl RepoRt 2012

DIRECTORS’ REPORT

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The KMP for the year ended 30 June 2012 are listed in the table below:

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Current Non-executive directors Current Senior Executives
Donald Taig Campbell Baird – CEO
Bruce McComish Mark Hine - COO (Note 1)
Gerry Fahey Paul Fromson - CFO and Company Secretary (Note 2)
Phil Lockyer
Former Non-executive Directors Former Senior Executives
Christopher Hendricks – resigned 18 April 2011 Brad Valiukas – former COO – resigned 24 January 2012 (Note 1)
Jon Grygorcewicz – former CFO and Company Secretary – resigned
30 April 2012 (note 2)
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Note 1 – Mr Hine was originally employed as the COO of Focus Minerals (Laverton) Ltd (formerly Crescent Gold Ltd). During the year Focus Minerals Ltd took control of this entity via the acquisition of 81.57% of its issued capital and when Mr Valiukas resigned Mr Hine assumed COO responsibilities for the expanded group.

Note 2 - On 17 April 2012 the company announced the resignation of Mr Grygorcewicz and his replacement Mr Fromson as Chief Financial Officer and Company Secretary. The resignation/appointment took effect from 30 April 2012.

There were no other changes of the Board or key management personnel between the reporting date and the date this financial report was authorised for issue.

Remuneration Objectives

It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and executive team by remunerating directors and key executives fairly and appropriately with reference to relevant employment market conditions. To assist in achieving this objective, the Remuneration Committee links the nature and amount of executive directors’ and other officers’ emoluments to the Company’s financial and operational performance.

The expected outcomes of the remuneration structure are:

retention and motivation of key executives;
attraction of high quality management to the Company; and
performance incentives that allow executives to share the success of Focus Minerals Ltd.

Remuneration Committee Established

The Board is responsible for determining and reviewing compensation arrangements for the directors themselves and the chief executive officer and executive team. The Board has established a Remuneration Committee, comprising of all the non-executive directors.

Members of the Remuneration Committee during the year were:

Phillip Lockyer – Committee Chairman
Donald Taig
Bruce McComish
Gerry Fahey

For details on the number of meetings of the Remuneration Committee held during the year and the attendees at those meetings, refer to the Directors’ Meeting section of this Report.

Compensation of Key Management Personnel

Remuneration structure

In accordance with best practice Corporate Governance, the structure of Non-Executive director remuneration is separate and distinct.

Remuneration committee

The Remuneration Committee of the Board of Directors of the Company is responsible for determining and reviewing compensation arrangements for the directors, the CEO and the senior executive team.

AnnuAl RepoRt 2012

DIRECTORS’ REPORT

The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of directors and senior executives on a periodic basis by reference to relevant employment market conditions with an overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team, subject to the following section relating to non-executive directors.

Non-executive director remuneration

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

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process.

Each non-executive director receives a fee for being a director of the Company.

During the period that Focus Minerals was transitioning from junior explorer to mining and processing, successive Board members have agreed to accept less than the comparable market fee for their work as a director, deciding to support the company during this period by avoiding fixed cost market fees.

We have maintained this approach since moving to a cash flow generating company and have instead, asked the directors to increase their work load through the evolution of Board Committees and the mentoring of one, or more of the executive management team.

Instead of seeking to move directors fees up over time to catch up this component of prior support, the Company introduced a Retirement Allowance in 2011 for the long term service of Director’s, tied solely to their current Director’s Fee at the time of retirement (Fixed Component).

The allowance is as follows:

3 - 5 Years’ Service – 25% of annual fees on retirement

5 – 8 Years’ Service – 50% of annual fees on retirement

8+ Years’ Service – 100% of annual fees on retirement

When this allowance was introduced, the Remuneration Committee was at pains to ensure the size of the benefit to the individual was not significant enough to the individual’s concerned to influence their judgement on Governance matters, or impair the sound functioning of the Board.

In this Annual Report, the only Directors who could benefit from this allowance are Mr Lockyer and Mr Taig. The committees of the Board, their Chair and members are as follows:

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Committee Chairman of Committee Other members
Remuneration and Appointments Phillip Lockyer Don Taig, Bruce McComish and Gerry Fahey
OH&S and Risk Management Bruce McComish Don Taig
Audit Committee Bruce McComish Don Taig
Technical Committee Gerry Fahey Phillip Lockyer
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In addition, the following members of the key management personnel are mentored in their roles by the Directors as follows:

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Role Director Mentor
C Baird - CEO Don Taig
M Hine - COO Phillip Lockyer
P Fromson - CFO Bruce McComish
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The compensation provided to the Directors in these circumstances is based upon an hourly fee which represents the variable nature of the time involved and doesn’t load the corporate overhead with another fixed component. As a result, the components of the Director’s remuneration will vary as to work and time and will be made up of 1) Fixed fee for Board meetings at less than market payments established from comparable published specialist remuneration consultants and 2) a variable component based upon work load and time to chair and contribute to Board Committees and mentoring of the Executive Team.

AnnuAl RepoRt 2012

DIRECTORS’ REPORT

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At present the maximum aggregate remuneration of directors’ fees for non-executive directors is $400,000 per annum of which $230,000 is currently paid to directors as fees.

The remuneration of non-executive directors for the period ended 30 June 2012 is detailed in the remuneration table.

non-executive Chairman

In a previous Annual Report the Chairman’s role was categorised as Executive Chairman. The reasoning has been canvassed widely with the auditors, the company’s lawyers and proxy houses. All have agreed that this was misleading and the company has reverted to a more normal description from Corporate Governance principles. The Chairman lives in Victoria and due to the need to let the Executive Team grow and mature in their roles has retained corporate responsibility for any mergers and acquisitions activity contemplated by the company from time to time. His Chairman’s fee is adjusted below market accordingly and replaced where this activity is undertaken, with an hourly amount based upon a full 8 hour day not a component thereof. Accordingly, the Chairman’s remuneration will be up or down in any year based upon the level of this activity. In all instances, the Board is quite satisfied that the Company’s outside advisory costs have been lowered due to Mr Taig’s activity and experience in this area.

Senior executive and executive director remuneration

Remuneration primarily consists of fixed and performance based remuneration where determined by the Remuneration Committee. The Company has presently established an equity based scheme that will allow the executive team to share in the success of Focus Minerals Ltd. Any Issue of an equity component to executive directors is subject to the approval of shareholders in general meeting and it is a policy of the current Board that Directors do not participate in equity based proposals.

Fixed Remuneration

Fixed remuneration is reviewed annually by the Remuneration Committee. The process consists of a review of relevant comparative remuneration in the market and internally and, where appropriate, external advice on policies and practices. The Committee has access to external, independent advice where necessary.

Senior managers are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be optimal for the recipient without creating additional cost for the Group.

The fixed remuneration component of specified company executives is detailed in Tables 1 and 2 below.

Performance Based Remuneration

The key performance indicators (KPIs) are set annually, with a certain level of consultation with key management personnel to ensure a common understanding. The KPI’s are specifically tailored to the areas each individual is involved in and has a level of control over. The KPIs target areas the Board believes hold greater potential for group expansion and profit, covering financial and non-financial as well as short and long-term goals or achievement of specific projects or tasks. The level set for each KPI is based on budgeted figures for the Group and completion of defined projects or tasks within defined timeframes. The bonuses applicable to key management personnel are a maximum of 20% of the base salary applicable to each executive and the final amount payable as disclosed in the remuneration table is subject to KPI achievement and Company financial performance.

The Company has issued share options to certain key employees. The options are subject to vesting criteria related to the company’s performance as follows:

Vesting of the options is subject to the Company achieving a Total Shareholder Return for the 12 month period prior to the applicable Vesting Date of at least within the 2nd quartile of Total Shareholder Returns for the Comparable Entities. Comparable Entities have been determined to be 12 gold producing companies listed on established stock exchanges and with operations predominately located within the Western Australian Eastern Goldfields region.

AnnuAl RepoRt 2012

DIRECTORS’ REPORT

Key Management Personnel Contracts

The key terms of the employment contracts for the key management personnel are summarised as follows:

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Ceo Coo CFo
Term of employment No fixed term No fixed term No fixed term
Maximum bonus - STI 20% of base salary 20% of base salary 20% of base salary
Termination Event Entitlements In the event of a genuine The COO is entitled to a genuine In the event of a genuine
redundancy directly as a result redundancy payout of between redundancy directly as a result
of a change of control the CEO a minimum of 4 and a maximum of a change of control the CFO
is entitled to a payout equivalent of 16 weeks based on a sliding is entitled to a payout equivalent
to 6 months of his base salary for scale commencing at 4 weeks to 6 months of his base salary for
loss of employment. with an additional week/s for loss of employment.
each completed year of service
until the maximum is reached
after 10 year’s service.
Notice period 3 months notice required 3 months notice required 8 weeks notice required by either
by either party except in the by either party except in the party except in the event of
event of fraud or other normal event of fraud or other normal fraud or other normal termination
termination events termination events events
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In determining whether or not a KPI has been achieved, the Remuneration Committee bases the assessment on audited figures or on verifiable achievement of the relevant KPI. During the year, KPI’s for the award of short term bonuses were measured on achievement of the Group’s profitability and gold production targets, as disclosed in the remuneration tables below.

Remuneration Tables

Directors’ remuneration for the years ended 30 June 2012 and 2011.

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Short-term Benefits Post Employment Benefits %
Directors Super- total Performance
Salary & Fees other Bonus
annuation related
Current directors
Donald Taig 2012 177,300 - 15,957 - 193,257 -
2011 154,500 - 8,505 - 163,005 -
Phillip Lockyer 2012 50,000 - 4,500 - 54,500 -
2011 71,000 - 4,500 - 75,500 -
Gerry Fahey 2012 50,000 - 4,500 - 54,500 -
2011 - - - - - -
Bruce McComish 2012 72,267 - 6,774 - 82,041 -
2011 - - - - - -
Former directors
Christopher 2012 - - - - - -
Hendricks resigned
18 April 2011
2011 41,667 - - - 41,667 -
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AnnuAl RepoRt 2012

DIRECTORS’ REPORT

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Remuneration of the key management personnel for the years ended 30 June 2012 and 2011

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Short-term Benefits Post Employment Benefits %
Salary & Super- Equity Performance
other Bonus total
Fees annuation Options based
Current Executives
Campbell Baird 2012 378,941 - 34,105 25,700 22,100 460,879 10.37%
Chief Executive Officer
2011 320,527 - 28,848 34,597 19,500 403,472 13.41%
Mark Hine [1] 2012 362,901 - 36,001 - - 398,902 -
Chief Operating Officer [1]
2011 - - - - - - -
Paul Fromson [2] 2012 49,154 - 4,424 - - 53,578 -
Company Secretary/Chief
Financial Officer
2011 - - - - - - -
Former Executives
Brad Valiukas [3] 2012 184,804 34,755 19,762 - - 239,344 -%
former COO
2011 258,715 - 23,284 20,240 19,200 321,439 12.27%
Jon Grygorcewicz [4] 2012 192,804 66,271 17,393 - 15,300 291,758 5.24%
former Company Secretary/
Chief Financial Officer
2011 185,199 15,015 16,668 12,182 13,500 242,564 10.59%
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1. Mr Hines was appointed as Chief Operating Officer of in December 2011. He joined Crescent Gold as Chief Operating Officer in April 2011, before being appointed to the role across the Group.
1. Mr Fromson was appointed as Company Secretary and Chief Financial Officer in April 2012.
1. Mr Grygorcewicz resigned from the position of Company Secretary and Chief Financial Officer in April 2012
1. Mr Valiukas resigned from the position of Chief Operating Officer in January 2012.

First Strike

At the last AGM held on 28 November 2011 the resolution to approve the Remuneration Report was narrowly defeated on a Poll vote and the Company incurred a so called “first strike”.

Since that time the Company has canvassed shareholders and in particular the Proxy Houses that instructed their clients to vote against the Remuneration Report. The concerns were not based around the level of remuneration for directors and senior executives, rather it was based on the level of disclosure of the basis of remuneration. The Company has therefore improved the disclosure in its Remuneration Report and explained in more detail the roles of the Board and the basis of the remuneration practices of the Company. The Chairman has undertaken to review the Company’s performance in this area annually after the AGM in order to promote a program of continuous improvement in this area.

Directors’ Meetings

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

AnnuAl RepoRt 2012

DIRECTORS’ REPORT

Director			Audit and Risk	Audit and Risk	Remuneration	Remuneration		Technical
				Committee		Committee		Committee
	A	B	A	B	A	B	A		B
Donald Taig	12	13	8	4	1	1	-		-
Phillip Lockyer	13	13	-	-	1	1	8		8
Gerry Fahey	13	13	-	-	1	1	8		8
Bruce McComish	12	13	8	8	1	1	-		-

A – Number of meetings attended.

B – Number of meetings held during the time the director held office or was a member of the relevant committee during the year.

Proceedings on Behalf of Company

Prior to Focus Minerals Ltd acquiring an 81.57% interest in Focus Minerals (Laverton) Ltd, the Company had a dispute over a royalty agreement with Indago Resources Ltd. Focus Minerals (Laverton) Ltd has lodged a writ in the Supreme Court of Western Australia to have the royalty agreement set aside. Focus Minerals Ltd has joined this action to protect its interest in the Company and is now managing this legal action on behalf of Focus Minerals (Laverton) Ltd.

Other than as disclosed in this report no person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The Company was not a party to any such proceedings during the year.

Auditor Independence and Non-Audit Services

Non-Audit Services

The Board of directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

Fees totalling $7,000 (2011: $51,864) were paid to Grant Thornton for non-audit services, principally for taxation services, provided during the year ended 30 June 2012.

Auditor’s Independence Declaration

The auditor’s independence declaration for the year ended 30 June 2012 has been received and can be found on page 41 of this Financial Report.

This Report of the Directors is signed in accordance with a resolution of the Board of Directors.

Don taig Chairman 28 September 2012 Perth, Western Australia

AnnuAl RepoRt 2012

AUDITOR’S INDEPENDENCE DECLARATION

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AnnuAl RepoRt 2012 41

STATEMENT OF COMPREHENSIVE INCOME FOR THE yEAR ENDED 30 JUNE 2012

Notes Revenue 2(a) Cost of sales Gross Proft Other income 2(b) Depreciation and amortisation expense 2(c) Finance costs 2(c) Other expenses 2(c) Takeover costs 2(c) Proft before income tax Income tax expense 3 Proft after income tax for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Total comprehensive income attributable to: Non-controlling interest 8 Owners of the parent Total Comprehensive Income for the year Earnings Per Share Basic proft per share (cents per share) 5 Diluted proft per share (cents per share) 5	Consolidated 2012 2011 $’000 $’000
	258,253 102,752 (202,625) (75,064)
	55,628 27,688 1,370 2,864 (32,800) (15,034) (17) (20) (13,794) (7,853) (3,543) -
	6,844 7,645 - -
	6,844 7,645
	- -
	6,844 7,645
	693 - 6,151 -
	6,844 7,645
	0.15 0.26 0.15 0.25

The accompanying notes form part of these financial statements.

