G11 RESOURCES LIMITED - Annual Report 2011

Lawson Gold Limited ABN 32 141 804 104

Financial Report

for the period 2 February 2010 to 30 June 2011

Lawson Gold Limited – Financial Report

Contents to Financial Report

Contents to Financial Report	Contents to Financial Report
Corporate Information ............................................................................................................. 3
Review	of Operations .............................................................................................................. 4
Directors’ Report .................................................................................................................... 12
Auditors’ Independence Declaration .................................................................................... 26
Statement of Comprehensive Income .................................................................................. 27
Statement of Financial Position ............................................................................................ 28
Statement of Changes in Equity ........................................................................................... 29
Statement of Cash Flows....................................................................................................... 30
1.	CORPORATE INFORMATION ................................................................................... 31
2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ......................................... 31
3.	SEGMENT INFORMATION ........................................................................................ 39
4.	REVENUE AND EXPENSES ...................................................................................... 39
5.	INCOME TAX ............................................................................................................. 40
6.	EARNINGS PER SHARE ........................................................................................... 41
7.	CASH AND CASH EQUIVALENTS ............................................................................ 42
8.	TRADE & OTHER RECEIVABLES ............................................................................ 43
9.	OTHER CURRENT ASSETS ...................................................................................... 43
10.	PLANT AND EQUIPMENT ......................................................................................... 43
11.	EXPLORATION AND EVALUATION ASSETS .......................................................... 43
12.	SHARE-BASED PAYMENTS ..................................................................................... 44
13.	TRADE AND OTHER PAYABLES ............................................................................. 45
14.	ISSUED CAPITAL ...................................................................................................... 45
15.	SHARE OPTION RESERVE ....................................................................................... 46
16.	RETAINED EARNINGS .............................................................................................. 46
17.	COMMITMENTS AND CONTINGENCIES.................................................................. 47
18.	AUDITOR REMUNERATION...................................................................................... 47
19.	FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES AND FINANCIAL
	INSTRUMENTS .......................................................................................................... 47
20.	RELATED PARTY DISCLOSURE .............................................................................. 50
21.	SIGNIFICANT EVENTS AFTER BALANCE DATE .................................................... 50
Directors' Declaration ............................................................................................................ 51
Independent Audit Report to the Company ......................................................................... 52

Lawson Gold Limited – Financial Report

Corporate Information

Directors

Mr David Hillier (Chairman) Mr David Turvey (Executive Director) Mr Peter Watson (Non-Executive Director)

Company Secretary

Mr Donald Stephens

Registered Office

Ground Floor 60 Hindmarsh Square ADELAIDE SA 5000

Principal place of business

Ground Floor 60 Hindmarsh Square ADELAIDE SA 5000

Share Registry

Computershare Investor Services Pty Ltd Level 5 115 Grenfell Street ADELAIDE SA 5000

Legal Advisors

Watsons Lawyers Ground Floor, 60 Hindmarsh Square ADELAIDE SA 5000

Bankers

National Australia Bank 22 – 28 King William Street ADELAIDE SA 5000

Auditors

Grant Thornton Audit Pty Ltd Chartered Accountants Level 1 67 Greenhill Road WAYVILLE SA 5034

Lawson Gold Limited – Financial Report

Review of Operations

Exploration History

The Lawson Gold Project area covers an 8km strike length of Archaean ultramafic, mafic, intermediate volcanoclastic and sedimentary rock stratigraphy. Despite numerous gold discoveries in the region in the 1800s and early 1900’s, there had been no comprehensive systematic goldfocused exploration until Lawson Gold raised $4.7m in a float in August 2010 with a clear focus on such a programme.

Previous work by Mt Kersey Mining (1990-99) and Mithril Resources (2005-09) focused predominantly on nickel. Often gold analysis was limited to bottom of hole samples which can underestimate or overlook gold potential. The best gold intersection of 4m @ 8.58g/t Au reported by Mt Kersey was from 44m depth. Of five shallow holes drilled by NiQuest Limited in 2004-5 (now Ferraus Limited), four drill holes returned anomalous gold and in hole ESR054 the last 5 metres in a 77 metre deep hole returned 18.22 g/t gold before drilling stopped.

With the granting of an additional exploration license (E27/432) and the application for four Prospecting Licenses (P27/2075-2078) (refer Figure 1) during the period the Company has now built a contiguous tenement package covering ~58 sq km in a highly prospective belt of rocks that hosts significant gold deposits, including the Kanowna Belle gold mine.

Summary of Exploration Activities

During the reporting period, all work carried out at the Lawson Gold Project focussed on the reconnaissance and exploration of previously identified gold prospects (Mithril Resources and others) as well as exploration for new gold targets.

Work completed during the reporting period included (see table 1):

RAB drilling conducted in June-July 2010
Diamond drilling (3 holes) at Lawsons and Tyrells Prospects
Reconnaissance and field checking of previous RAB and RC spoil sampling near to identified gold prospects, and the reproduction of elevated soil geochemistry results in selected areas
Detailed geological mapping of areas with anomalous gold in soils
End of hole geological logging over the entire tenement area including all historic holes which may or may not have been previously sampled
Blanket covering of soil geochemistry over the entire tenement area to at least 40 x 320m spacing
Rock-chip sampling at selected sites
Re-logging of old RAB and RC spoils at Lawsons and Tyrells prospects.
Recoding and updating historic geology in the database using the Lawson Gold logging codes
In depth literature review of available WAMEX reports over the entire tenement area
Geochemical interpretation of all historic datasets and generating new geochemical targets
Geophysical interpretation and new target generation
Ground checking of historic drilling to ensure the database accurately captures previous work

	Lease ID M27/262 M27/263 M27/264 M27/265 E27/345 27/432	Total Samples 376 352 544 627 32	Total Samples - 12 39 -	# Holes Total Samples - - 2 124 5 6 4 4 5 5	# Holes Metres Total Samples 3 340.9 315 - - - - - - - - - - - - 3 340.9 315
	Totals:	2210	51	16 139

Table 1: Summary of exploration activities carried out during the reporting period

Lawson Gold Limited – Financial Report

Review of O erations cont. p ( )

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Figure 1: Location Plan and Geological Interpretation - Lawson Gold Project, Western Australia.

Lawson Gold Limited – Financial Report

Review of O erations cont. p ( )

RAB Drilling

An initial 183 hole RAB drilling program (refer Figure 1) conducted to depths of 40-50 metres (nominally fresh rock) returned anomalous gold results ranging from 30ppb to maximum 330ppb (0.3 g/t gold). Anomalous gold was commonly associated with elevated values of arsenic, antimony and lead which are recognised as “pathfinder” elements for gold mineralisation in the Kanowna district. This first pass RAB drilling program covered less than 15% of the company’s tenements but improved the company’s understanding of geochemistry in the weathered profile (soil and deeply weathered rock) and assisted in prioritising targets for follow-up exploration.

Diamond Drilling

A follow-up diamond core drilling program was completed during December 2010 (3 x HQ3 drill holes for 342 metres) with the aim of defining the geology and mineralisation associated with highly anomalous gold values in RAB and RC drilling at the Lawsons and Tyrells Prospects by Mt Kersey Mining and NiQuest Limited.

Mineralisation intersected in diamond drill hole LWD001 at the Lawsons Prospect included 3 metres @ 1.8g/t gold (~40m depth), which is interpreted to be supergene enrichment within the weathered profile adjacent to the main mineralised zone of a fault/shear structure containing feldspar porphyry intrusive rocks (refer Table 2, Figure 2).

Significant assays in drill hole LWD002 included 3 metres @ 37.2 g/t gold (from approximately 45m depth) hosted in quartz veined & brecciated coarse grained volcanoclastic rocks and 12 metres @ 1.1g/t (~60m depth) in strongly altered (silicified), quartz veined feldspar porphyry (refer Table 2 and Figures 2 and 3). The gold mineralisation style in drill hole LWD002 is similar to gold mineralisation at the Gordon –Sirdar mining centre located ~7.5km southeast and at the “world-class” Kanowna Belle gold mine, where gold mineralisation is largely hosted by brecciated volcanoclastic rocks. At the Tyrells Prospect, diamond drill hole LWD003 intersected 3 metres @ 1.7g/t gold (~48m depth) occurring in sheared and strongly carbonate altered mafic volcanic rocks (refer Table 2 and Figures 4 and 5). This gold mineralisation is interpreted to be associated with a shear zone (fault structure) containing small quartz feldspar porphyry intrusive rocks observed in nearby drill holes. The mineralisation style intersected in drill hole LWD003 is similar to gold mineralisation at the Mulgarrie, historic mining centres located ~ 7.5km west of the Lawson Gold Project.

