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ANNUAL REPORT

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CORPORATE DIRECTORY

�� DIRECTORS

�� AUDITORS

�� COMPANY SECRETARY

�� SHARE REGISTRAR

�� REGISTERED OFFICE

�� SECURITIES EXCHANGE LISTING

| Jameson Resources Annual Report 2012

Corporate Directory

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�� Corporate Directory �� Chairman’s Letter .............................................................................................................................................................................................................2 �� Directors’ Report ..............................................................................................................................................................................................................3 �� Auditor’s Independence Declaration ........................................................................................................................................................................28 �� Statement of Comprehensive Income ......................................................................................................................................................................29 �� Statement of Financial Position ................................................................................................................................................................................30 �� Statement of Cash Flows..............................................................................................................................................................................................31 �� Statement of Changes in Equity .................................................................................................................................................................................32 �� Notes to the Financial Statements ............................................................................................................................................................................33 �� Directors’ Declaration ...................................................................................................................................................................................................62 �� Independent Auditor’s Report ...................................................................................................................................................................................63 �� Corporate Governance Statement .............................................................................................................................................................................65 �� Additional Shareholder Information .........................................................................................................................................................................74

Jameson Resources Annual Report 2012 |

Contents

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CHAIRMAN’S LETTER

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and will support the advancement of our projects.
I look forward to the increased field activity in 2012 / 2013 and seeing milestones achieved.
David Fawcett
Chairman
26 September 2012
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2 | Jameson Resources Annual Report 2012

Chairman’s Letter

DIRECTORS’ REPORT

David Fawcett

Mr Fawcett is a mining engineer with 36 years’ experience in the coal industry, primarily in Western Canada and has played a major role

John Holmes Managing Director BSc MAIG Mr Holmes is a geologist with over 20 years’ experience in the mineral exploration sector throughout Australasia including project management roles with some of Australia’s leading resource companies. Mr Holmes has significant high level commercial and technical experience in the thermal and metallurgical coal sector in Western Canada. Mr Holmes is a Founding Director of the Company and based in Perth, Western Australia

T. Arthur Palm Executive Director – Operations (appointed 1 August 2011 from Non-Executive Director) B.S. Mining Engineering, MBA Mr Palm is a professional mining engineer with 30 years’ of mining related operational experience, including responsibilities in open-pit and underground coal mining in North America. Mr Palm has recently focused on consulting activities with Mencon LLC, providing operations support, engineering and environmental services, and technical support to the mining industry. He recently completed a comprehensive feasibility study and assisted in mine development for a new coal mining operation in the western United States.

Jeff Bennett Non-Executive Director BComm CPA Mr Bennett has over 20 years’ experience in the resource, transport, IT and service industries. Mr Bennett has held senior financial positions at Intermoco Limited, Simoco Pacific, BHP, and Shell. His experience extends to corporate finance, capital markets, acquisitions and divestments and risk management.

Jameson Resources Annual Report 2012 | 3

Directors’ Report

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David Prentice Non-Executive Director Grad.Dip.BA, MBA

Mr Prentice’s career includes 21 years’ experience in commercial management and business development within the natural resources sector, working for some of Australia’s leading resource companies.

Directorships of other listed companies

Directorships of other listed companies held by directors in the 3 years immediately before the end of the financial year are as follows:

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Name Company Period of directorship
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David Fawcett	-	-
John Holmes	-	-
T. Arthur Palm	-	-
Jeff Bennett	Entellect Solutions Limited	20 May2008 – date
David Prentice	Challenger Energy Limited	23 January 2007 – 26 March 2012
	Red Fork Energy Limited	20 April 2004 – date

COMPANY SECRETARY

The following person has held the position of company secretary during or at the end of the financial year:

Suzie Foreman

Ms Foreman is a Chartered Accountant with over 16 years’ of experience within the UK and Australia. Ms Foreman has 8 years’ combined experience with KPMG and a boutique accounting firm specialising in the areas of audit, advisory and corporate services. Ms Foreman has extensive skills in the areas of financial and management reporting, due diligence and ASX corporate compliance. Ms Foreman is a director of Athena Corporate Pty Ltd and had been involved in the listing of ten exploration companies on the ASX and AIM markets in the last five years with capital raisings exceeding $65 million. Ms Foreman is also Company Secretary to ASX listed entities Red Fork Energy Limited, Killara Resources Limited and Merah Resources Limited.

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4 | Jameson Resources Annual Report 2012

Directors’ Report

Exploring and Developing Western Canadian Coal Projects

2. CORPORATE STRUCTURE

4. OPERATING RESULTS

Jameson Resources Limited is a public company listed on the ASX (Code: JAL) and is incorporated and domiciled in Western Australia. Jameson Resources Limited and its wholly owned subsidiaries NWPC Pty Ltd, NWP Coal Canada Ltd and Dunlevy Energy Inc are collectively referred to as Jameson, or the Group, as the context requires.

The loss of the Group amounted to $1,508,416 (2011: $492,432).

5. DIVIDENDS PAID OR RECOMMENDED

The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report.

3. PRINCIPAL ACTIVITIES

6. REVIEW OF OPERATIONS

The principal activity of the Group during the financial year was mineral exploration.

On 20 October 2011 Jameson Resources Limited (“Jameson” or “the Company”) announced that it had entered into a Sale and Purchase Agreement to acquire Dunlevy Energy Inc. which includes the Dunlevy coal project (“Dunlevy Project”). In addition the Company has entered into a binding Letter of Intent to acquire certain assets of Nexx Coal Inc (“Nexx”), which includes the Graham River, Peace Reach and Carbon East coal projects (“Nexx Projects”) located in northeast British Columbia, Canada.

In conjunction with the acquisition of the Dunlevy Project and the Nexx Projects (“the Projects”), the Company strengthened its management team with the appointment of Canada-based coal mining executive Mr David Fawcett as Non-Executive Chairman of the Company.

On 10 November 2011, the Company entered into a Sale and Option Agreement with Saturn Minerals Inc. to acquire an initial 10% interest with an option to earn up to a further 50% interest in the Red Earth coal project (“Red Earth Project”) located in eastern Saskatchewan, Canada.

Other than as stated above, there were no significant changes in the nature of the Group’s principal activities during the financial year.

Jameson Resources Ltd (“Jameson” or “the Company”) is focused on the acquisition, exploration and development of strategic coal projects in western Canada. Western Canada benefits from worldclass railways and deep water ports, which allow the Provinces of British Columbia and Alberta to be among of the leading metallurgical coal suppliers to the seaborne market.

During the financial year ended 30 June 2012, the Company strengthened its metallurgical coal project portfolio with the acquisition of the Dunlevy, Carbon East, Peace Reach and Graham River projects all of which are located in the Peace River coal fields in north east British Columbia. As part of the Dunlevy transaction, Mr David Fawcett has been appointed as Chairman.

Together with the Crown Mountain project, Jameson has now acquired a portfolio of exploration projects in the two most prolific metallurgical coal fields in western Canada.

Also during the year, Jameson entered into a sale and option agreement with Saturn Minerals Inc. on its Red Earth coal project (“Red Earth Project”) located in eastern Saskatchewan, Canada. A reconnaissance drilling program was undertaken by Saturn during the year. Jameson now holds a 20% interest in the Red Earth Project.

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Jameson Resources Annual Report 2012 | 5

Directors’ Report

British Columbia

Elk Valley Coal Field - Crown Mountain Project

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6 | Jameson Resources Annual Report 2012
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Directors’ Report

“ Crown Mountain sits in the heart of this lucrative production hub in close proximity to two significant metallurgical coal mines, Line Creek which is 10km to the north, and Elkview which is 8km to the southwest. The Project includes five granted coal licences.”

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Jameson Resources Annual Report 2012 | 7

Directors’ Report

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8 | Jameson Resources Annual Report 2012

Directors’ Report

“ The British Columbia Ministry of Energy and Mines approved and issued the Company’s Notice of Work application along with other associated permits. The approvals will allow the Company to drill up to 33 holes from 22 drill sites with the primary objective being to confirm coal quality, seam thickness and acquire all necessary data for resource estimation purposes.”

Jameson Resources Annual Report 2012 |

Directors’ Report

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“ Based on previous drilling, the coal seams range in thickness from 1.5m to 14m. The seams are part of the Mist Mountain Formation and appear to correlate with the No. 8, No. 9 and No. 10 seams, all of which are mined at the Line Creek Mine located 10km north of Crown Mountain.”

Drill holes are designed to penetrate the entire coal bearing stratigraphic sequence and will be terminated in the Moose Mountain Formation, (a basal sandstone unit). Drilling will be undertaken using a multi-purpose track-mounted rig with holes ranging in depth from 120m to 225m. Down-hole geophysics will be undertaken on all holes. Coal quality test work will be carried out on selected samples and will include proximate analysis, ultimate analysis, petrography, washability and a selection of other tests for metallurgical coal.

Other exploration activities including mapping and additional geological modelling will be undertaken as part of the program.

Baseline environmental monitoring including hydrology, surface water quality, wild life and fisheries studies will be undertaken as the project advances.

The approved drilling program commenced 9th August 2012 and is expected to be finished by mid-September. Resource modelling activities will be undertaken by the Company’s technical consultants Norwest Corporation as soon as all coal quality data has been received. The Company expects to file its inaugural JORC/NI43101 compliant resource for the Crown Mountain Project by the end of 2012.

Name	Licence Number	Status	Area (Ha)	Annual Rent
North Block	418150	Granted	334	$2,338
South Block	418151	Granted	1,001	$7,007
West Crown	418153	Granted	251	$1,757
West Alexander	418154	Granted	835	$5,845
Crown East	418152	Granted	167	$1,169
TOTAL			2,588	$18,116
Table 1 – Crown Mountain Coal License Summary Table (CAD)

10 | Jameson Resources Annual Report 2012

Directors’ Report

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Figure 3: Crown Mountain Summary Plan

Jameson Resources Annual Report 2012 |

Directors’ Report

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12 | Jameson Resources Annual Report 2012 Directors’ Report

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British Columbia

Peace River Coal Field – Dunlevy Project

Jameson Resources Annual Report 2012 | 13

Directors’ Report

Dunlevy – View of west limb of Dunlevy Syncline looking north west

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The Peace River projects are located in a well-developed area, approximately 90 km from Fort St. John, a regional commercial centre. All weather roads and good quality secondary roads link the Projects to Fort St. John and Chetwynd, where Canadian National Railway’s track is located. The rail leads to the Westshore, Neptune and Ridley coal terminals. There is also potential to reduce transportation costs by utilising waterways bordering the property to transport coal by barge to rail access.

In 2009 Dunlevy Energy Inc. completed reconnaissance field work over the Dunlevy Project including hand trenches and exposed a number of separate occurrences of potential economic interest. A total of 53 hand trenches were completed along new and existing road cuts and trails exposing coal seams of potential economic thickness. Mapping from these trenches yielded 9 coal occurrences ranging in thickness from 0.8m to 3.5m. As these samples were weathered, assessment of any metallurgical coal properties could not be accurately determined.

Exploration in what is now known as the Peace Reach area of Williston Lake (immediately upstream of Peace River canyon) dates back to the 1700’s when the Peace River served as a major transportation corridor for fur traders. By 1910, the economic potential for coal within the Peace River region was noted through government funded geological expeditions. Subsequently, there has been relatively continuous geological interest, common to both industry and government that centred largely on the oil, gas and coal potential.

Jameson plans to commence drilling and other exploration activities as soon as regulatory approvals are in place. Prior to licenses being issued, the Company plans to undertake low impact exploration activities which are permitted under the British Columbia Mines Act. Activities will include geological mapping and hand trenching at selected locations within all the Peace River Projects.

Additional mapping will be carried out over northern parts of the Dunlevy project. The objective of the mapping and trenching program over the Carbon East, Peace Reach and Graham River projects will be to determine coal seam thickness and geological structure in preparation for the lodgement of a Notice of Work to undertake initial drill testing. Coal seams of appreciable thickness have been exposed in forestry road cuts at Carbon East. Proximate analysis and reflectance will be undertaken on selected samples from the hand trenches.

The present Dunlevy Project coal license applications comprise selected portions of what was once known as the Dunlevy Project (Utah Mines Ltd) and the Williston Property (Hudson’s Bay Oil and Gas Ltd.). Only minor exploration including geological mapping, prospecting, and drilling was undertaken within the project area. Utah Mines Ltd completed 1 diamond drill hole totalling 246 metres on the east limb of the Dunlevy Creek syncline. The hole was drilled to test the Gething Formation. It is unclear whether the hole actually intersected the Gething Formation. Hudson’s Bay Oil and Gas Ltd. and Cyprus Anvil Mining Corp. drill tested parts of the Dunlevy Creek syncline with 8 holes totalling 1,256 metres. All of these holes were drilled outside and to the south east of the Project boundary. The holes appear to have tested the stratigraphic interval below the Gething Formation in what is known as the Cadomin Formation. At that time access to the current coal target area was limited; subsequently, however, new forestry roads have been cut across the coal measures exposing multiple occurrences. The Gething coal measures are recessive and generally have a cover of unconsolidated overburden that limits bedrock exposure.

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14 | Jameson Resources Annual Report 2012

Directors’ Report

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Figure 5: Dunlevy – Summary Plan

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Figure 6: Dunlevy South – Simplified Cross Section

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Jameson Resources Annual Report 2012 |

Directors’ Report

Carbon East Project – Coal seam exposure in Forestry Road Cutting

Name	License		Area
	Number	Status	(Ha)	Rent
Dunlevy	417666	Application	3,000	$21,000
Dunlevy	417689	Application	4,500	$31,500
Dunlevy	417691	Application	5,800	$40,600
Dunlevy	417694	Application	4,205	$29,435
Dunlevy	417703	Application	5,800	$40,600
Dunlevy	417704	Application	870	$6,090
Dunlevy	417742	Application	3,843	$26,898
TOTAL			28,018	$196,123

16 | Jameson Resources Annual Report 2012

Directors’ Report

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Jameson Resources Annual Report 2012 | 17

Directors’ Report

Dunlevy – Outcropping Coal Seam

Name	License		Area
	Number	Status	(Ha)	Rent
Graham
River	417739	Application	3,480	$24,360
Graham
River	417740	Application	4,350	$30,450
Graham
River	417741	Application	3,625	$25,375
Carbon East	417727	Application	2,734	$19,138
Peace Reach	417743	Application	4,568	$31,973
TOTAL			18,757	$131,296

18 | Jameson Resources Annual Report 2012

Directors’ Report

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“ Mapping from these trenches yielded 9 coal occurrences ranging in thickness from
0.8m to 3.5m. Jameson plans to commence drilling and other exploration activities
as soon as regulatory approvals are in place.”
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Directors’ Report Jameson Resources Annual Report 2012 | 19

Red Earth Coal Project

Saskatchewan

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Red Earth Coal Project – Drilling Activity
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20 | Jameson Resources Annual Report 2012

Directors’ Report

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Figure 7: Red Earth Coal Project – Location Plan

Jameson Resources Annual Report 2012 | 21

Directors’ Report

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Name	License		Area
	Number	Status	(Ha)	Rent
Red Earth	CPP 1228	Granted	768	$4,224
Red Earth	CPP 1229	Granted	768	$4,224
Red Earth	CPP 1231	Granted	768	$4,224
Red Earth	CPP 1233	Granted	768	$4,224
Red Earth	CPP 1234	Granted	768	$4,224
Red Earth	CPP 1235	Granted	768	$4,224
TOTAL			4,608	$25,344

Table 4 – Red Earth Coal Project – License Summary Table (CAD)

Reach and Carbon East coal projects (“Nexx Projects”) located in northeast British Columbia, Canada. Further details on the relevant acquisition terms are detailed in the Entitlements Issue Prospectus dated 11 November 2011 and ASX announcements dated 20 October 2011 and 10 November 2011.