42 AnnuAl RepoRt 2012

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

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Notes Assets Current Assets Cash and cash equivalents 6 Restricted Cash 6 Trade and other receivables 7 Inventories 9 Other current assets 10 Financial assets 11 Total Current Assets Non-Current Assets Restricted cash 6 Plant and equipment 12 Development expenditure 13 Exploration and evaluation assets 14 Total Non-Current Assets Total Assets Liabilities Current Liabilities Trade and other payables 16 Interest bearing liabilities 18 Total current liabilities Non-current liabilities Interest bearing liabilities 18 Provisions 17 Total Non-Current Liabilities Total Liabilities Net Assets Equity Issued capital 19 Reserves 19 Minority interest 8 Retained earnings Total Equity	Consolidated 2012 2011 $’000 $’000
	2,604 30,709 381 - 6,509 1,379 25,559 7,717 623 560 1,347 4,195
	37,023 44,560
	12,885 812 54,064 31,529 53,023 23,520 141,243 77,667
	261,215 133,528
	298,238 178,088
	61,553 22,206 9,455 1,445
	71,008 23,651
	2,404 1,750 8,397 4,454
	10,801 6,204
	81,809 29,854
	216,429 148,233
	203,910 145,010 (1,732) 123 5,000 - 9,251 3,100
	216,429 148,233

The accompanying notes form part of these financial statements.

AnnuAl RepoRt 2012 43

STATEMENT OF CHANGES IN EQUITy FOR THE yEAR ENDED 30 JUNE 2012

Consolidated Notes	Ordinary Retained Reserves Non Total Shares Earnings / Controlling (Accumulated Interest Losses) $’000 $’000 $’000 $’000 $’000
Balance as at 1 July 2010 Total comprehensive income for the period Transactions with owners, recorded directly in equity Shares issued in the period Option reserve on recognition of equity based payments Option reserve transferred to Retained Earnings on lapsed and cancelled options Transfer on exercise of options Share issue expense Balance as at 30 June 2011 Total comprehensive income for the period Non-controlling interest share of total comprehensive income Transactions with owners, recorded directly in equity Acquisition reserve OEI created on partial takeover of Crescent Gold Limited Shares issued in the period Balance as at 30 June 2012	102,770 (5,109) 2,026 - 99,687 - 7,644 - - 7,644 43,383 - - - 43,383 - - 100 - 100 - 565 (565) - - 1,438 - (1,438) - - (2,581) - - - (2,581)
	145,010 3,100 123 - 148,233 - 6,844 - - 6,844 - (693) - 693 - - - (1,855) - (1,855) - - - 4,307 4,307 58,900 - - - 58,900
	203,910 9,251 (1,732) 5,000 216,429

The accompanying notes form part of these financial statements.

AnnuAl RepoRt 2012

STATEMENT OF CASHFLOWS FOR THE yEAR ENDED 30 JUNE 2012

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Notes Cash fows from operating activities Receipts from customers Payments to suppliers and employees Royalties paid Other income Interest received Finance costs Net cash infow / (outfow) from operating activities 6(iii) Cash fows from investing activities Proceeds from sale of non-current assets Purchase of investments Acquisition of plant and equipment Mine development expenditure Cash acquired from acquisition of Crescent Gold Secured loan to third party Secured short term deposits Exploration expenditure Net cash (outfow) / infow in investing activities Cash fows from fnancing activities Proceeds from issue of shares Share issue expenses Proceeds from borrowings Net cash (outfow) / infow from fnancing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at 1 July Add: Restricted cash adjustment from opening balance Less: Restricted Cash Adjustment from closing balance Cash and cash equivalents at 30 June 2012 6(i)	Consolidated 2012 2011 $’000 $’000
	248,087 102,017 (183,330) (69,478) (9,106) (2,210) 484 3 589 442 (718) (20)
	56,006 30,754
	- 47 - (195) (13,622) (2,747) (46,335) (16,843) 1,901 - - (3,000) - (10) (21,601) (24,483)
	(79,657) (47,231)
	- 42,303 - (1,501) 8,000 -
	8,000 40,802
	(15,651) 24,325 30,709 6,384 812 - (13,266) -
	2,604 30,709

The accompanying notes form part of these financial statements.

AnnuAl RepoRt 2012 45

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The parent entity has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts in the financial statements and directors’ report have been rounded off to the nearest $1,000.

The consolidated financial statements are presented in Australian dollars (AUD), which is also the functional currency of the parent company.

The financial report covers the consolidated financial statements of Focus Minerals Ltd and controlled entities and Focus Minerals Ltd as an individual entity. Focus Minerals Ltd is a listed public company, incorporated and domiciled in Australia.

The financial report of Focus Minerals Ltd and controlled entities and Focus Minerals Ltd as an individual entity parent entity comply with Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.

(b) Reporting Basis and Conventions

The financial report has been prepared on an accrual 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.

(c) Principles of Consolidation

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Focus Minerals Limited at the end of the reporting period. A controlled entity is any entity over which Focus Minerals Limited has the power to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.

Where controlled entities have entered or left the Group during the year, the financial performance of those entities are included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 20 to the financial statements.

In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the Equity section of the consolidated Statement of Financial Position and Statement of Comprehensive Income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

(d) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Gold and silver sales: Revenue from the production of gold and silver is recognised when the Group has passed control and risk to the buyer.

Rendering of services: Revenue from the rendering of services provided is recognised when the service is provided charged on the per unit rate as agreed in contracts of service.

Interest income: Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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(d) Revenue Recognition (continued)

Dividends: Revenue is recognised when the Group’s right to receive the payment is established.

Rental income: Rental income from mining leases is accounted for on a straight-line basis over the lease term. Contingent rental income is recognised as income in the periods in which it is earned.

(e) Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are initially recognised at their fair value or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the general policy on borrowing costs.

Finance leased assets are depreciated on a straight line basis over the estimated useful life of the asset.

Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(f) Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of three months or less. For the purposes of the Statement of Cash Flow, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(g) Trade and other receivables

Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

(h) Inventories

Raw materials and stores, ore stockpiles and work in progress and finished gold stocks are physically measured or estimated and valued at the lower of cost and net realisable value. Net realisable value less costs to sell is assessed annually based on the amount estimated to be obtained from sale of the item of inventory in the normal course of business, less any anticipated costs to be incurred prior to its sale.

Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure and depreciation and amortisation relating to mining activities, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

Inventories of consumable supplies and spare parts expected to be used in production are valued at the lower of weighted average cost, which includes the cost of purchase as well as transportation and statutory charges, or net realisable value. Any provision for obsolescence is determined by reference to specific stock items identified.

During the exploration and development phase, where the cost of extracting the ore exceeds the likely recoverable amount, work in progress inventory is written down to net realisable value,

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

(i) Impairment of financial assets

The Group assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.

Financial assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account.

The amount of the loss is recognised in profit or loss. The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant.

If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

(j) Impairment of financial assets

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

Financial assets carried at cost

If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial asset.

Available-for-sale investments

If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to the income statement. Reversals of impairment losses for equity instruments classified as available-for-sale are not recognised in the income statement. Reversals of impairment losses for debt instruments are reversed through profit or loss if the increase in an instrument’s fair value can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.

(k) Impairment of non-financial 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 i.e. discounted cash flows, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement.

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

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

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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(l) Income tax

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

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

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

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

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

Unrecognised deferred income tax assets attributable to income tax losses are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profits will be available to allow the deferred tax asset to be recovered.

Determination of future taxable profits requires estimates and assumptions as to future events and outcomes, in particular, whether successful development and commercial exploitation, or alternatively sale, of the respective areas of interest will be achieved. This includes estimates and judgements about commodity prices, ore resources, exchange rates, future capital requirements, future operational performance and the timing of estimated cash flows. Changes in these estimates and assumptions could impact on the amount and probability of estimated taxable profits and accordingly the recoverability of deferred tax assets.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

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

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

(m) Financial Instruments

Recognition and Initial Measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

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

Classification and Subsequent Measurement

Finance instruments are subsequently measured at either of fair value, amortised cost using the effective 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. In other circumstances, valuation techniques are adopted.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

(m) Financial Instruments (continued)

Amortised cost is calculated as:

(a) the amount at which the financial asset or financial liability is measured at initial recognition;
(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and
(d) less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash

flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

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.

i. Financial assets at fair value through profit or loss

Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

ii. Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

iii. Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

Fair Value

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

Impairment

At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been impaired. Impairment losses are recognised in the income statement.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of noncash assets or liabilities assumed, is recognised in profit or loss.

(n) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of GST except:

when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.

(n) Goods and services tax (continued)

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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balance sheet.

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

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

(o) Plant and equipment

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

Depreciation

Depreciation on mobile plant is calculated on a straight-line basis over the estimated useful life of the assets being 5 -15 years.

Depreciation of underground assets is calculated on a units of production basis.

Depreciation of the mill treatment assets is calculated on a straight-line basis over the estimated useful life of the assets being 10 years.

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

Impairment

The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.

The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value.

An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.

For plant and equipment, impairment losses are recognised in the income statement.

De-recognition and disposal

An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

(p) Exploration and Evaluation Expenditure

Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest. Such expenditure comprises direct costs and does not include general overheads or administrative expenditure not having a specific nexus with a particular area of interest.

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

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

(p) Exploration and Evaluation Expenditure (continued)

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

Exploration expenditure is written off when it fails to meet at least one of the conditions outlined above or an area of interest is abandoned.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. When facts and circumstances suggest that the carrying amount exceeds the recoverable amount the impairment loss will be measured and disclosed in accordance with AASB 136 Impairment of Assets.

When a decision is made to develop an area of interest, all carried forward exploration expenditure in relation to the area of interest is transferred to development expenditure.

(q) Development Expenditure

Development expenditure represents the accumulated exploration, evaluation, land and development expenditure incurred by or on behalf of the Group in relation to areas of interest in which mining of a mineral resource has commenced.

When further development expenditure is incurred in respect of a mine property after commencement of production, such expenditure is carried forward as part of the mine property only when substantial future economic benefits are thereby established, otherwise such expenditure is classified as part of the cost of production.

In some circumstances, where conversion of resources into reserves is expected, some elements of resources may be included. Development and land expenditure still to be incurred in relation to the current reserves are included in the amortisation calculation. Where the life of the assets are shorter than the mine life their costs are amortised based on the useful life of the assets.

The estimated recoverable reserves and life of the mine and the remaining useful life of each class of asset is reassessed at least annually. Where there is a change in the reserves/resources amortisation rates are correspondingly adjusted.

(r) Trade and other payables

Trade and other payables are carried at the fair value of the consideration to be paid in the future. Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of goods and services.

(s) Interest bearing loans and borrowings

All loans and borrowings are initially recognised at cost, being fair value of the consideration received net of issue costs associated with the borrowing.

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.

Gains and losses are recognised in the income statement when the liabilities are derecognised and as well as through the amortisation process.

(t) Provisions

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

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

52 AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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(u) Employee leave benefits

Wages, salaries and annual leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

(v) Share-based payment transactions

Equity settled transactions

The Group provides benefits to certain third parties and employees (including senior executives) of the Group in the form of sharebased payments. Third parties and employees render services to the Group in exchange for shares or rights over shares (equity-settled transactions).

The cost of these equity-settled transactions with third parties and employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black Scholes model, further details of which are given in Note 13.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Focus Minerals Ltd (market conditions) if applicable.

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

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

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

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

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

(w) Share capital

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

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

(x) Restoration, rehabilitation and environmental Costs

Restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are accrued at the time of those activities and treated as exploration and evaluation expenditure.
Restoration, rehabilitation and environmental obligations recognised include the costs of reclamation and subsequent monitoring of the environment.

Costs are estimated on the basis of current assessed costs, current legal requirements and current technology, which are discounted to their present value. Estimates are reassessed at least annually. Changes in estimates are dealt with prospectively, with any amounts that would have been written off or provided against under accounting policy for exploration and evaluation immediately written off.

(y) Earnings per share

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

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

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

(z) Comparative figures

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

(aa) Going concern

The Directors have prepared the financial statements on a going concern basis which contemplates the realisation of assets and payment of liabilities in the normal course of business. The Group has a low gearing ratio of 0.4% and has minimal debt obligation of 11,859,000.

The Group incurred a net profit of 6,844,000 during the year after depreciation and amortisation expenditure of $32,800,000 ($2011: $7,645,000 after depreciation and amortisation expenditure of $15,034,000). The opening cash balance of $30,709,000 and the operating cash flow of $56,006,000 during the year (2011: $30,754,000) was used for developing the mine operations, exploration and purchase of property, plant and equipment, all of which will provide the Group with future economic benefits.

At 30 June 2012, the Group had net current asset deficiency of $33,985,000 (excluding non-current restricted cash of 12,885,000 associated with environmental bonds and security deposits) which includes cash and cash equivalents of $2,604,000, restricted cash of $381,000, trade and other receivable of $6,509,000, inventories of $25,559,000, financial assets of $1,347,000, trade and other payables of $61,553,000 and interest bearing liabilities of $9,455,000. The payment of trade payables and borrowings are forecasted to be met within agreed terms by operational cash flows and existing cash resources.

Should the consolidated entity be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from those stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should the Group be unable to continue as a going concern.

Directors continue to manage the Group’s activities with due regard to current and future funding requirements. On this basis the directors believe, the financial statements should be prepared on a going concern basis.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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(ab) 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 and economic data, obtained both externally and within the Group.

Key estimates

Determining ore reserves and remaining mine life

The consolidated entity estimates its ore reserves and mineral resources based on information compiled by Competent Persons (as defined in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves as revised in December 2004 (the JORC code). Reserves determined in this way are taken into account in the calculation of depreciation, amortisation, impairment, deferred mining costs, rehabilitation and environmental expenditure.

In estimating the remaining life of the mine for the purpose of amortisation and depreciation calculations, due regard is given, not only to the amount of remaining recoverable gold ounces contained in proved and probable reserves, but also to limitations which could arise from the potential changes in technology, demand and other issues which are inherently difficult to estimate over a lengthy time frame.

Where a change in estimated recoverable gold ounces contained in proved and probable ore reserves are made, depreciation and amortisation is accounted for prospectively.

The determination of ore reserves and remaining mine life affects the carrying value of a number of the Consolidated Entity’s assets and liabilities including deferred mining costs and the provision for rehabilitation.

Share based payments

The consolidated entity measures the cost of equity settled transactions with directors, employees and third parties with reference to the fair value of equity instruments at the date at which they are granted. The fair value is determined by using the Black Scholes Model with the assumptions in Note 13. The accounting estimates and assumptions relating to equity settled based payments may impact on the income, expenses and liabilities within the next annual reporting period.

Impairment of capitalised exploration and evaluation expenditure

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

To the extent that capitalised exploration expenditure is determined not to be made recoverable in future, profits and net assets will be reduced in the period in which the determination is made.

In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be written off, profits and net assets will be reduced in the period in which this determination is made.

Rehabilitation provision

The Company notes that the total dollar value of the environmental bonds it has lodged with the Department of Mines and Petroleum in fact exceeds the rehabilitation provision as stated in the accounts at year ended 30 June 2012. The Board is of the view that the Company has a very good track record in this area and is continually monitoring its obligations and undertaking rehabilitation work. It therefore forms the view that the rehabilitation provision in the accounts is adequate.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

(ac) Adoption of New and Revised Accounting Standards

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 July 2010:

AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project ;
AASB 2009-8 Amendments to Australian Accounting Standards – Group cash-settled Share-based Payment Transactions;
AASB 2009-10 Amendments to Australian Accounting Standards – Classification of Rights Issues ;
AASB Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments ;
AASB 2009-13 Amendments to Australian Accounting Standards arising from Interpretation 19 ; and
AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project .