Lawson Gold Limited – Financial Report

Review of O erations cont. p ( )

Table 2: Summary Assay Results – Diamond Core Drilling, Lawson Gold Project WA

Diamond Drill Hole	Sample Interval (metres)	Gold Assay (>/= 0.1 g/t Au)	Composite Gold Assay (metres @ g/t Au)*
LWD001	43-44	3.82	3m @ 1.81 g/t Au
	44-45	0.81
	45-46	0.79
	48-49	0.30	4m@ 0.34 g/t Au
	50-51	0.33
	51-52	0.68
	63-64	0.25	4m @ 0.24g/t Au
	64-65	0.16
	65-66	0.17
	66-67	0.27
LWD002 LWD002	33-34	0.11	1m @ 0.11 g/t Au
	46-47	0.64	1m @ 0.64 g/t Au
	47-48	51.75	3m @ 37.22 g/t Au
	48-49	8.56
	49-50	51.35
	51-52	0.15	1m @ 0.15 g/t Au
	54-55	1.09	1m @ 1.09 g/t Au
	60-61	0.29	1m @ 0.29 g/t Au
	63-64	2.04	12m @ 1.06 g/t Au Including 2m @ 2.49 g/t Au & 2m @ 1.09 g/t Au
	64-65	2.94
	69-70	0.12
	72-73	0.12
	73-74	0.70
	74-75	1.48
LWD002	81-82	0.41	8m @ 0.50 g/t Au
	82-83	1.42
	83-84	0.11
	85-86	0.24
	86-87	0.54
	87-88	0.69
	88-89	0.49
LWD003	52-53	0.28	1m @ 0.28 g/t Au
	53-54	2.58	3m @ 1.74 g/t Au
	54-55	1.60
	55-56	1.03
	56-57	0.13	1m @ 0.13 g/t Au
Sampling Method & Percentage Sampled	One metre intervals of sawn/split 1/2 HQ3 drill core 206 x 1m samples taken from 342m drilled=60% sampling ratio
Gold Assay Method and % Anomalous Gold Assays	Genalysis Laboratory using 50g fire assay & AAS finish 206 assays with 36 assays containing >/= 0.1 g/t Au = 17% * Rounding errorsmay occur incomposite assays

Lawson Gold Limited – Financial Report

Review of O erations cont. p ( )

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Figure 2: Location Plan and Geological Interpretation - Lawsons Prospect

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Figure 3: Cross Section and Geological Interpretation – Lawsons Prospect

Lawson Gold Limited – Financial Report

Review of O erations cont. p ( )

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Figure 4: Location Plan and Geological Interpretation – Tyrells Prospect.

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Figure 5: Cross Section and Geological Interpretation – Tyrells Prospect.

Lawson Gold Limited – Financial Report

Review of O erations cont. p ( )

RAB and RC Drill Spoil Sampling

During a reconnaissance traverse across the tenements, 139 spoil samples were taken from 16 selected historic RC and RAB drill holes around the Lawson, Tyrells and Yalumba prospects. Eleven spoil samples were taken from reconnaissance traverses in E27/345 and M27/265 from holes found on the ground but missing from the database and not found in Mines Department reports. The selected sample intervals were based on the desire to replicate significant historic assay results, to resample intervals with prospective geology but which returned poor results, as well as to sample prospective geology where there is no known assay results for, or which has historically not been assayed for, gold.

Results contained slightly anomalous gold values that confirmed the presence of low order gold mineralisation. No priority follow-up exploration was warranted.

Soil Sampling

Two phases of soil sampling were conducted on the Lawson Gold Project for a total of 2,210 samples. The purpose of the first phase in August/September 2010 and January/February 2011 (1,869 samples) was to blanket the entire tenement area to at least 40 x 320m spacing. A second phase of soil sampling was conducted in May/June/July 2011 with the purpose of infilling areas with anomalous gold values from earlier soil sampling and validating the historic soil sampling conducted by previous companies throughout the tenement area. (341 samples).

Gold results ranged from 0 to 36 ppb with an average of 5.6 ppb and the most common gold value was 3ppb. Approximately 1% of samples collected returned gold over 10 ppb, which were considered highly anomalous.

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Petrology & Geological Interpretation

During the June 2011 quarter, the company conducted petrology studies on the diamond core drilled during the previous December at the Lawson Gold Project. The petrology studies enabled re-logging of previous drill holes (from residual drill cuttings) and re-interpretation of the geological setting for gold mineralisation at the Lawsons and Tyrells Prospects. These new geological interpretations (refer Figures 2-5) have been used to establish exploration criteria (ie. favourable host rock types, faults & shear structures etc) in an attempt to define the location, size & grade of priority exploration targets for future RC or Diamond drilling on these prospects.

Soil Geochemical Review

A review and interpretation of all previous soil sampling results on Lawson Gold’s current exploration tenements was recently completed by an expert geochemical consultant, Nigel Brand – Geochemical Services Pty Ltd

The key objective of this geochemical review was to prioritise soil gold anomalies and identify new gold exploration targets.

The geochemical review involved normalising assay results from previous geochemical surveys that used different collection methods, sampled materials and assay techniques. This enabled the gold assay results to be compared by statistical analysis on an “apples to apples” basis. Significant outcomes of the geochemical review include:

a) Soil gold anomalies were identified that represent new gold exploration targets

Lawson Gold Limited – Financial Report

Review of O erations cont. p ( )

b) Multi-element geochemical signatures have assisted to prioritise soil gold anomalies and define their geological significance and possible relationships to economic gold mineralisation
c) All previous geochemical sampling methods have been successful in identifying soil gold anomalies (despite significant differences in comparative background and threshold gold values from different surveys)
d) Provided a greater understanding of “cost effective” sampling methods, data analysis and interpretation methods
e) Established a “clean” database for ongoing exploration.

Results of the geochemical review have been used for planning the ongoing gold exploration program, including geological mapping and follow-up surface and/or auger soil sampling.

Geophysical Interpretation:

A geological and structural interpretation of open file aeromagnetic data has been completed by Southern Geoscience Consultants (refer Figure 3) on behalf of the company.

The key objective of this work was to establish a structural framework (faults and shear zones) that may have acted as conduits and controls to the site of gold mineralisation. Further, to compare the fault structures on Lawson Gold’s tenements with nearby gold deposits including Kanowna Belle, Mulgarrie, Gordon – Sirdar, Lindsay’s Find etc.

Significant outcomes of the geophysical interpretation include:

a) Identified a structural framework (faults & shear zones) and litho-stratigraphic packages that may host gold, nickel and base metal mineralisation.
b) Generated new gold exploration targets based on structural and alteration associations.
c) Established a high quality aeromagnetic database that provides competitive advantages and increases the “possibility of success” for ongoing exploration.

Rehabilitation and Environmental, Program of Works and Aboriginal Heritage Surveys

Historic drill sites were inspected to ensure compliance with the Mining Act. All rubbish has been removed from work sites. Diamond drill holes have been plugged and all sumps were rehabilitated in line with recommended standard procedures.

Program of Works (POW’s) approved by the Department of Mines & Petroleum have been reconciled, including required Aboriginal heritage surveys.

Ongoing activity

Current work is focused on systematic gold exploration of all tenements in order to evaluate the potential of the project area to contain a significant gold deposit (nominally >500,000 ounces). Exploration methods may include surface and auger soil sampling, geological mapping and sampling, Aircore / RAB drilling and RC / Diamond drilling.

The exploration budget for the 2011-2012 field season is of the order of $500,000 to $800,000 and with success, additional drilling would warrant significantly higher expenditures.

The exploration results reported here are based on information compiled by David Turvey (BSc. Hons) who is a member of the Australian Institute of Mining and Metallurgy, and who is a Director of Lawson Gold Limited. He has sufficient experience relevant to the style of mineralisation and the type of deposit under consideration, and to the activity which he is undertaking, to qualify as a Competent Person as defined in the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2004 Edition”. He consents to the inclusion in this announcement on the information compiled by him in the form and context in which it appears.

*Lawson Gold Limited has not yet reported Mineral Resources from exploration of targets or named prospects on its project area. While the company remains optimistic it will report resources in the future, any discussion in relation to exploration potential or targets or potential gold mineralisation is only conceptual in nature and it is uncertain if further exploration will result in determination of a Mineral Resource.

