LIONTOWN LIMITED - Annual Report 2012

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aNNUaL REpORT 2012

Chairman’s Letter highLights

Chairman’s Letter 1 highLights 2 review of operations 3 sCheduLe of tenements 10 appendiCes 11

direCtors’ report

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|direCtors’ report|17|
|auditor’s independenCe deCLaration|24|
|ConsoLidated statement of Comprehensive inCome|25|
|ConsoLidated statement of finanCiaL position|26|
|ConsoLidated statement of Changes in equity|27|
|ConsoLidated statement of Cash fLows|28|
|notes to the ConsoLidated finanCiaL statements|29|
|direCtors’ deCLaration|48|
|independent auditor’s report|49|
|Corporate governanCe report|51|
|asX additionaL information|57|

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CORpORaTE DIRECTORy

DIRECTORS

Tim Rupert Barr Goyder David Ross Richards Douglas Alan Jones Anthony William Kiernan Craig Russell Williams

Chairman

Managing Director Non-executive Director Non-executive Director Non–executive Director

COMpaNy SECRETaRIES

Richard Keith Hacker Leanne Forgione

pRINCIpaL pLaCE Of BUSINESS & REgISTERED OffICE

Level 2, 1292 Hay Street WEST PERTH, WESTERN AUSTRALIA 6005 tel: (+61 8) 9322 7431 fax: (+61 8) 9322 5800 web: email:

aUDITORS

HLB Mann Judd Level 4, 130 Stirling Street PERTH, WESTERN AUSTRALIA 6000

ShaRE REgISTRy

Computershare Investor Services Pty Limited Level 2, Reserve Bank Building 45 St Georges Terrace PERTH, WESTERN AUSTRALIA 6000 tel: 1300 557 010

hOME ExChaNgE

Australian Securities Exchange Limited Exchange Plaza 2 The Esplanade PERTH, WESTERN AUSTRALIA 6000

aSx CODE

share Code: LTR

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review of operations
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cHAiRMAn’s LetteR

Dear ShareholDer

I am pleased to report that Liontown has had a successful year, particularly at its emerging Jubilee Reef Gold Project in Tanzania, East Africa, where ongoing drilling has outlined the potential for a large gold discovery.

Over 14,000 metres of Reverse Circulation (“RC”) and aircore drilling were completed at Jubilee Reef during the year, focusing mainly on the Masabi Hill prospect – where significant widths and grades of gold mineralisation have been intersected.

A further 11,000 metre combined RC, diamond and aircore program, which is budgeted to cost $1 million, is currently underway to determine the extent of mineralisation both at Masabi Hill and within the broader Jubilee Reef Project.

All mineralised zones intersected to date remain open and this exciting exploration program is expected to be completed prior to the end of the year, which will give us a much clearer indication of our exploration priorities moving into next year.

The Company has recently completed a fully underwritten rights issue to raise approximately $3.4 million before costs. The issue was very well supported by shareholders, ensuring that the Company has adequate funds to continue a deservedly thorough exploration program over the next 12 months.

Liontown has now earned a 51 per cent interest in the Jubilee Reef Project and our joint venture partner, Currie Rose Resources, has elected to dilute its 49 per cent interest during the December 2012 Quarter. It is expected that Liontown will have an interest of approximately 64 per cent in the Project at the end of 2012.

At the Mt Windsor Project in Queensland, which now includes the Panhandle Project, Liontown’s joint venture partner, Ramelius Resources, continued a well-funded exploration program during the year, having spent more than $4 million so far. While there have been no significant intersections from drilling to date, the potential of the project remains attractive, and Ramelius has indicated that it intends to continue an aggressive exploration campaign for the foreseeable future.

With our growing expertise on the ground in Tanzania, it is likely that the Company will continue to focus its activities on the Jubilee Reef Project with the objective of discovering an economic deposit.

On behalf of the Board, I would like to thank our exploration team, as they continue to undertake a well-planned and executed exploration program in Tanzania.

I would also like to thank our shareholders for their ongoing support and I hope that over the next 12 months your patience will be rewarded with exploration success and capital growth.

Yours faithfully

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TIM GOYDER Chairman

Liontown ResouRces LiMiteD 2012 1

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HigHLigHts

Jubilee reef JV – NortherN taNzaNia, eaSt africa

Two substantial drilling programs completed totalling 11,349 metres.
Outstanding gold results returned from Masabi Hill and Panapendesa prospects with better intersections including:
Masabi hill
62m @ 2.4g/t gold from 70m including 21m @ 4.7g/t gold from 70m
74m @ 1.8g/t gold from 8m including 23m @ 2.9g/t gold from 50m
50m @ 1.8g/t gold from 40m including 16m @ 4.1g/t gold from 47 m
68m @ 1.5g/t gold from 132 m including 21m @ 2.2g/t gold from 134 m

NortherN QueeNSlaND, auStralia

High level of exploration work maintained across all Liontown’s North Queensland projects including drilling programs totalling 7,252 metres.
At the Mt Windsor Joint Venture, elevated gold values (up to 3m @ 0.26g/t) and strongly anomalous silver assays (up to 2.8m @ 430g/t) intersected at Cardigan Dam validating exploration concept of targeting blind precious metal mineralisation.
Panhandle Project incorporated into Mt Windsor Joint Venture with Ramelius Resources ensuring well funded and well resourced exploration program will continue on the property.
All exploration activities on Liontown’s North Queensland projects to be fully funded by joint venture partner
Panapendesa
7m @ 5.6/t gold from 74m and 8m @ 3.2g/t gold from 92m

10m @ 2.7g/t gold from 42m

All mineralised zones remain open and a planned 14,000m drilling program is in progress at the date of this Report.
At Masabi Hill, multiple zones of mineralisation have been intersected and the results indicate potential for a large scale, granitoid hosted gold system.
Two additional prospects identified Chela and Tembo, where previous exploration has defined strong gold anomalism that will be tested by drilling in the coming year.
Ground position increased by acquisition of Mega JV area located immediately southwest of Jubilee Reef and along strike of mineralised Masabi Hill-Panapendesa trend.

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2 Liontown ResouRces LiMiteD 2012

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Review of opeRAtions

oVerVieW

Liontown is exploring for standalone precious metal deposits in northern Tanzania, East Africa and in northern Queensland, Australia.

In Africa, where exploration costs are higher, Liontown’s preference is to enter into joint ventures on more advanced projects where drill targets have already been defined and where the Company can earn majority equity.

In Australia, the Company’s strategy is to acquire and explore early-stage projects in under-explored but well endowed mineral provinces. Where deemed prudent, Liontown will join with partners with the financial and technical resources to accelerate work on Projects.

Liontown’s projects are located in well endowed mineral provinces where there are a number of world class mining operations. The exploration portfolio includes:

the Jubilee Reef Joint Venture Project located in northern Tanzania where Liontown has the right to earn up to 75% equity; and
an extensive land holding (>3,000km[2] ) in North Queensland where Ramelius Resources is funding all exploration activities and has the right to earn up to 60% equity in Liontown’s projects;

Fieldwork during the year included significant drilling programs with 18,600 metres drilled on Liontown’s projects during the year, a substantially higher amount than the 8,000-10,000 metres originally planned.

Significant gold mineralisation was intersected at Jubilee Reef and further major drilling programs are planned for Jubilee Reef Project in the coming year. Results from exploration in North Queensland warrant follow up work including drilling and Ramelius is continuing to fund exploration for a third year.

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lioNtoWN reSourceS liMiteD
ProJect locatioNS
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Liontown ResouRces LiMiteD 2012

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review of operations

1.0 JubiLee Reef Joint ventuRe (Liontown RigHt to eARn 75%)

The Jubilee Reef Joint Venture Project is located in the Lake Victoria Goldfield of northern Tanzania (Figure 1) where there are several multimillion ounce gold deposits including Bulyanhulu and Geita. Liontown has entered into an agreement with Currie Rose Resources Inc (TSX-V: CUI) to earn up to 75% equity in the Project.

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earn up to 75% equity in the Project.
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Figure 1: Jubilee Reef Project – Regional Setting

The Jubilee Reef Project is located in northern Tanzania approximately 850km west-northwest of Dar es Salaam. The region hosts a number of world class gold deposits in an Archaean greenstone-granite terrain, a geological setting very similar to the Eastern Goldfields of WA.

In late 2010, Liontown agreed to a joint venture with TSX-V listed Currie Rose Resources covering the Jubilee Reef Project. The principal terms of the Agreement between Liontown and Currie Rose are:

Liontown can earn 51% equity in the Jubilee Reef Project by completing 14,000 metres of drilling by December 31 2013; and
At its election, Liontown can increase its equity to 75% by completing a Definitive Feasibility Study.

It is envisaged that Liontown will have reached the 14,000 metre milestone sometime in the 4[th] Quarter of 2012. At this stage, Currie Rose may elect to contribute to the joint venture or dilute its interest.

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Previous exploration had defined a number of high order gold anomalies that were drill ready and Liontown has completed two major drilling programs since commencing field activities in mid 2011. A total of 11,349 metres has been drilled by Liontown comprising 64 RC holes (7,353m), 109 Aircore/RAB holes (3,662m) and 2 diamond core holes (334m). Results from the drilling programs, which are discussed below, indicate potential for the Project to host a major gold mineralised system and further major drilling programs are planned for the coming year. Drill statistics and significant results are listed in Appendices 1 - 5.

The Company’s other exploration activities included scout RC drilling to assess the iron ore potential of the Project and aeromagnetic surveying to assist with understanding the geological setting and controls on mineralisation.

Liontown has also assisted with the funding of a number of community initiatives including providing toilets, school desks and sporting equipment to the local school and medical equipment for the local health clinic.

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Figure 2: Jubilee Reef Project – Magnetic image compiled from recent airborne survey showing gold prospects and better exploration results

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goLD pRospects (see figuRe 2)

MAsAbi HiLL

The majority of Liontown’s exploration work during the year has been directed towards the Masabi Hill prospect where previous soil sampling and shallow RAB drilling defined a broadly east-west trending, >500 metre long, up to 300 metre wide gold anomaly (>100ppb) coincident with the outcropping portion of a syenitic granitoid. The anomalism defined by previous exploration was open along strike where prospective bedrock is obscured by transported sediments that post date mineralisation.

Liontown’s initial drilling at Masabi Hill focussed on testing beneath previous shallow RAB intersections and defining the limits of the gold anomalism beneath the transported cover towards the east and south. Following the intersection of strong gold mineralisation, the Company’s subsequent drilling programs have targeted extensions of better intersections and continued to test for the limits of the mineralised system which have not yet been defined. Drilling completed by Liontown at Masabi Hill comprises 39 RC holes for 4,953 metres, 109 aircore/RAB holes for 3,662 metres and 2 diamond core holes for 334 metres.

Multiple zones of gold mineralisation have been intersected at Masabi Hill (see figure 3) with most mineralised trends open along strike and at depth.

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Figure 3: Jubilee Reef Project – Interpreted geological map of Masabi Hill prospect showing better results intersected by Liontown drill programs

Better intersections include:

JBRRC041 62m @ 2.4g/t Au from 70m depth including 21m @ 4.7g/t Au from 70m
JBRRC045 74m @ 1.8g/t Au from 8m depth including 23m @ 2.9g/t Au from 50m depth

JBRRC041 is located within the central part of the Masabi Hill granitoid where it is hosted by altered syenite and appears to be part of a steeply plunging pipe-like body contained within a broad envelope of lower grade mineralisation. Other intersections recorded from this zone (see figure 4) include 50m @ 1.8g/t from 40m including 16m @ 4.1g/t Au from 47m and 68m @ 1.5g/t Au from 132m including 21m @ 2.2g/t Au from 134m.

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Figure 4: Jubilee Reef Project – Interpreted geological map of Masabi Hill prospect showing better results intersected by Liontown drill programs

JBRRC045 is located near the southern margin of the Masabi Hill granitoid approximately 250 metres south of JBRRC041 and the mineralisation is hosted by a mixed sequence of diorite, syenite and mafic volcanic. There has been no drilling along strike of this intersection and follow up of this zone will be a priority in the coming year.

In addition to the mineralised zones referred to above, significant intersections have been recorded on the margins of the area covered by drilling (see figure 3) including 18m @ 1.1g/t from 12m approximately 200m southwest of JBRRC045 and 22m @ 1.1g/t from 8m and 20m @ 1.0g/t from 84m on the eastern most line.

Drilling planned for next year is designed to test for extensions of existing gold intersections and determine the orientation and continuity of the mineralised zones. In addition, aeromagnetic data indicates that approximately 60% of the prospective granitoid, which is obscured by transported cover, has not yet been tested by drilling and lines of aircore/RAB holes will be drilled east and north of the current drill pattern to define the limits of gold anomalism associated with the intrusive body. The next phase of drilling at Masabi Hill will total approximately 6,000 metres evenly divided between RC and aircore with several diamond core holes also likely to provide detailed, subsurface geological data.