The adoption of these standards did not have any impact on the amounts for the current period or prior periods

(ac) New Accounting Standards for Application in Future Periods

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New/revised Superseded Explanation of amendments Likely impact
pronouncement pronouncement
AASB 9 AASB 139 AASB 9 introduces new requirements for the classification Depending on assets held, there
Financial Financial and measurement of financial assets and liabilities. may be movement of assets
Instruments Instruments: These requirements improve and simplify the approach for between fair value and amortised
(December 2010) Recognition and classification and measurement of financial assets compared cost categories, and ceasing of
Effective Date: Measurement (in with the requirements of AASB 139. The main changes are: impairment testing on available-for-
part) sale financial assets.
31 December (a) Financial assets that are debt instruments will be classified
2015 based on (1) the objective of the entity’s business model If the entity holds any financial
for managing the financial assets; and (2) the characteristics liabilities at fair value, the portion
of the contractual cash flows. of the fair value gain or loss
attributable to ‘own credit risk’ will
(b) Allows an irrevocable election on initial recognition
be incorporated in OCI, rather than
to present gains and losses on investments in equity
profit or loss.
instruments that are not held for trading in other
comprehensive income (instead of in profit or loss).
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.
(c) Financial assets can be designated and measured at
fair value through profit or loss at initial recognition if doing
so eliminates or significantly reduces a measurement or
recognition inconsistency that would arise from measuring
assets or liabilities, or recognising the gains and losses on
them, on different bases.
(d) Where the fair value option is used for financial liabilities
the change in fair value is to be accounted for as follows:
• The change attributable to changes in credit risk are
presented in other comprehensive income (OCI); and
• The remaining change is presented in profit or loss.
If this approach creates or enlarges an accounting mismatch
in the profit or loss, the effect of the changes in credit risk are
also presented in profit or loss.
Otherwise, the following requirements have generally been
carried forward unchanged from AASB 139 into AASB 9:
• Classification and measurement of financial liabilities; and
• Derecognition requirements for financial assets and
liabilities.
Consequential amendments were also made to other
standards as a result of AASB 9, introduced by AASB 2009-
11 and superseded by AASB 2010-7 and AASB 2010-10.
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AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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New/revised Superseded Explanation of amendments Likely impact
pronouncement pronouncement
AASB 10 AASB 127 AASB 10 establishes a revised control model that applies Entities most likely to be impacted
Consolidated AASB Int 112 to all entities. It replaces the consolidation requirements in are those that:
Financial AASB 127 Consolidated and Separate Financial Statements - have significant, but not a majority
Statements and AASB Interpretation 112 Consolidation – Special equity interests in other entities;
Purpose Entities.
Effective Date: - hold potential voting rights over
31 December The revised control model broadens the situations when investments, such as options or
2013 an entity is considered to be controlled by another entity convertible debt.
and includes additional guidance for applying the model
to specific situations, including when acting as an agent
may give control, the impact of potential voting rights and
when holding less than a majority voting rights may give ‘de
facto’ control. This is likely to lead to more entities being
consolidated into the group.
AASB 11 AASB 131 AASB 11 replaces AASB 131 Interests in Joint Ventures For entities that have joint
Joint AASB Int 113 and AASB Interpretation 113 Jointly- controlled Entities – ventures that have been previously
Arrangements Non-monetary Contributions by Ventures. AASB 11 uses accounted using proportionate
the principle of control in AASB 10 to define joint control, consolidation, they will need to
Effective Date:
and therefore the determination of whether joint control change to equity accounting in
31 December
exists may change. In addition, AASB 11 removes the most cases.
2013
option to account for jointly-controlled entities (JCEs) using For entities that have joint
proportionate consolidation. Instead, accounting for a joint operations that have been
arrangement is dependent on the nature of the rights and previously accounted using equity
obligations arising from the arrangement. Joint operations accounting, they will need to
that give the venturers a right to the underlying assets and change to accounting for the share
obligations themselves are accounted for by recognising of each asset, liability, income and
the share of those assets and liabilities. Joint ventures that
expense.
give the venturers a right to the net assets are accounted for
using the equity method. This may result in a change in the
accounting for the joint arrangements held by the group.
AASB 12 AASB 127 AASB 12 includes all disclosures relating to an entity’s There are some additional
Disclosure of AASB 128 interests in subsidiaries, joint arrangements, associates and disclosures centred on significant
Interests in AASB 131 structures entities. New disclosures introduced by AASB judgements and assumptions made
Other Entities 12 include disclosures about the judgements made by around determining control, joint
management to determine whether control exists, and to control and significant influence.
Effective Date:
require summarised information about joint arrangements,
31 December
associates and structured entities and subsidiaries with non-
2013
controlling interests.
AASB 13 None AASB 13 establishes a single source of guidance for For financial assets, AASB 13’s
Fair Value determining the fair value of assets and liabilities. AASB 13 guidance is broadly consistent with
Measurement does not change when an entity is required to use fair value, existing practice. It will however
but rather, provides guidance on how to determine fair value also apply to the measurement
Effective Date:
when fair value is required or permitted by other Standards. of fair value for non-financial
31 December
Application of this definition may result in different fair values assets and will make a significant
2013
being determined for the relevant assets. change to existing guidance in the
AASB 13 also expands the disclosure requirements for applicable standards.
all assets or liabilities carried at fair value. This includes
information about the assumptions made and the qualitative
impact of those assumptions on the fair value determined.
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AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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New/revised Superseded Explanation of amendments Likely impact
pronouncement pronouncement
AASB 128 AASB 128 Once an entity (using AASB 11) has determined that it has Unlikely to have an impact.
Investments in (Investments in an interest in a joint venture, it accounts for it using the
Associates and Associates) equity method in accordance with AASB 128 (Revised). The
Joint Ventures mechanics of equity accounting set out in the revised version
of AASB 128 remain the same as in the previous version.
Effective Date:
31 December
2013
AASB 2010-8 AASB Int 121 These amendments address the determination of deferred tax Unlikely to have significant impact
Amendments on investment property measured at fair value and introduce in Australia, although could have
to Australian a rebuttable presumption that deferred tax on investment some effect for properties acquired
Accounting property measured at fair value should be determined on the between 20 September 1985 and
Standards – basis that the carrying amount will be recoverable through 19 September 1999.
Deferred Tax: sale. The amendments also incorporate AASB Interpretation May impact entities with overseas
Recovery of 121 Income Taxes – Recovery of Revalued Non-Depreciable subsidiaries when the capital gains
Underlying Assets into AASB 112. tax rate is lower than the company
Assets [AASB tax rate.
112]
Effective Date:
31 December
2013
AASB 2011-4 None The Standard deletes from AASB 124 individual key Unlikely to have an impact.
Amendments management personnel disclosure requirements for
to Australian disclosing entities that are not companies.
Accounting
Standards
to Remove
Individual Key
Management
Personnel
Disclosure
Requirements
[AASB 124]
Effective Date:
31 June 2014
AASB 2011-7 None This Standard makes consequential amendments to various Refer to the likely impact of AASB
Amendments Australian Accounting Standards arising from the issuance of 10, AASB 11, AASB 12, AASB
to Australian AASB 10, AASB 11, AASB 12, AASB 127 (August 2011) and 127 (August 2011) and AASB 128
Accounting AASB 128 (August 2011). (August 2011).
Standards
arising from the
Consolidation
and Joint
Arrangements
Standards
Effective Date:
31 December
2013
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AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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New/revised Superseded Explanation of amendments Likely impact
pronouncement pronouncement
AASB 2011-9 None Amendments to group items presented in other Impact on separating components
Amendments comprehensive income on the basis of whether they are in other comprehensive income
to Australian potentially re-classifiable to profit or loss in subsequent between reclassification and non-
Accounting periods (reclassification adjustments, e.g. foreign currency reclassification adjustments.
Standards – translation reserves) and those that cannot subsequently be Name changes to statement of
Presentation reclassified (e.g. fixed asset revaluation surpluses). comprehensive income.
of Other Name changes of statements in AASB 101 as follows:
Comprehensive • One statement of comprehensive income – to be referred
Income [AASB to as ‘statement of profit or loss and other comprehensive
101] income’
Effective Date: • Two statements – to be referred to as ‘statement of profit
30 June 2013 or loss’ and ‘statement of comprehensive income’.
AASB 119 AASB 119 The main change introduced by this standard is to revise Only impacts entities that have
Employee the accounting for defined benefit plans. The amendment any defined benefit plans, and the
Benefits removes the options for accounting for the liability, and removal of the deferral of gains and
requires that the liabilities arising from such plans is losses under the corridor approach.
Effective Date:
recognised in full with actuarial gains and losses being
31 December
recognised in other comprehensive income. It also revised
2013
the method of calculating the return on plan assets.
Consequential amendments were also made to other
standards via AASB 2011-10.
AASB 2012-2 None This Standard amends the required disclosures in AASB 7 Unlikely to have significant impact
Amendments to include information that will enable users of an entity’s on entities.
to Australian financial statements to evaluate the effect or potential effect
Accounting of netting arrangements, including rights of set-off associated
Standards – with the entity’s recognised financial assets and recognised
Disclosures financial liabilities, on the entity’s financial position.
– Offsetting This Standard also amends AASB 132 to refer to the
Financial Assets additional disclosures added to AASB 7 by this Standard.
and Financial
Liabilities
Effective Date:
31 December
2013
AASB 2012-3 None This Standard adds application guidance to AASB 132 Unlikely to have a significant impact
Amendments to address inconsistencies identified in applying some of as it addresses inconsistencies in
to Australian the offsetting criteria of AASB 132, including clarifying the practise.
Accounting meaning of “currently has a legally enforceable right of
Standards set-off” and that some gross settlement systems may be
– Offsetting considered equivalent to net settlement.
Financial Assets
and Financial
Liabilities
Effective Date:
31 December
2014
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AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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New/revised Superseded Explanation of amendments Likely impact
pronouncement pronouncement
Mandatory None This Standard amends IFRS 9 to require application for None as the mandatory effective
Effective Date annual periods beginning on or after 1 January 2015, date has been deferred.
of IFRS 9 and rather than 1 January 2013. Early application of IFRS 9 is
Transition still permitted. IFRS 9 is also amended so that it does not
Disclosures1 require the restatement of comparative-period financial
Effective Date: statements for the initial application of the classification and
31 December measurement requirements of IFRS 9, but instead requires
2015 modified disclosures on transition to IFRS 9.
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NOTE 2: REVENUES AND EXPENSES

(a) Revenue Gold sales Silver sales Toll milling income (b) Other income Interest received Rental revenue Net gains (loss) on disposal of mining tenements Realised gold forward contracts and AFS investments MTM gain Net gains on disposal investments Other (c) Expenses Finance costs Finance charges payable under fnance leases and hire purchase contracts Depreciation & Amortisation Expense Depreciation Amortisation Total amortisation and depreciation Other expenses Legal fees Option expense Employee beneft expense Corporate Takeover costs	Consolidated 2012 2011 $’000 $’000
	257,463 101,167 790 253 - 1,332
	258,253 102,752
	781 442 242 1,434 - 962 347 - - 24 - 2
	1,370 2,864
	17 20
	9,486 4,698 23,314 10,336
	32,800 15,034
	355 61 708 99 3,506 3,001 9,225 4,692
	13,794 7,853
	3,543 -

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 3: INCOME TAX

Income tax recognised in proft and loss The prima facie income tax expense on pre-tax accounting from operations reconciles to the income tax expense in the fnancial statements as follows: Accounting proft before income tax and OEI Income tax expense: Income tax expense calculated at statutory income tax rate of 30% Sundry non-deductible expenses Deferred tax asset relating to tax losses not brought to account Income tax expense Income Statement of Comprehensive Income Current Tax Deferred tax asset relating to tax losses Deferred Income Tax Temporary differences recognised in equity Relating to origination and reversal on temporary differences Current year tax losses not recognised in the current period Income tax expense reported in the of Statement of Comprehensive Income Unrecognised Deferred Tax Balances Unrecognised deferred tax asset losses Unrecognised deferred tax asset other Unrecognised deferred tax liabilities Net unrecognised deferred tax assets	Consolidated 2012 2011 $’000 $’000	Consolidated 2012 2011 $’000 $’000
	6,844 7,644

	2,053 2,293 242 70 (2,295) (2,363)
	- -
	2,295 2,363 (484) (401) (2,712) (6,910) 3,196 4,948
	- -
	76,706 22,588 3,918 2,051 (38,049) (22,811)
	42,575 1,828

The deferred tax asset arising from the tax losses has not been recognised as an asset in the Statement of Financial Position because the recovery is not probable.

The tax benefit of losses not brought to account will only be obtained if:

(a) assessable income is derived of a nature and amount sufficient to enable the benefits to be realised,

(b) conditions for deductibility imposed by the law are complied with, and

Tax Consolidation

Focus Minerals Ltd and its 100% owned Australian resident subsidiaries have not formed a tax consolidated group.

NOTE 4: SEGMENT REPORTING

During the 2012 financial year, Focus Minerals Ltd acquired 81.57% of Focus Minerals (Laverton) Ltd – formerly Crescent Gold Ltd. In May 2012, Focus Minerals (Laverton) Ltd was delisted from the ASX and several of its Board members including the Managing Director resigned. Focus Minerals Ltd now directly manages all of the Focus Minerals (Laverton) Ltd.’s interests. Due to the ongoing minority interest, Focus Minerals Ltd will implement a formal service level agreement with Focus Minerals (Laverton) Ltd to ensure that costs are shared on an equitable basis for shared services. This will include costs such as shared premises and staff providing Group services.

AnnuAl RepoRt 2012 61

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 4: SEGMENT REPORTING (CONTINUED)

The entity has changed the structure of its internal organisation in a manner that causes the composition of its reportable segments to change, the corresponding information from 2011 restated. The Group has three reportable geographic segments, as described below, which are the Group’s strategic business units. The business units are managed separately as they require differing processes and skills. The Chief Executive Officer reviews internal management reports on a monthly basis. Gold produced is sold through agents at spot pricing or delivered into forward gold contracts. Segment Financial Information for the financial year ended 2012 are presented below:

	2012 2012 2012 2012 2012 Coolgardie Laverton Corporate Intercompany Consolidated $’000 $’000 $’000 $’000 $’000
Revenue from Main Product Sales - Gold Revenue from By Product Sales - Silver TOTAL GROSS REVENUE Cost of Sales Amortization & Depreciation SEGMENTED OPERATING PROFIT / (LOSS) Interest and fnancing fees Other income Interest income Takeover costs Other expenses1 SEGMENTED PROFIT / (LOSS) BEFORE UNDER NOTED ITEMS Income taxes Non-controlling interest SEGMENTED PROFIT / (LOSS) Current Assets Non-Current Assets - Restricted Cash - Property, Plant & Equipment - Mine Property - Exploration - Other TOTAL ASSETS Current Liabilities Non-Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Reserves Outside Equity Interest Retained Earnings NET EQUITy Capital Expenditures	145,547 111,916 - - 257,463 510 280 - - 790
	146,057 112,196 - - 258,253 112,099 90,526 - - 202,625 17,869 14,858 73 - 32,800
	16,089 6,812 (73) - 22,828 - 939 - (922) 17 (291) - (299) - (590) - (467) (1,235) 922 (780) - - 3,543 - 3,543 - 2,580 11,214 - 13,794
	16,380 3,760 (13,296) - 6,844 - - - - - - 693 - - 693
	16,380 3,067 (13,296) - 6,151
	12,103 22,211 2,709 - 37,023 61 11,808 1,016 - 12,885 32,657 21,156 200 51 54,064 32,409 20,614 - - 53,023 59,275 13,380 34,953 32,107 139,715 10,368 9,932 136,762 (155,534) 1,528
	146,873 99,101 175,640 (123,376) 298,238 21,810 37,657 10,086 1,455 71,008 52,720 34,316 5,746 (81,981) 10,801
	74,530 71,973 15,832 (80,526) 81,809
	72,343 27,128 159,808 (42,850) 216,429
	23,363 244,000 203,910 (267,363) 203,910 - 14,950 123 (16,805) (1,732) - - - 5,000 5,000 48,980 (231,823) (44,225) 236,319 9,251
	72,343 27,127 159,808 (42,849) 216,429
	26,778 32,543 - - 59,321

For further details, refer to note 2 (c).