This release may include forward ‐ looking statements that are based on management’s expectations and beliefs ‐ concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Lawson Gold Limited, that could cause actual results to differ materially from such statements. Lawson Gold Limited makes no undertaking to subsequently update or revise the forward ‐ looking statements made in this release to reflect events or circumstances after the date of this release.

Lawson Gold Limited – Financial Report

Directors’ Report

Your directors submit their report for the period ended 30 June 2011.

This financial report covers Lawson Gold Limited (ABN 32 141 804 104) as an individual entity. The Company's functional and presentation currency is Australian Dollars. The Company was incorporated on 2[nd] February 2010 and the report covers the period from that date.

A description of the Company's operations and of its principal activities is included in the review of operations and activities in the directors' report.

DIRECTORS

The names and details of the company’s directors in office during the period and until the date of this report unless otherwise stated are as follows:

David Hillier	Chairman, Non-	Appointed 02/02/10
	Executive Director
David Turvey	Executive Director	Appointed 02/02/10
Peter Watson	Non-Executive	Appointed 02/02/10
	Director
John Nyvlt	Chairman, Non-	Appointed 02/02/10	Resigned 05/08/10
	Executive Director
Michael Amundsen	Non-Executive	Appointed 02/02/10	Resigned 05/08/10
	Director
Robert Greenslade	Non-Executive	Appointed 02/02/10	Resigned 05/08/10
	Director

Names, qualifications, experience and special responsibilities

David Hillier

Non-Executive, Chairman (FCA, AMP (Harvard), MAICD)

David Hillier is a chartered accountant and has more than 30 years experience in commercial aspects of the resources industry. Until recently Mr Hillier was Chairman of Buka Gold Limited which successfully identified a number of gold anomalies in the Maryborough Basin in Queensland, an area not previously considered prospective for gold. In addition, throughout 2008 he worked as Chief Financial Officer and subsequently as an executive director of Buka’s major shareholder based in London. Between 1989 and 2002, Mr Hillier held a range of senior executive positions in the Normandy Mining Limited Group of companies and was Chief Financial Officer of Normandy for six of those years. He has served as Chairman and as a director of a number of public companies in the gold mining and exploration field. Mr Hillier is a Non-Executive Director of Phoenix Copper Limited

David Turvey

Executive Director (BSc (Hons))

Mr Turvey is a geologist and founding director of Equant Resources Pty Limited, a resource consulting company that provides technical evaluation and business development studies of global mineral projects. Mr Turvey is also a director of Sterling Mining Partners Pty Ltd, a consulting company that provides corporate advisory services. Mr Turvey was Managing Director of FerrAus Limited from 7 December 2005 to 31 May 2009 and Non-Executive Director thereafter until he retired from the FerrAus Board on 15 December 2009. Prior to 1998, Mr Turvey worked with companies including Normandy Mining, Chevron Corporation and CSR Limited managing successful mineral exploration programs and business

Lawson Gold Limited – Financial Report

Directors’ Report

development teams. His 28 years experience in the mineral industry has included seven years in expatriate management roles in South East Asia. Mr Turvey is a NonExecutive Director of Southern Gold Limited.

Peter Watson

Non-Executive Director (LLB(Hons))

Educated in Perth and Melbourne and holding a Bachelor of Laws (with honours) degree from Melbourne University, Mr Watson has 40 years experience in legal practice. He has been a Partner (and Managing Partner in both Perth and Melbourne) of a national law firm. In 1999, Mr Watson joined Normandy Mining Limited (then Australia's largest gold mining company) as a Group Executive and Group Legal Counsel. Following the 2002 takeover of Normandy Mining by Newmont Mining Corporation of the US, Mr Watson established Watsons Lawyers. Over Mr Watsons's lengthy career he has acted for major players in the automotive, mining (particularly gold mining) and construction industries as well as a wide range of clients in many other industries. He has worked extensively in the mergers and acquisitions field, in takeovers, schemes of arrangement, trade sales and commercial joint ventures and has represented bidders for and owners/developers of numerous major projects.

Mr Watson also has extensive experience in all aspects of the resources industries (acting for explorers, mine developers and producers) and in corporate, project, multicurrency and commodity based financing.

Mr Watson is a Non-Executive Director of Phoenix Copper Limited.

COMPANY SECRETARY

Donald Stephens (BA(Acc), FCA )

Mr Stephens is a Chartered Accountant and corporate adviser with more than 20 years experience in the accounting industry, including 14 years as a partner of HLB Mann Judd, a firm of Chartered Accountants. He is a non-executive director of Mithril Resources Limited and Papyrus Australia Limited and is company secretary to Minotaur Exploration Limited, Toro Energy Limited, Musgrave Minerals Limited and Petratherm Limited. He holds other company secretary positions and directorships with private companies and provides corporate advisory services to a wide range of organisations. He is a member of the Company's audit committee.

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE

As at the date of this report, the interests of the directors in the shares and options of Lawson Gold Limited were:

	Number of Ordinary Shares Number of Options over Ordinary Shares
David Hillier 100,000(1) 200,000(1) David Turvey 100,000(1) 100,000(1) Pet er Wat son 150,000(1) 100,000(1) Total 350,000 400,000	100,000(1) 200,000(1) 100,000(1) 100,000(1) 150,000(1) 100,000(1)

(1) Held by directors and entities in which directors have a relevant interest.

Lawson Gold Limited – Financial Report

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT

Introduction

The Board is responsible for the corporate governance of the Company including its strategic development. The Company operates in accordance with the corporate governance principles as set out by the ASX Corporate Governance Council and required under ASX listing rules.

Principle 1: Lay solid foundations for management and oversight

Board Responsibilities

The Board is accountable to the Company shareholders for the performance of the Company and has overall responsibility for its operations. Day to day management of the Company’s affairs, and the implementation of the corporate strategy and policy initiatives, are formally delegated by the Board to employees and key consultants.

The key responsibilities of the Board include:

approving the strategic direction and related objectives of the Company and monitoring management performance in the achievement of these objectives;
adopting budgets and monitoring the financial performance of the Company;
if a managing director is appointed, reviewing annually the performance of the managing director against the objectives and performance indicators established by the Board;
overseeing the establishment and maintenance of adequate internal controls and effective monitoring systems;
overseeing the implementation and management of effective safety and environmental performance systems;
ensuring all major business risks are identified and effectively managed; and
ensuring that the Company meets its legal and statutory obligations.

For the purposes of the proper performance of their duties, the Directors are entitled to seek independent professional advice at the Company’s expense, unless the Board determines otherwise. The Board schedules meetings on a regular basis and other meetings as and when required.

The Board has not publicly disclosed a statement of matters reserved for the Board, or the Board charter and therefore the Company has not complied with recommendation 1.3 of the ASX Corporate Governance Council. Given the size of the Company at this time, the Board does not consider the formation of a Board charter necessary.

Principle 2: Structure the Board to add value

Size and Composition

The Board consists of two non-executive directors and one executive director.

The Directors consider the size and composition of the Board is appropriate given the size and stage of development of the Company.

Lawson Gold Limited – Financial Report

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT (cont.)

Directors are expected to bring independent views and judgment to the Board’s deliberations.

Independence

The Board is conscious of the need for independence and ensures that where a conflict of interest may arise, the relevant Director(s) leave the meeting to ensure a full and frank discussion of the matter(s) under consideration by the rest of the Board. Those Directors who have interests in a specific transactions or potential transactions do not receive the Board papers related to those specific transactions or potential transactions, do not participate in any Directors’ meeting which considers those transactions or potential transactions, are not involved in the decision making process in respect of the transaction or potential transaction, and will be asked not to discuss the transaction or potential transaction with other Directors.

Mr Hillier is considered an independent director as he has no material relationship or association with the Company other than his directorship.

Nomination, retirement and appointment of Director’s

The Board has not established a nomination committee and therefore the Company has not complied with recommendation 2.4 of the Corporate Governance Council. Given the size of the Company at this time the Board does not consider a separate committee appropriate. The Board takes ultimate responsibility for these matters. The composition/membership of the Board is subject to review in a number of ways, including:

The Company’s constitution provides that at every annual general meeting, one third of the Directors shall retire from office but may stand for re-election.
Board composition will also be reviewed periodically either when a vacancy arises or if it is considered the Board would benefit from the services of a new Director, given the existing mix of skills and experience of the Board which should match the strategic demands of the Company. Once it has been agreed that a new Director is to be appointed, a search would be undertaken, potentially using the services of external consultants. Nominations would then be reviewed by the Board.

Evaluation of Board performance

The Board continually reviews its performance and identifies ways to improve performance. The Chairman is responsible for reviewing the Board performance on an annual basis.