Mr David Fawcett was appointed as Non-Executive Chairman and a member of the Board effective 23 December 2011.

Other than detailed in the Review of Operations and stated above, there were no other significant changes in the state of affairs of the Company during the financial year.

7. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

8. AFTER BALANCE DATE EVENTS

During the year, the Company raised a total of $9.1 million (before associated costs) via the following:

On 10 August 2012, the Company announced the commencement of drilling on its Crown Mountain coal project.

�� shares at $0.12 each;

On 20 September 2012, the Company announced an expanded drill program of 8 – 10 additional drill holes on the Crown Mountain coal project in addition to the existing 25 holes. The expansion is as a result of the British Columbia Ministry of Energy and Mines approving an additional Notice of Work.

�� existing shareholders at $0.10 each; and
�� sophisticated and professional investors at $0.20 per share.

175,000 unlisted options expiring 31 May 2012 and exercisable at $0.35 lapsed unexercised, and 5,000,000 performance shares issued to shareholders of NWPC Pty Ltd will not convert into fully paid ordinary shares as completion of milestones associated with the Basin Coal project cannot now be achieved and therefore have expired.

Other than as detailed above, no matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

During the year, the Company entered into a Sale and Purchase Agreement to acquire Dunlevy Energy Inc. which includes the Dunlevy coal project (“Dunlevy Project”). In addition, the Company entered into a binding Letter of Intent to acquire certain assets of Nexx Coal Inc (“Nexx”) which includes the Graham River, Peace

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22 | Jameson Resources Annual Report 2012

Directors’ Report

9. MEETINGS OF DIRECTORS

The number of directors’ meetings held during the financial year each director held office, and the number of meetings attended by each director is as follows:

	Directors	Meetings	Remuneration Committee	Remuneration Committee
Director	Number Eligible	Meetings	Number Eligible	Number Eligible
	to Attend	Attended	to Attend	to Attend
David Fawcett	3	3	1	1
John Holmes	7	7	-	-
T. Arthur Palm	7	7	-	-
David Prentice	7	4	1	1
Jeff Bennett	7	7	1	1

The Company does not have a formally constituted audit committee as the board considers that the Company’s size and type of operation do not warrant such a committee.

10. FUTURE DEVELOPMENTS

Jameson is focusing project generation activities on the coal sector in Western Canada and to this end the Company is currently evaluating several high quality metallurgical and thermal coal opportunities. The Company is aiming to enhance its profile and strength through the acquisition or joint venture of one of these projects.

11. ENVIRONMENTAL ISSUES

The Company is aware of its environmental obligations with regards to its exploration activities and ensures that it complies with all regulations when carrying out any exploration work. The directors of the Company are not aware of any breach of environmental regulations for the year under review.

The directors have considered the National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which introduces a single national reporting framework for the reporting and dissemination of information about the greenhouse gas emissions, greenhouse gas projects, and energy use and production of corporations. At the current stage of development, the directors have determined that the NGER Act will have no effect on the Company for the current or subsequent financial year. The directors will reassess this position as and when the need arises.

12. REMUNERATION REPORT (Audited)

Remuneration Policy

The remuneration policy of Jameson Resources Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component, which is assessed on an annual basis in line with market rates and offering specific long-term incentives based on key performance areas affecting the Group’s financial results. The board of Jameson Resources Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best directors and executives to run and manage the Group.

The board’s policy for determining the nature and amount of remuneration for board members and senior executives of the Group is as follows:

The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed by the board. This has now been delegated to the Remuneration Committee, who considers all remuneration matters for executives, nonexecutives and senior personnel and makes recommendations to the Board. All executives receive a base salary (which is based on factors such as length of service and experience) and superannuation. The Remuneration Committee reviews executive packages annually by reference to the Group’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries.

The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is to attract the highest calibre of executives and reward them for performance that results in long-term growth in shareholder wealth. Executives are also entitled to participate in the employee share and option arrangements. No incentive bonuses, shares or options were granted or provided to directors or executives during the current financial year. A Performance Rights Plan (PRP) was implemented by the Board and approved by shareholders at the 2011 Annual General Meeting. A total of 10.4 million Performance Rights were issued to directors during the year with vesting conditions linked to the Company’s key projects. Numbers granted are detailed in Note 15(fc) of the Company’s financial statements and vesting conditions are also outlined in Note 15(g).

Jameson Resources Annual Report 2012 | 23

Directors’ Report

The executive directors receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits.

All remuneration paid to directors and executives is valued at the cost to the Company and expensed. Options are valued using the BlackScholes method.

The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is currently at $250,000 as approved by shareholders at a General Meeting. Fees for non-executive directors are not linked to the performance of the Group. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company and able to participate in executive / employee incentive plans (such as the PRP referred to above) if deemed relevant and appropriate.

Performance based remuneration

The Company currently has no performance based remuneration component built into director and executive remuneration packages.

Company performance, shareholder wealth and director’s and executive’s remuneration

The remuneration policy has been tailored to increase goal congruence between shareholders and directors and, executives. Previously this was facilitated through the issue of options to the majority of directors and executives to encourage the alignment of personal and shareholder interests. These however expired during the year and due to changes in taxation legislation, the Company believed continuing this policy would be ineffective in aligning shareholder and director interests. A Performance Rights Plan (“PRP”) was therefore implemented with individual performance rights issued and linked to the achievement of milestones in the Company’s key projects. Given the recent issuance of the Performance Rights and that the Crown Mountain, Dunlevy and Nexx projects have not yet reached a stage to trigger the vesting conditions, these milestones still remain realistic and achievable, and the performance incentives provided to the board remain effective in aligning shareholder and director interests.

For details of directors’ and executives’ interests in shares, options and performance rights during and at year end, refer Note 15 of the financial statements.

Employment contracts of key management personnel

For details of service agreements between key management personnel and Jameson Resources Limited, refer Note 15 of the financial statements.

24 | Jameson Resources Annual Report 2012

Directors’ Report

(a) Compensation of Key Management Personnel

Remuneration Policy

The Remuneration Committee is responsible for reviewing compensation arrangements for the executive team and reporting its recommendations to the Board for final determination. The Remuneration Committee will assess the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. Remuneration of Key Management Personnel is set out below.

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SHORT-TERM BENEFITS POST EMPLOYMENT SHARE-BASED PAYMENT TOTAL
Salary Cash Non- Super- Termin- Perfor- Options $
& Fees Bonus Monetary annuation ation mance
Benefits Rights
Directors
David Fawcett – Non-Executive Chairman
2012 (i) 86,365 - - - - - - 86,365
2011 - - - - - - - -
Jeff Bennett – Non-Executive Director
2012 44,273 - - - - 11,790 - 56,063
2011 60,000 - - - - - - 60,000
John Holmes – Managing Director
2012 200,000 - - 18,000 - 39,300 - 257,300
2011 200,000 - - 18,000 - - - 218,000
David Prentice – Non-Executive Director
2012 30,000 - - 2,700 - 11,790 - 44,490
2011 30,000 - - 2,700 - - - 32,700
Stephen Anastos (iii)
2012 - - - - - - - -
2011 30,000 - - 2,700 - - - 32,700
T. Arthur Palm –Executive Director - Operations ^
2012 (ii) 170,673 - - - - 39,300 - 209,973
2011 198,287 - - - - - - 198,287
Specified Executive
Suzie Foreman – Company Secretary [ †]
2012 79,872 - - - - - - 79,872
2011 56,441 - - - - - - 56,441
Total Remuneration
2012 611,183 - - 20,700 - 102,180 - 734,063
2011 574,728 - - 23,400 - - - 598,128
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Athena Corporate Pty Ltd, a company Ms Foreman has an interest in, receives fees from Jameson Resources Limited for corporate, accounting and company secretarial services on normal commercial terms. These are included in the remuneration above.

^ During the year Mencon LLC, a US based company of which Mr T. Arthur Palm is a member received $11,714 (2011: $147,182) as consulting fees for Mr Palms technical services. These services were provided outside of director duties performed, and were provided on normal commercial terms. The fees have been included as part of director’s remuneration above.

During the year Coalworks Inc, a Canadian based company of which Mr D Fawcett is a member received $25,114 (2011: nil) as consulting fees for Mr Fawcett’s technical services. These services were provided outside of director duties performed, and were provided on normal commercial terms. The fees have been included as part of director’s remuneration above.
(i) Appointed 23 December 2011.

(ii) Appointed Executive Director – Operations from Non-Executive Director 1 August 2011.

(iii) Resigned 31 May 2011.

(b) Compensation Options: Granted and vested during and since the financial year ended 30 June 2012

During and since the financial year ended 30 June 2012, no compensation options were granted or vested to directors.

Jameson Resources Annual Report 2012 | 25

Directors’ Report

(c) Share and Option holdings

All equity dealings with directors have been entered into with terms and conditions no more favourable than those that the Company would have adopted if dealing at arm’s length. The relevant interests of each director in share capital at the date of this report are as follows:

Directors	Number	Number	Number of	Number of
	of Shares	of Options (i)	Performance	Exchangeable
David Fawcett(a)	-	-	Rights (ii) -	Shares (iii) 14,000,000
Jeff Bennett(b)	437,500	-	1,200,000	-
John Holmes(c)	320,000	83,333	4,000,000	-
David Prentice(d)	1,750,001	-	1,200,000	-
T. Arthur Palm	250,000	83,333	4,000,000	-
Total	2,757,501	166,666	10,400,000	14,000,000

(a) Mr Fawcett was granted 4,000,000 exchangeable shares in the Company’s wholly owned Canadian subsidiary NWP Coal Canada and may be exchanged for Jameson fully paid ordinary shares on an one for one basis upon completion of relevant milestones pursuant to the “Dunlevy” Share Exchange Agreement. A further 10,000,000 Exchangeable Shares were issued to Nexx Coal Inc, a company in which Mr Fawcett is the sole shareholder pursuant to the terms of the Binding Letter of Intent between Jameson and Nexx Coal Inc. Further details on the relevant acquisition terms of the projects are detailed in the Entitlements Issue Prospectus dated 11 November 2011, and ASX announcements dated 20 October 2011 and 10 November 2011, and Note 12 (g).
(b) Hixon Pty Ltd, an entity controlled by Jeff Bennett holds 437,500 shares and 1,200,000 performance rights in the Company.
(c) Mr John Holmes (Holmes Super Fund A/C) holds 320,000 fully paid ordinary shares and 83,333 options. The 4,000,000 performance rights are held by Mrs Teresa Maria Holmes (wife of Mr John Holmes).
(d) Mr David Prentice and Mrs Mirella Prentice (D&M Prentice Family A/C) holds 1,166,667 fully paid ordinary shares and 600,000 performance rights. Mr David Prentice and Mrs Mirella Prentice hold the remaining shares and performance rights.
(i) Refer to note 15 (d) for terms of options granted to directors.
(ii) Refer to note 15 (e) for details of performance rights issued to directors.
(iii) Refer to note 27 for details of exchangeable shares.

(d) Performance income as a proportion of total income

No performance based bonuses have been paid to key management personnel during the financial year.

END OF REMUNERATION REPORT

13. OPTIONS

At the date of this report unissued ordinary shares of the Company under option are:

Expiry Date	Exercise Price	Number of Shares
31 March 2013	$0.50	175,000
30 September 2014	$0.15	9,233,333

No ordinary shares have been issued as a result of the exercise of options during or since the end of the financial year.

No options have been cancelled during the year. 175,000 options exercisable at $0.35, expired during the year unexercised.

14. INDEMNIFYING OFFICERS OR AUDITOR

In accordance with the constitution, except as may be prohibited by the Corporations Act 2001 every Officer, auditor or agent of the Company shall be indemnified out of the property of the Company against any liability incurred by him in his capacity as Officer, auditor or agent of the Company or any related corporation in respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.

26 | Jameson Resources Annual Report 2012

Directors’ Report

The Company currently has a directors’ and officers’ liability insurance in place. A total premium of $10,600 had been paid for cover period from 31 January 2012 to 31 January 2013. Under the terms of the policy, the Company is covered for a limit of up to $5 million in aggregate against loss by reason of a wrongful act by the directors and officers during the period of insurance. No excess fee is payable for loss from such claims. The Company is also insured for the reimbursement of any payment by the Company following a successful defence of any wrongful act committed or alleged to have been committed by a Director or Officer of the Company during the period of Insurance. An excess fee of $20,000 is payable for loss from such claims.

15. PROCEEDINGS ON BEHALF OF 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 these proceedings.

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

16. AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration for the year ended 30 June 2012 has been received and can be found on page 28 of the annual report and forms part of this director’s report.

17. NON-AUDIT SERVICES

The board of directors is satisfied that the provision of non-audit services performed during the year by the Company’s auditors is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The directors are satisfied that the services as disclosed in Note 3 did not compromise the external auditor’s independence for the following reason:

�� APES 110 (Code of Ethics for Professional Accountants).

18. COMPETENT PERSONS STATEMENT

The information pertaining to the technical content of this report has been reviewed by Mr John Holmes, who is a member of the Australian Institute of Geoscientists. Mr. Holmes is employed by Jameson Resources Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Holmes consents to the inclusion in the report of the technical information in the form and context in which it appears.

Signed in accordance with a resolution of the Board of Directors.

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John Holmes Managing Director Dated this 26th day of September 2012

Jameson Resources Annual Report 2012 | 27

Directors’ Report

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Jameson Resources Limited for the year ended 30 June 2012, I declare that to the best of my knowledge and belief, there have been no contraventions of:

a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

b) any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Jameson Resources Limited.