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 4: SEGMENT REPORTING (CONTINUED)

Segment Financial Information for the fnancial	year ended 2011 are presented below: 2012 2012 2012 2012 2012 Coolgardie Laverton Corporate Intercompany Consolidated $’000 $’000 $’000 $’000 $’000
Revenue from Main Product Sales - Gold Revenue from By Product Sales - Silver Revenue from Toll Milling TOTAL GROSS REVENUE Cost of Sales Amortization & Depreciation SEGMENTED OPERATING PROFIT / (LOSS) Interest and fnancing fees Other income Takeover costs Other expenses SEGMENTED PROFIT / (LOSS) BEFORE UNDER NOTED ITEMS Income taxes Non-controlling interest SEGMENTED PROFIT / (LOSS) Current Assets Non-Current Assets - Restricted Cash - Property, Plant & Equipment - Mine Property - Exploration - Other TOTAL ASSETS Current Liabilities Non-Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Reserves Outside Equity Interest Retained Earnings NET EQUITy Capital Expenditures	101,167 - - - 101,167 253 - - - 253 1,332 - - - 1,332
	102,752 - - - 102,752 75,064 - - - 75,064 14,945 - 89 - 15,034
	12,743 - (89) - 12,654 - - 20 - 20 - - (2,864) - (2,864) - - - - - - - 7,853 - 7,853
	12,743 - (5,098) - 7,645 - - - - - - - - - -
	12,743 - (5,098) - 7,645
	40,365 - 4,195 - 44,560 812 - - - 812 52,349 - - - 52,349 2,700 - - - 2,700 77,667 - - - 77,667 (95,739) - 117,674 (21,934) -
	78,154 - 121,869 (21,934) 178,088 22,206 - 1,445 - 23,651 - - 6,204 - 6,204
	22,206 - 7,649 - 29,854
	55,948 - 114,220 (21,934) 148,233
	23,364 - 145,010 (23,364) 145,010 - - 123 - 123 - - - - - 32,584 - (30,914) 1,430 3,100
	55,948 - 114,219 (21,934) 148,233
	34,744 - - - 34,744

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 5: EARNINGS PER SHARE

*Basic earnings per share:* Total Basic EPS *Diluted earnings per share* Total Diluted EPS *Basic Earnings per share* The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows: Weighted average number of ordinary shares for the purposes of basic earnings per share *Diluted Earnings per share* The earnings and weighted average number of ordinary shares used in the calculation of diluted earnings per share: Weighted average number of ordinary shares for the purposes of diluted earnings per share NOTE 6: CASH, CASH EQUIVALENTS & RESTRICTED CASH Current Cash at bank and on hand Short-term deposits – unsecured Non- current Short-term deposits –secured	Consolidated 2012 2011 Centsper Share Centsper Share	Consolidated 2012 2011 Centsper Share Centsper Share
		0.15 0.26 0.15 0.25
		6,150,994 7,644,341
		4,185,341,251 2,982,670,549
		6,150,994 7,644,341
		4,237,075,097 3,082,186,465
		Consolidated 2012 2011 $’000 $’000
		2,604 2,290 381 28,419
		2,985 30,709
		12,885 812

Cash at bank earns interest at floating rates based on daily deposit rates.

Short-term deposits are made for varying periods up to three months, depending on the immediate cash requirements of the Group, and earn interest at the respective commercial short-term deposit rates.

Performance bonds have been issued by a bank on behalf of the Group in respect of Western Australian mining tenements. The Group has indemnified the bank against any loss arising from the performance bonds and the indemnity is secured against cash deposits. Refer to Note 21.

(i) Reconciliation to Cash Flow Statement

For the purposes of the Statement of Cash Flow, cash and cash equivalents comprise cash on hand and at bank and short term deposits, net of secured short term deposits.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 6: CASH AND CASH EQUIVALENTS (CONTINUED)

Cash and cash equivalents as shown in the Statement of Cash Flow is:

Cash and cash equivalents (ii) Cash balances not available for use Short term deposits lodged as security (iii) Reconciliation of proft for the year to net cash fows from operating activities Net Proft for the year Gain on sale or disposal of investments Gain on sale or disposal of mining tenements Depreciation expense Amortisation expense Share base payment Unrealised gain from gold forward sales contracts Reversal of provision (Increase)/decrease in assets: Current receivables Inventories Other current assets Increase/(decrease) in liabilities Current payables Other current liabilities Employee benefts Net cash from/(used in) operating activities	Consolidated 2012 2011 $’000 $’000
	2,604 30,709
	13,266 812
	Consolidated 2012 2011 $’000 $’000
	6,844 7,644 - (24) - (962) 7,037 4,752 25,763 10,336 708 99 (345) - (455) - 1,747 3,233 24,722 (2,814) 978 (2) (13,760) 10,104 386 (2,319) 2,381 707
	56,006 30,754

(v) Non cash financing and investing activities transactions

2012

Expenses during the period include the value of issued options for an amount of $708,000.

2011

Expenses during the period include the value of issued options for an amount of $99,282. The options were issued to senior management staff under the Employee incentive scheme.
During the period the Company has purchased mining equipment totalling $6,853,474 under hire purchase and finance leases.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 7: CURRENT TRADE AND OTHER RECEIVABLES

NOTE 7: CURRENT TRADE AND OTHER RECEIVABLES
Trade receivables Other receivables	Consolidated 2012 2011 $’000 $’000
	4,130 1,177 2,379 202
	6,509 1,379

An allowance for doubtful debts is made when there is objective evidence that a trade receivable is impaired. The amount of the allowance/ impairment loss has been measured as the difference between the carrying amount of the trade receivables and the estimated future cash flows expected to be received from the relevant debtors.

NOTE 8: BUSINESS COMBINATION

Merger with Crescent Gold Limited

On 20 June 2011 the Company jointly announced, with Crescent Gold Limited, an off-market bid by the Company to acquire the issued ordinary shares of Crescent Gold Limited (Crescent). The Bidder’s Statement was lodged with the Australian Investments and Securities Commission on 29 June 2011.

The Offer opened on 30 June 2011 and consisted of one Focus share for every 1.18 Crescent share and option on issue and was conditional, among other conditions, on achieving ownership of 90% of the issued shares of Crescent.

On 18 August 2011 the Company declared the Offer unconditional, this for accounting purposes was considered the date control was passed in accordance with Australian Accounting Standard AASB3 “Business Combination”. The Offer closed on 5 October 2011 and the Company received acceptances totalling 81.57% of Crescent issued ordinary shares. The Company issued 880,258,270 Focus shares in consideration for acceptances received.

Crescent is a gold producer with extensive landholdings in Laverton within the Eastern Goldfields of Western Australia The merger of Focus Minerals Ltd and Crescent Gold Limited has been accounted as a business acquisition and has been calculated in accordance with the proportional interest method.

The purchase price allocation is as follows:

Note Identifable assets acquired and liabilities assumed Cash and cash equivalents Restricted deposits Other receivable and prepayments Inventories Property, plant and equipment Exploration and evaluation expenditure Development expenditure Trade and other payables Provisions Loans and borrowings Net Assets Minority Interest (a) Net Assets Acquired Consideration paid	August 2011 $’000 1,910 9,078 3,417 2,606 18,558 5,504 10,624 (9,938) (7,027) (11,366)
	23,366
	4,307
	23,366
	58,900

Excess purchase price allocated to evaluation and exploration assets recognised on acquisition 37,983

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 8: BUSINESS COMBINATION (CONTINUED)

(a) MINORITy INTEREST

(a) MINORITy INTEREST
Minority interest (balance on takeover of Crescent) Non-controlling interest for the year	Consolidated 2012 2011 $’000 $’000
	4,307 - 693 -
	5,000 -

NOTE 9: INVENTORIES

NOTE 9: INVENTORIES
At cost: Consumables Ore stockpiles Gold in circuit NOTE 10: OTHER CURRENT ASSETS Prepaid expenses NOTE 11: FINANCIAL ASSETS Current Investments in listed entities – at fair valuea Loans to external partiesb Foreign exchange contract – fair value movementc	Consolidated 2012 2011 $’000 $’000

	3,197 2,524 20,976 1,648 1,386 3,545
	25,559 7,717
	Consolidated 2012 2011 $’000 $’000
	623 560
	Consolidated 2012 2011 $’000 $’000
	1,167 1,195 - 3,000 180 -
	1,347 4,195

a. Investment in the listed entity – Macphersons Resources Limited (“MRL”) was made for an amount of $1,000,000. The carrying value of the investment reflects the market value of the share price of MRL at year end.

b. Loans to external parties are secured by registered fixed and floating charge over the assets and operations of Crescent Gold Limited. The loan carries an interest rate of 7% pa. Refer also to Note 25. However at part of the consolidated entity, this loan is eliminated.

c. The Company entered into two forward contracts to sell 4000 ounces of gold at a weighted average price of $1,613 per ounce. The carrying value reflects the fair value movement based on the price of gold at $1,568 per ounce at 30 June 2012.

AnnuAl RepoRt 2012 67

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 12: PLANT & EQUIPMENT

At cost Less: Accumulated Depreciation Carrying value Movement Summary Cost: At Cost (opening balance) Additions Acquisitions through business combination At Cost (closing balance) Depreciation: At Cost (opening balance) Depreciation expense Acquisitions through business combination At Cost (closing balance) Total NOTE 13: DEVELOPMENT EXPENDITURE At Cost Less: Accumulated amortisation Net Exploration and Evaluation Expenditure Movement Summary: Cost: Opening balance Additions Acquisitions through business combination a Closing balance Accumulated amortisation: Opening balance Amortisation expense Acquisitions through business combination a Closing balance	Consolidated 2012 2011 $’000 $’000
	82,411 41,603 (28,347) (10,074)
	54,064 31,529
	41,603 33,097 13,463 8,506 27,345 -
	82,411 41,603
	(10,074) (5,322) (9,486) (4,752) (8,787) -
	(28,347) (10,074)
	54,064 31,529
	Consolidated 2012 2011 $’000 $’000
	117,619 53,119 (64,596) (29,599)
	53,023 23,520 53,119 36,276 42,193 16,843 22,307 -
	117,619 53,119 (29,599) (21,567) (23,314) (8,032) (11,683) -
	(64,596) (29,599)

a. Acquisition through business combination – refer Note 8.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 14: EXPLORATION & EVALUATION ASSETS

Exploration and Evaluation Expenditure: At Cost Net Development Expenditure Movements: Exploration and Evaluation Expenditure Carrying amount at beginning of the year plus– exploration expenditure plus– tenements acquired plus– excess purchase price allocated plus- Transfer (to)/from Development Expenditure Carrying amount at end of year	Consolidated 2012 2011 $’000 $’000
	141,243 77,667
	- 2,700 77,667 55,803 20,089 23,943 5,504 540 37,983 - - (2,619)
	141,243 77,667

NOTE 15: SHARE BASED PAyMENTS

During the year, the Company issued nil options to senior executive staff under the employee incentive scheme. During 2011 the Company issued 33,500,000 options to senior executive staff under the employee incentive scheme.

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

The following table lists the inputs to the model used for the years ended 30 June.

Volatility (%) Risk free interest rate (%) Expected life of option (years) Exercise price (cents) Weighted average share price at grant date (cents) Discount factor Imputed value of issued options	2012 2011
	70% 70% 5.35% 5.35% 3.25 yrs 3.25 yrs 12.3 cents 12.3 cents 8.7 cents 8.7 cents 75% 75%
	$57,900 $99,284

Subject to the vesting criteria being met, the options will vest on 31 December 2012. Accordingly, the option value has been proportionally expensed over the vesting period with $57,900 expensed at 30 June 2012. A further $25,618 is to be expensed annually from 30 June 2013 to 30 June 2014.

Vesting criteria of the Scheme is subject to the Company achieving a Total Shareholder Return for the 12 month period prior to the applicable Vesting Date of at least within the 2nd quartile of Total Shareholder Returns for the Comparable Entities. Comparable Entities have been determined to be 12 gold producing companies listed on established stock exchanges and with operations predominately located within the Western Australian Eastern Goldfields region.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 15: SHARE BASED PAyMENTS (CONTINUED)

The discount factor has been determined based on the historical Total Shareholder Return performance of the Company relative to the Comparable Entities over the past 3 years as a likelihood of achieving the vesting performance criteria.

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.

NOTE 16: TRADE AND OTHER PAyABLES

Current Trade payables Sundry creditors and accrued expenses Employee benefts	Consolidated 2012 2011 $’000 $’000
	49,117 15,261 9,307 5,503 3,129 1,442
	61,553 22,206

(i) Trade payables are non-interest bearing and are normally settled on 15-45 day terms. Information regarding the credit risk of current payables is set out in Note 20.

NOTE 17: PROVISIONS

non-Current Employee benefts Balance at 1 July Increase in the period Balance at 30 June Rehabilitation costs Balance at 1 July Increase in the period Balance at 30 June	Consolidated 2012 2011 $’000 $’000
	- - 225 -
	225 - 1,750 1,750 6,422 -
	8,172 1,750
	8,397 1,750

Provision for Mine Restoration

A provision has been recognised for the costs to be incurred for the restoration and rehabilitation of mining and prospecting leases used for the production and exploration of gold and nickel. A discount rate adjusted to reflect the risk inherent in the mining operation has been applied.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 18: FINANCIAL LIABILITIES

NOTE 18: FINANCIAL LIABILITIES
Current Bank loans a Finance lease – refer note 21 Non – current Finance lease – refer note 21	Consolidated 2012 2011 $’000 $’000
	8,000 1,445 1,455 -
	9,455 1,445
	2,404 4,454

Note a) Banking facility

At 30 June 2012, the Group has a Contingent Instrument Facility. The Facility provides bankers’ guarantees to meet tenement requirements and to secure services supply contracts.

The Facility is secured by:

fixed and floating charge over all the assets and undertakings of the Company, Austminex Pty Ltd and Focus Operations Pty Ltd,
an equitable mortgage over the issued shares owned by the Company in Austminex Pty Ltd and Focus Operations Pty Ltd, and
a mining mortgage over specified mining leases owned by the Company, in Austminex Pty Ltd and Focus Operations Pty Ltd.

The facility is comprised of the following at 30 June 2012:

	Drawn	Undrawn	Facility Limit
Contingent Instruments	$3,102,300	$397,700	$3,500,000

The Facility Agreement requires the Company to maintain a minimum bank balance of $3 million. There were no breaches of the financial covenants during the period.

At 30 June 2012, the Group has an interest bearing loan facility with Investec.