Board Committee

It is the role of the Board to oversee the management of the Company and it may establish appropriate committees to assist in this role.

At the present time no committees, other than an audit committee, have been established because of the size of the Company and the involvement of the Board in the operations of the Company. The Board takes ultimate responsibility for the operations of the Company including remuneration of Directors and executives and

Lawson Gold Limited – Financial Report

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT (cont.)

nominations to the Board.

The Board has not publicly disclosed the process for evaluating the performance of the Board, its committees and individual directors. Therefore, the Company has not complied with recommendation 2.5 of the Corporate Governance Council. The Board takes ultimate responsibility for these matters and does not consider disclosure of the performance evaluation necessary at this stage.

Principle 3: Promote ethical and responsible decision making

Code of Conduct

The Board recognises the need for Directors and employees as well as consultants and contractors while engaged in work for the Company to observe the highest standards of behaviour and business ethics when engaging in corporate activity. The Company intends to maintain a reputation for integrity. The Company’s officers and employees and consultants and contractors while engaged in work for the Company are required to act in accordance with the law and with the highest ethical standards. The Board has adopted a formal code of conduct applying to the Board, all employees and consultants and contractors while engaged in work for the Company. The code of conduct can be viewed on the Company’s website. The Board takes ultimate responsibility for these matters.

Securities Trading Policy

The Company has established a policy concerning trading in the Company’s shares by the Company’s officers, employees and contractors and consultants to the Company while engaged in work for the Company ( Representatives ).

This policy provides that it is the responsibility of each Representative to ensure they do not breach the insider trading prohibition in the Corporations Act. Breaches of the insider trading prohibition will result in disciplinary action being taken by the Company.

Representatives must also obtain written consent from the Chairman (or, in the case of the Chairman, from the Board) prior to trading in the Company’s securities.

Subject to these restrictions, the policy provides that Directors, the Company Secretary and employees of, or contractors to, the Company that have access to the Company’s financial information or drilling results are permitted to trade in the Company’s securities throughout the year except during the following periods:

(a) the period between the end of the March and September quarters and the release of the Company’s quarterly report to ASX for so long as the Company is required by the Listing Rules to lodge quarterly reports;
(b) the period between the end of the June quarter and the release of the Company’s annual report to ASX; and
(c) the period between the end of the December quarter and the release of the Company’s half year report to ASX.

In exceptional circumstances the Board may waive the requirements of the Share Trading Policy to allow Representatives to trade in the shares of the Company,

Lawson Gold Limited – Financial Report

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT (cont.)

provided to do so would not be illegal.

Directors must advise the Company Secretary of changes to their shareholdings in the Company within 2 business days of the change.

The Securities Trading Policy can be viewed on the Company’s website.

Principle 4: Safeguard integrity in financial reporting

The Company aims to structure management to independently verify and safeguard the integrity of their financial reporting. The structure established by the Company includes:

review and consideration of the financial statements by the audit committee;
a process to ensure the independence and competence of the Company’s external auditors.

Audit Committee

The audit, risk and compliance committee comprises Peter Watson (chair of the committee) and David Hillier, both Non-executive Directors, and Donald Stephens, the Company Secretary.

The committee’s primary responsibilities are to:

oversee the existence and maintenance of internal controls and accounting systems;
oversee the management of risk within the Company;
oversee the financial reporting process;
review the annual and half-year financial reports and recommend them for approval by the Board of Directors;
nominate external auditors;
review the performance of the external auditors and existing audit arrangements; and
ensure compliance with laws, regulations and other statutory or professional requirements, and the Company’s governance policies.

The committee has not been structured to contain three non-executive directors who are independent directors and therefore the Company has not complied with recommendation 4.2 of the ASX Corporate Governance Council. Given the relative skills and experience of the audit committee, the Board believes the structure and process to be adequate. The Board continues to monitor the composition of the committee and the roles and responsibilities of the members.

Principle 5: Make timely and balanced disclosure

The Company has a policy that all the Company Shareholders and investors have equal access to the Company’s information. The Board will ensure that all price sensitive information is disclosed to the ASX in accordance with the continuous disclosure requirements of the Corporations Act and the ASX Listing Rules. The Company Secretary has primary responsibility for all communications with the ASX and is accountable to the Board through the Chairman for all governance matters.

Lawson Gold Limited – Financial Report

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT (cont.)

The Company has not publicly disclosed a formal disclosure policy and therefore has not complied with recommendation 5.1 of the ASX Corporate Governance Council. Given the size of the Company, the Board does not consider public disclosure to be appropriate. The Board takes ultimate responsibility for these matters.

Principle 6: Respect the rights of Shareholders

The Board strives to ensure that Shareholders are provided with sufficient information to assess the performance of the Company and its Directors and to make wellinformed investment decisions.

Information is communicated to Shareholders through:

annual and half-yearly financial reports and quarterly reports;
annual and other general meetings convened for Shareholder review and approval of Board proposals;
continuous disclosure of material changes to ASX for open access to the public; and
the Company’s website where all ASX announcements, notices and financial reports are published as soon as possible after release to ASX.

The auditor is invited to attend the annual general meeting of Shareholders. The Chairman will permit Shareholders to ask questions about the conduct of the audit and the preparation and content of the audit report.

The Company has not designed or publicly disclosed a communications policy and therefore has not complied with recommendation 6.1 of the ASX Corporate Governance Council. Given the size of the Company, the Board does not consider disclosure of a communications policy to be appropriate. The Board takes ultimate responsibility for these matters.

Principle 7: Recognise and manage risk

The Board has identified the significant areas of potential business and legal risk of the Company.

The identification, monitoring and, where appropriate, the reduction of significant risk to the Company is the responsibility of the Board. The Board has also established an Audit , Risk and Compliance Committee which addresses the risks to the Company.

The Board will review and monitor the parameters under which such risks will be managed. Management accounts will be prepared and reviewed at Board meetings. Budgets will be prepared and compared against actual results.

The Company has not publicly disclosed a policy for the oversight and management of material business risks and therefore has not complied with recommendation 7.1 of the ASX Corporate Governance Council. The Board takes ultimate responsibility for these matters and does not consider the disclosure of a risk management policy to be appropriate at this stage.

Lawson Gold Limited – Financial Report

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT (cont.)

Principle 8: Remunerate fairly and responsibly

The Chairman and the Directors are entitled to draw Directors fees and receive reimbursement of reasonable expenses for attendance at meetings. The Company is required to disclose in its annual report details of remuneration to Directors. The maximum aggregate annual remuneration which may be paid to non-executive Directors is $250,000. This amount cannot be increased without Shareholder approval.

The Board has not established a remuneration committee and therefore the Company has not complied with recommendation 8.1 and 8.3 respectively of the ASX Corporate Governance Council. Given the size of the Company, the Board does not consider a separate committee appropriate. The Board takes ultimate responsibility for these matters.

Lawson Gold Limited – Financial Report

Directors’ Report (cont.)

DIVIDENDS

No dividends were paid or declared since the start of the period. No recommendation for payment of dividends has been made.

PRINCIPAL ACTIVITIES

The principal activities of the Company during the period were:

To continue to conduct mineral exploration of areas held and to also seek out new areas with potential mineralisation.
To evaluate the exploration results from surface sampling, drilling, geological mapping and geophysical surveys carried out during the year.

There were no significant changes in the nature of the Company's principal activities during the period.

OPERATING RESULTS

The loss of the Company for the period after providing for income tax amounted to $692,899.

OPERATIONS OVERVIEW

Please refer to the review of operations contained at the front of this report.

RISK MANAGEMENT

The Company takes a proactive approach to risk management. The Board is responsible for ensuring that risks are identified on a timely basis and that the opportunities align with the Company's objectives and activities.

The Company has not established a separate risk management committee.

The Board has a number of mechanisms in place to ensure that management's objectives and activities are aligned with the risks identified by the board. These include implementation of board approved operating plans and budgets and board monitoring of progress against these budgets.

AFTER BALANCE DATE EVENTS

No significant events have occurred since balance date.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

On 5 August 2010 the Company successfully listed on the Australian Securities Exchange, after completing a successful initial public offering raising $4.678 million before expenses.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

The Company intends to continue to undertake appropriate exploration and evaluation expenditure enabling it to maintain title to all its prospective mineral properties until decisions can be made to successfully develop and exploit, sell or abandon such properties. New projects will be sought and evaluated. The Company continues to seek corporate, joint venture and acquisition transactions that will add value for Shareholders. Provision of any further information may result in unreasonable prejudice to the Company.

Lawson Gold Limited – Financial Report

Directors’ Report (cont.)