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Perth, Western Australia 26 September 2012

N G NEILL Partner, HLB Mann Judd

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28 | Jameson Resources Annual Report 2012

Auditor’s Independence Declaration

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Consolidated Consolidated
Year Ended Year Ended
30 June 2012 30 June 2011
Note $ $
Revenue 2 125,192 70,647
Unrealised gain on financial assets 10 - 48,750
Employee benefits expense (411,605) (267,035)
Corporate and compliance fees (384,714) (193,130)
Consultancy expense (382,469) (129,800)
Exploration costs expensed (56,307) (121,805)
Administration expenses (275,246) (87,366)
-
Equity based payments (102,180)
Depreciation and amortisation (10,743) (6,382)
Interest and finance expenses (4,719) (947)
Write off exploration project 2 - 24,578
Foreign exchange translation expense - (5,684)
Impairment expense 10 (5,625) -
Loss before income tax expense (1,508,416) (668,174)
Income tax benefit 4 - 175,742
Net loss for the year (1,508,416) (492,432)
Other comprehensive income
Exchange differences on translation of foreign operations (236,618) 16,387
Other comprehensive (loss)/income for the year (236,618) 16,387
Total comprehensive (loss)/income for the year (1,745,034) (476,045)
Basic loss per share (cents per share) 20 (1.20) (0.6)
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The accompanying notes form part of these financial statements

Jameson Resources Annual Report 2012 | 29

Statement of Comprehensive Income

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As at 30 June 2012
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Consolidated Consolidated
as at as at
30 June 2012 30 June 2011
Note $ $
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5 7,241,129 1,544,569
Trade and other receivables 6 82,517 185,683
Other assets 7 46,854 11,200
TOTAL CURRENT ASSETS 7,370,500 1,741,452
NON CURRENT ASSETS
Deferred exploration and evaluation expenditure 8 6,637,298 450,089
Plant and equipment 9 40,430 11,441
Financial assets 10 219,375 225,000
Other assets 7 37,280 16,475
TOTAL NON CURRENT ASSETS 6,934,383 703,005
TOTAL ASSETS 14,304,883 2,444,457
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 11 206,476 180,792
Provisions 16,196 12,308
TOTAL CURRENT LIABILITIES 222,672 193,100
TOTAL LIABILITIES 222,672 193,100
NET ASSETS 14,082,211 2,251,357
EQUITY
Issued capital 12 22,169,243 9,256,380
Reserves 13 875,189 448,782
Accumulated losses 14 (8,962,221) (7,453,805)
TOTAL EQUITY 14,082,211 2,251,357
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The accompanying notes form part of these financial statements

30 | Jameson Resources Annual Report 2012

Statement of Financial Position

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STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2012
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Consolidated Consolidated
Year ended Year ended
30 June 2012 30 June 2011
Note $ $
Cash Flows from Operating Activities
- Interest received 135,921 59,918
- British Columbia Mining Tax Credit 168,205 -
- Payments to suppliers and employees (1,075,417) (565,894)
Net cash used in operating activities 21 (ii) (771,291) (505,976)
Cash Flows from Investing Activities
- Payments for exploration (1,353,268) (752,873)
- Payments for plant and equipment (38,225) (1,432)
- Payments for financial assets - (56,250)
- Payments for equity investments (664,364) -
Net cash used in investing activities (2,055,857) (810,555)
Cash Flows from Financing Activities
- Proceeds from issue of shares 9,119,480 1,437,433
- Payments for share issue costs (595,772) (113,329)
Net cash provided by financing activities 8,523,708 1,324,104
Net increase/(decrease) in cash and cash equivalents 5,696,560 7,573
Cash and cash equivalents at beginning of reporting year 1,544,569 1,536,996
Cash and cash equivalents at 30 June 2012 21 (i) 7,241,129 1,544,569
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The accompanying notes form part of these financial statements

Jameson Resources Annual Report 2012 | 31

Statement of Cash Flows

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STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2012
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2011 Consolidated Issued Accumulated Equity Foreign Total
Capital Losses Based Currency
Payment Reserve
Reserve
$ $ $ $ $
Balance at 1 July 2010 7,932,272 (6,961,373) 439,865 (7,470) 1,403,294
Loss for the year - (492,432) - - (492,432)
Foreign exchange translation - - - 16,387 16,387
Total comprehensive income - (492,432) - 16,387 (476,045)
Share capital net of capital raising costs 1,324,108 - - - 1,324,108
Balance at 30 June 2011 9,256,380 (7,453,805) 439,865 8,917 2,251,357
2012 Consolidated Issued Accumulated Equity Foreign Total
Capital Losses Based Currency
Payment Reserve
Reserve
$ $ $ $ $
Balance at 1 July 2011 9,256,380 (7,453,805) 439,865 8,917 2,251,357
Loss for the year - (1,508,416) - - (1,508,416)
Foreign exchange translation - - (236,618) (236,618)
Total comprehensive income - (1,508,416) - (236,618) (1,745,034)
Issue of performance rights - - 102,180 - 102,180
Issue of options - - 560,845 - 560,845
Issue of exchangeable securities 4,950,000 - - - 4,950,000
Share capital net of capital raising costs 7,962,863 - - - 7,962,863
Balance at 30 June 2012 22,169,243 (8,962,221) 1,102,890 (227,701) 14,082,211
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The accompanying notes form part of these financial statements

32 | Jameson Resources Annual Report 2012

Statement of Changes in Equity

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For the Year Ended 30 June 2012
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NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the law.

The financial report has also been prepared on a historical cost basis unless otherwise stated.

The Company is a listed public company, incorporated and operating in Australia. The entity’s principal activities are mineral exploration.

The financial report is presented in Australian dollars.

(b) Adoption of new and revised standards

Changes in accounting policies on initial application of Accounting Standards

In the year ended 30 June 2012, the Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period.

It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies.

The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2012. As a result of this review, the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Group accounting policies.

(c) Statement of Compliance

The financial report was authorised for issue on 26 September 2012.

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

(d) Critical accounting judgements and key sources of estimation uncertainty

The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Share-based payment transactions:

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a Black and Scholes model, using the assumptions detailed in Note 17.

The Group measures the cost of cash-settled share-based payments at fair value at the grant date using the Black and Scholes formula taking into account the terms and conditions upon which the instruments were granted, as discussed in Note 17.

Jameson Resources Annual Report 2012 | 33

Notes to the Financial Statements

The fair value is expensed over the period until vesting with recognition of a corresponding fair value liability. The liability is remeasured to fair value at each balance date up to and including the settlement date with changes in fair value recognised in profit or loss.

(e) Revenue Recognition

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

Interest income

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

(f) Cash and cash equivalents

Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(g)

Trade and other receivables

Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. Trade receivables are generally due for settlement within periods ranging from 15 days to 30 days.

(h)

Impairment of assets

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

(i) Financial assets carried at amortised cost

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

The amount of the loss is recognised in profit or loss.

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

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

(ii) Financial assets carried at cost

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

(iii) Available-for-sale investments

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

34 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

(i) Income tax

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

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

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of 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 carry-forward of unused tax credits and unused tax losses can be utilised, except:

�� 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
�� 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 statement of financial position 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 statement of financial position 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 statement of financial position 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.

(j) Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:
�� GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
��

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.

(k) Plant and equipment

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

Depreciation is calculated over the estimated useful life of the assets as follows:
Plant and equipment – over 5 to 15 years (straight line basis)
Computer equipment – 3 years (diminishing value)
Leasehold improvements – term of the lease (straight line basis)

Jameson Resources Annual Report 2012 | 35

Notes to the Financial Statements

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

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

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

For plant and equipment, impairment losses are recognised in the statement of comprehensive income in the cost of sales line item.

Derecognition and disposal

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

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

(l) Financial assets

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial yearend. All regular way purchases and sales of financial assets are recognised on the trade date, i.e. the date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.

(i) Financial assets at fair value through profit or loss

Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss.

(m) Trade and other payables

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

(n) Provisions

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

When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate assets but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.

When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

(o) Employee leave benefits

Wages, salaries, annual leave and sick leave

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

36 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

(p) Share-based payment transactions

Equity settled transactions:

The Group provides benefits to employees (including senior executives) in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

There is currently an Employee Share Option Plan (ESOP) in place to provide these benefits to directors, senior executives and employees.

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a Black-Scholes model, further details of which are given in Note 16.

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

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

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:

(i) the extent to which the vesting period has expired; and
(ii) the Group’s best estimate of the number of equity instruments that will ultimately vest.

No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

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

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

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

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see Note 20).

(q) 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.

(r) Earnings per share

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

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

��
�� expenses; and
�� ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

Jameson Resources Annual Report 2012 | 37

Notes to the Financial Statements

(s) Exploration and evaluation

Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

(i) the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions is also met:
(a) the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively,
(b) by its sale; or
(c) exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

(t) Foreign currency translation

Both the functional and presentation currency of Jameson Resources Limited and its Australian subsidiaries is Australian dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance date.

All exchange differences in the consolidated financial report are taken to profit or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

The functional currency of the foreign operations, NWP Coal Canada and Dunlevy Energy Inc is Canadian dollars, “CAD”.

As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation currency of Jameson Resources Limited at the rate of exchange ruling at the balance date and income and expense items are translated at the average exchange rate for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used.

The exchange differences arising on the translation are taken directly to a separate component of equity, being recognised in the foreign currency translation reserve.

38 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.

In addition, in relation to the partial disposal of a subsidiary that does not result in the Group losing control over a subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or jointly controlled entities that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

(u) Basis of Consolidation

The consolidated financial statements comprise the financial statements of Jameson Resources Limited and its subsidiaries as at 30 June each year (the Group). Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Control exists where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The purchase method of accounting involves allocating the cost of the business combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the consolidated financial statements include the results of subsidiaries for the period from their acquisition.

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NOTE 2. REVENUES AND EXPENSES Consolidated Consolidated
Year Ended Year Ended
30 June 2012 30 June 2011
$ $
The following revenue and expense items are relevant in
explaining the financial performance for the year:
- Interest received 125,192 70,647
Total income 125,192 70,647
Employee benefit expense
- Salaries 411,605 267,035
Project generation costs expensed 54,909 121,805
Depreciation and amortisation
- Depreciation expense 6,071 3,118
- Amortisation 4,672 3,264
Total depreciation and amortisation expense 10,743 6,382
Net change in fair value of non-current asset
- Write off capitalised exploration expenditure - (24,578)
Total write off of non-current assets - (24,578)
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NOTE 3. AUDITORS’ REMUNERATION

The auditor of Jameson Resources Limited is HLB Mann Judd Amounts received or due and receivable to the auditor for:
- Auditing or reviewing the financial report	26,900 26,350
- Preparation of Investigating Accountant’s report	11,000 -
	37,900 26,350

Jameson Resources Annual Report 2012 | 39

Notes to the Financial Statements

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NOTE 4. INCOME TAX Consolidated Consolidated
Year Ended Year Ended
30 June 2012 30 June 2011
$ $
a. The components of tax expense comprise:
Current tax - (175,742)
Deferred tax - -
- (175,742)
b. The prima facie tax benefit on loss before income tax
is reconciled to the income tax as follows:
Prima facie tax benefit on loss before income tax
at 30% (2011: 30%) (452,524) (200,452)
Add:
Tax effect of:
- Revenue losses not recognised 248,198 194,030
- Other non-allowable items 308,636 79,040
- Equity based payments 30,654 -
134,964 72,618
Less:
Tax effect of:
- Mining Tax Credit (Canada) - 175,742
- Other deferred tax balances not recognised 134,964 72,618
Income tax attributable to entity - benefit - (175,742)
The applicable weighted average effective tax rates is as follows: 0% 0%
c. Deferred tax recognised at 30 June relates to the following:
Deferred tax liabilities:
Financial assets (3,937) (5,625)
Other (309) (3,597)
Deferred tax assets:
Carry forward revenue losses 4,246 9,222
Net deferred tax - -
d. Unrecognised deferred tax assets:
Carry forward revenue losses 975,050 726,852
Capital raising costs 347,938 134,905
Provisions and accruals 10,118 11,127
1,333,106 872,884
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The tax benefits of the above deferred tax assets will only be obtained if:

(a) the company derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised;

(b) the company continues to comply with the conditions for deductibility imposed by law; and

40 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

NOTE 5. CASH AND CASH EQUIVALENTS	Consolidated As At 30 June 2012 $	Consolidated As At 30 June 2011 $
Current Cash at bank Short term deposits		177,251 1,367,318

	4,482,129

	2,759,000
	7,241,129	1,544,569

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

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

NOTE 6. TRADE AND OTHER RECEIVABLES

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Current
GST Receivable 80,602 6,173
British Columbia Mining Tax Credit (Canada) - 168,205
Other debtors 1,915 11,304
82,517 185,682
There are no impaired trade debtors.
Other debtors are non-interest bearing and are normally settled
on 60-day terms.
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NOTE 7. OTHER ASSETS

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Current
Prepayments 46,854 11,200
Non Current
Security deposit 37,280 16,475
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NOTE 8. DEFERRED EXPLORATION AND EVALUATION EXPENDITURE

Costs carried forward in respect of areas of interest in: Exploration and evaluation phases – at cost Brought forward Exploration expenditure capitalised during the period Acquisition costs Write offs during the year At reporting date	6,637,298 450,089
	450,089 - 1,012,512 425,511 5,174,697 - - 24,578
	6,637,298 450,089

The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases are dependent on the successful development and commercial exploitation or sale of the respective areas.

Jameson Resources Annual Report 2012 | 41

Notes to the Financial Statements

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NOTE 9. PLANT & EQUIPMENT Consolidated Consolidated
As At As At
30 June 2012 30 June 2011
$ $
Plant and Equipment
-
Plant and equipment at cost 29,118
Less: accumulated depreciation (2,761) -
26,357 -
Com p uter E q ui p ment
Computer equipment at cost 20,278 16,692
Less: accumulated depreciation (13,617) (10,335)
6,661 6,357
Leasehold Improvements
Leasehold Improvements at cost 23,365 16,365
Less: accumulated amortisation (15,953) (11,281)
7,412 5,084
Total Plant and Equipment 40,430 11,441
Movements in Plant and Equipment
Movements in Plant and Equipment
Balance at beginning of the year - -
Additions 29,118 -
Depreciation and amortisation expense (2,789) -
Balance at end of the year 26,329 -
Movements in Computer Equipment
Balance at beginning of the year 6,357 8,043
Additions 3,586 1,432
Depreciation and amortisation expense (3,282) (3,118)
Balance at end of the year 6,661 6,357
Movements in Leasehold Improvements
Balance at beginning of the year 5,084 16,366
Additions 7,000 -
Depreciation and amortisation expense (4,672) (11,280
Balance at end of the year 7,412 5,084
NOTE 10. FINANCIAL ASSETS
Non Current
Balance beginning of period 225,000 120,000
Change in fair value through profit or loss (5,625) 48,750
Purchases/(disposals) of financial assets - 56,250
Listed Shares at fair value 219,375 225,000
NOTE 11. TRADE AND OTHER PAYABLES
Current
Trade creditors 127,197 58,126
Other creditors and accruals 79,279 122,666
Total 206,476 180,792
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42 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

NOTE 12. ISSUED CAPITAL AND OPTIONS	Consolidated Consolidated As At As At 30 June 2012 30 June 2011 $ $
(a) 154,783,676 (2011: 95,828,865) fully paid ordinary shares	17,219,243 9,256,380
(b) 5,000,000 (2011:10,000,000) performance shares	- -
(c) 9,408,333 (2011: 350,000) options	- -
(d) 22,000,000 (2011: nil) exchangeable shares	4,950,000 -
Total	22,169,243 9,256,380

(a) Movements in fully paid ordinary shares on issue:

	As at	As at	As at	As at
	30 June 2012	30 June 2012	30 June 2011	30 June 2011
	Number	$	Number	$
Fully paid ordinary shares	154,783,676	17,219,243	95,828,865	9,256,380
Consolidated	As at	As at	As at	As at
	30 June 2012	30 June 2012	30 June 2011	30 June 2011
	Number	$	Number	$
At Beginning of the Period	95,828,865	9,256,380	63,885,910	7,932,272
Movements in ordinary shares on issue Entitlement Issue – 31,942,955 shares issued at $0.045 each			31,942,955	1,437,435
November 2011 Placement at $0.12 each December 2011	11,200,000	1,344,000	-	-
Entitlements Issue at $0.10 each	17,754,811	1,775,481	-	-
Institutional Placement at $0.20 each	30,000,000	6,000,000	-	-
Capital raising costs	-	(1,156,618)	-	(113,327)
At end of reporting period	154,783,676	17,219,243	95,828,865	9,256,380

(b) Movements in performance shares on issue:

(b) Movements in performance shares on issue:
	Consolidated Consolidated As at As at 30 June 2012 30 June 2011 Number Number

At the beginning of the reporting period	10,000,000 10,000,000
Performance shares expired At reporting date (i)	(5,000,000) -
	5,000,000 10,000,000

(i) The 5 million performance shares issued to shareholders of NWPC Pty Ltd remain on issue at year end, however as the rights to the Basin Coal Mine have ceased, these will not convert into fully paid ordinary shares as completion of milestones associated with the Basin Coal project cannot now be achieved. The remaining shares performance hurdles expire on 31 March 2013.