The Facility is secured by:

fixed and floating charge over all the assets and undertakings of the Company, Austminex Pty Ltd and Focus Operations Pty Ltd,

The facility is comprised of the following at 30 June 2012:

	Drawn	Undrawn	Facility Limit
Contingent Instruments	$8,000,000	$2,000,000	$10,000,000

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 19: ISSUED CAPITAL AND RESERVES

Authorised Capital

The Company does not have an Authorised Capital and there is no par value for ordinary shares.

(a) Ordinary shares

Issued capital Shares on issue at the beginning of reporting period Shares issued during the year - 23 August 2011 - 24 August 2011 - 26 August 2011 - 29 August 2011 - 30 August 2011 - 31 August 2011 - 01 September 2011 - 08 September 2011 - 14 September 2011 - 16 September 2011 - 30 September 2011 - 03 October 2011 - 5 October 2011 - 6 October 2011 - 27 April 2011 - 18 April 2011 - 31 March 2011 - 22 March 2011 - 04 March 2011 - 07 March 2011 Shares on issue at reporting date	Consolidated 2012 2011 $’000 $’000
	203,910 145,010
	No. of shares No. of shares 2012 2011
	3,440,515,431 2,862,543,210 705,051,845 17,754,555 2,512,861 5,723,899 14,451,598 15,387,371 37,300,103 24,836,939 30,391,642 148,563 669,607 14,923,378 10,858,449 247,460 26,000,000 517,104,911 1,867,310 14,000,000 16,000,000 3,000,000
	4,320,773,701 3,440,515,431

Share Issue Details

On 20th June 2011, the Company jointly, with Crescent Gold Limited, announced an-off market bid by the Company to acquire the issued ordinary shares of Crescent Gold Limited (Crescent). The Bidder’s Statement was lodged with the Australian Investments and Securities Commission on 29 June 2011.

On 18 August 2011, the Company declared the Offer unconditional; this for accounting purposes was considered the date control was passed in accordance with AASB3 – Business Combinations.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 19: ISSUED CAPITAL AND RESERVES (CONTINUED)

The Offer closed on 5 October 2011 and the Company received acceptances totalling 81.57% of Crescent issued ordinary shares. The Company issued 880,258,270 Focus shares during the financial year in consideration for acceptances, as shown below:

Issued 675,746,689 shares on 23 August 2011 at an issue price of $0.067 per share;
Issued 29,305,156 shares on 22 August 2011 and 23 August 2011 at an issue price of $0.065 per share;
Issued 17,754,555 shares on 25 August 2011 at an issue price of $0.063 per share;
Issued 2,512,861 shares on 26 August 2011 at an issue price of $0.065 per share;
Issued 5,723,899 shares on 29 August 2011 at an issue price of $0.065 per share;
Issued 14,451,598 shares on 30 August 2011 at an issue price of $0.066 per share;
Issued 15,387,371 shares on 31 August 2011 at an issue price of $0.069 per share;
Issued 37,300,103 shares on 01 September 2011 at an issue price of $0.070 per share;
Issued 24,836,939 shares on 08 September 2011 at an issue price of $0.068 per share;
Issued 30,391,642 shares on 14 September 2011 at an issue price of $0.069 per share;
Issued 148,563 shares on 16 September 2011 at an issue price of $0.072 per share;
Issued 669,607 shares on 30 September 2011 at an issue price of $0.072 per share;
Issued 14,923,378 shares on 03 October 2011 at an issue price of $0.072 per share;
Issued 10,858,449 shares on 05 October 2011 at an issue price of $0.072 per share;
Issued 247,460 shares on 06 October at an issue price of $0.072 per share;

Crescent is a gold producer with extensive landholdings in Laverton within the Eastern Goldfields of Western Australia. The merger of Focus Minerals Ltd and Crescent Gold Ltd has been accounted for as a business acquisition and has been calculated in accordance with proportional interest method.

Voting Entitlements

At each shareholder’s meeting each ordinary share is entitled to one vote on the calling of a poll, otherwise each shareholder is entitled to one vote on a show of hands.

(b) Options

The Company has issued options to acquire fully paid shares by defined expiry dates. The following are movements in options throughout the period and the outstanding options at 30 June 2012:

Issuing Entity Number of Options Exercise Price Centsper Share Expiry Date	Issuing Entity Number of Options Exercise Price Centsper Share Expiry Date
Focus Minerals Ltd Total Issued Options at 1 July 2011 Expired options Options Exercised Options Lapsed unexercised Options issued Executive incentive options Total options on issue Total Options issued	75,580,000 - - - - - - 6,923,077 7.5 31/12/2012 6,923,077 7.8 31/12/2012 10,000,000 12.3 30/06/2014 23,846,154 - - - 14,116,923 7.50 31/12/2012 14,116,923 7.80 31/12/2012 23,500,000 12.30 30/6/2014 51,733,846

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 19: ISSUED CAPITAL AND RESERVES (CONTINUED)

(c) Capital Management

Management controls the capital of the Group in order to ensure the group can fund its operations, continue as a going concern and ensuring compliance with banking covenants. As required under the banking facilities provided, the Group monitors monthly and reports quarterly on the compliance of financial covenants as listed in Note 16. The Group’s debt and capital includes ordinary share capital and financial liabilities supported by financial assets. There are no externally imposed capital requirements.

Management effectively manages the Group’s capital by assessing the Group’s financial risks, adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

The gearing ratios for the group are as follows:

Total borrowings Less: cash and cash equivalents Net debt / (net cash) Total equity Total capital Gearing ratio (net of cash and cash equivalents)	Consolidated 2012 2011 $’000 $’000
	11,859 5,899 (2,604) (30,709)
	9,255 (24,810)
	216,429 148,233
	225,684 123,423
	4% N/a

(d) Reserves

Option Reserve

Movements in the option reserve as a result of equity settled transactions were as follows:

Balance 1 July Reserve adjustments from Crescent takeover Employee share options issued Amount transferred to issued capital on exercise of options Amount transferred to Retained Earnings on lapsed or expired options Balance 30 June	Consolidated 2012 2011 $’000 $’000
	123 2,026 (1,855) - 99 - (1,438) - (565)
	(1,732) 122

The share option reserve arises on the grant of share options. Amounts are transferred out of the reserve and into issued capital when the options are exercised.

Refer Note 19 (b) for movement of issued options.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 20: FINANCIAL INSTRUMENTS

a. Financial Risk Management Policies

The group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable, loans to and from subsidiaries, leases, convertible notes and derivatives.

The main purpose of non-derivative financial instruments is to raise finance for group operations.

Derivatives are used by the group for hedging purposes such as forward gold sales agreements. The group does not speculate in the trading of derivative instruments.

i. Treasury Risk Management

A finance committee consisting of a non-executive director and the Chief Financial Officer meet on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.

The committee’s overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, whilst minimising potential adverse effects on financial performance.

The finance committee operates under policies approved by the board of directors. Risk management policies are reviewed and approved by the Board on a regular basis. These include the use of hedging derivative instruments, credit policies and future cash flow requirements.

ii. Financial Risk Exposures and Management

The main risks the group is exposed to through its financial instruments are interest rate risk, liquidity risk, credit risk and gold price risk.

Interest rate risk

Interest rate risk is managed with a mixture of fixed and floating rate debt. At 30 June 2012 approximately 100% of group debt is fixed. It is the policy of the group to keep between 75% and 100% of debt on fixed interest rates for short term periods up to 180 days.

Liquidity Risk

The group manages liquidity risk by monitoring forecast project and operating cash flows and ensuring that a minimum level of uncommitted cash is available for immediate use and consists of cash on deposit and/or utilised borrowing facilities.

Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements.

In respect of the parent entity, credit risk also incorporates the exposure of Focus Minerals Ltd to the liabilities of all members of the closed group.

Credit risk is managed on a group basis and reviewed regularly by the finance committee. It arises from exposures to approved customers as well as deposits with financial institutions.

The Audit and Business Risk Committee monitors credit risk by actively assessing the rating quality and liquidity of counter parties:

only approved banks and financial are utilised;
all potential customers are rated for credit worthiness taking into account their size, market position and financial standing.

Credit risk for derivative financial instruments arises from the potential failure by counter-parties to the contract to meet their obligations. The credit risk exposure to forward gold sale contracts is the net fair value of these contracts as disclosed in Note 18 (b). The consolidated group has not have a material credit risk exposure as, at balance date, no financial instruments are outstanding by the consolidated group. The total exposure is detailed in Note 18 (b) below.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 20: FINANCIAL INSTRUMENTS (CONTINUED)

Price Risk

The group is exposed to gold price risk through its gold mining operations. The Audit and Business Risk Committee assesses the price risk and may enter into gold forward sales contracts for delivery of specified quantities of gold on specific dates at fixed prices. At balance date no financial instruments are outstanding by the consolidated group.

Gold price risk is the risk that fluctuations in the price of gold will have an adverse effect on current or future earnings. The consolidated entity may use derivative financial instruments to hedge some of its exposure to fluctuations in gold prices.

In order to protect against the impact of falling gold prices, the consolidated entity may enter into hedging transactions which provide a minimum price to cover non-discretionary operating expenses, repayments due under the consolidated entity’s financing facilities and to provide for sustaining capital. The majority of the consolidated entity’s forecast production is unhedged, allowing it to take advantage of increases in gold prices. Call and put options have also been used by the consolidated entity to manage the gold price risk.

As the consolidated entity does not enter into financial instruments for trading purposes, the risks inherent in the financial instruments used are offset by the underlying risk being hedged. The consolidated entity ensures that the level of hedge cover does not exceed the anticipated gold production anticipated in future periods and that the term of the financial instruments does not exceed the mine life and that no residual basis risk exists.

b. Financial Instruments

i. Derivative Financial Instruments

Derivative financial instruments are used by the consolidated group to hedge exposure to gold price risk. Transactions for hedging purposes are undertaken without the use of collateral as only reputable institutions with sound financial positions are dealt with.

Forward Gold Contracts

The group has entered into forward exchange contracts to sell specified amounts of gold in the future at fixed gold prices. The objective in entering the forward gold contracts is to protect the group against unfavourable price movements for the contracted future sales of gold.

The accounting policy in regard to forward gold contracts is detailed in Note 1.

At balance date, details of outstanding forward gold sale contracts are:

	Consolidated Group Consolidated Group Average Gold Price/oz 2012 2011 2012 2011 $’000 $’000 Oz Oz
Gold forward sales contracts Less than 6 months 6 months to 1 year 1 – 2 years	6,452 - 1,613 - - - - - - - - -
	6,452 - 1,613 -

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 20: FINANCIAL INSTRUMENTS (CONTINUED)

At 30 June 2012 the group has 4,000 ounces as unsettled forward gold contracts (2011: nil) and no outstanding gold put options.

ii. Maturity Analysis Average Effective Interest Rate %	Floating Fixed Non Interest Interest Interest Rate Rate Bearing Total $’000 $’000 $’000 $’000
Consolidated	Payable within 1year
30 June 2012 Financial assets Cash and cash equivalents - Restricted cash - Other fnancial assets - Trade receivables - Total fnancial assets Financial liabilities Trade and other payables - Interest bearing liabilities – note 18 8.9% Total fnancial liabilities Consolidated 30 June 2011 Financial assets Cash and cash equivalents 5.2% Other fnancial assets 7.0% Trade receivables - Total fnancial assets Financial liabilities Trade payables and other payables - Interest bearing liabilities – note 18 8.9% Total fnancial liabilities	- - 2,604 2,604 - - 381 381 - - 1,347 1,347 - - 6,509 6,509
	- - 10,841 10,841
	- - 61,553 61,553 - 9,455 - 9,455
	- 9,455 61,553 71,008
	30,708 812 1 31,521 - 3,000 1,195 4,195 - - 1,379 1,379
	30,708 3,812 2,575 37,095
	- - 22,206 22,206 - 5,899 - 5,899
	- 5,899 22,206 28,105

AnnuAl RepoRt 2012 77

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 20: FINANCIAL INSTRUMENTS (CONTINUED)

Aggregate fair values and carrying values of financial assets and financial liabilities at balance date.

Consolidated	2012 2011 Carrying Net Carrying Net Amount Fair Value Amount Fair Value $’000 $’000 $’000 $’000
Financial assets Other fnancial assets Loans and receivables Interest bearing liabilities – note 18	1,347 1,347 1,195 1,195 6,509 6,509 4,379 4,379
	7,856 7,856 5,574 5,574
	11,859 11,859 5,899 5,899
	11,859 11,859 5,899 5,899

iii. Sensitivity Analysis

Interest Rate Risk, Gold Price Risk

The group has performed a sensitivity analysis relating to its exposure to gold price 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.

Gold Price Sensitivity Analysis

At 30 June 2012, the effect on profit and equity as a result of changes in the Australian dollar gold price and based on gold sold within the year with all other variables remaining constant would be as follows:

Gold Sold – ozs Average Gold price achieved Change in proft - Increase in A$ gold price by 10% - Decrease in A$ gold price by 10% Change in equity - Increase in A$ gold price by 10% - Decrease in A$ gold price by 10%	Consolidated 2012 2011 $’000 $’000
	155,213 72,720 $1,614 $1,391
	25,046 10,115 (25,046) (10,115) 25,046 10,115 (25,046) (10,115)

Interest Rate Analysis

At 30 June 2012, the Group had $13,266,000 invested in security deposits and performance bonds. A 1% increase / (decrease) in the interest rate would impact the interest earned by $132,000 / ($132,000) respectively.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 21: COMMITMENTS AND CONTINGENCIES

Operating lease commitments – Group as lessee

The Group has entered into commercial leases on certain office and regional residential accommodation. These leases have a life of one to five year with renewal options included in some lease contracts. There are no restrictions placed upon the lessee by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:

Offce Accommodation Within one year After one year but not more than fve years More than fve years	Consolidated 2012 2011 $’000 $’000
	504 492,538 1,305 1,810,904 - -
	1,809 2,303,442

Finance lease and hire purchase commitments – Group as lessee

The Group has finance leases for various items of plant and machinery. These leases have terms of renewal but no purchase options and escalation clauses. Renewals are at the option of the specific entity that holds the lease.

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

	2012 2011 Minimum Present value of Minimum Present value of lease lease lease lease payments payments payments payments $’000 $’000 $’000 $’000
ConSolIDAteD Within one year After one year but not more than fve years Total minimum lease payments Less amounts representing fnance charges Present value of minimum lease payments	2,617 2.001 1,900 1,445 2,790 2,460 4,952 4,454
	5.407 4,461 6,852 5,899 (473) - (953) -
	4,461 5,303 5,898 5,899

The weighted average interest rate impact on the leases for both the Group and the Parent at 30 June 2012 is 8.9% (2011: 8.9 %).

Mining tenement expenditure commitments and contingencies

The Consolidated Entities and Company have minimum statutory expenditure, including tenement rentals, as conditions of tenure of certain mining tenements.

To secure certain performance obligations attaching to certain mining and exploration tenements, the Consolidated Entity and the Company has lodged bank bonds totalling $15,079,000 (2011: $3,340,000) with the Department of Mines and Petroleum.