Liontown ResouRces LiMiteD 2012 5

review of operations

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sHAngAzA/pAnApenDesA

The Shangaza/Panapendesa prospect is located approximately 2 kilometres northeast of Masabi Hill and comprises two zones, Shangaza in the southwest and Panapendesa in the northeast, separated by a cross cutting fault structure. Previous RAB drilling had defined a 1 kilometre gold anomaly with intersections up to 19m @ 3.6g/t Au and limited deeper RC drilling intersected up to 20m @ 1.5g/t Au.

Liontown has completed a single phase of RC drilling at the prospect, comprising 7 RC holes for a total 870 metres which was designed to test for extensions of previous intersections. Strong gold mineralisation was intersected at the Panapendesa end of the prospect (see Figures 5 and 6) with better intersections including;

JBRRC024 7m @ 5.6g/t Au from 74m depth and 8m @ 3.2/t Au from 92m depth
JBRRC025 10m @ 2.7g/t Au from 42m depth

The mineralised trend, which is hosted by an interbedded sequence of BIF, shale and greywacke, remains open along strike and at depth and approximately 1,000m of follow up RC drilling is planned to test for extensions of the Panapendesa zone. A single diamond core hole will also be drilled to provide detailed geological and structural data to assist with determining the controls on mineralisation.

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Figure 5: Jubilee Reef Project – Drill hole plan of Panapendesa prospect showing better gold results

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Figure 6: Jubilee Reef Project – Drill section through central part of Panapendesa prospect

otHeR goLD pRospects

Two other gold prospects, Chela and Tembo, have been defined within the Jubilee Reef Prospect (see figure 2). Liontown’s follow up of these prospects is less advanced as the underlying Prospecting Licence was only granted late in the year.

At chela, previous RAB drilling had partially defined a >1km gold anomaly (0.1-1g/t) associated with a blind granitoid body that is totally obscured by a 10-40m thick blanket of transported sediments. The geological setting appears similar to Masabi Hill; however, most of the previously defined anomalism is contained within the transported cover with the RAB holes achieving only limited penetration of the granitoid. Liontown drilled 6 RC holes for a total 865 metres to test for significant mineralisation in the bedrock. While no ore grades and widths of gold mineralisation were intersected, strongly anomalous gold values were recorded (e.g. JBRRC057 15m @ 0.4g/t Au from 109m and JBRRC059 2m @ 1.3g/t Au from 92m) from the granitoid which appears to a similar composition to the central part of the Masabi Hill prospect. Liontown’s results confirm the potential for the Chela prospect to host economic gold mineralisation and further aircore/RAB drilling totalling approximately 2,500m is planned to better define targets for follow up RC drilling. At tembo, previous rock chip sampling recorded up to 8.5g/t Au over 200 metres strike coincident with a cross cutting veined zone that aeromagnetic data indicates is part of a major, north northwest trending structural break. There has been no previous drill testing of this feature and Liontown plans to drill 2 RC holes for 200m to test the intersection of the mineralised zone with adjacent BIF which trends east northeast at right angles to the veining.

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2.0 MegA Joint ventuRe (Liontown RigHt to eARn 75%)

The Mega Joint Venture Project is located immediately southwest and along strike of the Jubilee Reef JV and is prospective for the same styles of gold mineralisation. Liontown has entered into an agreement with private company Tanzoz Minerals Ltd to earn up to 75% equity in the Project, by funding exploration activities for the next three years.

The Mega JV Agreement is with private Tanzanian company Tanzoz Minerals Ltd and covers a 9.3km[2] prospecting license located immediately southwest of the Jubilee Reef JV Project (see figure 7). The PL includes the strike continuation of structures and stratigraphy that host the Masabi Hill and Panapendesa prospects at Jubilee Reef. Liontown can earn 75% equity within 3 years of the Effective date of the Agreement by paying Tanzoz $50,000 per annum and spending a minimum of $50,000 per annum on in-ground exploration.

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Figure 7: Jubilee Reef and Mega Projects – Regional geology plan

The Mega PL is largely covered by transported soils and previous exploration, which was restricted to soil sampling and wide spaced ground magnetics, has not effectively tested the prospective bedrock for gold. Outcrop is limited to a small hill in the central part of the PL comprising BIF and flanking sediments and rock chip sampling by Liontown recorded up to 0.13g/t gold and 1,115ppm arsenic from the northern flank indicating that the mineralized trends defined on the Jubilee Reef Project possibly extend into the Mega JV area.

Liontown commissioned a detailed aeromagnetic survey to cover the Mega PL (and adjacent Jubilee Reef Project) which was flown late in the year. The data has been processed and will be interpreted to identify targets for reconnaissance aircore drilling.

A 2,500-3,000 metre aircore drilling program is scheduled to be drilled across the Mega ground during the first half of the coming year.

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Liontown ResouRces LiMiteD 2012

review of operations

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3.0 Mount winDsoR Joint ventuRe pRoJect (RAMeLius ResouRces RigHt to eARn 60%)

The Mount Windsor Joint Venture Project comprises an extensive tenement package located in the Charters Towers goldfield of North Queensland (Figure 8) which has yielded >15 million ounces of gold from world-class mines such as Charters Towers (+7Moz), Kidston (+4Moz), Pajingo (+3Moz), and Mt Leyshon (3Moz). In April 2010, Liontown entered into a JV agreement with ASX-listed gold company Ramelius Resources Limited (Ramelius; ASX: RMS) under which Ramelius can earn up to a 60% interest in the Mt Windsor Project by spending $7 million over 4 years.

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Figure 8: Liontown project areas in North Queensland.

A high level of exploration activity was maintained at Mt Windsor during the Year with JV managers Ramelius completing two RC/diamond core drilling programs, detailed geophysical surveys and systematic geological mapping and geochemical sampling over a number of prospect areas. Ramelius’s total project expenditure up until year end is approximately $4.4 million.

Additionally, following a review of its exploration priorities and strategies late in the year, Liontown agreed to incorporate its other North Queensland properties, Panhandle and Keelbottom (see figure 8), into the Mt Windsor Joint Venture. As Panhandle was a stand-alone Project for most of the year, it will be discussed separately below. With the exception of a literature review which identified a number of targets for ground follow up, Liontown has not completed any work on the Keelbottom Project.

The two drilling programs tested targets at 7 prospects with 25 holes drilled comprising 4,586 metres RC and 1,566 metres diamond core. Targets were defined by exploration work completed by Liontown prior to the inception of the JV and by more recent geophysical and geochemical surveys undertaken by Ramelius Resources.

Anomalous drill results were recorded at the Cardigan Dam prospect (see figure 9) where several drill holes intersected elevated gold values and highly anomalous silver and pathfinder assays associated with a rhyolite breccia pipe that intrudes granodiorite (see figure 10).

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Figure 9: Mt Windsor JV Project – Regional geology and prospects.

Anomalous drill results from Cardigan Dam include:

CDDH001 2.8m @ 430g/t silver from 253.3 metres
2m @ 51.5g/t silver and 2.2% zinc from 124 metres
CDDH002
CDDH003 3m @ 0.26g/t gold from 315 metres

The results validate Liontown’s exploration concept of targeting blind precious metal zones at depth by applying techniques that use vertical zonation trends to provide vectors towards high grade mineralisation. While the Cardigan Dam results are encouraging from a Project perspective, they are not considered significant enough to warrant immediate follow up or deeper drilling.

Ramelius still consider the region to be highly prospective for precious metals and target definition work is ongoing with additional drilling programs scheduled for the first half the coming year. Details including previous drill statistics and assay results are given in Ramelius’s Annual Report.

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Figure 10: Mt Windsor JV Project – Cardigan Dam drill section.

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4.0 pAnHAnDLe pRoJect

(RAMeLius ResouRces RigHt to eARn 60%)

The Panhandle Project is located in North Queensland and is considered prospective for high grade gold and silver deposits similar to those found elsewhere in the region such as Mt Carlton, Pajingo and Mt Wright. In May 2012, Liontown agreed to incorporate the Panhandle Project into the Mt Windsor Joint Venture with Ramelius Resources.

The Panhandle Project is located 150 kilometres southsoutheast of Townsville (see figure 8) in North Queensland and was established in mid 2010 following the acquisition of a number of tenements where prior exploration by other companies defined significant precious metal anomalism which had not been adequately assessed.

Exploration work during the year comprised drill testing of the Powerline prospect (see figure 11) where Liontown had defined a strong silver-arsenic-base metal soil anomaly over 1 kilometre strike coincident with the faulted contact between two volcanic units. Two RC/diamond core holes and 4 RC holes were drilled for a total 1,100m (see appendix 6).

The drilling intersected a strongly clay altered, intensely bleached zone with associated disseminated pyrite, galena and sphalerite coincident with the faulted volcanic contact. Better results from the drilling include

• PNRD0002 1m @ 13g/t silver, 1.5% lead and 3.4% zinc from 303 metres

PNRD0003 1m @ 75g/t silver, 2.2% lead and 2.1% zinc from 94 metres.

Further target definition work including a Induced Polarisation survey to detect strong sulphide concentrations at depth is required at Powerline prior to further drill testing. Following a review of Liontown’s exploration priorities and strategies, the Company reduced the land position from 1,260km[2] to 398km[2] and agreed to incorporate the Panhandle Project into the Mt Windsor Joint Venture with Ramelius Resources for no additional consideration apart from maintaining the underlying tenements in good standing. The deal with Ramelius will ensure that a well funded and technically driven exploration program will continue on the Project.

Ramelius’s initial focus at Panhandle will be the Quartz Ridge prospect where a 150m long, northeast trending zone of poorly exposed veining with multiple float samples returning plus 1g/t gold values (up to 9.5g/t) and strongly anomalous silver (up to 201g/t) has been defined. This zone is interpreted as representing leakage from a deeper mineralised system and an IP survey completed by Liontown last year defined a zone of low resistance 100-150m vertically below the auriferous float which is possibly due to alteration associated with mineralisation. A single, 450-500m deep RC/ diamond core hole is planned to test this target.

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Figure 11 – Panhandle Project – Soil sampling plan showing anomalous silver areas and main prospect areas.

5.0 ReLinquisHeD pRoJects

AfRicAn bARRick iRon oRe Joint ventuRe

The African Barrick Iron Ore Joint Venture (ABIOJV) Project covered ~530km[2] and abutted Liontown’s Jubilee Reef JV in the Lake Victoria Goldfield of northern Tanzania. The Lake Victoria Goldfield is a similar geological terrain to the Mid-West region of Western Australia where a number of large iron ore resources have been discovered. African Barrick’s ground had not been previously assessed for iron mineralisation and Liontown secured the opportunity to earn up to 70% equity in the iron rights from African Barrick (ABG) which is the largest gold miner and one of the largest tenement holders in Tanzania. ABG retained all rights to minerals discovered other than iron ore and by-products directly associated with iron ore mineralogy.

The Agreement provided for a 6 month assessment period when Liontown could assess all technical data and undertake field traversing to determine whether there is potential for significant high grade, DSO iron mineralisation within the ABG tenements. A desk top review of the ABG database defined a number of conceptual iron targets over which field traversing and rock chip sampling was completed. Twelve traverses for a total of 21.8 line kilometres were undertaken with 35 rock chip samples collected.

No significant volumes of iron ore mineralisation were observed during the field work and Liontown elected not to proceed with the Joint Venture.

foRt constAntine soutH

The Fort Constantine South Project located near Cloncurry in western Queensland was relinquished during the year.