Jameson Resources Annual Report 2012 | 43

Notes to the Financial Statements

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(c) Movements in options on issue: Consolidated Consolidated
As at As at
30 June 2012 30 June 2011
Number Number
At the beginning of the reporting period 350,000 12,833,334
Options issued during the period:
- Options exercisable at $0.20 on 30 November 2010 expired - (8,783,334)
- Options exercisable at $0.35 on 31 May 2012 cancelled or expired (175,000) (1,850,000)
- Options exercisable at $0.35 on 31 May 2013 cancelled - (1,850,000)
- Options exercisable at $0.15 on 30 September 2014 issued
-
to CIP for underwriting 4,000,000
- Options exercisable at $0.15 on 30 September 2014 issued 5,233,333 -
At reporting date 9,408,333 350,000
(d) Movements in exchangeable shares on issue:
Exchangeable Shares Number $
Movements in exchangeable shares
At 1 July 2011 - -
Exchangeable Shares issued pursuant to “Dunlevy” acquisition 12,000,000 2,700,000
Exchangeable Shares issued pursuant to “Nexx” acquisition 10,000,000 2,250,000
At 30 June 2012 22,000,000 4,950,000
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See Note 12(g) for terms of the exchangeable shares.

(e) Terms of Ordinary Shares

Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held and in proportion to the amount paid up on the shares held.

At shareholders meetings each ordinary share is entitled to one vote in proportion to the paid up amount of the share when a poll is called, otherwise each shareholder has one vote on a show of hands.

(f) Terms of Options

At the end of the reporting period, there were 9,408,333 options over unissued shares as follows:

��
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(g) Terms of Exchangeable shares

Dunlevy Energy Inc acquisition

a) The issue of 4,000,000 non-voting, convertible, redeemable, preferred shares (“Exchangeable Shares”) to be created in the capital stock of NWPC to each Dunlevy Shareholder (being a total of 12,000,000 Exchangeable Shares), all of which were issued on 23 December 2011 (“settlement date”) and are exchangeable for fully paid ordinary shares in Jameson (“Jameson Shares”) on a one for one share basis, upon the performance of the following milestones:
(i) 1,000,000 Exchangeable Shares per Dunlevy Shareholder will be permitted to be exchanged for 1,000,000 Jameson Shares by each Dunlevy Shareholder, at any time after the Settlement Date, at the election of each Dunlevy Shareholder by delivering to Jameson and NWPC 60 days prior written notice;
(ii) a further 1,000,000 Exchangeable Shares per Dunlevy Shareholder will be permitted to be exchanged for 1,000,000 Jameson Shares by each Dunlevy Shareholder, at any time after the expiration of 18 months from the Settlement Date, at the election of each Dunlevy Shareholder by delivering to Jameson and NWPC 60 days prior written notice;
(iii) if Jameson has not issued a Termination Notice ((d) below) prior to 36 months from the Settlement Date, a further 1,000,000 Exchangeable Shares per Dunlevy Shareholder will be permitted to be exchanged for 1,000,000 Jameson

44 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

Shares by each Dunlevy Shareholder, at any time after the expiration of 36 months from the Settlement Date, at the election of each Dunlevy Shareholder by delivering to Jameson and NWPC 60 days prior written notice; and

(iv) if Jameson has not issued a Termination Notice ((d) below) prior to 54 months from the Settlement Date, a further 1,000,000 Exchangeable Shares per Dunlevy Shareholder will be permitted to be exchanged for 1,000,000 Jameson Shares by each Dunlevy Shareholder, at any time after the expiration of 54 months from the Settlement Date, at the election of each Dunlevy Shareholder by delivering to Jameson and NWPC 60 days prior written notice,
b) each Dunlevy Shareholder must elect to exchange their respective Exchangeable Shares for Jameson Shares if the relevant milestones in paragraphs (a)(i) to (iv) are met within five years from the Settlement Date; and
c) any Exchangeable Shares which have not been exchanged for Jameson Shares on the earlier of:
(i) Jameson’s delivery of a Termination Notice (defined below) to the Dunlevy Shareholders, the expiry date of the Repurchase Option (defined below) being 180 days from the date of the Termination Notice (“Repurchase Option Expiry Date”); or
(ii) 5 years from the date of the meeting of Jameson’s shareholders (“Jameson Meeting”) to approve the issue of the Jameson Shares to the Dunlevy Shareholders,

will be automatically redeemed by NWPC for the sum of $0.000001 within ten business days of the earlier of:

(i) Jameson’s delivery of a Termination Notice to the Dunlevy Shareholders, the Repurchase Option Expiry Date; or
(ii) 5 years from the date of the Jameson Meeting, except for any Exchanged Shares that are tendered by the Dunlevy Shareholders in accordance with the Repurchase Option (set out below).
d) Jameson may elect to terminate or abandon the Dunlevy Project if it does not meet Jameson’s economic hurdles, and a repurchase Option mechanism is in place whereby Dunlevy shareholders can tender to NWPC all of their un-exchanged Exchangeable Shares in exchange for such number of then-issued Dunlevy Shares in exchange for the projects.

Nexx Project acquisition

a) The issue of 10,000,000 non-voting, convertible, redeemable, preferred shares (“Nexx Exchangeable Shares”) to be created in the capital stock of NWPC, all of which were issued to Nexx on 23 December 2011 (“Settlement Date”) and exchangeable by Nexx for Jameson Shares on a one for one share basis, upon the performance of the following milestones:
(i) 2,500,000 Nexx Exchangeable Shares will be immediately exchangeable for 2,500,000 Jameson Shares following the Nexx Settlement Date;
(ii) a further 2,500,000 Nexx Exchangeable Shares in NWPC will be exchanged for another 2,500,000 Jameson Shares, upon the granting of tenure (issuance of coal licenses which comprise the Nexx Projects coal license applications) by the British Columbia Ministry of Forests, Lands, and Natural Resource Operations to Jameson or its nominee;
(iii) a further 2,500,000 Nexx Exchangeable Shares in NWPC will be exchanged for 2,500,000 Jameson Shares, 12 months following the granting of tenure as referenced in paragraph (a)(ii) above; and
(iv) a final 2,500,000 Nexx Exchangeable Shares in NWPC will be exchanged for 2,500,000 Jameson Shares, 24 months following the granting of tenure as referenced in paragraph (a)(ii) above;
b) Nexx must elect to exchange its respective Nexx Exchangeable Shares for Jameson Shares if the relevant milestones in paragraphs (a)(i) to (iv) are met within five years from the Nexx Settlement Date; and
c) any Nexx Exchangeable Shares which have not been exchanged for Jameson Shares on the earlier of:
(i) in the event Jameson has delivered a Nexx Termination Notice (defined below) to Nexx, the expiry date of the Nexx Repurchase Option (defined below) being 180 days from the date of the Nexx Termination Notice (“Nexx Repurchase Option Expiry Date”); or
(ii) 5 years from the date of the Jameson Meeting to approve the issue of the Jameson Shares to Nexx, will be automatically redeemed by NWPC for the sum of $0.000001 within ten business days of the earlier of: (i) in the event Jameson has delivered a Nexx Termination Notice to Nexx, the Nexx Repurchase Option Expiry Date; or (ii) 5 years from the date of the

Jameson Resources Annual Report 2012 | 45

Notes to the Financial Statements

Jameson Meeting, except for any Exchanged Shares that are tendered by Nexx in accordance with the Nexx Repurchase Option (set out below).

Under the Letter of Intent (“LOI”), Jameson has also agreed to assume Nexx’s obligations pursuant to a royalty agreement between Nexx and Pika Geological Inc. (“Pika”) (a corporation controlled by Kevin James), to pay to Pika a 0.40% FOB mine site royalty on all coal produced and sold from coal licence application tenure no. 417727 (which is currently held by Pika and will be transferred to Nexx).

Jameson may elect to terminate or abandon the Nexx Projects if it does not meet Jameson’s economic hurdles. If it elects to terminate or abandon the Nexx Projects, it must issue a termination notice to Nexx (“Nexx Termination Notice”), and Nexx may, at its option (“Nexx Repurchase Option”), tender to NWPC all of its un-exchanged Exchangeable Shares in exchange for in exchange for full ownership of the Nexx Projects.

At the date of this report, no exchangeable shares have been exchanged for fully paid shares in the Company.

	Consolidated Consolidated Year Ended Year Ended 2012 2011 $ $
NOTE 13. RESERVES
Equity Based Payment Reserve (a)	1,102,890 439,865
Foreign Currency Translation Reserve (b)	(227,701) 8,917
	875,189 448,782
(a) Equity Based Payments Reserve: Balance at the beginning of the year	439,865 439,865
Options issued to consultants	560,845 -
Performance Rights	102,180 -
Balance at the end of the year	1,102,890 439,865
(b) Foreign Currency Translation Reserve:
Balance at the beginning of the year	8,917 (7,470)
Foreign exchange differences Balance at the end of the year	(236,618) 16,387
	(227,701) 8,917

Equity Based Payments Reserve:

This reserve is used to record the value of equity benefits provided to employees, directors and consultants as part of their remuneration. Refer to Notes 16 and 17.

Foreign Currency Translation Reserve

Foreign currency translation reserve records exchange differences arising on translation of the subsidiaries’ functional currency (Canadian Dollars) into presentation currency at balance date.

NOTE 14. ACCUMULATED LOSSES

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Accumulated losses at the beginning of the year (7,453,805) (6,961,373)
Net loss for the year (1,508,416) (492,432)
Accumulated losses at the end of the year (8,962,221) (7,453,805)
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NOTE 15. KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Details of key management personnel

The following persons were directors of Jameson Resources Limited during the financial year:-

David Fawcett	Non-Executive Chairman (appointed 23 December 2011)
John Holmes	Executive Director
T. Arthur Palm	Executive Director – Operations (appointed 1 August 2011 from Non-Executive Director)
David Prentice	Non-Executive Director
Jeff Bennett	Non-Executive Director
Suzie Foreman	Company Secretary

46 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

(b) Remuneration policy of key management personnel

The objective of the Company’s executive reward framework is set to attract and retain the most qualified and experienced directors and senior executives. The board ensures that executive reward satisfies the following key criteria for good reward governance practices:

� ��

Directors’ fees

A director may be paid fees or other amounts as the directors determine where a director performs special duties or otherwise performs services outside the scope of the ordinary duties of a director. A director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.

Service agreements

John Holmes

Pursuant to an Executive Services Agreement (“Services Agreement”) executed on 22 September 2011, John Holmes is engaged by the Company to provide services to Jameson in the capacity of Managing Director. John Holmes will be paid an annual remuneration of $200,000 plus statutory superannuation. John Holmes will also be reimbursed for reasonable expenses incurred in carrying out his duties.

The Services Agreement continues for a period of 2 years, with an option to extend for a further one year term, unless terminated in accordance with its terms. The Services Agreement contains standard termination provisions under which the Company must give 3 months’ notice of termination (or shorter period in the event of a material breach), or alternatively, payment in lieu of service. In addition, John Holmes is entitled to all unpaid remuneration and entitlements up to the date of termination.

David Fawcett

Pursuant to an agreement executed 12 October 2011 upon settlement of the Dunlevy and Nexx acquisitions, David Fawcett is to provide services to the Company as a non-executive Chairman. The broad terms of this agreement include remuneration payable of $60,000 plus $150 per hour, over and above a minimum of 15 hours required, per month in base services.

The term commenced on 23 December 2011 and is valid for 2 years and may be extended by one year by the Company, in writing, by mutual consent, or may be terminated by shareholders of the Company.

The agreement may be terminated by either party by providing written notice and upon payment of any outstanding fees for services rendered.

T. Art Palm

Pursuant to an agreement executed on 9 August 2009, T Arthur Palm provided services to the Company as a non-executive Director. The broad terms of this agreement include remuneration payable prior to decision to mine $60,000 per annum as a Director fee plus a consultant fee of $15,000 per month excluding travel, accommodation and general expenses.

On 1 August 2011, the Company entered into revised agreement with T Arthur Palm as Executive Director of Operations. The broad terms of this agreement included remuneration payable on and from the signing date of the agreement of $200,000 USD per annum.

The agreement may be terminated by either party by providing 3 months written notice and upon payment of any outstanding fees for services rendered.

Jeff Bennett

Pursuant to an agreement executed on 25 August 2008, Jeff Bennett provides services to the Company as a non-executive Chairman. The broad terms of this agreement include remuneration payable of $60,000 per annum.

On 22 December 2011, the Company entered into a revised agreement with Jeff Bennett to provide services to the Company as a non-executive Director. The broad terms of this agreement include remuneration payable of $30,000 per annum.

The agreement may be terminated by either party by providing written notice and upon payment of any outstanding fees for services rendered.

Jameson Resources Annual Report 2012 | 47

Notes to the Financial Statements

David Prentice

Pursuant to an agreement executed on 25 August 2008, David Prentice provides services to the Company as a non-executive Director. The broad terms of this agreement include remuneration payable of $30,000 per annum.

The agreement may be terminated by either party by providing written notice and upon payment of any outstanding fees for services rendered.

Suzie Foreman

Suzie Foreman is the Company Secretary and has a related interest in Athena Corporate Pty Ltd. Athena Corporate is engaged pursuant to an agreement dated 1 July 2011, by Jameson Resources Limited to for Suzie to act in the capacity of Company Secretary and for Athena to provide services of accounting, company secretarial and corporate assistance on specified commercial rates until termination by either party.

(c) Compensation of key management personnel by individual

2012	Primary	Primary	Equity Compensation Post- employment	Equity Compensation Post- employment
Directors	Base Salary and Fees $	Bonus and Non Monetary Benefits $	Value of Options $	Performance Superannuation Rights Contributions $ $	Total $

David Fawcett*(i)	86,365	-	-	- -	86,365
John Holmes	200,000	-	-	39,300 18,000	257,300
T. Arthur Palm†(ii)	170,673	-	-	39,300 -	209,973
Jeff Bennett	44,273	-	-	11,790 -	56,063
David Prentice	30,000	-	-	11,790 2,700	44,490
Suzie Foreman^	79,872	-	-	- -	79,872
Total	611,183	-	-	102,180 20,700	737,063
2011	Primary		Equity Compensation	Post- employment
Directors	Bonus Base and Non Salary Monetary and Fees Benefits $ $		Value of Options $	Superannuation Contributions Total $ $

Jeff Bennett	60,000 -		-	- 60,000
John Holmes	200,000 -		-	18,000 218,000
David Prentice	30,000 -		-	2,700 32,700
Stephen Anastos(iii)	30,000 -		-	2,700 32,700
T. Arthur Palm	198,287 -		-	- 198,287
Suzie Foreman^	56,441 -		-	- 56,441
Total	574,728 -		-	23,400 598,128

(i) Appointed 23 December 2011

(ii) Change of position from Chairman to Non-Executive Director effective 23 December 2011

(iii) Resigned 31 May 2011

† During the year ended 30 June 2012 Mencon LLC, a US based company which Mr T. Arthur Palm is a member received $11,714 as consulting fees for Mr Palms technical services. These services were provided outside of director duties performed, and were provided on commercial terms. The fees have been included as part of directors remuneration above.