Mining tenement expenditure commitments

The Group has committed, under tenement landholding conditions, to spend a minimum of $6,621,260 of which $4,866,600 relates to Laverton (2011: $1,770,720 for Coolgardie and $4,664,960 for Laverton) per annum on mining and exploration tenements held by the Group.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 22: CONTROLLED ENTITIES

The consolidated financial statements include the financial statements of Focus Minerals Ltd and the subsidiaries listed below:

Name	Country of
	Incorporation		% Equity Interest
		2012		2011
Austminex Pty Ltd	Australia	100%		100%
Focus Operations Pty Ltd	Australia	100%		100%
Underground Drilling Services Pty Ltd	Australia	100%		100%
Focus Minerals (Laverton) Ltd1	Australia	81.57%		-
Laverton Nickel Pty Ltd	Australia	81.57%		-
Uranium West Holding Ltd	Australia	81.57%		-
Uranium West Ltd	Australia	81.57%		-

The trading name for Crescent Gold Ltd was changed to Focus Minerals (Laverton) Ltd on 24 July 2012.

NOTE 23: PARENT ENTITy

The parent company throughout the financial year ended 30 June 2012 was Focus Minerals Limited.

Results of the parent entity Proft for the period Other comprehensive income Total comprehensive income for the period Financial position of parent entity at year end Current assets Total assets Current Liabilities Total liabilities Total equity of parent entity comprising of: Share capital Option reserve Accumulated losses Total equity	Parent Entity 2012 2011 $’000 $’000
	(13,312) 1,717 - -
	(13,312) 1,717
	2,709 38,515 175,639 149,724 10,086 14,808 15,832 19,671 203,910 145,010 123 123 (44,225) (15,080)
	159,808 130,053

The parent entity has commitments of $504,000 (2011: $2,239,292) and is jointly and severally liable for the mining tenement expenditure commitments.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 24: RELATED PARTy DISCLOSURE

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

		Sales to	Purchases	Amounts	Amounts
		Related	from Related	Owed by	Owed to
		Parties	Parties	Related	Related
				Parties	Parties
		$’000	$’000	$’000	$’000
parent
Related party
Austminex Pty Ltd	2012	-	-	4,379	-
	2011	-	-	4,379	-
Underground Drilling Services Pty Ltd	2012	-	-	-	-
	2011	-	-	60	-
Focus Operations Pty Ltd	2012	-	-	31,331	-
	2011	-	-	10,406	-
Focus Minerals (Laverton) Ltd1	2012	-	-	17,922	-
	2011	-	-	-	-

The trading name for Crescent Gold Ltd was changed to Focus Minerals (Laverton) Ltd on 24 July 2012

Joint venture in which the entity is a venturer

The Group has a 100% interest in the assets, liabilities and output of the Coolgardie Gold Project (2011: 100%)

Terms and conditions of transactions with related parties

Sales to and purchases from related parties are made in arm’s length transactions both at normal market prices and on normal commercial terms.

Loan balances outstanding at year-end are unsecured, interest free and settlement occurs in cash.

For the year ended 30 June 2012, the Group has not made any allowance for doubtful debts relating to amounts owed by related parties due to solid payment history (2010: $nil). An impairment assessment is undertaken each financial year by examining the financial position of the related party and the market in which the related party operates to determine whether there is objective evidence that a related party receivable is impaired. When such objective evidence exists, the Group recognises an allowance for the impairment loss.

Mr Lockyer is a non-executive director of Swick Mining Services Limited (Swick). During the year the Group contracted with Swick to provide drilling services for the Group’s surface exploration programs. These services were awarded to Swick after undertaking a tender process. Drilling services provided by Swick for the year totalled $5,166,558 (2011: $3,600,892) determined in accordance with a schedule of rates established during the tender process.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

NOTE 25: AUDITORS’ REMUNERATION

The auditors of Focus Minerals Limited are Grant Thornton Audit Pty Ltd.

NOTE 25: AUDITORS’ REMUNERATION The auditors of Focus Minerals Limited are Grant Thornton Audit Pty Ltd.
		Consolidated
	2012		2011
	$’000		$’000
Amounts received or due and receivable by Grant Thornton Audit Pty Ltd.
An audit or review of the fnancial report of the entity and any other entity in the consolidated group	180		87
Other services in relation to the entity and any other entity in the consolidated group:
Taxation services	7		8
Financial modelling	-		44
	187		139

NOTE 26: DIRECTORS’ AND EXECUTIVE DISCLOSURES

Director and key management remuneration has been included in the Remuneration Section of the Directors’ Report.

(a) Compensation options:

No share options have been granted to the non-executive members of the Board of Directors.

(b) Options holdings of Key Management Personnel

30 June 2012

30 June 2012
	Balance at Granted as Options Balance at Beginning remuneration Exercised/ End of Of period lapsed Period Vested as at 30 June 2012 1/7/2011 30/6/2012 Total Vested Not Vested
30 June 2012 Directors Donald Taig Phillip Lockyer Gerry Fahey Bruce McComish Campbell Baird Paul Fromson1 Mark Hine2 Jon Grygorcewicz3 Brad Valiukas4 Total	- - - - - - - - - - - - - - - - - - - - - - - - - - - - 25,000,000 - - 25,000,000 25,000,000 - 25,000,000 - - - - - - - - - - - - - - 6,461,538 - (6,461,538) - - - - 17,384,616 - (17,384,616) - - - -
	48,846,154 - (23,846,154) 25,000,000 25,000,000 - 25,000,000

Paul Fromson was appointed at Company Secretary and Chief Financial Officer in April 2012.
Mark Hine was appointed as Chief Operating Officer in December 2011.
Jon Grygorcewicz resigned as Chief Financial Officer in April 2012.
Brad Valiukas resigned as Chief Operating Officer in January 2012.

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

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NOTE 26: DIRECTORS’ AND EXECUTIVE DISCLOSURES (CONTINUED)

(b) Options holdings of Key Management Personnel (continued )

30 June 2011	Balance at Granted as Options Balance at Beginning remuneration Exercised/ End of Of period lapsed Period Vested as at 30 June 2011 1/7/2010 30/6/2011 Total Vested Not Vested	Balance at Granted as Options Balance at Beginning remuneration Exercised/ End of Of period lapsed Period Vested as at 30 June 2011 1/7/2010 30/6/2011 Total Vested Not Vested	Balance at Granted as Options Balance at Beginning remuneration Exercised/ End of Of period lapsed Period Vested as at 30 June 2011 1/7/2010 30/6/2011 Total Vested Not Vested
30 June 2011 Directors Donald Taig Phillip Lockyer Gerry Fahey Bruce McComish Campbell Baird Jon Grygorcewicz Total	- - - - - - - - - - - - - - - - - - - - - - - - - - - - 15,000,000 10,000,000 - 25,000,000 25,000,000 - 25,000,000
	6,461,538 - - 6,461,538 6,461,538 - 6,	461,53	8
	21,461,538 10,000,000 - 31,461,538 31,461,538 - 31,461,538

(c) Shareholdings of Key Management Personnel

30 June 2012	Balance Granted as Balance 1 July 2011 remuneration Purchases 30 June 2012 Shares Options Shares Options Shares Options Shares Options
Directors Donald Taig Phillip Lockyer Gerry Fahey Bruce McComish Campbell Baird Jon Grygorcewicz Paul Fromson Mark Hine Total	11,963,259 - - - - - 11,963,259 - 594,523 - - - - - 594,523 - - - - - - - - - - - - - - - - - 6,394,736 25,000,000 - - - - 6,394,736 25,000,000 2,175,550 6,461,538 - - - - 2,175,550 6,461,538 - - - - - - - - - - - - - - - -
	21,128,068 31,461,538 - - - - 21,128,068 31,461,538

30 June 2011	Balance Granted as Balance 1 July 2010 remuneration Purchases 30 June 2011 Shares Options Shares Options Shares Options Shares Options
Directors Donald Taig Phillip Lockyer Gerry Fahey Bruce McComish Campbell Baird Jon Grygorcewicz Total	11,305,366 - - - 657,893 - 11,963,259 - 594,523 - - - - - 594,523 - - - - - - - - - - - - - - - - - 5,600,000 15,000,000 - 10,000,000 794,736 - 6,394,736 25,000,000 2,162,705 6,461,538 - - 12,845 - 2,175,550 6,461,538
	19,662,594 21,461,538 - 10,000,000 1,465,474 - 21,128,068 31,461,538

NOTE 27: SIGNIFICANT EVENTS AFTER BALANCE DATE

AnnuAl RepoRt 2012

NOTES TO THE FINANCIAL STATEMENTS FOR THE yEAR ENDED 30 JUNE 2012

Proposed Placement to Shandong Gold International Mining Corporation Limited.

“Focus Minerals Limited (“Focus”) [ASX: FML], an Australian gold producer and explorer, is pleased to announce that it has entered in to a Share Subscription Deed with Shandong Gold International Mining Corporation Limited (“Shandong Gold”), under which Shandong Gold has agreed to subscribe for new fully paid ordinary Focus shares to raise $225 million.

13.6% to the closing price of Focus shares of 4.4 cents per share on 19 September 2012; and
28% to the 60 day VWAP of 3.9 cents per share for the period ending 19 September 2012.”

The placement will require shareholder approval and the unanimous recommendation of the Board based on an independent report that the transaction is reasonable. The AGM is scheduled for 30 November to allow for sufficient time for the independent experts reports to be completed and a detailed Explanatory Memorandum to be compiled.

AnnuAl RepoRt 2012

DIRECTORS’ DECLARATION

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In the opinion of the Directors of Focus Minerals Limited (the “Company”):
(a) the financial statements and notes set out on pages 42 to 84 and the remuneration disclosures that are contained in pages 34 to 39 of the Remuneration report in the Directors’ report, are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the Group’s financial position as at 30 June 2011 and of their performance, for the financial year ended on that date; and
- (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
- (iii) complying with International Financial Reporting Standards as disclosed in Note 1.
(b) the remuneration disclosures that are contained in page 34 to 39 of the Remuneration report in the Directors’ report comply with Australian Accounting Standard AASB 124 Related Party Disclosures and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2011.

Signed in accordance with a resolution of the Directors:

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Don taig Director Dated 28 September 2012

AnnuAl RepoRt 2012

INDEPENDENT AUDITOR’S REPORT

                                 

     

   

AnnuAl RepoRt 2012

INDEPENDENT AUDITOR’S REPORT

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AnnuAl RepoRt 2012

INDEPENDENT AUDITOR’S REPORT

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AnnuAl RepoRt 2012

SHAREHOLDER INFORMATION

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Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report. The information was prepared based on share registry information processed up to 11 October 2012.

SpReAD oF SHAReHolDeRS

Spread of Holdings 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - and over Total Number of Holders	Shareholders 340 540 1,189 6,302 3,815 12,186

Number of shareholders holding less than a marketable parcel: 2,416 shareholders each hold less than 13,158 ordinary shares (based on 3.8 cents per share for $500 marketable parcel threshold).

SuBStAntIAl SHAReHolDeRS

As at the date of this report the following had notified the Company as being substantial shareholders: Van Eck Associates Corporation 310,449,580 ordinary shares

VotInG RIGHtS

All ordinary shares carry one vote per share without restriction. Options for ordinary shares do not carry any voting rights.

STATEMENT OF QUOTED SECURITIES

Quoted on the Australian Stock Exchange are 4,320,773,701 ordinary fully paid shares.

AnnuAl RepoRt 2012

SHAREHOLDER INFORMATION

TWENTy LARGEST SHAREHOLDERS OF EACH CLASS OF QUOTED SECURITIES oRDInARY FullY pAID SHAReS At 11 oCtoBeR 2012

No.	Shareholder Name	Number of Shares	Percentage of
			Capital
1	JP Morgan Nominees Australia Limited	620,531,031	14.36%
2	National Nominees Limited	396,252,550	9.17%
3	HSBC Custody Nominees (Australia) Limited	266,837,286	6.18%
4	JP Morgan Nominees Australia Limited	164,133,221	3.80%
5	Citicorp Nominees Pty Limited	145,261,621	3.36%
6	Gulara Pty Ltd	40,824,887	0.94%
7	Merrill Lynch (Australia) Nominees Pty Limited	36,030,654	0.83%
8	Brispot Nominees Pty Ltd	35,152,608	0.81%
9	Mr Graham Edward Dunjey + Mrs Linda Mary Dunjey	24,326,266	0.56%
10	Peter Erman Pty Limited – (Superannuation Fund A/C)	23,000,000	0.53%
11	Mrs Rita May Godfrey	22,966,000	0.53%
12	Investec Bank (Australia) Limited	22,000,000	0.51%
13	Merrill Lynch (Australia) Nominees Pty Limited	21,119,678	0.49%
14	Gulara Pty Ltd	18,869,707	0.44%
15	Geared Investments Pty Ltd	18,000,000	0.42%
16	CR Investments Pty Ltd	17,145,966	0.40%
17	HSBC Custody Nominees (Australia) Limited-GSCO ECA	15,306,084	0.35%
18	HSBC Custody Nominees (Australia) Limited-A/C 2	15,134,849	0.35%
19	Lujeta Pty Ltd	15,000,000	0.35%
20	Nefco Nominees Pty Ltd	13,738,592	0.32%
		1,931,631,000	44.71%

HOLDERS OF SECURITIES OF AN UNQUOTED CLASS - OPTIONS

Option Holder Name Charles McCormick Campbell Baird Garry Adams Graeme Ellis Barend Knoetze Dean Goodwin Neil Le Febvre Mark Rigby	Options Expiring Options Expiring 31/12/2012 30/6/2014 3,561,538 2,500,000 15,000,000 10,000,000 3,692,308 - 2,846,154 - 3,133,846 - - 5,000,000 - 5,000,000 - 1,000,000
	28,233,846 23,500,000

AnnuAl RepoRt 2012

TENEMENT REPORT

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INTEREST IN MINING TENEMENTS

