GATEWAY MINING LIMITED — Interim / Quarterly Report 2010

Mar 15, 2010

GATEWAY MINING LIMITED ABN: 31 008 402 391

INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

CONTENTS

Directors’ Report	2
Auditor’s Independence Declaration	3
Statement of Comprehensive Income	4 - 5
Statement of Financial Position	6
Statement of Changes in Equity	7
Cash Flow Statement	8
Notes to the Financial Statements	9 – 12
Directors’ Declaration	13
Independent Auditor’s Review Report	14 – 15

1

GATEWAY MINING LIMITED ABN: 31 008 402 391

DIRECTORS’ REPORT

Your directors submit the financial report on the company for the half-year ended 31 December 2009.

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

A 50 line km EM survey covering selected areas of the Montague tenements in the Gidgee project in Western Australia was completed, where a number of significant bedrock conductors have been delineated.

Follow up work is required to assess the nature of these conductors, with the expected work including infill MLTEM surveying, RG and air core drilling.

Further drilling at the Cup copper prospect, further delineating gold mineralisation at Julia’s Fault and testing the Victory Well gossans where a programme of between 2000m and 3200m being planned for early 2010.

The company has planned up to 1600m of RC drilling to test a number of targets in the vicinity mining area including Whistler, Rosie North-East and Montague-boulder targets.

On 11 August 2009, the company raised $500,000 in working capital under the Company’s Share Purchase Plan (6,250,000 ordinary shares at 8c/share) and raised a further $560,000 (7,000,000 ordinary shares at 8 c/share) through a private placement on 7[th] October 2009.

The takeover of Gateway Mining Limited was concluded in October 2009 by Citigold Corporation Limited with a 46% holding in the company.

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 2009.

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

==> picture [106 x 59] intentionally omitted <==

BRIAN GOMEZ Director

Dated this 15th day of March 2010

2

GATEWAY MINING LIMITED Priestley ABN: 31 008 402 391 &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 2009 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 [95 x 37] intentionally omitted <==

Priestley & Morris Chartered Accountants

M A Nevill Partner

Dated this 15th day of March 2010 Parramatta

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

3

GATEWAY MINING LIMITED ABN: 31 008 402 391

STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

NOTE Revenue 2 Depreciation expense Employee benefits expense Professional services rendered Office expenses Compliance fees Share registry fees Impairment loss – available-for-sale financial assets Other expenses (Loss) before income tax Income tax expense 2 (Loss) for the period	31 December 2009		31 December 2008
	$ 2,119		$ 8,583
	(1,490) (86,894) (40,430) (28,498) (25,790) (24,295) - (48,398)		(750) (84,419) (57,200) (23,360) (19,517) (13,636) (1,093,771) (38,612)
	(253,676)		(1,322,682)
	-		-
	(253,676)		(1,322,682)

4

GATEWAY MINING LIMITED ABN: 31 008 402 391

Other Comprehensive income Available for sale financial assets: Gains arising during the period Income tax relating to components of other comprehensive income Other comprehensive income/(loss) for the period, net of tax Total comprehensive income /(loss) for the period attributable to owners of the company Earnings per share Basic (loss)/earnings per share Diluted (loss)/earnings per share	532,438 - 532,438 278,762 (0.0036)		- - - (1,322,682) (0.0131)
	(0.0029)		(0.0126)

The accompanying notes form part of these financial statements.

5

GATEWAY MINING LIMITED ABN: 31 008 402 391

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2009

TATEMENT OF FINANCIAL POSITION S AT 31 DECEMBER 2009
NOTE ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Financial assets 3 Plant and equipment Deferred exploration and evaluation expenditure TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	31 Dec 2009		30 June 2009
	$ 502,209 90,128 -		$ 126,550 79,121 7,500
	592,337		213,171
	12,608 1,228,420 7,244 8,256,200		12,608 681,523 8,734 7,935,623
	9,504,472		8,638,488
	10,096,809		8,851,659
	28,820		56,832
	28,820		56.832
	28,820		56,832
	10,067,989		8,794,827
	21,892,160 665,438 (12,489,609)		20,897,760 133,000 (12,235,933)
	10,067,989		8,794,827

The accompanying notes form part of these financial statements

6

GATEWAY MINING LIMITED ABN: 31 008 402 391

STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

Balance at 1.7.2008 Share issued during the period Transaction costs Loss for the period Balance at31.12.2008 Balance at1.7.2009 Shares issued during the period Transaction costs Gain on available-for-sale financial assets Loss for the period Balance at 31.12.2009	Issued Capital	Accumulated losses	Investments revaluation reserve	Share Based payments reserve	Total
	$ 20,155,760 400,000 (32,000)	$ (10,376,456) (1,322,682)	$ -	$ 133,000	9,912,304 400,000 (32,000) (1,322,682)
	20,523,760	(11,699,138)	-	133,000	8,957,622
	20,897,760 1,060,000 (65,600)	(12,235,933) (253,676)	- 532,438	133,000	8,794,827 1,060,000 (65,600) 532,438 (253,676)
	21,892,160	(12,489,609)	532,438	133,000	10,067,989

The accompanying notes form part of these financial statements.