During the year ended 30 June 2012 Coalworks Inc, a Canadian based company which Mr D Fawcett is a member received $25,114 as consulting fees for Mr Fawcett’s technical services. These services were provided outside of director duties performed, and were provided on commercial terms. The fees have been included as part of directors remuneration above.

^ During the year ended 30 June 2012 Athena Corporate Pty Ltd, a company which Ms S Foreman is a member, received fees for corporate services. These services were provided on commercial terms.

48 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

(d) Compensation options: Granted and vested during the year

Year Ended 30 June 2012

During the financial year ended 30 June 2012 no options were granted to Directors of the Company.

Year Ended 30 June 2011

During and since the financial year ended 30 June 2011, no compensation options were granted or vested to directors. The following details the status of were granted as options which were granted to the Directors of the Company in prior periods.

Jeff Bennett	500,000 options at $0.20 exercisable on 30 November 2010 – expired
	200,000 options at $0.35 exercisable on 31 May 2012 – cancelled 9 August 2010
	200,000 options at $0.50 exercisable on 31 March 2013 – cancelled 9 August 2010
John Holmes	1,500,000 options at $0.20 exercisable on 30 November 2010 – expired 500,000 options at $0.35 exercisable on 31 May 2012 – cancelled 9 August 2010 500,000 options at $0.50 exercisable on 31 March 2013 – cancelled 9 August 2010
David Prentice	500,000 options at $0.20 exercisable on 30 November 2010 – expired
	200,000 options at $0.35 exercisable on 31 May 2012 – cancelled 9 August 2010
	200,000 options at $0.50 exercisable on 31 March 2013 – cancelled 9 August 2010
Stephen Anastos 500,000 options at $0.20 exercisable on 30 November 2010 – expired 200,000 options at $0.35 exercisable on 31 May 2012 – cancelled 9 August 2010 200,000 options at $0.50 exercisable on 31 March 2013 – cancelled 9 August 2010
T Arthur Palm	750,000 options at $0.35 exercisable on 31 May 2012 – cancelled 9 August 2010
	750,000 options at $0.50 exercisable on 31 March 2013 – cancelled 9 August 2010

For the Directors options which expired during the financial year ended June 2011, as detailed above, the vesting conditions were not achieved by the expiry date, and accordingly no value has been recorded as expensed in the Statement of Comprehensive Income for that Year.

The unexpired Director options were cancelled by the Company on 9 August 2010.

(e) Performance Rights: Granted and vested during the year

Year Ended 30 June 2012

During the financial year ended 30 June 2012 10,400,000 (2011: nil) performance rights were granted to Directors of the Company. No performance rights vested during the year. Further details of the terms of the Performance Rights are contained in Note 15 (g).

Jameson Resources Annual Report 2012 | 49

Notes to the Financial Statements

(f) Shares issued on exercise of compensation options or conversion of performance rights.

There were no shares issued on exercise of compensation options or conversion of performance rights during the year.

(fa) Option holdings of key management personnel

2012	Balance	Granted	Granted	Exercised	Bought &	Balance	Total	Exercisable
	at	as			(Sold/lapsed)	at	Vested	at
	01.07.11 Remuneration				(i)	30.06.12	at 30.06.12	30.06.12
David Fawcett		-	-	-	-	-	-	-
Jeff Bennett		-	-	-	-	-	-	-
John Holmes		-	-	-	83,333	83,333	83,333	83,333
David Prentice		-	-	-	-	-	-	-
T Arthur Palm		-	-	-	83,333	83,333	83,333	83,333
Suzie Foreman		-	-	-	-	-	-	-
Total		-	-	-	166,666	166,666	166,666	166,666

(i) Options acquired as a free attaching option on the Basis of 1 free attaching option for every 3 placement shares acquired in the Company’s November 2011 Placement at $0.12 per share.

2011	Balance	Granted	Exercised	Bought &	Balance	Total	Exercisable
	at	as		(Sold/lapsed)	at	Vested	at
	01.07.10	Remuneration		(i)	30.06.11 at 30.06.11		30.06.11
Jeff Bennett	900,000	-	-	(900,000)	-	-	-
John Holmes	3,000,000	-	-	(3,000,000)	-	-	-
David Prentice	900,000	-	-	(900,000)	-	-	-
Stephen Anastos	900,000	-	-	(900,000)	-	-	-
T Arthur Palm	1,500,000	-	-	(1,500,000)	-	-	-
Suzie Foreman	-	-	-	-	-	-	-
Total	7,200,000	-	-	(7,200,000)	-	-	-

(i) Refer note 15 (d) for individual detail of options lapsed or cancelled during the year.

(fb) Shareholdings of key management personnel

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

2012 Balance at Granted as On Exercise Bought & (Sold) Balance at
01.07.11 Remuneration of Options (i) 30.06.12
David Fawcett - - - - -
Jeff Bennett 375,000 - - 62,500 437,500
John Holmes 60,000 - - 260,000 320,000
David Prentice 1,500,000 - - 250,001 1,750,001
T Arthur Palm - - - 250,000 250,000
Suzie Foreman - - - - -
Total 1,935,000 - - 822,501 2,757,501
----- End of picture text -----

(i) Acquired pursuant to the Company’s Placement and entitlements share issue..

2011	Balance at Granted as 01.07.10 Remuneration	On Exercise Bought & (Sold) of Options (i)	Balance at 30.06.11
Jeff Bennett	250,000 -	- 125,000	375,000 60,000 1,500,000 - -
John Holmes	40,000 -	- 20,000
David Prentice	1,000,000 -	- 500,000
Stephen Anastos	- -	- -
Suzie Foreman	- -	- -
Total	1,290,000 -	- 645,000	1,935,000

(i) Acquired pursuant to the Company’s 1:2 entitlements issue at $0.045 per share.

50 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

(fc) Performance Rights of key management personnel

2012	Balance at	Granted as	On Exercise	Bought & (Sold)	Balance at
	01.07.11	Remuneration(i)	of Options		30.06.12
David Fawcett	-	-	-	-	-
Jeff Bennett	-	1,200,000	-	-	1,200,000
John Holmes	-	4,000,000	-	-	4,000,000
David Prentice	-	1,200,000	-	-	1,200,000
T Arthur Palm	-	4,000,000	-	-	4,000,000
Suzie Foreman	-	-	-	-	-
Total	-	10,400,000	-	-	10,400,000

(i) Issued pursuant to shareholder approval at the Annual General Meeting on 13 December 2011. For full details of the terms and conditions refer Note 15 (f).

(g) Performance Rights issued as Part of Remuneration for the period ended 30 June 2012

At the Company’s Annual General Meeting held 13 December 2011, the shareholders approved the issue of 10,400,000 Performance Rights to the Directors of the Company. Refer (fc) above for individual quantities granted.

The Performance Rights entitle the holder to fully paid ordinary shares in the Company (“Shares”), subject to the satisfaction of the vesting condition set out below, each Performance Right vests to one Share.

Performance Rights A

(a) 2,600,000 Performance Rights A shall vest and convert to Shares as follows:
(i) on upon the delineation of an initial NI 43-101 / JORC compliant coal resource of 10 million tonnes on the Crown Mountain Project) (Milestone); and
(ii) the holder remains an employee of the Company until three (3) months of the completion of (a)(i) above;
prior to the Expiry Date (as defined below) ((a)(i) and (ii) together, the Vesting Conditions and each a Vesting Condition).
(b) The Performance Rights A shall expire at 5.00 pm (WST) on before 30 August 2014 (Expiry Date). Any Performance Right A not vested before the Expiry Date shall automatically lapse on the Expiry Date and the holder shall have no entitlement to Shares pursuant to those Performance Rights A.

Performance Rights B

(a) 2,600,000 Performance Rights B shall vest and convert to Shares as follows:
(i) on the delineation of an initial NI 43-101 / JORC compliant coal resource of 10 million tonnes on the Dunlevy Coal Project, (Milestone); and
(ii) the holder remains an employee of the Company until three (3) months of the completion of (a)(i) above;
prior to the Expiry Date (as defined below) ((a)(i) and (ii) together, the Vesting Conditions and each a Vesting Condition).
(b) The Performance Rights B shall expire at 5.00 pm (WST) on before 30 August 2015 (Expiry Date). Any Performance Right B not vested before the Expiry Date shall automatically lapse on the Expiry Date and the holder shall have no entitlement to Shares pursuant to those Performance Rights B.

Performance Rights C

(a) 2,600,000 Performance Rights C shall vest and convert to Shares as follows:
(i) on the completion of a positive bankable feasibility study that could reasonably serve as the basis for the Board to recommend a decision to commence commercial production in respect of either of the Crown Mountain Project and the Dunlevy Coal Project; (Milestone); and

Jameson Resources Annual Report 2012 | 51

Notes to the Financial Statements

(ii) the holder remains an employee of the Company until three (3) months of the completion of (a)(i) above;
prior to the Expiry Date (as defined below) ((a)(i) and (ii) together, the Vesting Conditions and each a Vesting Condition).
(b) The Performance Rights C shall expire at 5.00 pm (WST) on 30 August 2016 (Expiry Date). Any Performance Right C not vested before the Expiry Date shall automatically lapse on the Expiry Date and the holder shall have no entitlement to Shares pursuant to those Performance Rights C.

Performance Rights D

(a) 2,600,000 Performance Rights D shall vest and convert to Shares as follows:
(i) on the completion of a positive bankable feasibility study that could reasonably serve as the basis for the Board to recommend a decision to commence commercial production in respect of both of the Crown Mountain Project and the Dunlevy Coal Project; (Milestone); and
(ii) the holder remains an employee of the Company until three (3) months of the completion of (a)(i) above;
prior to the Expiry Date (as defined below) ((a)(i) and (ii) together, the Vesting Conditions and each a Vesting Condition).
(b) The Performance Rights D shall expire at 5.00 pm (WST) on 30 August 2016 (Expiry Date). Any Performance Right D not vested before the Expiry Date shall automatically lapse on the Expiry Date and the holder shall have no entitlement to Shares pursuant to those Performance Rights D.

All of the Performance Rights were issued for no cash consideration and no consideration will be payable upon the vesting of the Performance Rights upon the satisfaction of the Vesting Conditions.

(h) Loans to key management personnel

No loans were made to key management personnel of the Company during the financial year or prior corresponding period.

(i) Other transactions and balances with key management personnel

During the year Zephyr Consulting Group Pty Ltd, a company associated with Mr Holmes received $90,650 (2011: $79,800) as fees for the provision of office space, office fit-out, bookkeeping and office administration services.

These costs have not been included in directors’ remuneration as these fees were not paid to Mr Holmes in relation to the management of the affairs of the Company. All transactions were entered into on normal commercial terms.

NOTE 16. EMPLOYEE BENEFITS

At 30 June 2012, Jameson Resources Limited had 2 (2011:1) employees.

Employee Incentive Option Plan

The Company’s Employee Incentive Scheme provides for the Board to elect to offer Options to an employee having regard to the potential contribution of the employee to the Company and any other matters the Board considers relevant.

Each option is convertible to one ordinary share. The exercise price of the options, determined in accordance with the Rules of the Scheme, is the price determined by the Board and advised to the employee when Options are offered to the employee.

All options expire on the earlier of their termination date or 30 days following termination of the employee’s employment. Options vest on granting, however exercise can be conditional upon the Company achieving certain performance hurdles as determined by the Board of directors.

There are no voting or dividend rights attaching to the options. There are no voting rights attaching to the unissued ordinary shares. Voting rights will be attached to the unissued ordinary shares when the options have been exercised.

Director options were previously issued under this scheme however these have all cancelled or expired. Details of shares and options issued to Directors are included in the Remuneration Report.

52 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

NOTE 17. SHARE BASED PAYMENT PLANS

Recognised employee share-based payment expenses

The expense recognised for employee services rendered during the year are shown in the table below:

	2012 2011 $ $
Total expenditure arising from employee and director share-based payment transactions	102,180 -
	102,180 -

Options

Options have previously been issued to directors and executives as part of their compensation under the Company’s Option Incentive Scheme. The options issued may be subject to performance criteria, and were issued to all directors of Jameson Resources to increase goal congruence between executives, directors and shareholders. The Company’s Option Incentive Scheme was approved by shareholders at the 2009 Annual General Meeting. In addition, options have previously been issued to consultants of the Company for their services rendered. Any options issued under this scheme have subsequently been cancelled or lapsed and the Company has now replaced the scheme with a Performance Rights Plan.

Performance Rights

During the year ended 30 June 2012, the shareholders of the Company approved the issue of 10,400,000 performance rights to the Directors of the Company. The total value of the performance rights issued is $608,400 and will be allocated across the vesting period, (2012: $102,180). The fair value of the performance rights granted was estimated as at the date of grant using the market value at that date, the probability of the relevant market conditions being met and the expected length of the vesting period. Refer note 15 (g) for further details.

	Tranche A	Tranche B	Tranche C	Tranche D
	2,600,000	2,600,000	2,600,000	2,600,000
Grant Date	23 Dec 2011	23 Dec 2011	23 Dec 2011	23 Dec 2011
Probability	60%	30%	30%	10%
VestingPeriod(years)	2.82	3.82	4.82	4.82
Fair Value	$0.108	$0.054	$0.054	$0.018

NOTE 18. RELATED PARTY DISCLOSURES

Key management personnel

Disclosures relating to key management personnel are set out in Note 15 and the Directors’ Report.

NOTE 19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The main risks arising from the Group’s financial instruments are market risk, currency risk and interest rate risk.

This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital.

The Board has overall responsibility for the establishment and oversight of the risk management framework. The Board reviews and agrees policies for managing each of these risks and they are summarised below:

The Group’s principal financial instruments comprise cash and short term deposits. The main purpose of the financial instruments is to earn the maximum amount of interest at a low risk to the Group. The Group also has other financial instruments such as trade debtors and creditors which arise directly from its operations. For the period under review, it has been the Group’s policy not to trade in financial instruments.

(a) Market Risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments.

Jameson Resources Annual Report 2012 | 53

Notes to the Financial Statements

The Group is exposed to movements in market interest rates on short term deposits. The policy is to monitor the interest rate yield curve out to 120 days to ensure a balance is maintained between the liquidity of cash assets and the interest rate return. The Group does not have short or long term debt, and therefore this risk is minimal.

