GATEWAY MINING LIMITED — Interim / Quarterly Report 2008

Mar 13, 2008

GATEWAY MINING LIMITED ABN: 31 008 402 391

INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

CONTENTS

Directors’ Report	2
Auditor’s Independence Declaration	3
Income Statement	4
Balance Sheet	5
Statement of Changes in Equity	6
Cash Flow Statement	7
Notes to the Financial Statements	8 – 11
Directors’ Declaration	12
Independent Auditor’s Review Report	13 – 14

1

GATEWAY MINING LIMITED ABN: 31 008 402 391

DIRECTORS’ REPORT

Your directors present their report on the company for the half-year ended 31 December 2007.

DIRECTORS

The names of directors who held office during or since the end of the half-year:

Mr. Brian Gomez (Chairman) Dr. Robert A. Creelman Mr. Brian F. Thornton

REVIEW OF OPERATIONS

In October Minotaur Exploration announced that Mitsubishi Materials Corporation and Mitsubishi Corporation had joined Minotaur in Gateway’s Cowra joint venture. Minotaur and Mitsubishi are committed to spend A$2 million to earn their 75% stake. Plans are advanced for drilling to commence on exciting targets at Cowra in the March quarter of 2008.

The wet weather and rig availability have hampered work at the Surprise copper-gold project near Cloncurry in Queensland, but joint venture partner Minotaur Exploration is confident key targets will be drilled in the March quarter.

As reported in our Annual Report 2007, WCP Resources Ltd (WCP) issued 6.25 million shares at 20 cents per share as an option to acquire a 70% interest in the Airport/ Barrelmaker Project in Western Australia. On 14[th] September 2007 and in accordance with the formal agreement signed, WCP had further issued $500,000 worth of its shares or equivalent to 1,958,251 ordinary shares to exercise its first 35% interest of the cumulative interest of 70% in the Airport/Barrelmaker Project in Western Australia.

On 16 July 2007, Legend Mining Limited (LEG) has entered a Joint Venture Agreement with the company’s West Bungarra P57/976 area on the equity basis 70% Legend and 30% Gateway Mining Ltd.

AUDITOR’S DECLARATION

The auditor’s independence declaration under Section 307C of the Corporations Act 2001 is set out on page 3 for the half-year ended 31 December 2007.

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

==> picture [91 x 50] intentionally omitted <==

BRIAN GOMEZ Director

Dated this 14th day of March 2008

2

GATEWAY MINING LIMITED ABN: 31 008 402 391 [Priestley] &Morris

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF GATEWAY MINING LIMITED

Chartered Accountants

I declare that, to the best of my knowledge and belief, during the half-year ended 31 December 2007 there have been:

• (a) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review, and

• (b) no contraventions of any applicable code of professional conduct in relation to the review.

==> picture [99 x 38] intentionally omitted <==

Priestley & Morris Chartered Accountants

==> picture [100 x 38] intentionally omitted <==

P A Cordwell

Partner

Dated this 15th day of March 2008 Parramatta

Priestley & Morris - ABN: 51 502 720 047

Level 7, 3 Horwood Place, Parramatta NSW 2150 PO Box 19, Parramatta NSW 2124 Tel: +61 2 8836 1500 Fax: +61 2 8836 1555

E: email@priestleymorris.com.au W: www.priestleymorris.com.au

Liability limited by a scheme approved under Professional Standards Legislation

==> picture [38 x 44] intentionally omitted <==

3

GATEWAY MINING LIMITED ABN: 31 008 402 391

INCOME STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

NOTE Revenue 3 Depreciation expense Employee benefits expense Professional services rendered Office expenses Compliance fees Share registry fees Other expenses Profit before income tax Income tax expense 4 Profit for the period Profit attributable to members of Gateway Mining Limited Overall Operations: Basic earnings per share Diluted earnings per share	31 December 2007		31 December 2006
	$ 834,421		$ 34,137
	(1,132) (84,419) (48,400) (24,942) (19,691) (10,909) (45,427)		(1,290) (84,409) (47,300) (22,321) (19,613) (13,636) (38,808)
	599,501		(193,240)
	-		-
	599,501		(193,240)
	599,501		(193,240)
	0.0059		(0.0014)
	0.0058		(0.0013)

The accompanying notes form part of these financial statements.