Liontown ResouRces LiMiteD 2012

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scHeDuLe of teneMents

Mt winDsoR Joint ventuRe

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teneMent# stAtus RegisteReD HoLDeR cuRRent equity
EPM15192 Owned Liontown Resources Limited 100%
EPM18690 Owned Liontown Resources Limited 100%
EPM14161 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM15102 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM16627 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM16712 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM16408 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM17804 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM17971 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM18231 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM18233 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM18235 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM18236 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM18352 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM18376 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM18545 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM16920 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM14762 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM16213 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM18270 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM18774 Owned Liontown Resources Limited Ramelius Resources currently earning equity up to 60%
EPM16846 Application Liontown Resources Limited 0%
EPM17081 Application Liontown Resources Limited 0%
EPM17082 Application Liontown Resources Limited 0%
EPM18224 Application Liontown Resources Limited 0%
EPM18422 Application Liontown Resources Limited 0%
tAnzAniA
JubiLee Reef Jv
teneMent# stAtus RegisteReD HoLDeR cuRRent equity
PL4495/2007 Owned Currie Rose Resources (T) Limited Earning up to 75% equity in the Project.
PL6168/2009 Owned Currie Rose Resources (T) Limited Earning up to 75% equity in the Project.
PL8125/2012 Owned Boulder Mining Company Limited Earning up to 75% equity in the Project.
HQ-P 20634 Application Barrick Exploration Africa Limited Earning up to 75% equity in the Project.
HQ-P 24810 Application Currie Rose Resources (T) Limited Earning up to 75% equity in the Project.
HQ-P 24830 Application Currie Rose Resources (T) Limited Earning up to 75% equity in the Project.
MegA (tAnzoz) Jv
teneMent# stAtus RegisteReD HoLDeR cuRRent equity
PL5406/2008 Owned Tanzoz Mineral Limited Earning up to 75% equity in the Project.
eAsteRn AppLicAtions
teneMent# stAtus RegisteReD HoLDeR cuRRent equity
HQ-P 23726 Application Alphex Consulting Company Limited 0%
HQ-P 23896 Application Alphex Consulting Company Limited 0%
HQ-P 23897 Application Alphex Consulting Company Limited 0%
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10 Liontown ResouRces LiMiteD 2012

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AppenDices

AppenDix 1 MAsAbi suMMARy Rc inteRsections 2012

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HoLe iD eAsting noRtHing DeptH significAnt inteRsections significAnt inteRsections
(>0.1g/t Au) (>0.5g/t Au)
From To InTerval Grade From To InTerval Grade
3 18 15 0.63 13 17 4 1.14
JLRR31 439155 9606320 100 20 47 27 0.63 28 33 5 1.59
62 80 18 0.90 62 73 11 1.12
19 26 7 0.27
JLRR9 439019 9606438 125 83 89 6 0.29
91 92 1 1.06 91 92 1 1.06
6 12 6 0.34
24 30 6 0.24
JRRC-1 439300 9606350 98 33 39 6 0.22
57 63 6 0.22
75 81 6 0.28
0 33 33 0.70 6 27 21 0.93
JRRC-2 439000 9606245 65
42 57 13 0.90 48 51 3 3.00
4 6 2 1.32
2 36 34 0.63 17 24 7 1.22
26 29 3 0.98
42 69 27 2.76
JBRRC018 439042 9606254 175 40 90 50 1.79
80 87 7 1.09
99 108 9 0.89 104 107 3 2.24
135 148 13 0.75 138 144 6 1.20
153 175 22 0.45 153 158 5 1.00
0 48 48 1.05 9 46 37 1.30
60 64 4 0.46
JBRRC019 439136 9606272 175 68 76 8 0.13
88 92 4 0.31
97 103 6 0.42
107 109 2 1.27 107 109 2 1.27
JBRRC020 439064 9606418 175 128 140 12 0.88 130 131 1 6.28
148 160 12 0.54
35 46 11 0.59 36 44 8 0.74
70 91 21 4.66
JBRRC041 439030 9606208 132
70 132 62 2.37 94 99 5 1.00
102 132 30 1.40
3 12 9 0.27
17 30 13 0.32
40 57 17 0.25
66 78 12 0.26
JBRRC042 439029 9606364 165 86 94 8 0.32
110 111 1 0.77
114 117 3 1.16 114 117 3 1.16
129 152 23 0.50 133 137 4 1.49
154 165 11 0.30
0 8 8 0.30 3 4 1 1.20
40 45 5 0.23
JBRRC043 439120 9606236 123 48 85 37 0.48 49 55 6 1.08
99 105 6 0.48 100 102 2 0.96
112 119 7 0.57 114 115 1 1.65
11 25 14 0.34
29 41 12 1.01 31 36 5 2.08
18 36 18 0.36 53 55 2 1.28
JBRRC044 439123 9606356 129 66 73 7 0.86 70 72 2 2.38
80 84 4 0.63 82 83 1 1.41
89 100 11 0.27
105 111 6 0.18
----- End of picture text -----

Liontown ResouRces LiMiteD 2012

AppenDix 1 MAsAbi suMMARy Rc inteRsections 2012 (continueD)

==> picture [502 x 688] intentionally omitted <==

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

HoLe iD eAsting noRtHing DeptH significAnt inteRsections significAnt inteRsections
(>0.1g/t A u) (>0.5g/t Au)
From To InTerval Grade From To InTerval Grade
12 32 20 2.33
8 82 74 1.8 50 73 23 2.93
76 82 6 1.46
JBRRC045 439216 9605991 135
84 86 2 0.58
97 104 7 0.44
124 129 5 0.99 127 128 1 3.65
48 51 3 0.3
54 57 3 0.66 56 57 1 1.16
JBRRC046 439222 9606131 135 62 66 4 0.43
105 112 7 0.34
118 130 12 1.23 122 128 6 2.11
104 107 3 0.19
JBRRC047 439600 9606027 140
109 112 3 2.11 109 112 3 2.11
JBRRC048 439602 9606171 39 Hole abandoned before reaching target depth
JBRRC049 439610 9606176 79 Hole abandoned before reaching target depth
24 28 4 0.29
52 57 5 1.07 53 57 4 1.25
JBRRC050 439617 9606172 130
86 94 8 1.27 86 92 6 1.59
125 128 3 0.88 125 127 2 1.15
16 32 16 0.28 16 20 4 0.66
87 92 5 0.44
JBRRC051 439477 9606305 190 109 112 3 1.55 109 111 2 2.14
164 168 4 0.36
180 188 4 0.25
18 22 4 1.1
17 59 42 0.5
26 33 7 1.26
JBRRC052 439451 9606431 120 64 88 24 0.16
91 98 7 0.76 93 97 4 1.05
104 120 16 0.54 117 120 3 1.73
12 16 4 0.36
22 28 6 0.68 22 25 3 1.08
JBRRC053 439441 9606506 112
56 59 3 0.52
64 71 7 0.4
JBRRC054 439598 9606101 84 23 36 13 0.24 23 24 1 1.02
4 16 12 0.45
JBRRC061 438980 9606267 100 31 40 9 0.26
65 94 29 0.25
32 44 12 0.68
27 71 44 0.43
48 49 1 1.39
74 97 23 0.38 77 86 9 0.55
JBRRC062 438970 9606201 150
99 105 6 0.33
111 132 21 0.35
134 145 9 0.78 137 144 7 1.1
140 150 10 0.77 141 148 7 0.98
153 159 6 0.7 154 155 1 2.99
JBRRC063 438983 9606161 200
164 167 3 0.31
193 198 5 0.28
4 12 8 0.44
JBRRC064 439062 9606273 80 14 32 18 0.43 21 26 5 0.89
45 66 21 0.62 45 55 10 0.89
15 33 18 0.45 16 17 1 1.1
JBRRC065 439064 9606161 200
27 29 2 1.33
12 20 8 0.47 13 15 2 1.24
31 40 9 0.28
64 69 5 0.17
75 81 6 0.27
JBRRC066 439024 9606164 200 89 91 2 1.3 90 91 1 2.48
110 114 4 0.22
133 161 28 1.95
132 200 68 1.5 162 183 21 1.46
186 200 14 1.11
----- End of picture text -----

12 Liontown ResouRces LiMiteD 2012

AppenDix 1 MAsAbi suMMARy Rc inteRsections 2012 (continueD)

==> picture [502 x 635] intentionally omitted <==

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

HoLe iD eAsting noRtHing DeptH significAnt inteRsections significAnt inteRsections
(>0.1g/t Au) (>0.5g/t Au)
From To InTerval Grade From To InTerval Grade
67 73 6 0.36 68 70 2 0.89
78 83 5 0.23
JBRRC067 439174 9606201 124 85 87 2 0.27
93 103 10 0.68 99 103 4 1.22
113 123 10 0.27
3 12 9 0.64 3 6 3 1.47
14 22 8 0.76 15 20 5 1.03
JBRRC068 439166 9606260 134 27 58 31 0.52 27 34 7 0.83
50 52 2 1.23
75 98 23 0.63 86 95 9 1.31
36 38 2 0.29
JBRRC069 439164 9606371 90 54 56 2 0.39
86 90 4 0.32
123 131 7 0.8 128 131 3 1.6
JBRRC070 439220 9606098 187 150 153 3 0.43
175 177 2 0.4
JBRRC071 439600 9606291 111 8 109 101 0.35 72 81 9 1.07
8 24 16 0.37
32 48 16 1.01 40 44 4 3.16
JBRRC072 439590 9606298 150
72 88 16 0.41 76 80 4 1.06
120 132 12 0.98 120 128 8 1.36
28 40 12 0.65
JBRRC073 439604 9606428 129 28 92 64 0.4
60 68 8 1.36
28 52 24 0.93
12 72 60 0.56
56 60 4 1.1
JBRRC074 439594 9606428 123
80 84 4 0.59 80 84 4 0.59
88 108 20 1 88 100 12 1.52
JBRRC075 439601 9606548 87 12 80 68 0.29 52 56 4 1.68
JBRRC076 439582 9606522 33 16 33 17 0.41 Hole abandoned before target depth
JBRRC077 439587 9606521 95 16 56 40 0.22
4 9 5 0.15
13 19 6 0.21
JBRRC078 439027 9606178 80
48 56 8 0.31
65 77 12 0.35
1 20 19 1.17
0 35 35 0.87 22 24 2 0.86
JBRRC079 439015 9606245 81
30 33 3 1.31
67 81 14 0.56
1 63 62 0.75 35 56 21 1.24
67 81 14 0.27
JBRRC080 438982 9606247 130
83 87 4 0.41
89 129 40 0.86 110 123 13 1.43
1 15 14 0.18
JBRRC081 438988 9606180 81 31 45 14 0.49 32 33 1 1.53
62 73 11 0.3 62 63 1 1.36
11 16 5 0.85
18 22 4 1.32
29 32.8 3.8 0.98
JBRDD001 439036 9606240 152 7.05 94.3 87.25 0.94 43.7 49.7 6 1.22
51.7 59.6 7.9 1.05
60.75 61.75 1 10.05
63.5 92.3 28.8 1.14
17.2 40.6 23.4 0.36 33.95 34.95 1 1.6
59.3 74.5 15.2 0.48 69 70 1 1.49
JBRDD002 439220 9605980 182
77.22 93 15.78 1.56 77.22 82.75 5.53 2.39
136.2 138.2 2 1.18 136.2 138.2 2 1.18
----- End of picture text -----

3-4m composite samples

Liontown ResouRces LiMiteD 2012 13

AppenDix 2 MAsAbi suMMARy RAb inteRsections 2012

HoLe iD	eAsting	noRtHing	DeptH	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.5g/t Au)	significAnt inteRsections (>0.5g/t Au)	significAnt inteRsections (>0.5g/t Au)	significAnt inteRsections (>0.5g/t Au)
				From	To	InTerval	Grade	From	To	InTerval	Grade
JLRB483	439599	9606100	39	16	39	33	0.31
JLRB484	439599	9606121	39	No signifcant assays
JLRB485	439601	9606141	19
JLRB486	439601	9606162	40
JLRB487	439601	9606181	34
JLRB488	439600	9606200	30	8	30	22	1.1	9	22	13	1.52
JLRB489	439600	9606221	37	4	20	16	0.2
JLRB490	439600	9606241	40	4	40	36	0.2
JLRB491	439600	9606261	21	16	20	4	0.12
JLRB492	439600	9606281	19	4	16	12	0.5
JLRB493	439280	9605947	40	No signifcant assays
JLRB494	439273	9605965	40
JLRB495	439260	9605987	40
JLRB496	439252	9606001	40	4	32	28	0.3
JLRB497	439242	9606020	40	12	36	24	0.24
JLRB498	439234	9606040	37	9	37	28	0.8	31	36	5	1.5
JLRB499	439227	9606053	38	5	37	32	0.6	9	17	8	1.3
JLRB500	439220	9606072	35	No signifcant assays
JLRB501	439212	9606092	37	8	16	8	0.24
JLRB502	439199	9606108	28	No signifcant assays
JLRB503	439191	9606128	22
JLRB504	439181	9606147	28
JLRB505	439172	9606170	40
JLRB506	439850	9606351	32
JLRB507	439831	9606350	22
JLRB508	439811	9606351	39	20	32	12	0.21
JLRB509	439789	9606350	39
JLRB510	439765	9606349	36	24	36	12	0.18
JLRB511	439741	9606349	40	No signifcant assays
JLRB512	439720	9606350	40
JLRB513	439699	9606350	40	20	24	4	0.37
JLRB514	439679	9606350	40	No signifcant assays
JLRB515	439661	9606351	39
JLRB516	439641	9606351	40	28	40	12	0.26
JLRB517	439620	9606351	34	28	34	6	0.13
JLRB518	439600	9606350	40	32	40	8	0.33
JLRB519	439599	9606300	40	20	32	12	0.35
JLRB520	439599	9606319	33	28	32	4	0.28
JLRB521	439600	9606339	31	28	31	3	0.66	28	31	3	0.66
JLRB522	439600	9606361	40	12	32	20	0.37
JLRB523	439601	9606379	39	24	39	15	0.8	31	34	3	2.09
JLRB524	439601	9606400	37	No signifcant assays
JLRB525	439600	9606419	27	12	27	15	0.3
JLRB526	439601	9606441	40	16	40	24	0.3
JLRB527	439601	9606459	35	20	35	15	0.3
JLRB528	439601	9606480	32	16	32	16	0.7
JLRB529	439601	9606501	30	16	30	12	0.5
JLRB540	439988	9606351	40	No signifcant assays
JLRB541	439967	9606350	38
JLRB542	439946	9606350	34
JLRB543	439930	9606350	40
JLRB544	439910	9606350	40
JLRB545	439890	9606351	34
JLRB546	439872	9606351	31
JLRB547	440000	9606003	33
JLRB550	439602	9605903	39	28	36	8	0.48