(b) Currency Risk

Foreign exchange risk arises from future commitments, assets and liabilities that are denominated in a currency that is not he functional currency of the Group. The Group deposits are denominated in both Canadian and Australian dollars. At the year end the majority of deposits were held in Canadian dollars. Currently there are no foreign exchange programs in place. The Group treasury function manages the purchase of foreign currency to meet operational requirements. The impact of reasonably possible changes in foreign exchange rates for the Group is not material.

(c) Interest Rate Risk

The table below reflects the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations of the settlement period for all other financial instruments. As such, the amounts might not reconcile to the statement of financial position.

==> picture [511 x 395] intentionally omitted <==

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

30 June 2012 Weighted
Average
Effective Less than 1 to 3 3 months 1 to 5
Interest 1 months to 1 year years Total
Rate month
% $ $ $ $ $
FINANCIAL ASSETS
Non-interest bearing 82,517 - - - 82,517
Variable interest rate instruments 4,482,129 - - - 4,482,129
Fixed interest rates instruments - 2,759,000 - - 2,759,000
4.25% 4,564,646 2,759,000 - - 7,323,646
FINANCIAL LIABILITIES
Non-interest bearing 206,476 - - - 206,476
NET FINANCIAL ASSETS 4,358,170 2,759,000 - - 7,117,170
30 June 2011 Weighted
Average
Effective Less than 1 to 3 3 months 1 to 5
Interest 1 months to 1 year years Total
Rate month
% $ $ $ $ $
FINANCIAL ASSETS
Non-interest bearing 185,682 - - - 185,682
Variable interest rate instruments 177,251 - - - 177,251
Fixed interest rates instruments - 1,367,318 - - 1,367,318
5.21% 362,933 1,367,318 - - 1,730,251
FINANCIAL LIABILITIES
Non-interest bearing (180,772) - - - (180,772)
NET FINANCIAL ASSETS 182,161 1,367,318 - - 1,549,479
----- End of picture text -----

Net fair value of financial assets and liabilities

The carrying amount of cash and cash equivalents approximates fair value because of their short-term maturity.

54 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

(i) Interest Rate Sensitivity Analysis

At 30 June 2012, the effect on loss and equity as a result of changes in the interest rate, with all other variable remaining constant would be as follows:

be as follows:
	2012 2011 $ $
CHANGE IN LOSS Increase in interest rate by1%	Change Change (20,608) (14,673)
Decrease in interest rate by1%	20,608 14,673
CHANGE IN EQUITY Increase in interest rate by1%	Change Change (20,608) (14,673)
Decrease in interest rate by1%	20,608 14,673

(d) Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults.

The Group operates in the mining explorer sector; it therefore does not have trade receivables and is not exposed to credit risk in relation to trade receivables. The Group does not have any significant credit risk exposure to any single counterparty or any Company of counterparties having similar characteristics.

The Group’s maximum exposure to credit risk at each balance date in relation to each class of recognised financial assets is the carrying amount, net of any provision for doubtful debts, of those assets as indicated in the statement of financial position. The maximum credit risk exposure of the Group at 30 June 2012 is $82,517 (2011: $185,682). There are no impaired receivables at 30 June 2012 (2011: Nil).

(e)

Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group manages liquidity risk by monitoring forecast cash flows on a rolling monthly basis. The Group does not have any significant liquidity risk as the Group does not have any collateral debts.

(f) Capital Management

The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it may continue to provide returns for shareholders and benefits for other stakeholders.

Due to the nature of the Group’s activities, being mineral exploration, it does not have ready access to credit facilities and therefore is not subject to any externally imposed capital requirements, with the primary source of Group funding being equity raisings. Accordingly, the objective of the Group’s capital risk management is to balance the current working capital position against the requirements to meet exploration programmes and corporate overheads. This is achieved by maintaining appropriate liquidity to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required.

(g) Fair value of financial instruments

As of 1 July 2011, Jameson Resources has adopted the amendments to AASB 7 Financial Instruments: Disclosures which require disclosure of fair value measurements by level of the following fair value measurement hierarchy:

��
�� or indirectly ( derived from prices) (level 2), and
��

Assets classified as financial assets at fair value through profit or loss are considered level 1.

Jameson Resources Annual Report 2012 | 55

Notes to the Financial Statements

NOTE	20. LOSS PER SHARE	Consolidated	Consolidated
		Year Ended	Year Ended
		2012	2011
		$	$
(a)	Loss used in the calculation of basic lossper share	(1,508,416)	(492,432)
		Number of shares	Number of shares
(b)	Weighted average number of ordinary shares
	outstanding during the reporting period used in
	calculation of basic lossper share:	125,646,368	80,263,249

The diluted earnings per share is not disclosed as the Company made a loss for the period.

NOTE 21. CASH FLOW INFORMATION

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

Consolidated Consolidated
Year Ended Year Ended
30 June 2012 30 June 2011
$ $
(i) Reconciliation of cash and cash equivalent:-
Cash at Bank 7,241,129 1,544,569
(ii) Reconciliation of cash flows from operating
activities with loss after income tax
Loss after income tax (1,508,416) (492,432)
Add: Non-cash items:
- Depreciation 10,743 6,382
-
- Impairment on investments 5,625
-
- Equity based payments 102,180
-
- Payments for acquisition 614,928
- Unrealised (gain)/loss on financial assets - (48,750)
- Write off of exploration project - (24,578)
- Exchange differences on translation (93,438) (14,417)
Changes in assets and liabilities
- Decrease/(Increase) in trade and other receivables 67,512 (119,438)
- Increase/(Decrease) in trade and other payables 29,574 187,257
Net cash (outflows) from Operating Activities (771,291) (505,976)
----- End of picture text -----

(iii) Non-cash financing and investing activities

2012

Other than as detailed in Note 27 and the Directors Report, there were no non-cash financing or investing activities during the financial year ended 30 June 2012.

2011

There were no non-cash financing or investing activities during the financial year ended 30 June 2011.

56 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

NOTE 22. SEGMENT REPORTING

Jameson Resources Limited operates predominantly in one industry being the mining and exploration industry in Australia and Canada.

Segment Information

Identification of reportable segments

The Company has identified its operating segments based on the internal reports that are reviewed and used by the board of directors in assessing performance and determining the allocation of resources.

The Company is managed primarily on the basis of its coal exploration in Canada and its corporate activities. Operating segments are therefore determined on the same basis.

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics.

Types of reportable segments

(i) Coal exploration

Segment assets, including acquisition cost of exploration licenses and all expenses related to the tenements in Canada are reported on in this segment.

(ii) Corporate

Corporate, including treasury, corporate and regulatory expenses arising from operating an ASX listed entity. Segment assets, including cash and cash equivalents, and investments in financial assets are reported in this segment.

Basis of accounting for purposes of reporting by operating segments

Accounting policies adopted

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

Segment assets

Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

Unless indicated otherwise in the segment assets note, deferred tax assets and intangible assets have not been allocated to operating segments.

Segment liabilities

Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Company as a whole and are not allocated. Segment liabilities include trade and other payables.

Jameson Resources Annual Report 2012 | 57

Notes to the Financial Statements

==> picture [511 x 369] intentionally omitted <==

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

|||||||
|---|---|---|---|---|---|
|Corporate|Coal Exploration|Total|
|$|$|$|
|(i)|Segment performance|
|30 June 2012|
|Segment revenue|125,192|-|125,192|
|Segment results|(888,637)|(619,779)|(1,508,416)|
|Included within segment result:|
|��|��|��|��|��|
|��|��|��|��|��|
|Segment assets|7,325,399|6,979,484|14,304,883|
|Segment liabilities|(85,726)|(136,946)|(222,672)|
|Corporate|Coal Exploration|Total|
|$|$|$|
|30 June 2011|
|Segment revenue|70,082|172,656|242,738|
|Segment results|(450,450)|(41,982)|(492,432)|
|Included within segment result:|
|��|��|��|��|��|
|��|��|��|��|��|
|Se|g|ment assets|252,916|450,089|703,005|
|Segment liabilities|(193,100)|-|(193,100)|

----- End of picture text -----

(ii) Revenue by geographical region

For the year ending 30 June 2011, the Group had revenue receivable of $168,205 in respect to a tax credit claim from the British Columbia Mining Exploration Tax Credit. There were no revenue attributable to external customers for the years ended 30 June 2011 and 2012.

(iii) Assets by geographical region

Reportable segment assets are located in Canada and Australia.

NOTE 23. EVENTS SUBSEQUENT TO REPORTING DATE

On 10 August 2012, the Company announced the commencement of drilling on its Crown Mountain coal project.

Other than as detailed above, no matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.

58 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

NOTE 24. CONTINGENCIES

Dunlevy Energy Inc acquisition

As a condition under the acquisition of Dunlevy Energy Inc. and its Dunlevy Project, Jameson has agreed to assume the responsibility of the repayment of Dunlevy’s obligations to Mr Ken Murfitt consisting of:

(i) C$100,000, in consideration of the transfer of coal licence application No. 417666, payable in the following increments for the redemption of 100 preferred shares held by Mr Ken Murfitt in Dunlevy (“Preferred Shares”) of which 45 preferred shares were redeemed for $45,000 at 23 December 2011, with the balance payable as follows:
(a) C$25,000 for the redemption of a further 25 Preferred Shares on 9 October 2012, and;
(b) C$30,000 for the redemption of the final 30 Preferred Shares on 9 October 2013, and;
(ii) C$250,000 (plus Canadian HST) to be paid upon commencement of commercial production from the Dunlevy Project as further consideration for the Preferred Shares in Dunlevy held by Mr Ken Murfitt.

Nexx Project acquisition

Under the Nexx agreement, Jameson has also agreed to assume Nexx’s obligations pursuant to a royalty agreement between Nexx and Pika Geological Inc. (Pika) (a corporation controlled by Kevin James), to pay to Pika a 0.40% FOB mine site royalty on all coal produced and sold from coal licence application tenure No. 417727 (which is currently held by Pika and will be transferred to Nexx).

In the opinion of the directors there were no contingent liabilities at 30 June 2012, and the interval between 30 June 2012 and the date of this report.

NOTE 25. COMMITMENTS

(a) Exploration commitments

The Company’s exploration commitment is as follows:

	2012	2011
	$	$
Not longer than 1 year	18,116	-
Longer than 1 but not longer than 5 years Longer than 5years	- -	- -
Total	18,116	-

(b) Lease expenditure commitments

The Company has no operating lease commitments, as it is currently leasing premises on a monthly tenancy.

(c) Remuneration Commitments

There are no commitments for the payment of salaries and other remuneration under long-term employment contracts.

NOTE 26. INTEREST IN SUBSIDIARIES

The following companies are subsidiaries of Jameson Resources Limited.

Name Country of Incorporation	Percentage of equity interest held byConsolidated Entity Investment
	2012 2011 2012 2011 % % $ $

NWPC Pty Ltd Australia	100 100 - -
NWP Coal Canada Ltd Canada	100 100 1 1
Dunlevy Energy Inc Canada	100 - 3,052,751 -

Jameson Resources Annual Report 2012 | 59

Notes to the Financial Statements

NOTE 27. ACQUISITION OF DUNLEVY ENERGY INC.

On 22 December 2011, the Company’s 100% wholly owned subsidiary, NWP Coal Canada Ltd, acquired 100% of the voting shares of Dunlevy Energy Inc, a company registered in British Columbia, Canada.

The total cost of the acquisition was $3,052,751 and comprised an issue of equity instruments and cash and contingent consideration. The Company issued 12,000,000 exchangeable shares with a fair value of $0.225 each, based on the quoted price of the shares of Jameson Resources Limited at the date of exchange.

The Group has provisionally recognised the fair values of the identifiable assets and liabilities of Dunlevy Energy Inc based upon the best information available as of the reporting date. Provisional business acquisition accounting is as follows:

	Fair value at acquisition date $
Cash and cash equivalents	6,077
Other receivables	6,321
Exploration expenditure	336,699
Trade payables	(114,861)
Other payables	(193,087)
Fair value of identifiable net assets	41,149
Goodwill arising on acquisition1	3,011,602
	3,052,751

1 Goodwill has been capitalised as additions to the deferred exploration and evaluation expenditure for the period.

	$
Acquisition date fair value of consideration transferred: Exchangeable shares issued, at fair value	2,700,000
Trade Payables assumed by parent	206,970
Cash payments Total consideration	145,781
	3,052,751

Direct costs relating to the acquisition of $77,605 have been expensed.

Direct costs relating to the acquisition of $77,605 have been expensed.
	Consolidated $
The cash outflow on acquisition is as follows:	(145,781) 6,077
Cash paid
Net cash acquired with the subsidiary
Net cash outflow	(139,704)

Acquisition related costs of $77,605 are included in other expenses in the statement of comprehensive income.

Directly attributable costs of raising equity have been included as a deduction from equity.

Under the terms of the acquisition agreement, the Group agrees to pay Mr Ken Murfitt, a preference shareholder of Dunlevy Energy Inc. a cash payment upon the redemption of 100 preferred shares in the increments as defined in the purchase agreement. See Note 24.

60 | Jameson Resources Annual Report 2012

Notes to the Financial Statements

NOTE 28. PARENT ENTITY DISCLOSURES

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

a) Financial position As at As at
30 June 2012 30 June 2011
$ $
Assets
Current assets 7,116,595 1,489,903
Non-current assets 7,014,596 1,064,775
Total assets 14,131,191 2,554,678
Liabilities
Current liabilities 85,726 193,100
Non-current liabilities - -
Total liabilities 85,726 193,100
Equity
Issued capital 17,219,244 9,256,380
Accumulated losses (9,226,670) (7,334,667)
Reserves 6,052,891 439,865
Total equity 14,045,465 2,361,578
Financial performance Year ended Year ended
30 June 30 June
2012 2011
$ $
Loss for the year (1,892,003) (574,873)
Other comprehensive income - -
Total comprehensive income (1,892,003) (574,573)
----- End of picture text -----

b) Contingent liabilities

As at 30 June 2012 and 2011, the Company had no contingent liabilities.

c) Contractual Commitments

As at 30 June 2012 and 2011, the Company had no contractual commitments.

d) Guarantees entered into by parent entity

As at 30 June 2012 and 2011, the Company had entered into no guarantees.

Jameson Resources Annual Report 2012 | 61

Notes to the Financial Statements

DIRECTORS’ DECLARATION

In the opinion of the directors of Jameson Resources Limited (the ‘Company’):
a. the financial statements, notes and the additional disclosures are in accordance with the Corporations Act 2001 including:
- i. giving a true and fair view of the consolidated group’s financial position as at 30 June 2012 and of its performance for the year then ended; and
- ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board
This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2012.

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

==> picture [113 x 52] intentionally omitted <==

John Holmes Executive Director

Dated this 26th day of September 2012

62 | Jameson Resources Annual Report 2012

Directors’ Declaration

==> picture [216 x 91] intentionally omitted <==

INDEPENDENT AUDITOR’S REPORT

To the members of Jameson Resources Limited

Report on the Financial Report

We have audited the accompanying financial report of Jameson Resources Limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year.

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 in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

In Note 1(c), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements , that the consolidated financial report 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. Those standards require that we 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. In making those risk assessments, the auditor considers internal control relevant to the entity’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 entity’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.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

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.