4

GATEWAY MINING LIMITED ABN: 31 008 402 391

BALANCE SHEET AS AT 31 DECEMBER 2007

ALANCE SHEET S AT 31 DECEMBER 2007
NOTE ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Financial assets 4 Plant and equipment Deferred exploration and evaluation expenditure TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Short-term provisions TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	31 Dec 2007		30 June 2007
	$ 926,534 70,938		$ 921,100 65,380
	997,472		986,480
	12,608 2,843,521 6,089 7,044,306		12,608 3,516,232 7,222 6,792,336
	9,906,524		10,328,398
	10,903,996		11,314,878
	32,525 1,627		49,153 9,933
	34,152		59,086
	34,152		59,086
	10,869,844		11,255,792
	20,155,760 312,425 (9,598,341)		20,155,760 1,297,874 (10,197,842)
	10,869,844		11,255,792

The accompanying notes form part of these financial statements

5

GATEWAY MINING LIMITED ABN: 31 008 402 391

STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

Balance at 1.7.2006 Revaluation increment Loss attributable to members of the company Balance at31.12.2006 Balance at 1.7.2007 Revaluation decrement Profit attributable to members of the company Balance at 31.12.2007	Issued Capital Ordinary	Accumulated losses	Financial assets revaluation and Share Based Payment Reserve	Total
	$ 20,150,506 - -	$ (10,257,691) - (193,240)	$ 232,595 777,729 -	$ 10,125,410 777,729 (193,240)
	20,150,506	(10,450,931)	1,010,324	10,709,899
	20,155,760 -	(10,197,842) 599,501	1,297,874 (985,449) -	11,255,792 (985,449) 599,501
	20,155,760	(9,598,341)	312,425	10,869,844

6

GATEWAY MINING LIMITED ABN: 31 008 402 391

CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

==> picture [460 x 507] intentionally omitted <==

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

31 December 31 December
2007 2006
$ $
CASH FLOWS FROM OPERATING
ACTIVITIES
Payments to suppliers and employees (264,278) (289,942)
Interest and other income received 20,935 34,137
NET CASH USED IN OPERATING
ACTIVITIES (243,343) (255,805)
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds from sale of non-current assets 667,335 -
Purchase of non-current assets (166,588) -
Expenditure on mining interests (251,970) (270,446)
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 248,777 (270,446)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares - -
NET CASH FROM FINANCING
ACTIVITIES - -
NET INCREASE (DECREASE) IN 5,434 (526,251)
CASH HELD
Cash at 1 July 2007 921,100 1,846,243
CASH AT 31 DECEMBER 2007 926,534 1,319,992
----- End of picture text -----

7

GATEWAY MINING LIMITED ABN: 31 008 402 391

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

NOTE 1: BASIS OF PREPARATION

The half-year financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standard AASB 134: Interim Financial Reporting, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2007 and any public announcements made by the company during the half-year in accordance with the continuous disclosure requirements arising under the Corporations Act 2001.

The accounting policies have been consistently applied by the entity and are consistent with those in the June 2007 financial report.

The half-year report does not include full disclosures of the type normally included in an annual financial report.

Reporting Basis and Conventions

The half-year report has been prepared on an accruals basis and is based on historic costs modified by the revaluation of selected financial assets for which the fair value basis of accounting has applied.

Accounting Policies

(a) Exploration and Development Expenditure

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

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

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

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.

8

GATEWAY MINING LIMITED ABN: 31 008 402 391

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

NOTE 1: BASIS OF PREPARATION (continued)

(b) Income Tax

The charge for current income tax expenses is based on the profit or loss for the period adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

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

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

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

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

(d) Financial Instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Available-for-sale financial assets

Available-for-sale financial assets are reflected at fair value. Unrealised gains or losses arising from changes in fair value are taken directly to equity.