14 Liontown ResouRces LiMiteD 2012

AppenDix 2 MAsAbi suMMARy RAb inteRsections 2012 (continueD)

HoLe iD	eAsting	noRtHing	DeptH	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.5g/t Au)	significAnt inteRsections (>0.5g/t Au)	significAnt inteRsections (>0.5g/t Au)	significAnt inteRsections (>0.5g/t Au)
				From	To	InTerval	Grade	From	To	InTerval	Grade
JLRB551	439601	9605922	40	No signifcant assays
JLRB552	439600	9605941	32
JLRB553	439603	9605956	40
JLRB554	439602	9605975	39
JLRB555	439603	9605994	30
JLRB556	439604	9606010	14
JLRB557	439606	9606017	40
JLRB558	439600	9606037	30
JLRB559	439600	9606052	32
JLRB560	439601	9606068	19
JLRB561	439600	9606080	21
JLRB562	439400	9605900	28
JLRB563	439400	9605915	34
JLRB564	439400	9605932	35
JLRB565	439400	9605949	40
JLRB566	439400	9605970	52
JLRB567	439400	9605996	34
JLRB568	439400	9606013	36	20	24	4	0.32
JLRB569	439113	9605904	11	4	8	4*	0.12
JLRB570	439113	9605924	32	12	16	4*	0.18
JLRB571	439108	9605955	20	4	8	4*	0.13
				16	20	4	0.27
JLRB572	439102	9605984	20	12	20	8	0.43	18	19	1	1.29
JLRB573	439096	9606009	20	No signifcant assays
JLRB574	439074	9606035	20
JLRB575	439066	9606091	30	25	28	3	0.42	27	28	1	0.75
JLRB576	439066	9606155	30	4	12	8*	0.12
				18	21	3	2.05	19	21	2	2.94
				25	30	5	1.6	25	28	3	2.49
JLRB577	439064	9606184	30	20	24	4*	0.25
JLRB578	439067	9606215	30	28	30	2	1.8	28	30	2	1.8
JLRB579	439069	9606123	30	No signifcant assays
JLRB580	439074	9606064	30
JLRB581	439111	9605871	30	4	30	26	0.84	12	30	18	1.1
JLRB582	439115	9605842	36	20	27	7	0.23
JLRB583	439409	9606043	42	16	20	4*	0.15
JLRB584	439415	9606072	30	No signifcant assays
JLRB585	439418	9606109	30
JLRB586	439425	9606135	30	10	12	2	0.84	11	12	1	1.44
JLRB587	439406	9606169	24	No signifcant assays
JLRB588	439403	9606199	24	8	12	4*	0.12
JLRB589	439401	9606231	24	12	24	12*	0.2
JLRB590	439400	9606259	24	4	20	16	0.62	15	17	2	3.42
JLRB591	439404	9606295	24	0	8	8*	0.19
				12	21	9	0.37	16	21	5	0.57

4m composite samples

AppenDix 3 sHAngAzA / pAnApenDesA suMMARy Rc inteRsections 2012

HoLe iD	eAsting	noRtHing	DeptH	significAnt inteRsections(>0.5g/t Au)	significAnt inteRsections(>0.5g/t Au)	significAnt inteRsections(>0.5g/t Au)	significAnt inteRsections(>0.5g/t Au)
				From	To	InTerval	Grade
JBRRC021	440963	9607570	121	<0.5g/t Au
JBRRC022	441075	9607750	157
JBRRC023	441015	9607434	101
JBRRC024	441282	9607813	103	74	81	7	5.6
				92	100	8	3.2
JBRRC025	441351	9607848	110	42	52	10	2.7
JBRRC026	440854	9607404	103	<0.5g/t Au
JBRRC040	440850	9607396	175

Liontown ResouRces LiMiteD 2012

AppenDix 4 cHeLA suMMARy Rc inteRsections

HoLe iD	eAsting	noRtHing	DeptH	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.1g/t Au)	significAnt inteRsections (>0.5g/t Au)	significAnt inteRsections (>0.5g/t Au)	significAnt inteRsections (>0.5g/t Au)	significAnt inteRsections (>0.5g/t Au)
				From	To	InTerval	Grade	From	To	InTerval	Grade
JBRRC055	445232	9610913	118	36	48	12*	0.12
				112	118	6*	0.15
JBRRC056	445292	9610807	130	24	36	12*	0.12
				52	60	8*	0.14
				88	100	12*	0.11
				112	120	8*	0.14
JBRRC057	445300	9610807	148	20	24	4*	0.86	20	24	4	0.86
				84	92	8*	0.12
				109	124	15	0.40	111	117	6	0.59
JBRRC058	445365	9610653	158	No signifcant assays
JBRRC059	445582	9610937	156	56	68	12*	0.20
				92	96	4	0.74	92	94	2	1.3
				116	136	20*	0.12
JBRRC060	445663	9610806	155	44	56	12*	0.12
				60	68	8*	0.17
				84	96	12*	0.16
				108	111	3	0.82	108	110	2	1.02
				124	136	12*	0.17

AppenDix 5 LtR iRon HoLes Rc inteRsections 2012

HoLe iD	eAsting	noRtHing	RL	Dip	AziMutH	DeptH (M)	fRoM (M)	to (M)	wiDtH (M)	fe %
JBRRC-028	16330	11316	1464	-60	150	151	16	49	33	29
JBRRC-029	16367	11223	1460	-60	150	43	0	43	43*	32
JBRRC-030	19496	10965	1435	-60	180	121	0	20	20	29.6
JBRRC-031	19503	11028	1450	-60	180	73	0	73	73*	29.4
JBRRC-032	19501	11068	1453	-60	180	31	0	31	31*	33.9
JBRRC-033	19501	11152	1464	-60	180	43	28	43	15*	30.9
JBRRC-034	19501	11128	1466	-60	180	31	0	31	31*	31
JBRRC-035	19501	11115	1456	-60	180	33	No signifcant intersections
JBRRC-036	19501	11098	1456	-60	180	31	No signifcant intersections
JBRRC-037	19501	11084	1464	-60	180	14	8	14	6*	30.1
JBRRC-038	19501	11077	1455	-60	180	24	0	24	24*	28.7
JBRRC-039	16442	11042	1422	-60	150	175	60	116	56	29.4

*Hole ended in mineralization

AppenDix 6 pAnHAnDLe suMMARy inteRsections

HoLe iD	pRospect	eAst	noRtH	RL	Dip	AziMutH	HoLe type	DeptH (M)	significAnt inteRsections*	significAnt inteRsections*	significAnt inteRsections*	significAnt inteRsections*	significAnt inteRsections*	significAnt inteRsections*
									From (m)	To (m)	InTerval (m)	aG (G/T)	Pb (%)	Zn (%)
PNRD0002	Powerline	532301	7716897	359	-60	276	RC/DDH	359.6	303	304	1	14.2	1.5	3.4
PNRD0003	Powerline	532113	7716904	353	-60	278	RC/DDH	200.5	94	95	1	75.3	2.2	2.1
PNR0004	Powerline	532111	7717338	353	-60	270	RC	150	No signifcant assays
PNR0005	Powerline	532232	7717344	351	-60	270	RC	140
PNR0006	Powerline	532833	7717661	362	-60	270	RC	150
PNR0007	Powerline	532051	7717052	349	-60	270	RC	110

10g/t Ag, >1%Pb, >1% Zn

16 Liontown ResouRces LiMiteD 2012

Directors’ report

==> picture [596 x 78] intentionally omitted <==

The Directors present their report together with the financial report of Liontown Resources Limited (‘Liontown Resources’ or ‘the Company’) for the financial year ended 30 June 2012 and the independent auditor’s report thereon.

1. Directors

The names and details of the Company’s directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

t R B Goyder

Chairman

Tim has over 30 years experience in the resource industry. Tim has been involved in the formation and management of a number of private and publicly-listed companies. He is currently Executive Chairman of Chalice Gold Mines Limited and a director of Uranium Equities Limited and Strike Energy Limited.

D R Richards

BSc (Hons), MAIG

Managing Director

David has over 30 years experience in mineral exploration in Australia, Southeast Asia and western USA. His career includes exploration and resource definition for a variety of gold and base metal deposit styles and he led the team that discovered the multi-million ounce, high grade Vera-Nancy gold deposits in North Queensland. He has held senior positions with Battle Mountain Australia Inc, Delta Gold Limited, AurionGold Limited and was Managing Director of ASX-listed Glengarry Resources Limited from 2003-2009.

D A Jones

PhD, AusIMM, RPGeo

Non-executive Director

Doug is a Geologist with over 30 years experience in international mineral exploration, having worked extensively in Australia, Africa, South America and Europe. His career has covered exploration for gold in a wide range of geological settings, volcanic and sediment-hosted zinc-copper-lead, and IOCG style copper-gold. Doug is also Managing Director of Chalice Gold Mines Limited, and a director of TSX and AIM-listed Minera IRL Limited and TSX listed Serabi Mining Plc.

A w Kiernan

LLB

Non-executive Director

Tony, previously a lawyer, is a general corporate advisor with extensive experience in the administration and operation of listed public companies. He is Chairman of BC Iron Limited, Uranium Equities Limited, Venturex Resources Limited and is a director of Chalice Gold Mines Limited.

c R williams

BSc (Hons)

Non-executive Director

Craig is a Geologist with over 30 years experience in mineral exploration and development. Craig co-founded Equinox Minerals Limited in 1993 and was President, Chief Executive Officer and Director prior to Barrick Gold’s takeover of Equinox. He is currently Chairman of OreCorp Limited. He has been directly involved in several significant discoveries, including the Ernest Henry Deposit in Queensland and a series of gold deposits in Western Australia. In addition to his technical capabilities, he also has extensive corporate management and financing experience.

V P Gauci

B.Eng (Hons)

Non-executive Director

(resigned 3 October 2011)

Vince was a non-executive director of the Company since 2007. He resigned as a non-executive director of the board on 3 October 2011. Vince was chairman of the Group’s audit committee. During the past three years he also served as a director of Newcrest Mining Limited and Runge Limited.

Liontown ResouRces LiMiteD 2012 17

Directors’ report

==> picture [596 x 78] intentionally omitted <==

2. company secretaries

R K Hacker

B.Com, CA, ACIS

Richard is a Chartered Accountant and Chartered Secretary with significant professional and corporate experience in the resources and energy sector in Australia and the United Kingdom. Richard has previously worked in senior finance roles with global energy companies including Woodside Petroleum Limited and Centrica Plc. Prior to this, Richard was in private practice with major accounting practices. Richard is also the CFO and Company Secretary of Chalice Gold Mines Limited.

L Forgione

B.Com, CA

Leanne is a Chartered Accountant who has over 10 years of accounting and governance experience within the mining and energy industries. Leanne is also joint Company Secretary of Chalice Gold Mines Limited.

3. Directors’ Meetings

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

==> picture [497 x 25] intentionally omitted <==

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

DIRECtoRS’ AuDIt REMuNERAtIoN NoMINAtIoN
MEEtINGS
----- End of picture text -----

Number of meetings held:	6	2	-	-
Number of meetings attended:
T R B Goyder	6	-	-	-
D A Jones	5	-	-	-
A W Kiernan	3	2	-	-
D R Richards	6	-	-	-
V P Gauci	-	1	-	-
C R Williams	6	1	-	-

*The full Board did not officially convene as a nomination or remuneration committee during the reporting period, however, nomination and remuneration discussions occurred from time to time as required.

As at the date of this report, the company had a separate audit committee. Given the current size and composition of the Board, the Company has not established a separate remuneration committee or nomination committee. Members acting on the committees of the board during the year were:

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AuDIt REMuNERAtIoN NoMINAtIoN
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V P Gauci (Chairman)	Full Board	Full Board
(resigned 3 October 2011)
A W Kiernan (Chairman)
(Appointed 3 October 2011)
C R Williams

4. Principal Activities

The principal activities of the Company during the course of the financial year were mineral exploration and evaluation. The Company made a loss after tax for the year of $1,215,220 and had current assets in excess of current liabilities of $832,152.