Coolgardie Gold Project - Focus Minerals Ltd and its 100% subsidiaries

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State Project tenement Status Interest State Project tenement Status Interest
WA Bayleys G15/7 Live 100% WA Gunga P15/4939 Live 100%
WA Bayleys M15/630 Live 100% WA Gunga P15/4940 Live 100%
WA Bayleys M15/1433 Live 100% WA Gunga P15/4944 Live 100%
WA Bayleys M15/1788 Live 100% WA Gunga P15/5039 Live 100%
WA Bayleys P15/4912 Live 100% WA Gunga P15/5040 Live 100%
WA Bayleys P15/4927 Live 100% WA Gunga P15/5041 Live 100%
WA Bayleys P15/5036 Live 100% WA Gunga P15/5256 Live 100%
WA Bayleys P15/5717 Pending 100% WA Gunga P15/5510 Live 100%
WA Bayleys L15/34 Live 100% WA Gunga P15/5702 Pending 100%
WA Bayleys L15/122 Live 100% WA Gunga P15/5703 Pending 100%
WA Bayleys L15/161 Live 100% WA Gunga L15/88 Live 100%
WA Bayleys L15/164 Live 100% WA Gunga L15/90 Live 100%
WA Bayleys L15/186 Live 100% WA Gunga L15/95 Live 100%
WA Bonnie Vale M15/277 Live 100% WA Gunga L15/96 Live 100%
WA Bonnie Vale M15/365 Live 100% WA Gunga L15/114 Live 100%
WA Bonnie Vale M15/595 Live 100% WA Gunga L15/116 Live 100%
WA Bonnie Vale M15/662 Live 100% WA Gunga L15/119 Live 100%
WA Bonnie Vale M15/711 Live 100% WA Gunga L15/283 Pending 100%
WA Bonnie Vale M15/770 Live 100% WA Lake Cowan E15/986 Live 90%
WA Bonnie Vale M15/852 Live 100% WA Lord Bob M15/385 Live 100%
WA Bonnie Vale M15/857 Live 100% WA Lord Bob M15/664 Live 100%
WA Bonnie Vale M15/877 Live 100% WA Lord Bob M15/1789 Live 100%
WA Bonnie Vale M15/981 Live 100% WA Lord Bob P15/4829 Live 100%
WA Bonnie Vale M15/1384 Live 100% WA Lord Bob P15/4916 Live 100%
WA Bonnie Vale M15/1444 Live 100% WA Lord Bob P15/4917 Live 100%
WA Bonnie Vale M15/1760 Live 100% WA Lord Bob P15/4950 Live 100%
WA Bonnie Vale P15/5155 Live 100% WA Lord Bob P15/4951 Live 100%
WA Bonnie Vale P15/5156 Live 100% WA Lord Bob P15/4952 Live 100%
WA Bonnie Vale P15/5158 Live 100% WA Lord Bob P15/4953 Live 100%
WA Bonnie Vale P15/5159 Live 100% WA Lord Bob P15/4956 Live 100%
WA Bonnie Vale P15/5190 Live 100% WA Lord Bob P15/5227 Live 100%
WA Bonnie Vale P15/5238 Live 100% WA Lord Bob P15/5550 Live 100%
WA Bonnie Vale P15/5253 Live 100% WA Lord Bob P15/5712 Pending 100%
WA Bonnie Vale P15/5254 Live 100% WA Lord Bob L15/51 Live 100%
WA Bonnie Vale P15/5255 Live 100% WA Lord Bob L15/59 Live 100%
WA Bonnie Vale P15/5704 Pending 100% WA Lord Bob L15/63 Live 100%
WA Bonnie Vale L15/126 Live 100% WA Lord Bob L15/77 Live 100%
WA Bonnie Vale L15/127 Live 100% WA Lord Bob L15/78 Live 100%
WA Bonnie Vale L15/130 Live 100% WA Mount M15/30 Live 100%
WA Bonnie Vale L15/200 Live 100% WA Mount M15/1423 Live 100%
WA Bonnie Vale L15/211 Live 100% WA Mount M15/1431 Live 100%
WA Gunga M15/455 Live 100% WA Mount P15/4906 Live 100%
WA Gunga M15/1341 Live 100% WA Mount P15/4907 Live 100%
WA Gunga M15/1357 Live 100% WA Mount P15/5495 Live 100%
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AnnuAl RepoRt 2012

TENEMENT REPORT

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State Project tenement Status Interest State Project tenement Status Interest
WA Gunga M15/1358 Live 100% WA Mount P15/5500 Live 100%
WA Gunga M15/1359 Live 100% WA Mount P15/5501 Live 100%
WA Gunga P15/4909 Live 100% WA Mount L15/325 Pending 100%
WA Gunga P15/4928 Live 100% WA Mount L15/327 Pending 100%
WA Gunga P15/4929 Live 100% WA Mount L15/338 Pending 100%
WA Gunga P15/4930 Live 100% WA Nepean M15/576 Live 100%
WA Gunga P15/4931 Live 100% WA Nepean M15/709 Live 100%
WA Gunga P15/4932 Live 100% WA Nepean M15/1809 Pending 100%
WA Gunga P15/4936 Live 100% WA Nepean P15/5026 Live 100%
WA Gunga P15/4937 Live 100% WA Nepean P15/5027 Live 100%
WA Gunga P15/4938 Live 100% WA Nepean P15/5028 Live 100%
WA Nepean P15/5029 Live 100% WA Three Mile Hill M15/150 Live 100%
WA Nepean P15/5248 Live 100% WA Three Mile Hill M15/154 Live 100%
WA Nepean P15/5519 Live 100% WA Three Mile Hill M15/636 Live 100%
WA Nepean P15/5625 Pending 100% WA Three Mile Hill M15/645 Live 100%
WA Nepean P15/5626 Live 100% WA Three Mile Hill M15/781 Live 100%
WA Nepean P15/5627 Live 100% WA Three Mile Hill M15/827 Live 100%
WA Nepean P15/5628 Live 100% WA Three Mile Hill M15/1432 Live 100%
WA Nepean P15/5629 Pending 100% WA Three Mile Hill M15/1434 Live 100%
WA Nepean L15/27 Live 100% WA Three Mile Hill P15/4913 Live 100%
WA Nepean L15/28 Live 100% WA Three Mile Hill P15/4926 Live 100%
WA Nepean L15/179 Live 100% WA Three Mile Hill L15/42 Live 100%
WA Nepean L15/193 Live 100% WA Three Mile Hill L15/123 Live 100%
WA Nepean L15/194 Live 100% WA Three Mile Hill L15/177 Live 100%
WA Nepean L15/294 Live 100% WA Tindals M15/23 Live 100%
WA Norris M15/384 Live 100% WA Tindals M15/237 Live 100%
WA Norris M15/391 Live 100% WA Tindals M15/410 Live 100%
WA Norris M15/515 Live 100% WA Tindals M15/411 Live 100%
WA Norris M15/761 Live 100% WA Tindals M15/412 Live 100%
WA Norris M15/791 Live 100% WA Tindals M15/646 Live 100%
WA Norris M15/871 Live 100% WA Tindals M15/660 Live 100%
WA Norris M15/1153 Live 100% WA Tindals M15/675 Live 100%
WA Norris M15/1422 Live 100% WA Tindals M15/958 Live 100%
WA Norris M15/1793 Live 100% WA Tindals M15/966 Live 100%
WA Norris P15/4955 Live 100% WA Tindals M15/1114 Live 100%
WA Norris P15/5154 Live 100% WA Tindals M15/1262 Live 100%
WA Norris P15/5241 Live 100% WA Tindals M15/1293 Live 100%
WA Norris P15/5522 Live 100% WA Tindals M15/1294 Live 100%
WA Norris P15/5523 Live 100% WA Tindals M15/1461 Live 100%
WA Norris P15/5524 Live 100% WA Tindals P15/4810 Live 100%
WA Norris P15/5525 Live 100% WA Tindals P15/4933 Live 100%
WA Norris P15/5526 Live 100% WA Tindals P15/4934 Live 100%
WA Norris P15/5527 Live 100% WA Tindals P15/4935 Live 100%
WA Norris P15/5528 Live 100% WA Tindals P15/4941 Live 100%
WA Norris L15/71 Live 100% WA Tindals P15/4943 Live 100%
WA Norris L15/168 Live 100% WA Tindals P15/4945 Live 100%
WA Norris L15/169 Live 100% WA Tindals P15/4947 Live 100%
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AnnuAl RepoRt 2012

TENEMENT REPORT

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State Project tenement Status Interest State Project tenement Status Interest
WA Norris L15/170 Live 100% WA Tindals P15/5046 Live 100%
WA Norris L15/171 Live 100% WA Tindals P15/5048 Live 100%
WA Norris L15/172 Live 100% WA Tindals P15/5209 Live 100%
WA Norris L15/173 Live 100% WA Tindals P15/5257 Live 100%
WA Norris L15/174 Live 100% WA Tindals P15/5464 Live 100%
WA Norris L15/175 Live 100% WA Tindals L15/213 Live 100%
Laverton Gold Project - Focus Minerals (Laverton) Ltd
Focus Minerals Ltd has an 81.57% interest in Focus Minerals (Laverton) Ltd (formerly Crescent Gold Ltd) which owns the following
tenements:
State Project tenement Status Interest State Project tenement Status Interest
WA Barnicoat M38/264 Live 100% WA Central Laverton E38/2203 Live 100%
WA Barnicoat M38/318 Live 100% WA Central Laverton M38/38 Live 100%
WA Barnicoat M38/376 Live 100% WA Central Laverton M38/39 Live 100%
WA Barnicoat M38/377 Live 100% WA Central Laverton M38/52 Live 100%
WA Barnicoat M38/387 Live 100% WA Central Laverton M38/143 Live 100%
WA Barnicoat M38/401 Live 100% WA Central Laverton M38/236 Live 100%
WA Barnicoat M38/507 Live 100% WA Central Laverton M38/270 Live 100%
WA Barnicoat M38/1032 Live 100% WA Central Laverton M38/342 Live 100%
WA Barnicoat M38/1042 Live 100% WA Central Laverton M38/345 Live 100%
WA Burtville E38/1642 Live 100% WA Central Laverton M38/358 Live 100%
WA Burtville E38/2032 Live 100% WA Central Laverton M38/363 Live 100%
WA Burtville M38/8 Live 100% WA Central Laverton M38/364 Live 100%
WA Burtville M38/73 Live 56% WA Central Laverton M38/1129 Live 100%
WA Burtville M38/89 Live 56% WA Central Laverton M38/1133 Live 100%
WA Burtville M38/261 Live 100% WA Central Laverton M38/1187 Live 100%
WA Burtville M38/459 Live 100% WA Central Laverton P38/3324 Live 100%
WA Burtville P38/3612 Live 100% WA Central Laverton P38/3327 Live 100%
WA Burtville P38/3614 Live 100% WA Central Laverton P38/3488 Live 100%
WA Burtville P38/3667 Live 100% WA Central Laverton P38/3489 Live 100%
WA Burtville P38/3675 Live 100% WA Central Laverton P38/3490 Live 100%
WA Burtville P38/3676 Live 100% WA Central Laverton P38/3491 Live 100%
WA Burtville P38/3693 Live 100% WA Central Laverton P38/3492 Live 100%
WA Burtville P38/3694 Live 100% WA Central Laverton P38/3495 Live 100%
WA Burtville P38/3695 Live 100% WA Central Laverton P38/3498 Live 100%
WA Burtville P38/3766 Live 100% WA Central Laverton P38/3503 Live 100%
WA Central Laverton E38/1349 Live 100% WA Central Laverton P38/3653 Live 100%
WA Central Laverton E38/1878 Live 100% WA Central Laverton P38/3691 Live 100%
WA Central Laverton E38/1886 Live 100% WA Central Laverton P38/3726 Live 100%
WA Central Laverton E38/1896 Live 100% WA Central Laverton P38/3727 Live 100%
WA Central Laverton E38/1966 Live 100% WA Central Laverton P38/3728 Live 100%
WA Central Laverton E38/2027 Live 100% WA Central Laverton P38/3729 Live 100%
WA Central Laverton E38/2033 Live 100% WA Central Laverton P38/3730 Live 100%
WA Central Laverton E38/2034 Live 100% WA Central Laverton P38/3731 Live 100%
WA Central Laverton E38/2143 Live 100% WA Central Laverton P38/3732 Live 100%
State Project Tenement Status Interest State Project Tenement Status Interest
WA Central Laverton P38/3733 Live 100% WA Infrastructure L38/152 Live 100%
WA Central Laverton P38/3734 Live 100% WA Infrastructure L38/153 Live 100%
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State	Project	tenement	Status	Interest	State	Project	tenement	Status	Interest
WA	Norris	L15/170	Live	100%	WA	Tindals	P15/5046	Live	100%
WA	Norris	L15/171	Live	100%	WA	Tindals	P15/5048	Live	100%
WA	Norris	L15/172	Live	100%	WA	Tindals	P15/5209	Live	100%
WA	Norris	L15/173	Live	100%	WA	Tindals	P15/5257	Live	100%
WA	Norris	L15/174	Live	100%	WA	Tindals	P15/5464	Live	100%
WA	Norris	L15/175	Live	100%	WA	Tindals	L15/213	Live	100%
Laverton Gold Project - Focus Minerals (Laverton) Ltd Focus Minerals Ltd has an 81.57% interest in Focus Minerals (Laverton) Ltd (formerly Crescent Gold Ltd) which owns the following tenements:
State	Project	tenement	Status	Interest	State	Project	tenement	Status	Interest
WA	Barnicoat	M38/264	Live	100%	WA	Central Laverton	E38/2203	Live	100%
WA	Barnicoat	M38/318	Live	100%	WA	Central Laverton	M38/38	Live	100%
WA	Barnicoat	M38/376	Live	100%	WA	Central Laverton	M38/39	Live	100%
WA	Barnicoat	M38/377	Live	100%	WA	Central Laverton	M38/52	Live	100%
WA	Barnicoat	M38/387	Live	100%	WA	Central Laverton	M38/143	Live	100%
WA	Barnicoat	M38/401	Live	100%	WA	Central Laverton	M38/236	Live	100%
WA	Barnicoat	M38/507	Live	100%	WA	Central Laverton	M38/270	Live	100%
WA	Barnicoat	M38/1032	Live	100%	WA	Central Laverton	M38/342	Live	100%
WA	Barnicoat	M38/1042	Live	100%	WA	Central Laverton	M38/345	Live	100%
WA	Burtville	E38/1642	Live	100%	WA	Central Laverton	M38/358	Live	100%
WA	Burtville	E38/2032	Live	100%	WA	Central Laverton	M38/363	Live	100%
WA	Burtville	M38/8	Live	100%	WA	Central Laverton	M38/364	Live	100%
WA	Burtville	M38/73	Live	56%	WA	Central Laverton	M38/1129	Live	100%
WA	Burtville	M38/89	Live	56%	WA	Central Laverton	M38/1133	Live	100%
WA	Burtville	M38/261	Live	100%	WA	Central Laverton	M38/1187	Live	100%
WA	Burtville	M38/459	Live	100%	WA	Central Laverton	P38/3324	Live	100%
WA	Burtville	P38/3612	Live	100%	WA	Central Laverton	P38/3327	Live	100%
WA	Burtville	P38/3614	Live	100%	WA	Central Laverton	P38/3488	Live	100%
WA	Burtville	P38/3667	Live	100%	WA	Central Laverton	P38/3489	Live	100%
WA	Burtville	P38/3675	Live	100%	WA	Central Laverton	P38/3490	Live	100%
WA	Burtville	P38/3676	Live	100%	WA	Central Laverton	P38/3491	Live	100%
WA	Burtville	P38/3693	Live	100%	WA	Central Laverton	P38/3492	Live	100%
WA	Burtville	P38/3694	Live	100%	WA	Central Laverton	P38/3495	Live	100%
WA	Burtville	P38/3695	Live	100%	WA	Central Laverton	P38/3498	Live	100%
WA	Burtville	P38/3766	Live	100%	WA	Central Laverton	P38/3503	Live	100%
WA	Central Laverton	E38/1349	Live	100%	WA	Central Laverton	P38/3653	Live	100%
WA	Central Laverton	E38/1878	Live	100%	WA	Central Laverton	P38/3691	Live	100%
WA	Central Laverton	E38/1886	Live	100%	WA	Central Laverton	P38/3726	Live	100%
WA	Central Laverton	E38/1896	Live	100%	WA	Central Laverton	P38/3727	Live	100%
WA	Central Laverton	E38/1966	Live	100%	WA	Central Laverton	P38/3728	Live	100%
WA	Central Laverton	E38/2027	Live	100%	WA	Central Laverton	P38/3729	Live	100%
WA	Central Laverton	E38/2033	Live	100%	WA	Central Laverton	P38/3730	Live	100%
WA	Central Laverton	E38/2034	Live	100%	WA	Central Laverton	P38/3731	Live	100%
WA	Central Laverton	E38/2143	Live	100%	WA	Central Laverton	P38/3732	Live	100%
State	Project	Tenement	Status	Interest	State	Project	Tenement	Status	Interest
WA	Central Laverton	P38/3733	Live	100%	WA	Infrastructure	L38/152	Live	100%
WA	Central Laverton	P38/3734	Live	100%	WA	Infrastructure	L38/153	Live	100%