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Company’s environmental obligations are regulated under both Western Australian State and Federal Law. The Company is committed to conduct its activities with high standards of care for the natural environment. The Company will apply the most appropriate standards to each activity and communicate with employees, contractors and communities about environmental objectives and responsibilities. No environmental breaches have been notified by any Government agency during the period ended 30 June 2011.

OCCUPATIONAL HEALTH, SAFETY AND WELFARE

In running its business, the Company aims to protect the health, safety and welfare of employees, contractors and guests. In the reporting period the company experienced no lost time injuries. The Company reviews its Occupational Health, Safety and Welfare (OHS&W) policy at regular intervals to ensure a high standard of OHS&W.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

Throughout the period, the Company has had in place and paid premiums for insurance policies with a limit of liability of $10 million, indemnifying each director and the secretary of the Company. The liabilities insured include costs and expenses that may be incurred in defending civil or criminal proceedings (that may be brought) against the officers in their capacity as officers of the Company or a related body, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a willful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. The contracts of insurance contain confidentiality provisions that preclude disclosure of premium paid.

SHARE OPTIONS

Unissued Shares

At the date of this report, the following options to acquire ordinary shares in the Company were on issue:

Issue Date Expiry Date Exercise Price	Balance at incorporation	Net Issued/ (Exercised/Lap sed) during Year Balance at 30 June 2011
05/08/2010 04/08/2015 $0.30 05/08/2010 04/08/2015 $0.40	- - -	300,000 300,000 600,000 600,000 900,000 900,000

Lawson Gold Limited – Financial Report

Directors’ Report (cont.) REMUNERATION REPORT (AUDITED)

This report outlines the remuneration arrangements in place for Directors and other Key Management Personnel of the Company.

The remuneration and entitlement information, required to be disclosed by the Corporations Act, is provided below.

Key Management Remuneration Policy

The Board is responsible for determining remuneration policies applicable to directors and senior executives of the Company. The policy is to ensure that remuneration properly reflects the individuals' duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people with appropriate skills and experience. At the time of determining remuneration consideration is given by the Board to the Company's financial performance.

The maximum aggregate annual remuneration which may be paid to Non-Executive Directors is currently $250,000. This cannot be increased without approval of the Company's shareholders.

Key Management Personnel remuneration and equity holdings

The Board currently determines the nature and amount of remuneration for Key Management Personnel of the Company. The policy is to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the Company’s financial results.

All remuneration paid to Key Management Personnel is expensed as incurred. Key Management Personnel receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation.

Options are valued using the Black-Scholes methodology and are recognised as remuneration over the vesting period.

The Board policy is to remunerate Non-Executive Directors at market rates based on comparable companies for time, commitment and responsibilities. The Board determines payments to Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required.

Lawson Gold Limited – Financial Report

Directors’ Report (cont.)

REMUNERATION REPORT (AUDITED) (cont.)

Key Management Personnel remuneration for the period ended 30 June 2011

	Short Term Benefits	Post Employment	Share-based Payments Total	Share-based Payments Total
	Salary, Fees & Bonuses	Superannuation	Value of Options	$
David Hillier(1) 2011	36,139	-	31,200	67,339
David Turvey(2) 2011	93,442	2,272	15,900	111,614
Peter Watson(3) 2011	27,103	-	15,900	43,003
Donald Stephens(4) 2011	-	-	-	-
Total 2011	156,685	2,272	63,000	221,957

Key Management Personnel in the above table include directors and specified executives.

(1) David Hillier received administration consulting fees of $20,580 for assistance during the listing process.

(2) Equant Resources Pty Ltd (Equant), of which David Turvey is a Director, has a Services Agreement to provide technical and management overview and evaluation services to the Company. Under the Agreement Equant will receive an hourly rate of $230 (exclusive of GST and pro-rated for part hours) for providing Mr Turvey’s services, capped at a maximum of $5,520 per month. Equant will also be reimbursed for any reasonable out of pocket expenses approved by the Company. During the period Equant received $68,198 in consulting fees.

(3) Watson’s Lawyers, of which Peter Watson is a partner, received professional service fees of $81,540.

(4) HLB Mann Judd (SA) Pty Limited has received professional fees for accounting, taxation and secretarial services provided during the year totalling $42,196. Donald Stephens, the company secretary, is a consultant with HLB Mann Judd (SA) Pty Limited.

Lawson Gold Limited – Financial Report

Directors’ Report (cont.) REMUNERATION REPORT (AUDITED) (cont.)

Options issued as part of remuneration

Options were issued to Directors to reward them for working as Directors in the period from incorporation to listing. These options were valued using the BlackScholes method (Note 12).

Grant Date Grant Number	Exercise Date Expiry Date Value per option at grant date Exercise Price Total Fair value Expensed during the year % of Remun- eration Exercise Period
D Hillier 5/08/2010 100,000 4/08/2012 4/08/2015 $ 0.159 $ 0.30 $ 15,900 $ 15,900 24% 5/08/2010 100,000 4/08/2012 4/08/2015 $ 0.153 $ 0.40 $ 15,300 $ 15,300 23% D Turvey 5/08/2010 100,000 4/08/2012 4/08/2015 $ 0.159 $ 0.30 $ 15,900 $ 15,900 14% P Wat son 5/08/2010 100,000 4/08/2012 4/08/2015 $0.159$0.30$15,900$15,900 37%
Total 400,000 $ 63,000$ 63,000

No options were issued to Donald Stephens during the period. Option holdings of Key Management Personnel

30 June 2011	Balance at		Granted as	Balance at end	Exercisable at		Not exercisable
	incorporation		remuneration	of period	end of period		at end of period
D Hillier		-	200,000	200,000		-	200,000
D Turvey		-	100,000	100,000		-	100,000
P Wat son		-	100,000	100,000		-	100,000
D St ephens		-	-	-		-	-
Total		-	400,000	400,000		-	400,000

Key Management Personnel Shareholdings

30 June 2011	Balance at		Net Change	Balance 30
	incorporation		Other	June 2011
D Hillier*		-	100,000	100,000
D Turvey*		-	100,000	100,000
P Wat son*		-	150,000	150,000
D St ephens		-	-	-
Total		-	350,000	350,000

Held by Directors and entities in which Directors have a relevant interest.

Lawson Gold Limited – Financial Report

Directors’ Report (cont.)

DIRECTORS’ MEETINGS

The number of meetings of Directors held during the period since incorporation and the number of meetings attended by each Director was as follows:

David Hillier David Turvey Pet er Wat son John Nyvlt Michael Am undsen Robert Greenslade	Number eligible to attend Number attended Number eligible to attend Number attended Directors' Meetings Audit Committee Meetings
	8 8 1 1 8 8 - - 8 8 1 1 5 5 - - 5 5 - - 5 3 - -

The company has an audit committee consisting of the following key personnel: David Hillier Non-Executive Chairman Peter Watson Non-Executive Director Donald Stephens Company Secretary

PROCEEDINGS ON BEHALF OF THE COMPANY

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 period since incorporation.

AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES

Grant Thornton Audit Pty Ltd, in its capacity as auditor for the Company, has not provided any non-audit services throughout the reporting period. The auditor’s independence declaration for the period ended 30 June 2011 has been received and can be found on page 26.

Signed in accordance with a resolution of the board of directors.

==> picture [149 x 53] intentionally omitted <==

David Hillier Non-Executive Chairman

Dated this 29[th] day of September 2011

==> picture [206 x 39] intentionally omitted <==

Level 1, 67 Greenhill Rd Wayville SA 5034 GPO Box 1270 Adelaide SA 5001

T 61 8 8372 6666 F 61 8 8372 6677 E [email protected] W www.grantthornton.com.au

AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF LAWSON GOLD LIMITED

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Lawson Gold Limited for the period ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been:

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

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

S J Gray Director – Audit & Assurance Services

Adelaide, 29 September 2011

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

Liability limited by a scheme approved under Professional Standards Legislation

Lawson Gold Limited – Financial Report

Statement of Comprehensive Income FOR THE PERIOD ENDED 30 JUNE 2011

Note	2011 $
Ot her incom e 4 (a) Im pairm ent of non-current asset s Consult ancy f ees Em ployee benef it s expense 4 (b) Depreciat ion expense Adm inist rat ion expenses 4 (c) Loss before income tax expense Incom e t ax (exp ense) 5 Loss for the period Loss attributable to members of the entity Ot her com prehensive incom e Total comprehensive income for the period Earnings per share: Basic loss per share 6 Dilut ed loss per share 6	182,189 (250,000) (54,371) (153,757) (4,808) (284,172)
	(564,919)
	(127,980)
	(692,899)
	(692,899)
	-
	(692,899)
	Cents (4.11) (4.11)