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Jameson Resources Annual Report 2012 | 63

Independent Auditor’s Report

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Matters relating to the electronic presentation of the audited financial report and remuneration report

This auditor’s report relates to the financial report and remuneration report of Jameson Resources Limited for the financial year ended 30 June 2012 published in the annual report and included on the company’s website. The company’s directors are responsible for the integrity of the company’s website. We have not been engaged to report on the integrity of this website. The auditor’s report refers only to the financial report and remuneration report. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report and remuneration report. If users of the financial report and remuneration report are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial report and remuneration report to confirm the information contained in this website version of the financial report and remuneration report.

Auditor’s opinion

In our opinion:

(a) the financial report of Jameson Resources Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year 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 Note 1(c).

Report on the Remuneration Report

We have audited the remuneration report included in the directors’ report for the year ended 30 June 2012. 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

In our opinion the remuneration report of Jameson Resources Limited for the year ended 30 June 2012 complies with section 300A of the Corporations Act 2001 .

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HLB MANN JUDD Chartered Accountants

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Perth, Western Australia 26 September 2012

N G NEILL Partner

64 | Jameson Resources Annual Report 2012

Independent Auditor’s Report

CORPORATE GOVERNANCE STATEMENT

The Company is committed to implementing the highest standards of corporate governance. In determining what those high standards should involve the Company has turned to the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations. The Company is pleased to advise that the Company’s practices are largely consistent with those ASX guidelines. As consistency with the guidelines has been a gradual process, where the Company did not have certain policies or committees recommended by the ASX Corporate Governance Council (the Council) in place during the reporting year, we have identified such policies or committees.

To assist the Board carry out its functions, it has developed a Code of Conduct to guide the Directors, the Chairman, Chief Executive Officer (Managing Director), the Chief Financial Officer and other key executives in the performance of their roles. The Code of Conduct addresses the maintenance of the confidence in the Company’s integrity, legal obligations and expectations of shareholders, responsibility and accountability of individuals for reporting and investigating reports of unethical behaviour. The Company’s Code of Conduct is located on its website (www.jamesonresources.com.au).

PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE

Where the Company’s corporate governance practices do not correlate with the practices recommended by the Council, the Company is working towards compliance however it does not consider that all the practices are appropriate for the Company due to the size and scale of Company operations. A checklist summarising the Company’s compliance with the Recommendations is also set out at the end of this statement. The table does not provide the full text of each recommendation but rather the topic covered.

Details of all of the recommendations can be found on the ASX Corporate Governance Council’s website at http://www.asx.com.au/about/CorporateGovernance_AA2.shtm

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

1.1 Role of the Board

Board Charter

The Board is accountable to shareholders for the performance of the Company. The Board operates under the Board Charter that details its functions, responsibilities and powers and those delegated to management.

The Board’s role is to govern the Company rather than to manage it. In governing the Company, the Directors must act in the best interests of the Company as a whole. It is the role of the senior executives to manage the Company in accordance with the direction and delegations of the Board and the responsibility of the Board to oversee the activities of management in carrying out these delegated duties. In carrying out its governance role, the main task of the Board is to drive the performance of the Company. The Board must also ensure that the Company complies with all of its contractual, statutory and any other legal obligations, including the requirements of any regulatory body. The Board has the final responsibility for the successful operations of the Company. The Board charter can be located on the Company’s website (www. jamesonresources.com.au).

On appointment, non-executive directors receive formal letters of appointment setting out the terms and conditions of appointment. The formal letter of appointment covers the matters referred to in the guidance and commentary for Recommendation 1.1. Executive directors are employed pursuant to employment agreements.

2.1 Composition of the Board

The Board consists of a Non-Executive Chairman, two Executive Directors (Managing Director, and Executive Director of Operations), and two Non-Executive Directors. Details of their skills, experience and expertise and the period of office held by each director have been included in the Directors’ Report. The number of board meetings and the attendance of the directors are set out in the Directors’ Report.

The roles of Chairman and the Managing Director are not exercised by the same individual. The role of Managing Director is carried out by Executive Director, Mr Holmes. The Board Charter summarises the roles and responsibilities of the Non-Executive Chairman, Mr Fawcett, and the Managing Director, Mr Holmes.

2.2 Independence of non-executive directors and the Chairman of the Board

The Company recognises the importance of Non-Executive Directors and the external perspective and advice that NonExecutive Directors can offer. The Board has assessed the independence of the Non-Executive Directors and the Chairman using defined criteria of independence and materiality consistent with the guidance and commentary for Recommendation 2.1.

Mr Jeff Bennett and Mr David Prentice are Non-Executive Directors and are independent Directors as they meet the following criteria for independence adopted by the Company:

An Independent Director is a Non-Executive Director and:
�� or otherwise associated directly with, a substantial shareholder of the Company;
�� or another group member and there has not been a period of at least three years between ceasing such employment and serving on the Board;
�� professional adviser or a material consultant to the Company or another group member or an employee materially associated with the service provided;
�� group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; and
�� other group member other than as a Director of the Company.

Jameson Resources Annual Report 2012 | 65

Corporate Governance Statement

The Chairman, Mr David Fawcett does not satisfy the tests of independence as detailed in the Recommendations by virtue of his material contractual relationship with the Company and vested interest in the Dunlevy and Nexx projects. The Company however believes that Mr Fawcett’s skills and knowledge relating to these material projects outweigh any Corporate Governance risks associated with non-independence. The Company is of the view that the size and scale of its current operations do not warrant the appointment of an independent chairperson and that noncompliance with this Recommendation 2.2 will not be detrimental to the Company.

Mr John Holmes is the Managing Director of the Company and does not meet the Company’s criteria for independence and Mr T Art Palm is an Executive Director and also does not meet the Company’s criteria for independence.

continuous period in excess of three years or past the third annual general meeting following the director’s appointment, whichever is the longer, without submitting for re-election. The Company has not adopted a policy in relation to the retirement or tenure of directors.

2.6 Evaluation of the performance of the Board, its committees and individual directors

The performance of the Board and individual directors are evaluated in accordance with the Performance Evaluation Policies introduced via Board Charter. The objective of this evaluation is to provide best practice corporate governance to the Company. The Board Performance Evaluation Policy is available at the Company’s website. The appointment of the Company Secretary is a matter for the Board. Information on the skills, experience and qualifications of the Company Secretary can be found in the Directors’ Report.

2.7 Induction and education

The Company therefore does not comply with Recommendations 2.1 and 2.2 of the Principles of Good Corporate Governance, however it believes that the current Board represents the best mix of directors that have an appropriate range of qualifications and expertise, can understand and competently deal with current and emerging business issues and can effectively review and challenge the performance of the Company.

2.2 Responsibilities of the Board

In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company. It is required to do all things that may be necessary to be done in order to carry out the objectives of the Company. The responsibilities of the board are defined within the Company’s board charter which can be located on the Company website.

When appointed to the Board, a new director will receive an induction appropriate to their experience. Directors may participate in continuing education to update and enhance their skills and knowledge from time to time, as considered appropriate.

2.8 Access to information and advice

Directors are entitled to request and receive such additional information as they consider necessary to support informed decision-making. The Board also has a policy under which individual directors and Board committees may obtain independent professional advice at the Company’s expense in relation to the execution of their duties, after consultation with the Chairman.

PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING

3.1 Code of Conduct

2.3 Nomination Committee

The Company does not have an existing Nomination Committee as recommended in Recommendation 2.4. As the whole Board only consists of five (5) members, it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues.

The Board has adopted a Code of Conduct which applies to all directors and officers of the Company. It sets out Jameson Resources commitment to successfully conducting the business in accordance with all applicable laws and regulations while demonstrating and promoting the highest ethical standards. The Code of Conduct reflects the matters set out in the commentary and guidance for Recommendation 3.1.

2.4 Criteria for selection of Directors

Directors are appointed based on the specific governance skills required by the Company. Given the size of the Company and the business that it operates, the Company aims at all times to have at least two Directors with experience appropriate to the Company’s target market. In addition, Directors should have the relevant blend of personal experience in accounting and financial management and Director-level business experience. The Board is responsible for implementing a program to identify, assess and enhance director competencies and puts in place succession plans to ensure an appropriate mix of skills, experience, expertise and diversity are maintained on the Board. The Company’s Director Selection Procedure is located on its website.

2.5 Board renewal and succession planning

The appointment of directors is governed by the Company’s Constitution and the Appointment and Selection of New Directors policy. In accordance with the Constitution of the Company, no director except a Managing Director shall hold office for a

3.2 Trading in Company Shares

On 29 December 2010 the Board reviewed and adopted a new Share Trading Policy which included restrictions on trading in closed periods, complying with the ASX Listing Rule requirements. The Board periodically reminds Directors, senior executives and employees of the prohibition in the Corporations Act 2001 concerning trading in the Company’s securities when in possession of “inside information”. The Board also periodically reminds Directors of their obligations to notify the Company Secretary of any trade in securities to ensure that ASX Listing Rule requirements are met. The Company’s Share Trading Policy is located on its website

3.3 Conflicts of Interest

Directors must:

�� that may or might reasonably be thought to exist between the interests of the Director and the interests of any other parties in

66 | Jameson Resources Annual Report 2012

Corporate Governance Statement

carrying out the activities of the Company; and

�� period as may be permitted, take such necessary and reasonable steps to remove any conflict of interest.

If a Director cannot or is unwilling to remove a conflict of interest, then the Director must, as per the Corporations Act, absent himself or herself from the room when discussion and/or voting occurs on matters about which the conflict relates.

A register of Conflicts of Interest is tabled at every Board meeting.

3.4 Related Party Transactions

Related party transactions include any financial transaction between a Director and the Company. Unless there is an exemption under the Corporations Act from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction.

A register of Related Parties is tabled at every Board meeting.

3.5 Diversity Policy

Due to its size and scale of operations, the Company does not have an existing diversity policy as recommended in Recommendation 3.2. The Executive Directors are currently the Company’s only permanent employees.

There are no permanent women employees in the organisation, in senior executive positions or on the Board. Ms Foreman is the current the Company Secretary on a consultancy contact.

Details of each of the Board members and Company Secretary are disclosed in the Directors’ Report.

The Board has determined that the composition of the current Board represents the best mix of directors that have an appropriate range of qualifications and expertise, can understand and competently deal with current and emerging business issues and can effectively review and challenge the performance of the Company. As the Company’s operations grow and evolve, the Board will reconsider the appropriateness of implementing a diversity policy.

PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING

4.1 Audit Committee

Due to the size and scale of operations of the Company the full Board undertakes the role of the Audit Committee. Below is a summary of the role and responsibilities of an Audit Committee.

Company and the independence of the external auditor. The Board is therefore responsible for reviewing the integrity of the Company’s financial reporting and overseeing the independence of the external auditors.

The Audit Committee, or as at the date of this report the full Board of the Company, reviews the audited annual and half-yearly financial statements and any reports which accompany published financial statements and recommends their approval to the members.

4.2 External auditor

The Audit and Risk Committee, or as at the date of this report the full Board of the Company, reviews the external auditor’s terms of engagement and audit plan, and assesses the independence of the external auditor. The current practice, subject to amendment in the event of legislative change, is for the rotation of the engagement partner to occur every five years.

The Company’s independent external auditor is HLB Mann Judd (“Mann Judd”).

PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE

The Continuous Disclosure Policy sets out the key obligations of the directors and employees in relation to continuous disclosure as well as the Company’s obligations under the ASX Listing Rules and the Corporations Act. The Policy also provides procedures for internal notification and external disclosure, as well as procedures for promoting understanding of compliance with the disclosure requirements for monitoring compliance. The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure of information to the ASX as well as communicating with the ASX.

The Policy reflects the matters set out in the commentary and guidance for Recommendation 5.1.

The Continuous Disclosure Policy is available on Jameson Resources website.

PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS

The Shareholder Communications Policy sets out the Company’s aims and practices in respect of communicating with both current and prospective shareholders. The Policy reinforces the Company’s commitment to promoting investor confidence by requiring:

(a) compliance with the continuous disclosure obligations; (b) compliance with insider trading laws;
(c) compliance with financial reporting obligations;

As the whole Board only consists of five (5) members, the Company does not have an audit committee because it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues and an audit committee cannot be justified based on a cost-benefit analysis. However, in accordance with the ASX Listing Rules, the Board will move towards setting up an audit committee once the Directors consider the size and scale of the Company’s activities warrant a separate committee.

In the absence of an audit committee, the Board sets aside time to deal with issues and responsibilities usually delegated to the audit committee to ensure the integrity of the financial statements of the

(d) compliance with shareholder meeting requirements, including the provision of an opportunity for shareholders and other stakeholders to hear from and put questions to the Board, management and auditor of the Company;
(e) communication with shareholders in a clear, regular, timely and transparent manner; and
(f) response to shareholder queries in a prompt and courteous manner.

The Policy reflects the matters set out in the commentary and guidance for Recommendation 6.1.

Jameson Resources Annual Report 2012 | 67

Corporate Governance Statement

The Shareholder Communications Policy is available on Jameson Resources website.

PRINCIPLE 7: RECOGNISE AND MANAGE RISK

7.1 Risk Management Policy

Jameson Resources recognises that risk is inherent to any business activity and that managing risk effectively is critical to the immediate and future success of the Company. As a result, the Board has adopted a Risk Management Policy which sets out the Company’s system of risk oversight, management of material business risks and internal control. The Board sets aside time at meetings to discuss any risk management issues and Directors are encouraged to give priority to such issues.

7.2 Risk oversight

The Board’s Charter clearly establishes that it is responsible for ensuring there is a sound system for overseeing and managing risk. As the whole Board only consists of five (5) members, the Company does not have a Risk Management Committee because it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues. At the date of this report the full Board of the Company is responsible for establishing policies on risk oversight and management.

The Remuneration Committee consists of three (3) non-executive directors, being Mr Jeff Bennett, Mr David Prentice, Mr David Fawcett and the Company Secretary. The Chairman of the Remuneration Committee is Mr Jeff Bennett, an independent director. The Remuneration Committee was formed on 28 August 2012 and met once subsequent to the financial year end 30 June 2012 and each member was present at all meetings.

8.1.2 Responsibilities

The responsibilities of a Remuneration Committee include setting policies for senior officers’ remuneration, setting the terms and conditions of employment for the Managing Director, reviewing and making recommendations to the Board on the Company’s incentive schemes and superannuation arrangements, reviewing the remuneration of both Executive and Non-Executive Directors, recommendations for remuneration by gender and making recommendations on any proposed changes and undertaking reviews of the Managing Director’s performance, including, setting with the Managing Director goals and reviewing progress in achieving those goals.

8.3 Non-executive directors’ remuneration policy

The structure of non-executive directors’ remuneration is not currently clearly distinguished from that of executives.

7.3 Reporting and assurance

In the absence of an Audit Committee, the Board sets aside time to deal with issues and responsibilities usually delegated to the Audit Committee to ensure the integrity of the financial statements of the Company and the independence of the external auditor.

As detailed in responsibilities of the Audit Committee, the full Board of the Company reviews the audited annual and half-yearly financial statements and any reports which accompany published financial statements and recommends their approval to the members. The Audit Committee, or as at the date of this report the full Board of the Company, is also responsible for establishing policies on risk oversight and management.

The Board has received assurance from the Chair, Company Secretary and the Managing Director that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.

The Risk Management Policy is available on the Jameson Resources website.