9

GATEWAY MINING LIMITED ABN: 31 008 402 391

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

NOTE 2: REVENUE

Non-operating activities: Interest received Net gain on disposal of financial assets Option fee received to acquire 35% interest in Barrelmaker and Airport gold exploration tenements Total revenue NOTE 3: INCOME TAX EXPENSE Prima facie tax payable (benefit) on profit (loss) from ordinary activities before income tax at 30% Add tax effect of permanent difference Tax effect of capital losses used and carried forward separately Income tax expense (benefit) arising from profit (loss) Utilisation of prior period tax losses Benefit of tax loss not brought to account Income tax expense attributable to profit (loss)	31 December 2007		31 December 2006
	$ 20,936 313,485 500,000		$ 34,137 - -
	834,421		34,137
	31 December 2007		31 December 2006
	$ 179,850 - -		$ (57,972) - -
	179,850 (179,850) -		(57,972) - 57,972
	-		-

10

GATEWAY MINING LIMITED ABN: 31 008 402 391

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

NOTE 4: OTHER FINANCIAL ASSETS

Available for sale financial assets: Shares in listed corporations at fair value Shares in unlisted corporations	31 December 2007		30 June 2007
	$ 2,176,934 666,587		$ 2,966,232 550,000
	2,843,521		3,516,232

NOTE 5: SEGMENT INFORMATION

The company operates in Australia predominantly in the mineral exploration industry and mainly in gold.

11

GATEWAY MINING LIMITED ABN: 31 008 402 391

DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The financial statements and notes, as set out on pages 2 – 11:

2. a. comply with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and

3. b. give a true and fair view of the company’s financial position as at 31 December 2007 and of its performance for the half-year ended on that date.

4. In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as when they become due and payable.

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

==> picture [104 x 57] intentionally omitted <==

BRIAN GOMEZ Director

Dated this 14th day of March 2008

12

GATEWAY MINING LIMITED ABN: 31 008 402 391

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF GATEWAY MINING LIMITED

[Priestley] &Morris Chartered Accountants

Report on the Half-Year Financial Report

We have reviewed the half-year financial report of Gateway Mining Limited which comprises the balance sheet as at 31 December 2007, and the income statement, statement of changes in equity and cash flow statement for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporation Act 2001.This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial that is free from misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of procedures described, we have become aware that makes us believe that the financial report is not in accordance with the Corporation Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2007 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134: Interim Financial Reporting and Corporation Regulations 2001. As the auditor of Gateway Mining Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primary of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporation Act 2001, was provided to the directors of Gateway Mining Limited on 15 March 2008.

Priestley & Morris - ABN: 51 502 720 047 Level 7, 3 Horwood Place, Parramatta NSW 2150 PO Box 19, Parramatta NSW 2124 Tel: +61 2 8836 1500 Fax: +61 2 8836 1555 E: email@priestleymorris.com.au W: www.priestleymorris.com.au

Liability limited by a scheme approved under Professional Standards Legislation

==> picture [38 x 44] intentionally omitted <==

13

GATEWAY MINING LIMITED ABN: 31 008 402 391

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF GATEWAY MINING LIMITED (CONTINUED)

[Priestley] &Morris

Chartered Accountants

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Gateway Mining Limited is not in accordance with the Corporations Act including:

• A. giving a true and fair view of the company’s financial position as at 31 December 2007 and of its performance for the half-year ended on that date; and

• B. complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001.

==> picture [98 x 38] intentionally omitted <==

Priestley & Morris Chartered Accountants

==> picture [100 x 38] intentionally omitted <==

P A Cordwell

Partner Dated this 15th day of March 2008

Parramatta

Priestley & Morris - ABN: 51 502 720 047 Level 7, 3 Horwood Place, Parramatta NSW 2150 PO Box 19, Parramatta NSW 2124 Tel: +61 2 8836 1500 Fax: +61 2 8836 1555 E: email@priestleymorris.com.au W: www.priestleymorris.com.au

Liability limited by a scheme approved under Professional Standards Legislation

==> picture [38 x 44] intentionally omitted <==

14