The accompanying notes form part of these financial statements

Lawson Gold Limited – Financial Report

Statement of Financial Position AS AT 30 JUNE 2011

Note	2011 $
ASSETS CURRENT ASSETS Cash and cash equivalent s 7 Trade and ot her receivables 8 Ot her 9 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equip m ent 10 Explorat ion and evaluat ion asset s 11 TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and ot her payables 13 TOTAL CURRENT LIABILITIES TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capit al 14 Reserves 15 Accum ulat ed losses 16 TOTAL EQUITY	2,796,901 156,229 15,497
	2,968,627
	10,179 1,229,555
	1,239,734
	4,208,361
	120,138
	120,138
	-
	120,138
	4,088,223
	4,641,622 139,500 (692,899)
	4,088,223

The accompanying notes form part of these financial statements

Lawson Gold Limited – Financial Report

Statement of Changes in Equity FOR THE PERIOD ENDED 30 JUNE 2011

Note	Issued Accumlated Reserves Total Capital Losses $ $ $ $
Balance at Incorporation Tot al com prehensive incom e Seed capit al issued at incorporat ion on 2 February 2010 Shares issued as considerat ion f or acquisit ion of t enem ent s on 23 April 2010 Shares issued via init ial public of f ering on 23 July 2010 Fair value of opt ions issued Transact ion cost s (net of t ax) Balance at 30 June 2011
	- - - -
	- (692,899) - (692,899) 1 - - 1 300,000 - - 300,000 4,678,600 - - 4,678,600 - - 139,500 139,500 (336,979) - - (336,979)
	4,641,622 (692,899) 139,500 4,088,223

The accompanying notes form part of these financial statements

Lawson Gold Limited – Financial Report

Statement of Cash Flows FOR THE PERIOD ENDED 30 JUNE 2011

Note	2011 $
Paym ent s t o suppliers and key personnel Int erest received NET CASH USED IN OPERATING ACTIVITIES 7 Acquisit ions of plant and equipm ent Paym ent s f or explorat ion act ivit ies Proceeds f rom issue of shares Transact ion cost s of issue of shares Net increase in cash and cash equivalent s Cash at t he beginning of t he report ing period CASH AT THE END OF THE REPORTING PERIOD 7 NET CASH PROVIDED BY FINANCING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES CASH FLOWS FROM OPERATING ACTIVITIES	(505,068) 169,037
	(336,031)
	(14,987) (1,142,223)
	(1,157,210)
	4,678,601 (388,459)
	4,290,142
	2,796,901 -
	2,796,901

The accompanying notes form part of these financial statements

Lawson Gold Limited – Financial Report

Notes to the Financial Statements FOR THE PERIOD ENDED 30 JUNE 2011

1. CORPORATE INFORMATION

The financial report of Lawson Gold Limited (the Company) for the period ended 30 June 2011 was authorised for issue in accordance with a resolution of the Directors on 29 September 2011. The Company is a listed public company incorporated and domiciled in Australia. The Company was incorporated on 2 February 2010 and the financial statements reflect the transactions from incorporation to 30 June 2011.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This financial report includes the financial statements and notes of the Company.

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 (“AASB”) and the Corporations Act 2001.

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

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.

a.

Revenue

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

Interest income

Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

b. Finance costs

Finance costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

c. Cash and cash equivalents

Cash and cash equivalents comprise cash at bank, cash on hand and short term deposits with an original maturity of three months or less.

d. 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 Company will not be able to collect the debts. Bad debts are written off when identified.

e. Income tax

Current tax assets and liabilities for the period 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 at the balance date.

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

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

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

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Income Tax (Cont.)

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

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

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

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

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

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

f. Goods and Services Tax (GST)

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

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

f. Goods and Services Tax (GST) (Cont.)

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

Cash flows are included in the Statement of Cash Flows 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.

g.

Plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.

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.

Depreciation is calculated on a straight-line and diminishing value basis on all plant and equipment as follows:

Class of asset:	Depreciation rate:
Plant and equipment	13 – 50%

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 unit 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 Statement of Comprehensive Income.

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

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

h. Impairment of assets

At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income.

i. Exploration expenditure

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

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

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

Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of equipment and building structures, waste removal, and rehabilitation of the site in accordance with the terms on which permits were granted. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. Any changes in the estimates for the costs are accounted for on a prospective basis.

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

j. Trade and other payables

Trade payables and other payables are carried at cost and represent liabilities for goods and services provided to the Company prior to the end of the period that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.

k. Share-based payment transactions

The Company provided benefits to Directors of the Company in the form of share-based payments, whereby Directors received options (equity-settled transactions) as compensation for work prior to listing.

The cost of these equity-settled transactions with Directors is measured by reference to the fair value at the date at which they were granted. Share-based payments to non-employees are measured at the fair value of the equity instruments issued. The fair value is determined using the Black-Scholes option pricing model.

The cost of equity-settled transactions is recognised as an expense in the Statement of Comprehensive Income, together with a corresponding increase in the share option reserve, when the options are issued.

Upon the exercise of options, the balance of share based payments reserve relating to those options is transferred to issued capital.

l. Issued Capital

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

m. Critical Accounting Estimates and Judgments

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

Key judgements — exploration and evaluation

The Company’s policy for exploration and evaluation is discussed in note 2(i). The application of this policy requires the Board to make certain assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure, the Board concludes that the capitalised expenditure is unlikely to be recovered by future sale or exploration, then the relevant capitalised amount will be written off through the Statement of Comprehensive Income.

Lawson Gold Limited – Financial Report

Notes to the Financial Statements FOR THE PERIOD ENDED 30 JUNE 2011

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Key estimates – impairment

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

n. Earnings per share

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

In accordance with AASB 133 ‘Earnings per Share’, as potential ordinary shares may only result in a situation where their conversion results in an increase in loss per share or decrease in profit per share from continuing operations, no dilutive effect has been taken into account in 2011.

o. Adoption of new and revised accounting standards

During the current year the Company adopted all of the new and revised Australia Accounting Standards and Interpretations applicable to its operations which became mandatory.

Recently issued accounting standards to be applied in future reporting periods The accounting standards that have not been early adopted for the period ended 30 June 2011, but will be applicable to the Company in future reporting periods are detailed below.

i) Fair Value Measurement IFRS 13: “Fair Value Measurements” was issued by the IASB in May 2011 and provides a precise definition of fair value, as a single source of fair value measurement and prescribes disclosure requirements for use across IFRS. The requirements do not extend the use of fair value accounting, but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRS.

p. Adoption of new and revised accounting standards (Cont.)

The standard will apply to the Company from 1 July 2013 and at this stage it is believed there will be no impact.

ii) Other

In addition to the above recently issued accounting standards that are applicable in future years, the following new accounting standards are applicable in future years:

AASB 124: “Related Party Disclosures”;
AASB 2009-12: “Amendments to Australian Accounting Standards”;

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

AASB 2010-4: “Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project”;
• AASB 2010-5: “Amendments to Australian Accounting Standards”;
• AASB 2010-8: “Amendments to Australian Accounting Standards- Deferred Tax: Recovery of Underlying Assets” and
• AASB 2011-4: “Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements”.

The Company does not expect these standards to materially impact the financial results upon adoption.

Lawson Gold Limited – Financial Report

Notes to the Financial Statements FOR THE PERIOD ENDED 30 JUNE 2011

3. SEGMENT INFORMATION

The Board has considered the requirements of AASB 8 Operating Segments and the internal reports that are reviewed by the chief operating decision maker (the Board) in allocating resources and has concluded at this time that there are no separately identifiable segments.

4. REVENUE AND EXPENSES

	2011 $
REVENUE AND EXPENSES (a) Other Income Bank int erest received or receivable (b) Employee Benefit Expenses Wages, salaries, direct ors f ees and ot her rem unerat ion expenses Share-b ased paym ent s expense (c) Administration Expenses Account ing f ees Legal cost s Occupancy cost s Insurance ASX f ees Travel & accom m odat ion Service Agreem ent s Audit f ees Ot her expenses
	182,189
	182,189

	90,757 63,000
	153,757

	59,022 14,717 36,500 19,269 33,882 8,737 82,839 22,650 6,556
	284,172

Lawson Gold Limited – Financial Report

Notes to the Financial Statements FOR THE PERIOD ENDED 30 JUNE 2011

5. INCOME TAX

	2011 $
The m ajor com ponent s of incom e t ax expense are: Current incom e t ax charge A reconciliat ion bet w een t ax expense and t he product of account ing prof it bef ore incom e t ax m ut ilb le by t he Com pany's applicable incom e t ax rat e is as f ollow s: Account ing loss bef ore incom e t ax At t he Com pany's st at ut ory incom e t ax rat e of 30% - Expendit ure not allow able f or incom e t ax purposes - Im m ediat e w rit e of f f or capit al it em s - Ot her deduct ible it em s Def erred t ax asset not realised as recognit ion crit eria of AASB 112 not m et Subt ot al Tax port ion of capit al raising cost s Incom e t ax expense	127,980 (564,919)
	(169,476) 93,900 (443,886) (27,897) 547,359
	-
	127,980
	127,980

The Company has tax losses arising in Australia of $1,824,466 that are available indefinitely for offset against future taxable profits of the Company.