18 Liontown ResouRces LiMiteD 2012

Directors’ report

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5. Review of operations

During and since the end of the financial year Liontown Resources continued exploration for precious metal deposits in northern Tanzania, East Africa and northern Queensland, Australia. The current exploration portfolio includes the Jubilee Reef Joint Venture Project located in northern Tanzania where Liontown Resources has the right to earn up to 75% equity; the Mega Joint Venture located immediately southwest of the Jubilee Reef Project where Liontown Resources can earn up to 75%; and circa3,500km2 Mt Windsor Joint Venture Project (including the Panhandle Project) in North Queensland where Ramelius Resources has the right to earn up to 60% equity.

5.1 Jubilee Reef Joint Venture Project (Liontown Resources earning up to 75%)

During the year, several significant intersections were recorded from drilling at the Masabi Hill prospect indicating that there is potential for a large gold system. Attention has therefore focused on undertaking a comprehensive drilling program aimed a further defining strike and dip extensions of significant intersections at Masabi Hill and to gain a better understanding of the geology at the project. A drilling program has recommenced in September 2012 to follow up on known targets and to undertake an aircore drilling program aimed at further defining the extent of mineralisation at the project and to generate further Reverse Circulation (“RC”) drilling targets.

To 1 September 2012, Liontown Resources has drilled at total of approximately 11,000 metres since entering into an earnin and joint venture agreement with TSX-V company, Currie Rose Resources. Under the terms of the agreement, Liontown Resources may elect to drill 14,000 metres to earn a 51% interest in the project. At that stage, Liontown Resources can either elect to earn a 75% interest by sole funding to completion a definitive feasibility study or to form a contributing joint venture of Liontown Resources 51% and Currie Rose 49%.

5.2 Mega Joint Venture Project

The Mega Joint Venture Project is located immediately southwest and along strike of the Jubilee Reef Project in northern Tanzania and is prospective for the same styles of gold mineralisation. During the year, Liontown Resources entered into an agreement with Tanzoz Minerals Ltd to earn up to 75% equity in the project by paying Tanzoz $50,000 per annum and spending a minimum of $50,000 per annum on in-ground exploration over 3 years.

5.3 Mount windsor Joint Venture

RC and diamond drilling was completed over the Mt Windsor JV project leases during the year where a total of 13 RC holes were completed. To date no significant results have been received. An Amending Deed was signed between Ramelius Resources and Liontown Resources subsequent to year end which allows for Liontown Resources’ Panhandle Project to be included into the existing exploration earn-in and joint venture agreement.

6. significant changes in the state of Affairs

There are no changes in the state of affairs other than as noted elsewhere in this financial report.

7. Remuneration Report - Audited

7.1 introduction

This remuneration report for the year ended 30 June 2012 outlines remuneration arrangements in place for directors and executives of Liontown Resources in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C) of the Act.

The remuneration report details the remuneration for key management personnel (“KMP”) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company, and the Group. KMP’s during the year were:

(i) Directors

T R B Goyder (Chairman)

C R Williams (Non-executive Director)

D A Jones (Non-executive Director)

A W Kiernan (Non-executive Director)

D R Richards (Managing Director)

V P Gauci (Non-executive Director) (Resigned 3 October 2011)

(ii) Executives

Richard Hacker (CFO)

There were no changes to KMP after the reporting date and before the date the financial report was authorised for issue.

Liontown ResouRces LiMiteD 2012

Directors’ report

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7.1.1 Remuneration philosophy

The performance of the Company depends upon the quality of the directors and executives. The philosophy of the company in determining remuneration levels is to set competitive remuneration packages to attract and retain high calibre employees and to link a significant component of executive rewards to shareholder value creation. The size, nature and financial strength of the Company are also taken into account when setting remuneration levels so as to ensure that the operations of the Company remain sustainable.

7.1.2 Remuneration committee

The Board performs the role of the Remuneration Committee and is responsible for determining and reviewing compensation arrangements for the directors, the Managing Director and any executives.

7.1.3 Remuneration Structure

In accordance with best practice corporate governance, the structure of non-executive and executive remuneration is separate and distinct.

a) Non-executive director remuneration

The Board recognises the importance of attracting and retaining talented non-executive directors and aims to remunerate these directors in line with fees paid to directors of companies of a similar size and complexity in the mining and exploration industry. The Board seeks to set aggregate remuneration at a level that provides the company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

The Company’s Constitution and the ASX Listing Rules specify that the aggregate fees to be paid to non-executive directors for their role as a director are to be approved by shareholders at a general meeting. Shareholders have approved an aggregate amount of $300,000 per year (including superannuation).

The amount of total compensation apportioned amongst directors is reviewed annually and the Board considers advice from external shareholders as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process. The Board will not seek any increase for the non-executive pool at the 2012 AGM.

The remuneration of non-executive directors consists of directors’ fees. Each director receives a fee for being a director of the company. No additional fees are paid for each Board committee which a director sits due to the size of the company. The non-executive directors are not entitled to receive retirement benefits and, at the discretion of the Board, may participate in the Employee Share Option Plan, subject to the usual approvals required by shareholders.

The Board considers it may be appropriate to issue options to non-executive directors given the current nature and size of the Company as, until profits are generated, conservation of cash reserves remain a high priority. Any options issued to directors will require separate shareholder approval.

Apart from their duties as directors, some non-executive directors may undertake work for the Company on a consultancy basis pursuant to the terms of consultancy services agreement. The nature of the consultancy work varies depending on the expertise of the relevant non-executive director. Under the terms of these consultancy agreements non-executive directors would receive a daily rate or a monthly retainer for the work performed at a rate comparable to market rates that they would otherwise receive for their consultancy services.

The remuneration of non-executive directors for the period ended 30 June 2012 is detailed in page 21 of this report.

b) Executive remuneration

The Company’s executive remuneration strategy is designed to attract, motivate and retain high performance individuals and align the interests of executives and shareholders. Remuneration consists of fixed remuneration and variable remuneration (comprising short-term and long-term incentive schemes).

Fixed remuneration

Fixed remuneration is reviewed annually by the Board by a process which consists of a review of relevant comparative remuneration in the market and, where appropriate, external advice on policies and practices.

Variable remuneration - Long term incentive scheme

Options may be issued under the Employee Share Option Plan to directors, employees and consultants of the Company and must be exercised within 3 months of termination. The ability to exercise the options is usually based on the option holder remaining with the Company for at least one year. Other than the vesting period, there is no performance hurdle required to be achieved by the Company to enable the options to be exercised.

The Company believes that the issue of share options in the Company aligns the interests of directors, employees and shareholders alike. As no formal performance hurdles are set on options issued to executives, the Company believes that as options are issued at a price in excess of the Company’s current share price at the date of issue of those options, there is an inherent performance hurdle as the share price of the Company’s shares has to increase before any reward can accrue to the executive.

20 Liontown ResouRces LiMiteD 2012

Directors’ report

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Short term incentive schemes

The Company currently has no formal performance related remuneration policy which governs the payment of annual cash bonuses upon meeting pre-determined performance targets. However, the board may consider performance related remuneration in the form of cash or share options when they consider these to be warranted.

7.1.4 Employment contracts

Remuneration arrangements for KMP are formalised in employment agreements. Details of these contracts are provided below.

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NAME AND JoB tItLE EMPLoyMENt CoNtRACt NotICE PERIoD tERMINAtIoN PRovISIoNS
DuRAtIoN
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Executive Director	Unlimited	3 months by the Company	Nil
D R Richards		and the employee
Managing Director
R K Hacker
Chief Financial Officer	At will	Nil	Nil

7.2 Directors’ and executive officers’ Remuneration (audited)

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KEy MANAGEMENt SHoRt-tERM PAyMENtS PoSt-EMPLoyMENt SHARE-
PERSoNNEL PAyMENtS BASED
PAyMENtS
SALARy NoN- totAL SuPERANNuAtIoN tERMINAtIoN oPtIoNS (A) totAL vALuE of
& fEES MoNEtARy BENEfItS BENEfItS oPtIoNS AS
BENEfItS PRoPoRtIoN of
REMuNERAtIoN
$ $ $ $ $ $ $ (%)
Directors
T R B Goyder 2012 45,872 1,918 47,790 4,128 - - 51,918 0%
2011 45,872 1,778 47,650 4,128 - - 51,778 0%
D R Richards 2012 275,229 1,918 277,147 24,771 - - 301,918 0%
2011 225,000 1,778 226,778 20,250 - 177,417 424,445 42%
D A Jones 2012 32,110 1,918 34,028 2,890 - 2,330 39,248 6%
2011 37,462 1,778 39,240 3,372 - 9,053 51,665 18%
V P Gauci (resigned 2012 8,028 499 8,527 722 - - 9,249 0%
3 October 2011)
2011 68,807 1,778 70,585 6,193 - - 76,778 0%
A W Kiernan 2012 75,210 1,918 77,128 2,890 - - 80,018 0%
2011 74,310 1,778 76,088 2,890 - - 78,978 0%
C R Williams 2012 32,110 1,918 34,028 2,890 - - 36,918 0%
2011 32,110 1,778 33,888 2,890 - - 36,778 0%
Executive
R K Hacker 2012 37,500 1,918 39,418 3,375 - - 42,793 0%
2011 - 1,778 1,778 - - 12,662 14,440 89%
total Compensation 2012 506,059 12,007 518,066 41,666 - 2,330 562,062
2011 483,561 12,446 496,007 39,723 - 199,132 734,862
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Notes in relation to the table of directors’ and executive officers’ remuneration

A. The fair value of the options are calculated at the date of grant using a Black Scholes option pricing model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed is the portion of the fair value of the options allocated to this reporting period. In valuing the options, market conditions have been taken into account. (Refer to note 14).

7.3 equity instruments

7.3.1 options and rights over ordinary shares granted as compensation

During the year no options were granted as compensation to key management personnel. In the year ended 30 June 2011 Mr Richards was granted three million options with an exercise price of 10 cents and expiring 1 May 2013.

All options that are issued to key management personnel are at no cost to the recipients, however to exercise the options the recipients must pay to the Company the appropriate exercise price.

Liontown ResouRces LiMiteD 2012

Directors’ report

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7.3.2 Exercise of options granted as compensation

During the year and previous financial year, no shares were issued on the exercise of options previously granted as compensation.

7.3.3 Analysis of options and rights vested during the period

	NuMBER GRANtED	DAtE GRANtED	ExERCISE PRICE	% vEStED IN yEAR	foRfEItED IN yEAR	fINANCIAL yEAR IN wHICH GRANt vEStS
Directors
D A Jones	1,000,000	2 December 2008	0.20	100%	-	2012

7.3.4 Analysis of movements in options

There was no movement during the reporting period, by value, of options over ordinary shares held by each key management person.

8. Dividends

No dividends were declared or paid during the period and the directors recommend that no dividend be paid.

9. events subsequent to Reporting Date

On 20 August 2012, Liontown Resources announced a fully underwritten entitlement issue to raise approximately $3.43 million. The raising is to be undertaken through a 1-for-3 pro-rata non-renounceable rights issue (‘Offer’) to existing shareholders at 3.5 cents per share. The Company will also be issuing 1 free attaching New Option for every 3 New Shares subscribed. Each New Option will have an exercise price of 5 cents and will expire on 27 September 2015. The Offer is underwritten by Bell Potter Securities Limited.

Funds raised from the entitlement issue will be used to underpin a major new drilling program comprising over 14,000 metres of reverse circulation and aircore drilling at the Jubilee Reef Project in Tanzania and for working capital.

10. Likely Developments

There are no likely developments that will impact on the Company other than as disclosed elsewhere in this report.

11. Directors’ interests

The relevant interest of each director in the shares, rights or options over such instruments issued by the Company and other related bodies corporate at the date of this report is as follows:

	oRDINARy SHARES	oPtIoNS ovER oRDINARy SHARES
T R B Goyder	81,454,571	-
D R Richards	1,340,750	3,000,000
D A Jones	1,881,500	5,000,000
A W Kiernan	4,267,364	-
C R Williams	2,040,129	-

22 Liontown ResouRces LiMiteD 2012

Directors’ report

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12. share options

options granted to directors and officers of the Company

No options over ordinary shares in the Company were granted as compensation to key management personnel during the reporting period.

unissued shares under options

At the date of this report 9,650,000 unissued ordinary shares of the Company are under option on the following terms and conditions:

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ExPIRy ExERCISE NuMBER of
DAtE PRICE SHARES
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1 December 2012	0.35	2,000,000
31 July 2013	0.20	500,000
30 November 2013	0.20	3,000,000
1 May 2013	0.10	3,000,000
1 November 2013	0.20	1,150,000

These options do not entitle the holder to participate in any share issue of the Company or any other body corporate. During the period between balance date and the date of this report, no options have been granted.