7

GATEWAY MINING LIMITED ABN: 31 008 402 391

CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest and other income received NET CASH USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of non-current assets Purchase of non-current assets Expenditure on mining interests NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Placement fees NET CASH FROM FINANCING ACTIVITIES NET INCREASE (DECREASE) IN CASH HELD Cash at 1 July 2009 CASH AT 31 DECEMBER 2009	31 December 2009		31 December 2008
	$ (285,824) 2,119		$ (307,679) 8,583
	(283,705)		(299,096)
	- (14,459) (320,577)		- - (276,210)
	(335,036)		(276,210)
	1,060,000 (65,600)		400,000 (32,000)
	994,400		368,000
	375,659		(207,306)
	126,550		366,714
	502,209		159,408

8

GATEWAY MINING LIMITED ABN: 31 008 402 391

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

NOTE 1: BASIS OF PREPARATION

These general purpose financial statements for the interim half-year reporting period ended 31 December 2009 have been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB 134: Interim Financial Reporting. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.

This interim financial report is intended to provide users with an update on the latest annual financial statements of Gateway Mining Ltd. As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the company. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the company for the year ended 30 June 2009, together with any public announcements made during the half-year.

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements except for the adoption of the following new and revised Accounting Standards.

Accounting Standards not previously applied

The company has adopted the following new and revised Australian Accounting Standards issued by the AASB which are mandatory to apply to the current interim period. Disclosures required by these Standards that are deemed material have been included in this financial report on the basis that they represent a significant change in information from that previously made available.

Presentation of Financial Statements

AASB 101 prescribes the contents and structure of the financial statements. Changes reflected in this financial report include:

• the replacement of income statement with statement of comprehensive income. Items of income and expense not recognised in profit or loss are now disclosed as components of ‘other comprehensive income’. In this regard, such items are no longer reflected as equity movements in the statement of changes in equity;

• the adoption of the separate income statement/single statement approach to the presentation of the statement of comprehensive income;

• other financial statements are renamed in accordance with the Standard.

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.

9

GATEWAY MINING LIMITED ABN: 31 008 402 391

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

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 nonassessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance sheet date.

As at balance date the company has estimated carry-forward tax losses of $15,292,821 (June 2009: $14,739,041), which is an income tax benefit of $4,587,846 (June 2009: $4,165,385).

In view of the tax losses, which have not yet been confirmed by the taxation authority, deferred tax accounting has not been adopted.

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 profit or loss or other comprehensive income.

(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 to other comprehensive income.

10

GATEWAY MINING LIMITED ABN: 31 008 402 391

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

NOTE 2: PROFIT FOR THE PERIOD

The following revenue and expense items are relevant in explaining the financial performance for the interim period: - EXPENSES Impairment of available-for-sale financial assets NOTE 2: 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) Benefit of tax loss not brought to account Income tax expense attributable to profit (loss)	31 December 2009		31 December 2008
	$ -		$ (1,093,771)
	31 December 2009		31 December 2008
	$ (76,103) - -		$ (396,805) - -
	(76,103) 76,103		(396,805) 396,805
	-		-

11

GATEWAY MINING LIMITED ABN: 31 008 402 391

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

NOTE 3: OTHER FINANCIAL ASSETS

Available for sale financial assets: Shares in listed corporations at fair value Shares in unlisted corporations	31 December 2009		30 June 2009
	$ 1,214,874 13,546		$ 674,311 7,212
	1,228,420		681,523

NOTE 4: SEGMENT INFORMATION

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

NOTE 5: EVENTS SUBSEQUENT TO REPORTING DATE

There is no significant event subsequent to reporting date.

12

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 – 12:

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 2009 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 [101 x 56] intentionally omitted <==

BRIAN GOMEZ Director

Dated this 15th day of March 2010

13

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 accompanying half-year financial report of Gateway Mining Ltd which comprises the statement of financial position as at 31 December 2009, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows for the half-year ended on that date, the accounting policies and other selected explanatory notes and the directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors of Gateway Mining Ltd are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material 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 the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the consolidated entity’s financial position as at 31 December 2009 and its performance for the half-year ended on that date and complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Gateway Mining Ltd, 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, primarily of persons responsible for financial and accounting matters, and applying analytical and 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 Corporations Act, provided to the directors of Gateway Mining Limited on 15 March 2010, would be in the same terms if provided to the directors as at the date of this auditor’s review report.

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 Ltd is not in accordance with the Corporations Act 2001 including:

• giving a true and fair view of the company’s financial position as at 31 December 2009 and of its performance for the half-year ended on that date; and

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

14

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 Ltd is not in accordance with the Corporations Act 2001 including:

• giving a true and fair view of the company’s financial position as at 31 December 2009 and of its performance for the half-year ended on that date; and

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

==> picture [95 x 37] intentionally omitted <==

Priestley & Morris Chartered Accountants

M A Nevill Partner Dated this 15th day of March 2010 Parramatta

**

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

15