This deferred tax asset will only be obtained if:

future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; and
the conditions for deductibility imposed by tax legislation continue to be complied with; and
No changes in tax legislation adversely affect the Company in realising the benefit.

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

6. EARNINGS PER SHARE

Earnings per share amounts are calculated by dividing net loss for the period attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated by dividing the net loss attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

Net loss at t ribut able t o ordinary equit y holders of t he parent Weight ed average num ber of ordinary shares f or basic earnings per share calculat ion	2011 $
	(692,899)
	2011
	16,861,416

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements.

Lawson Gold Limited – Financial Report

Notes to the Financial Statements FOR THE PERIOD ENDED 30 JUNE 2011

7. CASH AND CASH EQUIVALENTS

	2011 $
CASH AND CASH EQUIVALENTS Cash at bank and on hand Short -t erm deposit s
	196,901 2,600,000
	2,796,901

Cash at bank earns interest at floating rates based on daily bank deposit rates. The weighted average effective interest rate on short-term bank deposits was 5.69%.

Cash at the end of the period as shown in the statement of cash flows is as follows:

Cash and cash equivalents $2,796,901

Reconciliation of net loss after tax to net cash flows from operations Net loss Adjustments for non-cash items: Incom e t ax expense Depreciat ion Share opt ions expensed Im pairm ent of non-current asset s Changes in operating assets and liabilities (Increase)/d ecrease in t rade and ot her receivables (Increase)/d ecrease in prepaym ent s (Decrease)/increase in t rade and ot her payables Net cash f rom operat ing act ivit ies
	(692,899) 127,980 4,808 63,000 250,000 (156,229) (15,497) 82,806
	(336,031)

Reconciliation of net loss after tax to net cash flows
from operations
Net loss
Adjustments for non-cash items:
Incom e t ax expense
Depreciat ion
Share opt ions expensed
Im pairm ent of non-current asset s
Changes in operating assets and liabilities
(Increase)/d ecrease in t rade and ot her
receivables
(Increase)/d ecrease in prepaym ent s
(Decrease)/increase in t rade and ot her
payables
Net cash f rom operat ing act ivit ies

(692,899)
127,980
4,808
63,000
250,000
(156,229)
(15,497)
82,806

(336,031)

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

8. TRADE & OTHER RECEIVABLES

TRADE & OTHER RECEIVABLES
	2011 $
Int erest receivable Goods & Services Tax receivable
	13,152 143,077
	156,229

Receivables are not considered past due or impaired.

9. OTHER CURRENT ASSETS

Prepaym ent s	15,497
	15,497

10. PLANT AND EQUIPMENT

PLANT AND EQUIPMENT
	Plant & equipment Total $ $
At 30 June 2011 Cost Accum ulat ed depreciat ion and im pairm ent Net carrying am ount Period ended 30 June 2011 At incorporat ion, net of accum ulat ed depreciat ion and im pairm ent Addit ions Depreciat ion charge f or t he period At 30 June 2011, net of accum ulat ed depreciat ion and im pairm ent	14,987 14,987 (4,808) (4,808)
	10,179 10,179
	- - 14,987 14,987 (4,808) (4,808)
	10,179 10,179

11. EXPLORATION AND EVALUATION ASSETS

	2011 $
Balance at beginning of period Capit alised exp lorat ion cost s Explorat ion cost s w rit t en of f Tot al
	- 1,479,555 (250,000)
	1,229,555

The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective exploration areas.

Exploration and Evaluation expenditure has been carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recovered reserves. Management assessment of carried forward expenditure resulted in impairment of $250,000.

Lawson Gold Limited – Financial Report

Notes to the Financial Statements FOR THE PERIOD ENDED 30 JUNE 2011

12. SHARE-BASED PAYMENTS

The expense recognised in the Statement of Comprehensive Income in relation to director share-based payments is disclosed in Note 4(b).

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

	2011 2011 Number of options Weighted Average Exercise Price $
Out st anding at t he beginning of t he period Grant ed d uring t he period Grant ed d uring t he period Out st anding at t he end of t he period	- - 300,000 0.30 600,000 0.40
	900,000 0.37

The outstanding balance as at 30 June 2011 is represented by:

A total of 300,000 options exercisable any time between 4 August 2012 until 4 August 2015 with a strike price of $0.30 and a fair value per option at grant date of $0.159.
A total of 600,000 options exercisable any time between 4 August 2012 until 4 August 2015 with a strike price of $0.40 and a fair value per option at grant date of $0.153.

Contractual life of options

The weighted average remaining contractual life for the share options outstanding as at 30 June 2011 is 4.10 years.

Exercise price of options

The range of exercise prices for options outstanding at the end of the year was $0.30 - $0.40.

Fair value of options

The weighted average fair value of options granted during the year was $0.155.

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

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

12. SHARE-BASED PAYMENTS (Cont.)

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

Hist orical volat ilit y (%) Risk-f ree int erest rat e (%) Expect ed lif e of opt ion (years)	2011
	118% 5% 5

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, based on companies of a similar nature and size, 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.

13. TRADE AND OTHER PAYABLES

		2011 $ 38,845 79,808 1,485 120,138 2011 $ 4,641,622 4,641,622 Number $ 2011
	Trade payab les Ot her payab les Payroll payables 14. ISSUED CAPITAL Shares
	Balance at incorporat ion Seed cap it al issued at incorporat ion on 2/02/2010 Shares issued as considerat ion f or t enem ent s on 23/04/2010 Shares issued via Init ial Public Of f ering on 23/07/2010 Transact ion cost s on shares issued Balance at 30 June 2011	- - 1 1 1,500,000 300,000 23,393,000 4,678,600 - (336,979)
		24,893,001 4,641,622

Fully paid Ordinary Shares carry one vote per share and carry the right to dividends (in the event such a dividend is declared).

Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.

In the event of winding up the Company, ordinary shareholders rank after all creditors and are fully entitled to any net proceeds of liquidation.

Lawson Gold Limited – Financial Report

Notes to the Financial Statements FOR THE PERIOD ENDED 30 JUNE 2011

15. SHARE OPTION RESERVE

a) The share-option reserve records items recognised as expenses or capitalised on valuation of share options and other equity settled transactions.

Table of Share Options movement in the Company as at 30 June 2011:

	2011
	$
Balance at beginning of t he period	-
Opt ions expensed during period	63,000
Opt ions capit alised during period	76,500
Total Option Reserve	139,500

b) Table of Share Option movement for the Company for the period ended 30 June 2011:

2011:
	Number of	Classification	Exercise		Fair value	Total Option
	Options		Price	recognised in			Value
					period
Opening Balance	-				-
5 August 2010	300,000	Direct ors	$0.30	$	47,700	$	47,700
5 August 2010	100,000	Chairm an	$0.40	$	15,300	$	15,300
5 August 2010	500,000	Incent ive	$0.40	$	76,500	$	76,500
Closing Balance at 30 June 2011	900,000			$	139,500	$	139,500

During the year 300,000 options (exercisable at $0.30, with an expiry date of 4 August 2015) were issued to Directors; 100,000 options (exercisable at $0.40, with an expiry date of 4 August 2015) were issued to the Chairman; and 500,000 options (exercisable at $0.40 with an expiry date of 4 August 2015) were issued as Incentive Options to consultants to the prospectus.

The total fair value of these options was $139,500, of which $63,000 was expensed in the current financial period being the fair value of options issued to Directors as determined by the Black-Scholes pricing model (refer to note 2(k)). The remaining $76,500 was capitalised.