Shares issued on exercise of options

During or since the end of the year, the Company has not issued any ordinary shares as a result of the exercise of options.

13. indemnification and insurance of Directors and officers

The Company has agreed to indemnify all the directors and officers who have held office of the Company during the year, against all liabilities to another person (other than the Company or a related body corporate) that may arise from their position as directors and officers of the Company, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.

During the year the Company paid insurance premiums of $12,007 in respect of directors’ and officers’ indemnity insurance contracts, for current and former directors and officers. The insurance premiums relate to:

costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever their outcome; and
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or improper use of information or position to gain a personal advantage.

The amount of insurance paid is included in directors’ and executive officers’ remuneration on page 21.

14. non-audit services

During the year HLB Mann Judd, the Company’s auditors, performed no other services in addition to their statutory duties.

15. Auditor’s independence Declaration

The auditor’s independence declaration is set out on page 24 and forms part of the Directors’ Report for the year ended 30 June 2012.

This report is made with a resolution of the directors:

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D R Richards

Managing Director

Dated at Perth the 24th day of September 2012

The information in this report that relates to Exploration Results is based on information compiled by Mr David Richards, a full time employee of Liontown Resources Limited, who is a Member of the Australian Institute of Geoscientists. Mr Richards has sufficient experience in the field of activity being reported to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves, and consents to the release of information in the form and context in which it appears here.

Liontown ResouRces LiMiteD 2012

AuDitor’s inDepenDence DeclArAtion

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Liontown 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 Liontown Resources Limited.

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Perth, Western Australia 24 September 2012

W M CLARK Partner, HLB Mann Judd

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers.

24 Liontown ResouRces LiMiteD 2012

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consoliDAteD stAtement of comprehensive income for the YeAr enDeD 30 June 2012

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NotE 2012 2011
$ $
Continuing operations
Revenue 3(a) 62,800 117,480
Impairment of exploration and evaluation assets 11 (334,451) -
Exploration costs not capitalised 11 (118,903) (213,644)
Corporate administrative expenses 3(b) (824,666) (1,093,782)
Loss before tax (1,215,220) (1,189,946)
Income tax expense 6 - -
Loss for the period attributable to owners of the parent (1,215,220) (1,189,946)
other comprehensive income
-
Exchange differences on translation of foreign operations 15,525
total comprehensive income after tax attributable to owners of the parent (1,199,695) (1,189,946)
Basic earnings per share attributable to ordinary equity holders 7 (0.005) (0.006)
Diluted earnings per share attributable to ordinary equity holders 7 (0.005) (0.006)
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The statement of comprehensive income is to be read in conjunction with the notes to the financial statements.

Liontown ResouRces LiMiteD 2012

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consoliDAteD stAtement of finAnciAl position As At 30 June 2012

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NotE 2012 2011
$ $
Current assets
Cash and cash equivalents 8 1,489,378 1,503,416
Trade and other receivables 9 61,343 54,684
total current assets 1,550,721 1,558,100
Non-current assets
Financial assets 10 54,369 52,402
Exploration and evaluation assets 11 3,640,913 1,684,900
Property, plant and equipment 12 82,720 103,056
total non-current assets 3,778,002 1,840,358
total assets 5,328,723 3,398,458
Current liabilities
Trade and other payables 13 687,721 124,182
Employee benefits 14 30,848 16,190
total current liabilities 718,569 140,372
total liabilities 718,569 140,372
Net assets 4,610,154 3,258,086
Equity
Issued capital 15 22,884,163 20,343,846
Accumulated losses 15 (19,912,561) (18,697,341)
Reserves 15 1,638,552 1,611,581
total equity 4,610,154 3,258,086
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The statement of financial position is to be read in conjunction with the notes to the financial statements.

26 Liontown ResouRces LiMiteD 2012

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consoliDAteD stAtement of chAnges in equitY for the YeAr enDeD 30 June 2012

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

NotE ISSuED ACCuMuLAtED SHARE BASED tRANSLAtIoN totAL EquIty
CAPItAL LoSSES PAyMENtS RESERvE
RESERvE
$ $ $ $ $
Balance at 1 July 2011 20,343,846 (18,697,341) 1,611,581 - 3,258,086
- - -
Loss for the period (1,215,220) (1,215,220)
Exchange differences on
translation of foreign operations - - - 15,525 15,525
total comprehensive
- -
loss for the period (1,215,220) 15,525 (1,199,695)
Share issue – rights issue
(net after costs) 1,469,188 - - - 1,469,188
Share placement
- - -
(net after costs) 1,071,129 1,071,129
Share based payment
expense - - 11,446 - 11,446
Balance at 30 June 2012 15 22,884,163 (19,912,561) 1,623,027 15,525 4,610,154
NotE ISSuED ACCuMuLAtED SHARE BASED tRANSLAtIoN totAL EquIty
CAPItAL LoSSES PAyMENtS RESERvE
RESERvE
$ $ $ $ $
-
Balance at 1 July 2010 20,280,242 (17,507,395) 1,375,985 4,148,832
- - -
Loss for the period (1,189,946) (1,189,946)
total comprehensive
- - -
loss for the period (1,189,946) (1,189,946)
Issue of shares
on acquisition of
- - -
exploration tenements 63,604 63,604
-
Share based payment
- -
expense 235,596 235,596
Balance at 30 June 2011 15 20,343,846 (18,697,341) 1,611,581 - 3,258,086
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The statement of changes in equity is to be read in conjunction with the notes to the financial statements.

Liontown ResouRces LiMiteD 2012

consoliDAteD stAtement of cAsh flows for the YeAr enDeD 30 June 2012

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NotE 2012 2011
$ $
Cash flows from operating activities
Cash paid to suppliers and employees (750,344) (823,962)
Interest received 63,875 112,116
Net cash used in operating activities 18 (686,469) (711,846)
Cash flows from investing activities
Payments for exploration and evaluation (1,864,309) (901,078)
Acquisition of property, plant and equipment (920) (2,857)
Net cash used in investing activities (1,865,229) (903,935)
Cash flows from financing activities
Proceeds from issue of shares 2,723,058 -
Transaction costs of issue of shares (182,741) -
Net cash from financing activities 2,540,317 -
Net increase/(decrease) in cash and cash equivalents (11,381) (1,615,781)
Net foreign exchange differences (2,657) 438
Cash and cash equivalents at the beginning of the period 1,503,416 3,118,759
Cash and cash equivalents at 30 June 8 1,489,378 1,503,416
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The statement of cash flows is to be read in conjunction with the notes to the financial statements.

28 Liontown ResouRces LiMiteD 2012

notes to the consoliDAteD finAnciAl stAtements for the YeAr enDeD 30 June 2012

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1. siGniFicAnt AccountinG PoLicies

Liontown Resources is an ASX listed public company domiciled in Australia at Level 2, 1292 Hay Street, West Perth, Western Australia. The consolidated financial report comprises the financial statements of Liontown Resources Limited (‘Company’) and its subsidiaries (‘the Group’) for the year ended 30 June 2012.

The financial report was authorised for issue by the directors on 24th day of September 2012.

(a) statement of compliance

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’).

(b) 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. The financial report is presented in Australian dollars.

The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated. The Company is a listed public company, incorporated in Australia and operating in Australia and Tanzania. The principal activity is mineral exploration and evaluation.

(c) Adoption of new and revised 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 annual reporting periods beginning on or after 1 July 2011. It has been determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, the Group has adopted the following new and amended Australian Accounting Standards and AASB Interpretations as of 1 July 2011:

AASB 124 Related Party Disclosures (amendment) effective 1 July 2011
AASB 132 Financial Instruments
Improvements to AASB’s

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. The following standards and interpretations have been recently issued or amended and have not been adopted by the Group for the annual reporting period ending 30 June 2012, outlined below:

AASB 10 Consolidated Financial Statements
AASB 12 Disclosure of Interests in Other Entities
AASB 13 Fair Value Measurement
AASB 119 Employee Benefits
AASB 9 Financial Instruments

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 the Group’s accounting policies.

Liontown ResouRces LiMiteD 2012

notes to the consoliDAteD finAnciAl stAtements for the YeAr enDeD 30 June 2012

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(d) Basis of consolidation

The consolidated financial statements comprise the financial statements of Liontown Resources Limited (‘Company’ or ‘Parent’) and its subsidiaries as at 30 June 2012.

Subsidiaries are all those entities over which the Company has the power to govern the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether a group controls another entity.

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 Company 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 existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing when the Company controls another entity.

Investments in subsidiaries held by Liontown Resources Limited are accounted for at cost in the accounts of the parent entity less any impairment charges.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The identifiable assets acquired and the liabilities assumed are measured at their acquisition date fair values.

The difference between the above items and the fair value of consideration (including the fair value of any pre-existing investment in the acquiree) is goodwill or a discount on acquisition.

A change in ownership interest of a subsidiary that does not result in a loss of control is accounted as an equity transaction.

(e) significant accounting judgements, estimates and assumptions

The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. These accounting policies have been consistently applied by the Group.

The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

(i) Recoverability of exploration expenditure

The carrying amount of exploration and evaluation expenditure is dependent on the future successful outcome from exploration activity or alternatively the sale of the respective areas of interest.

(ii) Shared-based payment transactions

The Group measures the cost of equity-settled share-based payments at fair value at the grant date using a binomial formula taking into account the terms and conditions upon which the instruments were granted.

(f) Going concern

The financial statements are prepared on a going concern basis. At balance date, the Group had an excess of current assets over current liabilities of $832,152.

Notwithstanding the positive working capital position at balance date, the Group has forecast that it will need to seek additional funding in the coming year in order to meet its operating expenditure and planned exploration expenditure for the next 12 months from the date of signing these financial statements. Subsequent to year end, the Company announced a fully underwritten Entitlement Offer to raise $3.43 million which the Company believes is sufficient to sustain activities for at least the next 12 months.

30 Liontown ResouRces LiMiteD 2012

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(g) Foreign currency translations

The functional currency of the Company is Australian dollars and the functional currency of subsidiary based in Tanzania is United States dollars (US$). The presentation of the Group is Australian dollars.

(i) foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction.

Foreign currency differences arising on retranslation are recognised in profit or loss, except for the following differences which are recognised in other comprehensive income arising on the retranslation of:

available-for-sale equity investments (except on impairment in which case foreign currency differences that are recognised in other comprehensive income are reclassified to profit or loss);
a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
qualifying cash flow hedges to the extent the hedge is effective.

(ii) foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the functional currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Australian dollars at average exchange rates.

Foreign currency differences are recognised in other comprehensive income, and presented in foreign currency translation reserve (translation reserve) in equity upon translation to presentation currency. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When settlement of a monetary item receivable from or payable to a foreign operation is neither planned or likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the translation reserve in equity.

(h) segment reporting

Operating segments are reported in a manner consistent with internal reporting provided to the Board of Directors who are responsible for allocating resources and assessing the performance of the operating segments.

Liontown ResouRces LiMiteD 2012 31

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(i) 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.

(i) Sale of goods and interests in exploration assets Revenue is recognised when the significant risks and rewards of ownership of the goods/exploration assets have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be reliably measured. Risks and rewards of ownership are considered passed to the buyer at the time of delivery of the goods/exploration assets to the buyer.

(ii) Services rendered

Revenue from services rendered is recognised in the statement of comprehensive income in proportion to the stage of completion of the transaction at balance date. The stage of completion is assessed by reference to surveys of work performed. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, the costs incurred or to be incurred cannot be measured reliably.

(iii) Interest received

Interest income is recognised in the statement of comprehensive income as it accrues, using the effective interest method. The interest expense component of finance lease payments is recognised in the statement of comprehensive income using the effective interest method.

(j) expenses

(i) operating lease payments

Payments made under operating leases are recognised in the statement of comprehensive income on a straight-line basis over the term of the lease. Lease incentives received are recognised in the statement of comprehensive income as an integral part of the total lease expense and spread over the lease term.

(ii) finance lease payments

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(iii) financing costs

Financing costs comprise interest payable on borrowings calculated using the effective interest method and interest receivable on funds invested.

(k) Depreciation

Depreciation is charged to the statement of comprehensive income on a diminishing value basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. Depreciation rates used in the current and comparative periods are as follows:

• plant and equipment 5%-50%

The residual value, if not insignificant, is reassessed annually.

(l) income tax

Income tax in the statement of comprehensive income comprises current and deferred tax. Income tax is recognised in the statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on all temporary differences at balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

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(m) Goods and services tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (‘GST’), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the Australian Taxation Office (‘ATO’) is included as a current asset or liability in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(n) impairment

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. Value in use is the present value of the future cash flows expected to be derived from the asset or cash generating unit. In estimating value in use, a pre-tax discount rate is used which reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cashflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

Impairment losses are recognised in the statement of comprehensive income unless the asset has previously been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through the statement of comprehensive income. Receivables with a short duration are not discounted.