Remuneration for non-executive directors is fixed. Non-Executive Directors are to be paid their fees out of the maximum aggregate amount approved by shareholders for the remuneration of NonExecutive Directors. Non-Executive Directors also receive long term incentives in the form of shares or options in the Company. NonExecutive Directors are also entitled to but not necessarily paid statutory superannuation.

The Performance Rights Plan and Employee Share Option Plan are used by the Company as part of the remuneration planning for both executive and non-executive Directors and employees. The Corporate Governance Guidelines and Recommendations recommend that non-executive directors should not receive options or participate in schemes designed for the remuneration of executives. Although the use of the Performance Rights Plan and Employee Share Option Plan as part of the remuneration planning for non-executive Directors is not in accordance with Recommendation 8.3, the Company considers that it is appropriate for non-executive Directors to be granted Performance Rights and Options having regard to the Company’s current circumstances including its size and stage of operations.

8.4 Executive directors’ remuneration policy

PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY

8.1 Remuneration Committee

The Remuneration Committee has delegated responsibilities in relation to the Company’s remuneration policies as set out in the Nomination and Remuneration Committee Charter. The Charter reflects the matters set out in the commentary and guidance for Recommendation 8.1.

As noted previously, executive directors are employed pursuant to employment agreements. Summaries of these employment agreements are set out in the Remuneration Report.

Further details regarding the remuneration arrangements of the Company are set out in the Remuneration Report.

8.1.1 Role

The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and incentive policies for employees.

68 | Jameson Resources Annual Report 2012

Corporate Governance Statement

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“ The Company expects to file its inaugural JORC/NI43-101 compliant resource for the Crown Mountain project by the end of 2012.”

Jameson Resources Annual Report 2012 | 69

Corporate Governance Statement

The checklist below summarises the Company’s compliance with the Recommendations:

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

Principles Recommendations Complied Reference/
Yes / No Explanation
Principle 1 Lay solid foundations for management and oversight
Rec 1.1 Companies should establish the functions reserved to the Board and those Yes Website and
delegated to senior executives and disclose the functions. Page 65
Rec 1.2 Companies should disclose the process for evaluation the performance of Yes Website and
senior executives. Page 65
Rec 1.3 Companies should provide the information indicated in the Guide to reporting Yes Website and
to Principle 1. Page 65
Principle 2 Structure the Board to add value
Rec 2.1 A majority of the Board should be independent directors. Yes Website and
Page 65, 66
Rec 2.2 The Chairperson should be an independent director. No Website and
Page 65, 66
Rec 2.3 The roles of chairperson and chief executive officer should not be exercised by Yes Website and
the same individual. Page 65, 66
Rec 2.4 The Board should establish a nomination committee No Website and
Page 65, 66
Rec 2.5 Rec 2.5 Companies should disclose the process for evaluating the performance Yes Website and
of the Board, its committees and individual directors. Page 65, 66
Rec 2.6 Companies should provide the information indicated in the Guide to reporting Yes Website and
to Principle 2 Page 65, 66
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70 | Jameson Resources Annual Report 2012

Corporate Governance Statement

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

Principles Recommendations Complied Reference/
Yes / No Explanation
Principle 3 Promote ethical and responsible decision making
Rec 3.1 Companies should establish a code of conduct and disclose the code or a Yes Website and
summary of the code as to: Page 66, 67
- the practices necessary to maintain confidence in the company’s integrity;
- the practices necessary to take account of their legal obligations and
reasonable expectations of their stakeholders; and
- the responsibility and accountability of individuals for reporting and
investigating reports of unethical practices.
Rec 3.2 Companies should establish a policy concerning diversity and disclose the No Page 67
policy or a summary of that policy. The policy should include requirements for
the Board to establish measurable objectives for achieving gender diversity
and for the Board to assess annually both the objectives and progress in
achieving them.
Rec 3.3 Companies should disclose in each annual report the measurable objectives for No Page 67
achieving gender diversity.
Rec 3.4 Companies should disclose in each annual report the proportion of women Yes Page 67
employees in the whole organisation, women in senior executive positions and
women on the Board
Rec 3.5 Companies should provide the information indicated in the Guide to reporting Yes Website and
on Principle 3. Page 67
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Jameson Resources Annual Report 2012 | 71

Corporate Governance Statement

The checklist below summarises the Company’s compliance with the Recommendations:

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

Principles Recommendations Complied Reference/
Yes / No Explanation
Principle 4 Safeguard integrity in financial reporting
Rec 4.1 The Board should establish an audit committee. No Website and
Page 67
Rec 4.2 The audit committee should be structured so that it: No Website and
Page 67
- consists only of non-executive directors
- consists of a majority of independent directors
- is chaired by an independent chair, who is not a chair of the Board
- has at least three members
Rec 4.3 The audit committee should have a formal charter. No Website and
Page 67
Rec 4.4 Companies should provide the information indicated in the Guide to reporting Yes Website and
on Principle 4. Page 67
Principle 5 Make timely and balanced disclosure
Rec 5.1 Companies should establish written policies designed to ensure compliance Yes Website and
with ASX Listing Rule disclosure requirements and to ensure accountability at Page 67
a senior level for that compliance and disclose those policies or a summary of
those policies.
Rec 5.2 Companies should provide the information indicated in the Guide to reporting Yes Website and
on Principle 5. Page 67
Principle 6 Respect the rights of shareholders
Rec 6.1 Companies should design a communications policy for promoting effective Yes Website and
communication with shareholders and encouraging their participation at Page 67
general meetings and disclose their policy or a summary of that policy.
Rec 6.2 Company should provide the information indicated in the Guide to reporting on Yes Website and
Principle 6. Page 67
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72 | Jameson Resources Annual Report 2012

Corporate Governance Statement

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

Principles Recommendations Complied Reference/
Yes / No Explanation
Principle 7 Recognise and manage risk
Rec 7.1 Companies should establish policies for the oversight and management of Yes Website and
material business risks and disclose a summary of those policies. Page 68
Rec 7.2 The Board should require management to design and implement the risk Yes Website and
management and internal control system to manage the company’s material Page 68
business risks and report to it on whether those risks are being managed
effectively. The Board should disclose that management has reported to it as to
the effectiveness of the company’s management of its material business risks.
Rec 7.3 The Board should disclose whether it has received assurance from the Yes Website and
chief executive officer (or equivalent) and the chief financial officer (or Page 68
equivalent) that the declaration provided in accordance with section 295A of
the Corporations Act is founded on a sound system of risk management and
internal control and that the system is operating effectively in all material
respects in relation to financial reporting risks.
Rec 7.4 Companies should provide the information indicated in the Guide to reporting Yes Website and
on Principle 7. Page 68
Principle 8 Remunerate fairly and responsibly
Rec 8.1 Rec 8.1 The Board should establish a remuneration committee. Yes Website and
Page 68
Rec 8.2 The remuneration committee should be structured so that it: Yes Website and
Page 68
- consists of a majority of independent directors
- is chaired by an independent director
- has at least three members
Rec 8.3 Companies should clearly distinguish the structure of non-executive directors’ No Website and
remuneration from that of executive directors and senior executives. Page 68
Rec 8.4 Rec 8.4 Companies should provide the information indicated in the Guide to Yes Website and
reporting on Principle 8. Page 68
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Jameson Resources Annual Report 2012 | 73

Corporate Governance Statement

ADDITIONAL SHAREHOLDER INFORMATION

A. CORPORATE GOVERNANCE

A statement disclosing the extent to which the Company has followed the best practice recommendations set by the ASX Corporate Governance Council during the reporting period is contained within the Financial Report.

B. SHAREHOLDING

1. Substantial Shareholders

The names of the substantial shareholders listed on the company’s register as at 31 August 2012:

Shareholder	Number	Percentage of issued
		capital held
NEFCO NOM PL	6,042,38 5	6.31%

2. Unquoted Securities

Class of Equity Security	Number	Number of
		SecurityHolders
35 cents options expiring31 March 2013	175,000	1
15 cents options expiring30 September 2014	9,233,333	41
Exchangeable shares	22,000,000	5
Performance rights A expiring30 August 2014	2,600,000	4
Performance rights B expiring30 August 2015	2,600,000	4
Performance rights C expiring30 August 2016	2,600,000	4
Performance rights D expiring30 August 2016	2,600,000	4

Names of persons holding greater than 20% of a class of unquoted equities:

Class of EquitySecurity	Number	Holder
31 March 2013 options -$0.50	175,000	Michael Hynes
30 September 2012 options -$0.15	3,622,223	GAB Superannuation
		Fund PtyLtd
Exchangeable shares	14,000,000	David Fawcett (and
		associated entities)
Performance Rights A expiring30 August 2014	1,000,000	Teresa Holmes
Performance Rights A expiring30 August 2014	1,000,000	Art Palm
Performance Rights B expiring30 August 2015	1,000,000	Teresa Holmes
Performance Rights B expiring30 August 2015	1,000,000	Art Palm
Performance Rights C expiring30 August 2016	1,000,000	Teresa Holmes
Performance Rights C expiring30 August 2016	1,000,000	Art Palm
Performance Rights D expiring30 August 2016	1,000,000	Teresa Holmes
Performance Rights D expiring30 August 2016	1,000,000	Art Palm

3. Number of holders in each class of equity securities and the voting rights attached

There are 964 holders of ordinary shares. Each shareholder is entitled to one vote per share held.

There are 0 holders of listed options.

On a show of hands every shareholder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

74 | Jameson Resources Annual Report 2012

Additional Shareholder Information

4. Distribution schedule of the number of holders in each class of equity security as at 31 August 2012.

	Class of Equity Securities
Number Held as at 31 August 2012	FullyPaid OrdinaryShares
1-1,000	37
1,001 - 5,000	112
5,001 – 10,000	155
10,001 - 100,000	465
100,001 and over	195
Totals	964

5. Marketable Parcel

Holders of less than a marketable parcel:- fully paid shares 57

6. Twenty largest holders of each class of quoted equity security

The names of the twenty largest holders of each class of quoted equity security, the number of equity security each holds and the percentage of capital each holds (as at 31 August 2012) is as follows:

	Name	Number of Ordinary	Held of Issued
		FullyPaid Shares Held	OrdinaryCapital(%)
1	MACQUARIE BANK LTD METALS & ENERGY CA	15,000,000	9.69%
2	NEFCO NOM PL	10,094,152	6.52%
3	LORD ROBERT SIMEON	6,000,000	3.88%
4	UBS WEALTH MGNT AUST NOM	4,725,222	3.05%
5	PERTH INV CORP LTD	4,631,445	2.99%
6	LUJETA PL MARGARET ACCOUNT	4,480,000	2.89%
7	ZERO NOM PL	4,000,000	2.58%
8	SPAR NOM PL	3,214,848	2.08%
9	CITICORP NOM PL	3,051,111	1.97%
10	LYONS TIMOTHY GUY + H M GNOWELLEN S/F A/C	2,813,720	1.82%
11	GAB S/F PL	2,585,416	1.67%
12	ARGYLE GAVIN JOHN GAVIN ARGYLE FAM A/C	2,562,354	1.66%
13	KARAKORAM NO2 PL S/F A/C	2,480,000	1.60%
14	COLEMAN JEREMY JAMES	2,159,359	1.40%
15	HILLBOI NOM PL	2,077,589	1.34%
16	R M CO PL R MACGREGOR INV A/C	2,066,667	1.34%
17	HSBC CUSTODY NOM AUST LTD	1,989,227	1.29%
18	NATIONAL NOM LTD	1,985,075	1.28%
19	CAP INV PTNRS PL	1,978,010	1.28%
20	SML CONTRACTING PL	1,715,000	1.11%
	TOTALS:	76,609,195	51.44%

7. Securities Exchange on which the Company’s securities are quoted

The Company’s listed equity securities are quoted on the Australian Securities Exchange.

8. Restricted Securities

There are no restricted securities on issue at the current date.

9. Review of Operations

A review of operations is contained in the Directors’ Report.

Voting Rights

Ordinary Shares

In accordance with the Company’s Constitution, on a show of hands every member present in person or by proxy or attorney or duly authorised representative has one vote. On a poll every member present in person or by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held.

Jameson Resources Annual Report 2012 | 75

Additional Shareholder Information

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76 | Jameson Resources Annual Report 2012 Schedule of Mineral Tenements

www.jamesonresources.com.au

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www.jamesonresources.com.au

AI assistant

JAMESON RESOURCES LIMITED — Annual Report 2012

65152_rns_2012-10-28_1c899ef5-da16-442c-96ba-544334b85ba0.pdf

ANNUAL REPORT

CORPORATE DIRECTORY

CONTENTS

CHAIRMAN’S LETTER

DIRECTORS’ REPORT

Directorships of other listed companies

COMPANY SECRETARY

Suzie Foreman

2. CORPORATE STRUCTURE

4. OPERATING RESULTS

5. DIVIDENDS PAID OR RECOMMENDED

3. PRINCIPAL ACTIVITIES

6. REVIEW OF OPERATIONS

British Columbia

British Columbia

Saskatchewan

7. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

8. AFTER BALANCE DATE EVENTS

9. MEETINGS OF DIRECTORS

10. FUTURE DEVELOPMENTS

11. ENVIRONMENTAL ISSUES

12. REMUNERATION REPORT (Audited)

Remuneration Policy

Performance based remuneration

Company performance, shareholder wealth and director’s and executive’s remuneration

Employment contracts of key management personnel

(a) Compensation of Key Management Personnel

Remuneration Policy

(b) Compensation Options: Granted and vested during and since the financial year ended 30 June 2012

(c) Share and Option holdings

(d) Performance income as a proportion of total income

END OF REMUNERATION REPORT

13. OPTIONS

14. INDEMNIFYING OFFICERS OR AUDITOR

15. PROCEEDINGS ON BEHALF OF COMPANY

16. AUDITOR’S INDEPENDENCE DECLARATION

17. NON-AUDIT SERVICES

18. COMPETENT PERSONS STATEMENT

AUDITOR’S INDEPENDENCE DECLARATION

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

(b) Adoption of new and revised standards

Changes in accounting policies on initial application of Accounting Standards

(c) Statement of Compliance

(d) Critical accounting judgements and key sources of estimation uncertainty

Share-based payment transactions:

(e) Revenue Recognition

Interest income

(f) Cash and cash equivalents

(g)

Trade and other receivables

(h)

Impairment of assets

(i) Financial assets carried at amortised cost

(ii) Financial assets carried at cost

(iii) Available-for-sale investments

(i) Income tax

(j) Other taxes

(k) Plant and equipment

Derecognition and disposal

(l) Financial assets

(i) Financial assets at fair value through profit or loss

(m) Trade and other payables

(n) Provisions

(o) Employee leave benefits

Wages, salaries, annual leave and sick leave

(p) Share-based payment transactions

Equity settled transactions:

(q) Issued capital

(r) Earnings per share

(s) Exploration and evaluation

(t) Foreign currency translation

(u) Basis of Consolidation

NOTE 3. AUDITORS’ REMUNERATION

NOTE 6. TRADE AND OTHER RECEIVABLES

NOTE 7. OTHER ASSETS

NOTE 8. DEFERRED EXPLORATION AND EVALUATION EXPENDITURE

JAMESON RESOURCES LIMITED Annual Report 2012