16. RETAINED EARNINGS

	2011 $
Balance at b eginning of period Net loss at t ribut able t o m em bers of t he Com pany Balance at end of f inancial period
	- (692,899)
	(692,899)

Lawson Gold Limited – Financial Report

Notes to the Financial Statements FOR THE PERIOD ENDED 30 JUNE 2011

17. COMMITMENTS AND CONTINGENCIES

Exploration leases

In order to maintain current rights of tenure to exploration tenements the Company will be required to spend in the year ending 30 June 2012 amounts of approximately $346,500. These obligations are expected to be fulfilled in the normal course of operations.

At 30 June 2011 there were no contingent liabilities.

18. AUDITOR REMUNERATION

Audit or review of f inancial report	2011 $
	22,650

19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES AND FINANCIAL INSTRUMENTS

Capital risk management

The Company manages its capital to ensure that entities it will be able to continue as a going concern while maximising the return to stakeholders.

The capital structure of the Company consists of equity attributable to equity holders, comprising issued capital and reserves as disclosed in notes 14 and 15 respectively.

Proceeds from share issues are used to maintain and expand the Company’s exploration activities and fund operating costs.

Categories of financial instruments

FINANCIAL ASSETS Cash and cash equivalent s Trade and ot her receivables FINANCIAL LIABILITIES Trade and ot her payables	2011 $

	2,796,901 156,229

	120,138

Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from activities.

The Company does not have any significant credit risk exposure to any single counterparty or any Company of counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Company’s maximum exposure to credit risk.

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES AND FINANCIAL INSTRUMENTS (Cont.)

Interest rate sensitivity analysis

At reporting date, if interest rates had been 0.5% higher or lower and all other variables were held constant, the Company’s:

Net profit would increase or decrease by $3,464 which is attributable to the Company’s exposure to interest rates on its variable bank deposits.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board which has built an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves.

Liquidity and interest risk tables

The following table details the Company’s remaining contractual maturity for its nonderivative financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

	< 1 year > 1 - < 5 years > 5 years Total $ $ $ $
Period ended 30 June 2011 FINANCIAL LIABILITIES Fixed rate non-interest bearing Trade and other payables Weighted average effective interest rate Total Financial Liabilities	120,138 - - -
	- - - -
	120,138 - - -

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES AND FINANCIAL INSTRUMENTS (Cont.)

The following table details the Company’s expected maturity for its non-derivative financial assets. The table below has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Company anticipates that the cash flow will occur in a different period.

	< 1 year > 1 - < 5 years > 5 years Total $ $ $ $
FINANCIAL ASSETS Floating rate Cash assets Fixed rate non-interest bearing Receivables Weighted average effective interest rate Total Financial Assets Period ended 30 June 2011	2,796,901 - - 2,796,901 156,229 - - 156,229
	5.69% - - -
	2,953,130 - - 2,953,130

The Company is not materially exposed to any effects on changes in interest rates.

Net fair values of financial assets and liabilities

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

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

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

The carrying amount of financial assets and liabilities is equivalent to fair value at reporting date.

Lawson Gold Limited – Financial Report

Notes to the Financial Statements

FOR THE PERIOD ENDED 30 JUNE 2011

20. RELATED PARTY DISCLOSURE

Payments to related parties

David Hillier received administration consulting fees of $20,580 for assistance during the listing process.

Equant Resources Pty Ltd (Equant), of which David Turvey is a Director, has a Services Agreement to provide technical and management overview and evaluation services to the Company. Under the Agreement Equant will receive an hourly rate of $230 (exclusive of GST and pro-rated for part hours) for providing Mr Turvey’s services, capped at a maximum of $5,520 per month. Equant will also be reimbursed for any reasonable out of pocket expenses approved by the Company. During the period Equant received $68,198 in consulting fees.

Watson’s Lawyers, of which Peter Watson is a partner, received professional service fees of $81,540.

HLB Mann Judd (SA) Pty Limited has received professional fees for accounting, taxation and secretarial services provided during the year totalling $42,196. Donald Stephens, the company secretary, is a consultant with HLB Mann Judd (SA) Pty Limited.

Details of Key Management Personnel’s interests in shares and options of the Company and their remuneration can be found on pages 20 to 24 of this document.

21. SIGNIFICANT EVENTS AFTER BALANCE DATE

No significant events have occurred after the balance date.

Lawson Gold Limited – Financial Report

Directors' Declaration

The Directors of Lawson Gold Limited, declare that:

In the opinion of the directors:
a. the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including:
- i. giving a true and fair view of the Company's financial position as at 30 June 2011 and of its performance for the period ended on that date; and
- ii. complying with Accounting Standards and Corporations Regulations 2001 and other mandatory professional reporting requirements; and
- iii. complying with International Financial Reporting Standards as disclosed in Note 2;
b. the Directors have been given the declarations required by section 295A of the Corporations Act; 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.

Signed in accordance with a resolutions of the Directors

On behalf of the Board of Directors

==> picture [149 x 53] intentionally omitted <==

David Hillier Chairman

Dated this 29[th] day of September 2011

==> picture [206 x 39] intentionally omitted <==

Level 1, 67 Greenhill Rd Wayville SA 5034 GPO Box 1270 Adelaide SA 5001

T 61 8 8372 6666 F 61 8 8372 6677 E [email protected] W www.grantthornton.com.au

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF LAWSON GOLD LIMITED

Report on the financial report

We have audited the accompanying financial report of Lawson Gold Limited (the “Company”), which comprises the statement of financial position as at 30 June 2011, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the period then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the company.

Directors responsibility for the financial report

The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view of the financial report in accordance with Australian Accounting Standards and the Corporations Act 2001. This responsibility includes such internal controls as the Directors determine are necessary to enable the preparation of the financial report to be free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

==> picture [139 x 27] intentionally omitted <==

In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.

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

Independence

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

Auditor’s opinion

In our opinion:

a the financial report of Lawson Gold Limited is in accordance with the Corporations Act 2001, including:
i giving a true and fair view of the Company’s financial position as at 30 June 2011 and of its performance for the period ended on that date; and
ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements.

Report on the remuneration report

We have audited the remuneration report included in the directors’ report for the period ended 30 June 2011. The Directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of Lawson Gold Limited for the period ended 30 June 2011, complies with section 300A of the Corporations Act 2001.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

S J Gray Director – Audit & Assurance Services

Adelaide, 29 September 2011

AI assistant

G11 RESOURCES LIMITED — Annual Report 2011

64956_rns_2011-09-28_be970582-df1c-4963-bdf6-6f246c5ac329.pdf

Financial Report

Contents to Financial Report

Corporate Information

Directors

Company Secretary

Registered Office

Principal place of business

Share Registry

Legal Advisors

Bankers

Auditors

Review of Operations

Exploration History

Summary of Exploration Activities

Review of O erations cont. p ( )

Review of O erations cont. p ( )

RAB Drilling

Diamond Drilling

Review of O erations cont. p ( )

Review of O erations cont. p ( )

Review of O erations cont. p ( )

Review of O erations cont. p ( )

RAB and RC Drill Spoil Sampling

Soil Sampling

Petrology & Geological Interpretation

Soil Geochemical Review

Review of O erations cont. p ( )

Geophysical Interpretation:

Rehabilitation and Environmental, Program of Works and Aboriginal Heritage Surveys

Ongoing activity

Directors’ Report

DIRECTORS

Names, qualifications, experience and special responsibilities

David Hillier

Non-Executive, Chairman (FCA, AMP (Harvard), MAICD)

David Turvey

Executive Director (BSc (Hons))

Directors’ Report

Peter Watson

Non-Executive Director (LLB(Hons))

COMPANY SECRETARY

Donald Stephens (BA(Acc), FCA )

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT

Introduction

Principle 1: Lay solid foundations for management and oversight

Board Responsibilities

Principle 2: Structure the Board to add value

Size and Composition

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT (cont.)

Independence

Evaluation of Board performance

Board Committee

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT (cont.)

nominations to the Board.

Principle 3: Promote ethical and responsible decision making

Code of Conduct

Securities Trading Policy

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT (cont.)

Principle 4: Safeguard integrity in financial reporting

Audit Committee

Principle 5: Make timely and balanced disclosure

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT (cont.)

Principle 6: Respect the rights of Shareholders

Principle 7: Recognise and manage risk

Directors’ Report (cont.) CORPORATE GOVERNANCE STATEMENT (cont.)

Principle 8: Remunerate fairly and responsibly

Directors’ Report (cont.)

DIVIDENDS

PRINCIPAL ACTIVITIES

OPERATING RESULTS

OPERATIONS OVERVIEW

RISK MANAGEMENT

AFTER BALANCE DATE EVENTS

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

Directors’ Report (cont.)

G11 RESOURCES LIMITED Annual Report 2011