(o) cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with an original maturity of six months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(p) trade and other receivables

Trade and other receivables are stated at cost less impairment losses (see accounting policy (n)).

(q) non-current assets held for sale and discontinued operations

Immediately before classification as held for sale, the measurement of the assets (and all assets and liabilities in a disposal group) is brought up to date in accordance with applicable AIFRS. Then, on initial classification as held for sale, non-current assets and disposal groups are recognised at the lower of carrying amount and fair value less costs to sell.

Impairment losses on initial classification as held for sale are included in profit or loss, even when there is a revaluation. The same applies to gains and losses on subsequent re-measurement.

A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. A disposal group that is to be abandoned also may qualify.

(r) Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred.

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

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

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

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(s) 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 transactions 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 year end.

(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.

(ii) Held-to-maturity investments

If the Group has the positive intent and ability to hold debt securities to maturity, then they are classified as held-to-maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method, less any impairment losses.

(iii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

(iv) Available-for-sale investments

Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models.

(t) Derecognition of financial assets and financial liabilities

(i) financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

the rights to receive cash flows from the asset have expired;
the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or
the Group has transferred its rights to receive cash flows from the asset and either:
(a) has transferred substantially all the risks and rewards of the asset, or

(b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration received that the Group could be required to repay.

When continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Group’s continuing involvement is the amount of the transferred asset that the Group may repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, the extent of the Group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

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(ii) financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(u) impairment of financial 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. Such impairment loss shall not be reversed in subsequent periods.

(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.

(v) exploration, evaluation, development and tenement acquisition costs

Exploration, evaluation, development and tenement acquisition costs in relation to separate areas of interest for which rights of tenure are current, are capitalised in the period in which they are incurred and are carried at cost less accumulated impairment losses. The cost of acquisition of an area of interest and exploration expenditure relating to that area of interest is carried forward as an asset in the statement of financial position so long as the following conditions are satisfied:

1) the rights to tenure of the area of interest are current; and
2) at least one of the following conditions is also met:
(i) the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; or
(ii) 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 expenditure is assessed for impairment when facts and circumstances suggest that their carrying amount exceeds their recoverable amount. Where this is the case an impairment loss is recognised. Where a decision is made to proceed with development, accumulated expenditure will be amortised over the life of the reserves associated with the area of interest once mining operations have commenced.

Liontown ResouRces LiMiteD 2012

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(w) trade and other payables

Trade and other payables are stated at cost. Trade and other payables are presented as current liabilities unless payment is not due within 12 months.

(x) employee benefits

(i) Superannuation

Obligations for contributions to defined contribution pension plans are recognised as an expense in the statement of comprehensive income as incurred.

(ii) Share-based payment transactions

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

The Group currently provides benefits under an Employee Share Option Plan.

The cost of these equity-settled transactions with employees and directors is measured by reference to the fair value at the date at which they are granted.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of the Company (‘market conditions’). The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’).

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 number of awards that, in the opinion of the directors, will ultimately vest. This opinion is formed based on the best available information at balance date. 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.

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

Where 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 increase in the value of the transaction as a result of the modification, as measured at the date of modification.

Where 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.

(iii) wages, salaries, annual leave, sick leave and non-monetary benefits

Liabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations resulting from employees’ services provided to reporting date, calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay as at reporting date including related on-costs, such as, workers compensation insurance and payroll tax.

(y) Provisions

A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability.

(z) issued capital

(i) ordinary share capital

Ordinary shares and partly paid shares are classified as equity.

(ii) transaction costs

Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit.

(aa) earnings per share

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

36 Liontown ResouRces LiMiteD 2012

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notes to the consoliDAteD finAnciAl stAtements for the YeAr enDeD 30 June 2012

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

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

(ab) Parent entity information

The financial information for the parent entity, Liontown Resources Limited, disclosed in note 21, has been prepared on the same basis as the consolidated financial statements, except as set out below.

(i) Investments in subsidiaries, associates and joint venture entities

Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the parent entity’s financial statements. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.

(ii) Share-based payments

The grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

2. seGMent RePoRtinG

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

The operating segments are identified by management based on the allocation of costs; whether they are corporate related costs or exploration costs. Results of both segments are reported to the Board of Directors at each Board meeting or more frequently if required.

ExPLoRAtIoN AND EvALuAtIoN CoRPoRAtE 30 JuNE 2012 30 JuNE 2011 30 JuNE 2012 30 JuNE 2011 $ $ $ $	ExPLoRAtIoN AND EvALuAtIoN CoRPoRAtE 30 JuNE 2012 30 JuNE 2011 30 JuNE 2012 30 JuNE 2011 $ $ $ $	totAL
		30 JuNE 2012 30 JuNE 2011
		$ $
Impairment of exploration and evaluation assets (334,451) - - - Exploration costs not capitalised (118,903) (213,644) - - Corporate and administrative expenses - - (824,666) (1,093,782) Segment net gain/ (loss) before tax (453,354) (213,644) (824,666) (1,093,782) unallocated income/(expenses) Net financing income Profit/(loss) before income tax		(334,451) - (118,903) (213,644) (824,666) (1,093,782)
	(453,354) (213,644) (824,666) (1,093,782)	(1,278,020) (1,307,426) 62,800 117,480
		(1,215,220) (1,189,946)

	ExPLoRAtIoN AND EvALuAtIoN CoRPoRAtE	totAL
	30 JuNE 2012 30 JuNE 2011 30 JuNE 2012 30 JuNE 2011	30 JuNE 2012 30 JuNE 2011
	$ $ $ $	$ $
Segment assets: Exploration and evaluation assets Other unallocated assets total assets Segment Liabilities	3,640,913 1,684,900 - - 116,190 67,196 59,295 86,706	3,640,913 1,684,900 175,485 153,902
	3,757,103 1,752,096 59,295 86,706 640,698 69,077 77,871 71,295	3,816,398 1,838,802 1,512,325 1,559,656
		5,328,723 3,398,458
		718,569 140,372

Liontown ResouRces LiMiteD 2012

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NotE 2012 2011
$ $
3. ReVenue AnD exPenses
(a) Revenue
Interest received 62,800 117,480
62,800 117,480
(b) corporate administrative expenses
Depreciation and amortisation 21,256 32,557
Insurance 27,131 28,893
Legal fees 41,465 34,420
Office costs 9,519 13,241
Personnel expenses 4 397,271 662,114
Regulatory and compliance 98,749 88,476
Corporate and administration office rent 144,000 144,000
Other 85,275 90,081
824,666 1,093,782
4. PeRsonneL exPenses
Wages and salaries 166,915 130,035
Directors’ fees 163,750 235,834
Other associated personnel expenses 4,121 22,255
Defined contribution superannuation fund contributions 36,381 25,349
Annual leave 14,658 13,045
Equity-settled transactions 11,446 235,596
397,271 662,114
5. AuDitoR’s ReMuneRAtion 2011
$
Audit services
HLB Mann Judd
Audit and review of financial reports 27,500 27,860
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2012 2011
$ $
6. incoMe tAx
(a) the prima facie income tax expense on pre-tax accounting result from
operations reconciles to the income tax benefit in the financial statements
as follows:
Accounting loss before tax from continuing operations (1,215,220) (1,189,946)
Income tax benefit calculated at 30% (364,566) (356,984)
Tax effect of amounts which are not tax deductible (taxable) in calculating
taxable income:
Non-deductible expenses 5,015 45,407
-
Share based payments 3,434
Deferred tax assets and liabilities not recognised 356,117 311,577
- -
Income tax expense/(benefit) reported in the statement of comprehensive income
(b) unrecognised deferred tax balances
The following deferred tax assets and liabilities have not been brought to account:
Deferred tax assets comprise:
Revenue losses available to offset against future taxable income 2,505,876 2,059,974
Share issue expenses 54,721 28,125
Accrued expenses and liabilities 10,668 11,457
2,571,265 2,099,556
Deferred tax liabilities comprise:
Exploration expenditure capitalised 525,433 463,840
Accrued interest 327 1,151
525,760 464,991
(c) Income tax expense not recognised directly in equity during the year:
Share issue costs 54,822 28,125
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Deferred tax liabilities have not been recognised in respect of these taxable temporary differences as the entity is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

7. eARninGs PeR sHARe

Basic and diluted earnings per share

The calculation of basic and diluted earnings per share for the year ended 30 June 2012 was based on the loss attributable to ordinary shareholders of $1,215,220 [2011: loss of $1,189,946] average number of ordinary shares outstanding during the year ended 30 June 2012 of 252,724,609 [2011: 210,905,599] calculated as follows:

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2012 2011
$ $
Profit/(loss) attributable to ordinary shareholders (diluted)
Profit/(loss) attributable to ordinary shareholders (1,215,220) (1,189,946)
Profit/(loss) attributable to ordinary shareholders (diluted) (1,215,220) (1,189,946)
No. No.
weighted average number of ordinary shares (diluted)
Weighted average number of ordinary shares at 30 June 252,724,609 210,905,999
Weighted average number of ordinary shares (diluted) at 30 June 252,724,609 210,905,999
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2012 2011
$ $
8. cAsH AnD cAsH equiVALents
Bank accounts 829,787 489,342
Term deposits 652,530 1,011,388
Petty cash 7,061 2,686
Cash and cash equivalents in the statement of cash flows 1,489,378 1,503,416
9. tRADe AnD otHeR ReceiVABLes 2011
Current
Other trade receivables 43,259 37,104
Prepayments 18,084 17,580
61,343 54,684
10. FinAnciAL Assets 2011
Non-current
Bank guarantee 33,410 31,739
Security deposits 15,000 15,000
Funds held on trust 5,959 5,663
54,369 52,402
11. exPLoRAtion AnD eVALuAtion exPenDituRe
Costs carried forward in respect of areas of interest in the exploration and evaluation
phases (at cost):
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.
Balance at beginning of year 1,684,900 925,950
Expenditure incurred during the year 2,409,367 972,594
-
Impairment of exploration and evaluation assets (334,451)
Exploration expenditure not capitalised (118,903) (213,644)
3,640,913 1,684,900
12. PRoPeRty, PLAnt AnD equiPMent
At cost 345,901 344,981
Less: accumulated depreciation (263,181) (241,925)
82,720 103,056
Plant and equipment
Carrying amount at 1 July 103,056 132,756
Additions 920 2,857
Depreciation (21,256) (32,557)
Carrying amount at end of period 82,720 103,056
13. tRADe AnD otHeR PAyABLes 2011
Trade payables 73,696 73,248
Accrued expenses 614,025 50,934
687,721 124,182
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40 Liontown ResouRces LiMiteD 2012

notes to the consoliDAteD finAnciAl stAtements for the YeAr enDeD 30 June 2012

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2012 2011
$ $
14. eMPLoyee BeneFits
Liability for annual leave 30,848 16,190
total employee benefits 30,848 16,190
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share based payments

Employee Share option Plan

The Company has an Employee Share Option Plan (‘ESOP’) in place. Under the terms of the ESOP, the Board may offer free options to full-time or part-time employees (including persons engaged under a consultancy agreement) and executive and non-executive Directors.

Each option entitles the holder, on exercise, to one ordinary fully paid share in the Company. There is no issue price for the options. The exercise price for the options is such price as determined by the Board.

An option may only be exercised after that option has vested and any other conditions imposed by the Board on exercise satisfied. The Board may determine the vesting period, if any.

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

The number and weighted average exercise prices of shares options are as follows:

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wEIGHtED NuMBER
AvERAGE of oPtIoNS
ExERCISE PRICE
($)
2012 2012
Outstanding at the beginning of the period 0.23 11,650,000
Outstanding at the end of the period 0.23 11,650,000
Exercisable at the end of the period 0.23 11,650,000
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The options outstanding at 30 June 2012 have a weighted average exercise price of $0.23 (2011:$0.23) and a weighted average contractual life of 4 years.

During the year, no share options were exercised and no share options were granted.

The fair value of the options is estimated at the date of grant using a binomial option-pricing model.

The following table provides the assumptions made in determining the fair value of the options granted.

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fAIR vALuE of SHARE oPtIoNS AND ASSuMPtIoNS 2012 2011
Share price at grant date (weighted average) - 0.10
Exercise price (weighted average) - 0.13
Expected volatility (expressed as weighted average volatility used in the modelling - 100%
under binominal option-pricing model)
-
Option life (expressed as weighted average life used in the modelling under binomial 4 years
option-pricing model)
Expected dividends - Nil
Risk-free interest rate - 5.06%
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Share options are granted under service conditions. Non-market performance conditions are not taken into account in the grant date fair value measurement of the services received.