AnnuAl RepoRt 2012

TENEMENT REPORT

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State Project tenement Status Interest State Project tenement Status Interest
WA Central Laverton P38/3735 Live 100% WA Infrastructure L38/160 Live 100%
WA Central Laverton P38/3736 Live 100% WA Infrastructure L38/163 Live 100%
WA Central Laverton P38/3737 Live 100% WA Infrastructure L38/164 Live 100%
WA Central Laverton P38/3738 Live 100% WA Infrastructure L38/165 Live 100%
WA Central Laverton P38/3822 Live 100% WA Infrastructure L38/166 Live 100%
WA Central Laverton P38/3862 Live 100% WA Infrastructure L38/173 Live 100%
WA Central Laverton P38/3863 Live 100% WA Infrastructure L38/177 Live 100%
WA Central Laverton P38/3865 Live 100% WA Infrastructure L38/178 Live 100%
WA Chatterbox M38/40 Live 100% WA Infrastructure L38/179 Live 100%
WA Chatterbox M38/48 Live 100% WA Infrastructure L38/183 Live 100%
WA Chatterbox M38/49 Live 100% WA Infrastructure L39/124 Live 100%
WA Chatterbox M38/101 Live 100% WA Infrastructure L39/214 Live 100%
WA Chatterbox M38/535 Live 100% WA Jasper Hills E39/970 Live 100%
WA Chatterbox M38/693 Live 100% WA Jasper Hills M39/138 Live 100%
WA East Laverton E38/1559 Live 100% WA Jasper Hills M39/139 Live 100%
WA East Laverton E38/1670 Live 100% WA Jasper Hills M39/185 Live 100%
WA East Laverton E38/1860 Live 100% WA Jasper Hills M39/262 Live 96%
WA East Laverton E38/1864 Live 100% WA Lancefield M38/37 Live 100%
WA East Laverton E38/1867 Live 100% WA Mount Weld E38/812 Live 100%
WA East Laverton E38/1869 Live 64% WA Mount Weld E38/1725 Live 100%
WA East Laverton E38/2059 Live 100% WA Mount Weld E38/1865 Live 100%
WA East Laverton E38/2130 Live 100% WA Mount Weld E38/2028 Live 100%
WA East Laverton E38/2169 Live 100% WA Mount Weld E38/2030 Live 100%
WA East Laverton M38/392 Live 100% WA Mount Weld E38/2388 Live 100%
WA East Laverton M38/393 Live 100% WA Mount Weld M38/1047 Live 100%
WA East Laverton P38/3608 Live 64% WA Mount Weld M38/1048 Live 100%
WA East Laverton P38/3610 Live 100% WA Mount Weld M38/1049 Live 100%
WA East Laverton P38/3615 Live 100% WA Mount Weld M38/1149 Live 100%
WA East Laverton P38/3671 Live 100% WA Mount Weld M38/390 Live 100%
WA East Laverton P38/3692 Live 100% WA Mount Weld M38/403 Live 100%
WA East Laverton P38/3700 Live 100% WA Mount Weld M38/749 Live 100%
WA East Laverton P38/3823 Live 100% WA Mount Weld M38/846 Live 100%
WA Infrastructure G38/20 Live 100% WA Mount Weld M38/881 Live 100%
WA Infrastructure G38/24 Live 100% WA Mount Weld M38/915 Live 100%
WA Infrastructure G38/25 Live 100% WA Mount Weld M38/953 Live 100%
WA Infrastructure L38/34 Live 100% WA Mount Weld M38/954 Live 100%
WA Infrastructure L38/52 Live 100% WA Mount Weld P38/3122 Live 100%
WA Infrastructure L38/53 Live 100% WA Mount Weld P38/3609 Live 100%
WA Infrastructure L38/54 Live 100% WA Mount Weld P38/3611 Live 100%
WA Infrastructure L38/55 Live 100% WA Mount Weld P38/3617 Live 100%
WA Infrastructure L38/56 Live 100% WA Mount Weld P38/3620 Live 100%
WA Infrastructure L38/57 Live 100% WA Mount Weld P38/3656 Live 100%
WA Infrastructure L38/63 Live 100% WA Mount Weld P38/3657 Live 100%
WA Infrastructure L38/75 Live 100% WA Mount Weld P38/3658 Live 100%
WA Infrastructure L38/76 Live 100% WA Mount Weld P38/3659 Live 100%
WA Infrastructure L38/78 Live 100% WA Mount Weld P38/3660 Live 100%
WA Infrastructure L38/92 Live 100% WA Mount Weld P38/3661 Live 100%
----- End of picture text -----

AnnuAl RepoRt 2012

TENEMENT REPORT

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==> picture [513 x 646] intentionally omitted <==

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State Project tenement Status Interest State Project tenement Status Interest
WA Infrastructure L38/101 Live 100% WA Mount Weld P38/3662 Live 100%
WA Infrastructure L38/108 Live 100% WA Mount Weld P38/3663 Live 100%
WA Infrastructure L38/120 Live 100% WA Mount Weld P38/3664 Live 100%
WA Mount Weld P38/3665 Live 100% WA Sunrise M39/951 Live 100%
WA Mount Weld P38/3674 Live 100% WA Sunrise P39/4797 Live 100%
WA Mount Weld P38/3701 Live 100% WA West Laverton E38/1930 Live 100%
WA Mount Weld P38/3702 Live 100% WA West Laverton E39/1296 Live 100%
WA Mount Weld P38/3706 Live 100% WA West Laverton M38/46 Live 100%
WA Mount Weld P38/3707 Live 100% WA West Laverton M38/372 Live 100%
WA Mount Weld P38/3708 Live 100% WA West Laverton M38/694 Live 100%
WA Mount Weld P38/3709 Live 100% WA West Laverton M38/1134 Live 100%
WA Mount Weld P38/3710 Live 100% WA West Laverton P38/3493 Live 100%
WA Mount Weld P38/3711 Live 100% WA West Laverton P38/3494 Live 100%
WA Mount Weld P38/3712 Live 100% WA West Laverton P38/3496 Live 100%
WA Mount Weld P38/3713 Live 100% WA West Laverton P38/3497 Live 100%
WA Mount Weld P38/3714 Live 100% WA West Laverton P38/3499 Live 100%
WA Mount Weld P38/3715 Live 100% WA West Laverton P38/3502 Live 100%
WA Mount Weld P38/3716 Live 100% WA West Laverton P38/3717 Live 100%
WA Mount Weld P38/3756 Live 100% WA West Laverton P38/3718 Live 100%
WA Mt Crawford E38/1861 Live 100% WA West Laverton P38/3719 Live 100%
WA Mt Crawford E38/2321 Live 100% WA West Laverton P38/3720 Live 100%
WA Mt Crawford M38/159 Live 100% WA West Laverton P38/3721 Live 100%
WA Mt Crawford P38/3500 Live 100% WA West Laverton P39/4648 Live 100%
WA Mt Crawford P38/3501 Live 100% WA West Laverton P39/4782 Live 100%
WA Mt Crawford P38/3864 Live 100% SA Sturt JV EL4064 Live 12.5%
WA Mt Margaret P39/4783 Live 100% SA Sturt JV EL4065 Live 12.5%
WA Mt Margaret P39/4784 Live 100% SA Sturt JV EL4068 Live 12.5%
WA Mt Margaret P39/4785 Live 100% SA Sturt JV EL4069 Live 12.5%
WA Mt Margaret P39/4786 Live 100% SA Sturt JV EL4071 Live 12.5%
WA Mt Margaret P39/4787 Live 100% SA Sturt JV EL4072 Live 12.5%
WA Mt Margaret P39/4788 Live 100% SA Sturt JV EL4073 Live 12.5%
WA Single M38/544 Live 100% SA Sturt JV EL4075 Live 12.5%
WA Single M38/989 Live 100% SA Sturt JV EL4076 Live 12.5%
WA Sunrise E38/1652 Live 100% SA Sturt JV EL4077 Live 12.5%
WA Sunrise M39/520 Live 100% SA Sturt JV EL4078 Live 12.5%
WA Sunrise M39/545 Live 100% SA Sturt JV EL4079 Live 12.5%
WA Sunrise M39/647 Live 100% SA Sturt JV EL4080 Live 12.5%
WA Sunrise M39/653 Live 100% SA Sturt JV EL4081 Live 12.5%
WA Sunrise M39/654 Live 100% SA Sturt JV EL4082 Live 12.5%
WA Sunrise M39/655 Live 100% SA Sturt JV EL4084 Live 12.5%
WA Sunrise M39/664 Live 100% SA Sturt JV EL4085 Live 12.5%
WA Sunrise M39/667 Live 100% SA Sturt JV EL4086 Live 12.5%
WA Sunrise M39/668 Live 100% SA Sturt JV EL4087 Live 12.5%
WA Sunrise M39/669 Live 100% SA Sturt JV EL4088 Live 12.5%
WA Sunrise M39/670 Live 100% SA Sturt JV EL4089 Live 12.5%
WA Sunrise M39/742 Live 100% SA Sturt JV EL4090 Live 12.5%
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AnnuAl RepoRt 2012 95

TENEMENT REPORT

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State Project tenement Status Interest State Project tenement Status Interest
WA Sunrise M39/743 Live 100% SA Sturt JV ELA62/10 Pending 12.5%
WA Sunrise M39/849 Live 100% SA Sturt JV ELA83/10 Pending 12.5%
WA Sunrise M39/862 Live 100% NT Calvert Hills EL24837 Live 25%
WA Sunrise M39/904 Live 100% NT Tennant Creek EL24835 Live 50%
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Tenement Abbreviations: E = Exploration Licence EL = Exploration Licence P = Prospecting Licence M = Mining Lease L = Miscellaneous Licence G = General Purpose Licence

ROyALTy AGREEMENTS

Coolgardie Gold Project

Focus Minerals Ltd and its 100% owned subsidiaries have entered into the following deeds of assignment for royalty agreements relating to the Coolgardie Gold Project. The material terms of these royalty agreements are set out in the table below:

Tenements Royalty M15/645 (portion of) $1.00/tonne crushed and treated M15/646, M15/660, M15/1114, $0.25/tonne mined and treated P15/4933, P15/4934, M15/1262, (after 2,500,000 tonnes or ore have been mined and treated) P15/4947 & P15/4935 P15/4913 (portion of) $1.00/tonne mined and treated P15/646 (portion of) 2% of all future gold production M15/781 & M15/827 0.5% NSR M15/770, P15/5155, P15/5156, 2.5% NSR M15/852, M15/857, M15/981, M15/1760, M15/365, M15/662, M15/711 & M15/1384 M15/958, M15/1114, $10/ounce gold produced(after first 100,000 ounces M15/646 (portion of) & M15/660 produced) & 3% NSR on all other metals (portion of) M15/958 (portion of) $0.75/dry tonne mined and treated M15/1423 $1/tonne mined and treated M15/1357 & M15/1358 1.5% NSR on gold & 1% NSR on all other metals M15/675 $1/tonne mined and treated M15/958 (portion of) $1.50/tonne mined and treated M15/237 & P15/5209 1.5% NSR M15/1341 & M15/1359 2.5% NSR on gold & 1% NSR on all other metals P15/4907 & M15/1461 $1.00/tonne mined and treated E15/986 2.5% NSR P15/5494 1.5% NSR

AnnuAl RepoRt 2012

TENEMENT REPORT

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LAVERTON GOLD PROJECT

Focus Minerals Ltd has an 81.57% interest in Focus Minerals (Laverton) Ltd (formerly Crescent Gold Ltd) and that company and/or its subsidiaries have entered into the following deeds of assignment for royalty agreements relating to the Laverton Gold Project. The material terms of these royalty agreements are set out in the table below:

Tenements

M38/376 (portion of)

Royalty

$1.50/BCM of ore mined between 100,000BCM and 850,000BCM

M38/143

$10/ounce gold produced (after the first 50,000 ounces)

All tenements at Laverton owned by Focus Minerals (Laverton) Ltd (all tenements are listed in the “Interest in Mining Tenements” section above)

2% NSR

M38/37, M38/38, M38/39, M38/40, P38/3719, E38/1930 (portion of), M38/46, P38/3718, M38/48, M38/49, M38/52, E38/1966 (portion of), M38/101, M38/358, M38/535, P38/3488, P38/3489, P38/3490, P38/3491, P38/3492, P38/3717 & P38/3718

$1.00/tonne mined and treated from open cut & $1.50/tonne mined and treated from underground (assuming spot gold price is fixed by the Perth Mint (SGP) is $525 (Base Price)). Each quarter the royalty is to be varied by: (i) calculating the average daily $ SGP during the quarter; (ii) subject to (iii), for each $10 that the average SGP for the quarter varies from the Base Price, there will be an increase or a reduction in the royalty of $0.10/tonne of mined and treated; (iii) the minimum royalty payable for open cut and underground will be $0.75 and $1.25 respectively

AnnuAl RepoRt 2012

AI assistant

FOCUS MINERALS LTD — Annual Report 2012

64932_rns_2012-10-25_60c67701-c45f-4467-a521-8f58b54adbd4.pdf

Annual Report 2012

ABout uS

ContentS

Operating Profit Growth

Resource Growth

Reserve Growth

Margin Growth

An Experienced Board

A Talented Team

DeAR SHAReHolDeR

Turnaround of Laverton Operations

Expansion of Coolgardie

Focus on Costs

$225 Million Placement with Shandong Gold

Donald Taig

Chairman

CEO’s Operations Review

Highlights

pRoDuCt

pRoCeSSInG

FY2011 pRoDuCtIon

oRe ReSeRVe

TENEMENTS AREA

ReVenue

WORKFORCE

Why Laverton Was A Key Acquisition

Coolgardie (FML 100%)

Highlights

pRoDuCt

opeRAtInG AReAS

pRoCeSSInG

FY2011 pRoDuCtIon

ReSouRCeS

ReSeRVeS

TENEMENTS AREA

ReVenue

WORKFORCE

Coolgardie

exploration

The Opportunity

Coolgardie

Laverton

exploration

Treasure Island

Achievements

Laverton

Coolgardie

Treasure Island

Resources

Reserves

Competent Person’s Statement

CORPORATE GOVERNANCE STATEMENT

IntRoDuCtIon

PRINCIPLE 1: LAyING SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Role and Responsibilities of the Board

CORPORATE GOVERNANCE STATEMENT

PRINCIPLE 2: STRUCTURING THE BOARD TO ADD VALUE

Composition of the Board

CORPORATE GOVERNANCE STATEMENT

Independent Professional Advice and Access to Company Information

Appointments Committee / Appointment of new Directors

Performance of Directors and Chief Executive Officer

CORPORATE GOVERNANCE STATEMENT

Performance of Senior Executives

Term of office

PRINCIPLE 3: PROMOTION OF ETHICAL AND RESPONSIBLE DECISION –MAKING

Code of Conduct

CORPORATE GOVERNANCE STATEMENT

Trading in Focus Minerals Securities by Directors, Officers and Employees

Conflict of Interest

PRINCIPLE 4: SAFEGUARDING INTEGRITy IN FINANCIAL REPORTING

Audit and Business Risks Committee - Membership and Conduct

CORPORATE GOVERNANCE STATEMENT

PRINCIPLE 5: MAKING TIMELy AND BALANCED DISCLOSURE

Market Disclosure Policies

CORPORATE GOVERNANCE STATEMENT

PRINCIPLE 6: RESPECTING THE RIGHTS OF SHAREHOLDERS

FOCUS MINERALS LTD Annual Report 2012