	2012 2011
	$ $
Share options granted in 2011 - equity settled total expense recognised as personnel expenses	11,446 235,596
	11,446 235,596

Liontown ResouRces LiMiteD 2012 41

notes to the consoliDAteD finAnciAl stAtements for the YeAr enDeD 30 June 2012

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15. issueD cAPitAL AnD ReseRVes

Reconciliation of movement in capital and reserves attributable to equity holders of the company

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2012 ISSuED ACCuMuLAtED foREIGN SHARE BASED totAL EquIty
CAPItAL LoSSES CuRRENCy PAyMENtS
(A) tRANSLAtIoN RESERvE
RESERvE (B)
$ $ $ $ $
-
Balance at 1 July 2011 20,343,846 (18,697,341) 1,611,581 3,258,086
- - -
Share issue – rights issue (net of costs) 1,469,188 1,469,188
- - -
Share issue – placement (net of costs) 1,071,129 1,071,129
- - -
Share based payment expense 11,446 11,446
- - -
Loss for the period (1,215,220) (1,215,220)
Currency translation differences - - 15,525 - 15,525
Balance at 30 June 2012 22,884,163 (19,912,561) 15,525 1,623,027 4,610,154
2011 ISSuED ACCuMuLAtED foREIGN SHARE BASED totAL EquIty
CAPItAL LoSSES CuRRENCy PAyMENtS
(A) tRANSLAtIoN RESERvE
RESERvE (B)
$ $ $ $ $
-
Balance at 1 July 2010 20,280,242 (17,507,395) 1,375,985 4,148,832
Issue of shares on acquisition of
exploration tenements 63,604 - - - 63,604
- - -
Share based payment expense 235,596 235,596
Loss for the period - (1,189,946) - - (1,189,946)
Balance at 30 June 2011 20,343,846 (18,697,341) - 1,611,581 3,258,086
2012 2011
No. No.
(a) issued capital
On issue at 1 July 211,073,581 210,073,581
-
Issue shares on acquisition of exploration tenements 1,000,000
-
Rights Issue 52,768,600
Issue of fully paid ordinary shares – share placement 30,000,000 -
On issue at 30 June 293,842,181 211,073,581
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ordinary shares

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the Company, the ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any proceeds on liquidation.

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2012 2011
No. No.
(b) share options
On issue at 1 July 11,650,000 10,310,000
-
Options issued during the year 4,150,000
Options forfeited during the year - (2,810,000)
On issue at 30 June 11,650,000 11,650,000
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At 30 June the Company had 11,650,000 unlisted options on issue under the following terms and conditions:

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NuMBER ExPIRy DAtE ExERCISE PRICE
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4,000,000	1 December 2012	0.35
500,000	31 July 2013	0.20
3,000,000	30 November 2013	0.20
3,000,000	1 May 2013	0.10
1,150,000	1 November 2013	0.20

42 Liontown ResouRces LiMiteD 2012

notes to the consoliDAteD finAnciAl stAtements for the YeAr enDeD 30 June 2012

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(c) nature and purpose of reserves

Share based payments reserve

This reserve is used to record the value of equity benefits provided to employees and directors as part of their remuneration. Refer to section 7 in the Directors’ Report for further details of these plans.

16. FinAnciAL instRuMents

(a) capital risk management

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

The capital structure of the Group consists of equity attributable to equity holders, comprising issued capital, reserves and accumulated losses as disclosed in note 15.

The Board reviews the capital structure on a regular basis and considers the cost of capital and the risks associated with each class of capital. The Group will balance its overall capital structure through new share issues as well as the issue of debt, if the need arises.

(b) Market risk exposures

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

foreign exchange rate risk

The Group undertakes certain transactions denominated in foreign currencies, hence exposes to exchange rate fluctuations arise. The Group does not hedge this exposure. The Group manages its foreign exchange risk by constantly reviewing its exposure and ensuring that there are appropriate cash balances in order to meet its commitments.

Equity prices

The Group currently has no significant exposure to equity price risk.

Interest rate risk exposures

The Group’s exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and financial liabilities is set out below:

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30 JuNE 2012 NotE 1 yEAR ovER 1 to 5 fLoAtING NoN- totAL wEIGHtED
oR LESS yEARS INtERESt INtERESt AvERAGE
BEARING INt. RAtE
$ $ $ $ $
financial assets
Bank balances 8 - - 829,787 - 829,787 2.02%
Term deposits 8 652,530 - - - 652,530 5.83%
Bank guarantee 10 33,410 - - - 33,410 5.18%
Petty cash 8 - - - 7,061 7,061 -
Trade and other receivables 9 - - - 61,343 61,343 -
Security deposits, bonds, 10 - - - 20,959 20,959 -
funds held on trust
financial liabilities
Trade payables and accrued
expenses 13 - - - 687,721 687,721 -
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Liontown ResouRces LiMiteD 2012 43

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notes to the consoliDAteD finAnciAl stAtements for the YeAr enDeD 30 June 2012

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30 JuNE 2011 NotE 1 yEAR ovER 1 to 5 fLoAtING NoN- totAL wEIGHtED
oR LESS yEARS INtERESt INtERESt AvERAGE
BEARING INt. RAtE
$ $ $ $ $
financial assets
Bank balances 8 - - 489,341 - 489,341 3.55%
Term deposits 8 1,011,389 - - - 1,011,389 5.86%
Bank guarantee 10 31,739 - - - 31,739 5.90%
Petty cash 8 - - - 2,686 2,686 -
Trade and other receivables 9 - - - 54,684 54,684 -
Security deposits, bonds, 10 - - - 20,663 20,663 -
funds held on trust
financial liabilities
Trade payables and
accrued expenses 13 - - - 124,182 124,182 -
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(c) credit risk exposure

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk is not significant and currently arises principally from sundry receivables which represent an insignificant proportion of the Group’s activities.

The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date to recognised financial assets is the carrying amount, net of any allowance for doubtful debts, as disclosed in the notes to the financial statements.

(d) Liquidity risk exposure

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board actively monitors the Group’s ability to pay its debts as and when they fall due by regularly reviewing the current and forecast cash position based on the expected future activities.

The Group has non-derivative financial liabilities which include trade and other payables of $687,721 all of which are due within 60 days.

(e) net fair values of financial assets and liabilities

The carrying amounts of all financial assets and liabilities approximate the net fair values.

17. cAPitAL AnD otHeR coMMitMents

Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various governments. These obligations are subject to renegotiation when application for a mining lease is made and at other times. The amounts stated are based on the maximum commitments. The Group may in certain situations apply for exemptions under relevant mining legislation. These obligations are not provided for in the financial report and are payable:

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2012 2011
$ $
Within 1 year 136,915 402,000
Within 2 – 5 years 598,960 1,200,000
Later than 5 years 364,980 -
1,100,855 1,602,000
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44 Liontown ResouRces LiMiteD 2012

notes to the consoliDAteD finAnciAl stAtements for the YeAr enDeD 30 June 2012

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2012 2011
$ $
18. ReconciLiAtion oF cAsH FLows FRoM
oPeRAtinG ActiVities
Cash flows from operating activities
Loss for the period (1,215,220) (1,189,946)
Adjustments for:
Depreciation and amortisation 21,256 32,557
Net gain on foreign exchange 2,657 (438)
-
Impairment of exploration and evaluation assets 334,451
Exploration expenditure not capitalised 118,903 213,644
Equity-settled share-based payment expenses 11,446 235,596
operating loss before changes in working capital and provisions (726,507) (708,587)
(Increase)/decrease in trade and other receivables 1,013 (14,442)
Increase/(decrease) in trade creditors and accruals 24,367 (1,862)
Increase/(decrease) in provisions 14,658 13,045
Net cash used in operating activities (686,469) (711,846)
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19. Key MAnAGeMent PeRsonneL

The following were key management personnel of the Group at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period:

Directors

T R B Goyder

D R Richards

D A Jones

V P Gauci (resigned 3 October 2011)

A W Kiernan

C R Williams

Executive

R K Hacker (Chief Financial Officer/Company Secretary)

The key management personnel compensation is as follows:

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2012 2011
$ $
Short-term employee benefits 518,066 496,007
Post-employment benefits 41,666 39,723
Equity-settled transactions 2,330 199,132
562,062 734,862
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Individual directors’ and executives’ compensation disclosures

The Group has transferred the detailed remuneration disclosures to the Directors’ Report in accordance with Corporations Amendment Regulations 2006 (No. 4). These remuneration disclosures are provided in the Remuneration Report section of the Directors’ Report and are designated as audited.

Loans to key management personnel and their related parties

No loans were made to key management personnel and their related parties.

other key management personnel transactions with the Group

A number of key management persons, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities.

A number of these entities transacted with the Group in the reporting period. The terms and conditions of the transactions with management persons and their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-Director related entities on an arm’s length basis.

Liontown ResouRces LiMiteD 2012

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notes to the consoliDAteD finAnciAl stAtements for the YeAr enDeD 30 June 2012

The aggregate amounts recognised during the year relating to key management personnel and their related parties were as follows:

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tRANSACtIoN NotE AMouNtS AMouNtS
PAyABLE/ PAyABLE/
(RECEIvABLE) (RECEIvABLE)
2012 2011
$ $
Key Management Persons
A W Kiernan Legal and consulting services (i) 43,100 44,300
other related parties
Chalice Gold Mines Limited Corporate Services (ii) 144,000 144,000
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(i) The Group used the legal and consulting services of Mr Kiernan during the year. Amounts were billed based on normal market rates for such services and were due and payable under normal payment terms.
(ii) The Group receives corporate services including accounting and company secretarial services under a Corporate Services Agreement with Chalice Gold Mines Limited. Messrs Goyder, Kiernan and Jones were all directors of Chalice Gold Mines Limited during the year, and Mr Hacker and Ms Forgione are joint company secretaries. Amounts billed are based on a proportionate share of the cost to Chalice Gold Mines Limited of providing the services and have normal payment terms.

Amounts payable to key management personnel at reporting date arising from these transactions were as follows:

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LIABILItIES ARISING fRoM tHE ABovE tRANSACtIoNS 2012 2011
$ $
Current payables (16,200) (2,100)
(16,200) (2,100)
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options and rights over equity instruments granted as compensation

The movement during the reporting period in the number of options over ordinary shares in Liontown Resources held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

HELD At 1 JuLy 2011 GRANtED AS CoMPENSAtIoN ExERCISED ExPIRED/ foRfEItED HELD At 30 JuNE 2012 vEStED DuRING tHE yEAR vEStED AND ExERCISABLE At 30 JuNE 2012	HELD At 1 JuLy 2011 GRANtED AS CoMPENSAtIoN ExERCISED ExPIRED/ foRfEItED HELD At 30 JuNE 2012 vEStED DuRING tHE yEAR vEStED AND ExERCISABLE At 30 JuNE 2012
T R B Goyder - - - - - - - D R Richards 3,000,000 - - - 3,000,000 - 3,000,000 D A Jones 5,000,000 - - - 5,000,000 1,000,000 5,000,000 V P Gauci 2,000,000 - - - 2,000,000 - 2,000,000 A W Kiernan - - - - - - - C R Williams - - - - - - - Executive R K Hacker 750,000 - - - 750,000 - 750,000

	HELD At 1 JuLy 2010 GRANtED AS CoMPENSAtIoN ExERCISED ExPIRED/ foRfEItED HELD At 30 JuNE 2011 vEStED DuRING tHE yEAR vEStED AND ExERCISABLE At 30 JuNE 2011
T R B Goyder - - - - - - - D R Richards - 3,000,000 - - 3,000,000 3,000,000 3,000,000 D A Jones 5,000,000 - - - 5,000,000 1,000,000 4,000,000 V P Gauci 2,000,000 - - - 2,000,000 - 2,000,000 A W Kiernan - - - - - - - C R Williams - - - - - - - Executive R K Hacker 500,000 250,000 - - 750,000 250,000 750,000

Movements in ordinary shares

The movement during the reporting period in the number of ordinary shares in Liontown Resources held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

46 Liontown ResouRces LiMiteD 2012

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notes to the consoliDAteD finAnciAl stAtements for the YeAr enDeD 30 June 2012

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HELD At ADDItIoNS RECEIvED oN SALES HELD At
1 JuLy 2011 ExERCISE of 30 JuNE 2012
oPtIoNS
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Directors
T R B Goyder	58,511,444	22,543,127	-	-	81,054,571
D R Richards	200,000	1,140,750	-	-	1,340,750
D A Jones	1,120,000	761,500	-	-	1,881,500
V P Gauci	1,405,216	-	-	-	1,405,216
A W Kiernan	2,436,091	1,831,273	-	-	4,267,364
C R Williams	615,783	1,424,346	-	-	2,040,129
Executives
R K Hacker	962,000	1,672,000	-	-	2,634,000

20. GRouP entities

During the reporting period a wholly owned subsidiary, incorporated in Tanzania, Africa was formed. This subsidiary is the operating company for the Company’s relevant exploration interests in Tanzania. Details of the subsidiary are as follows:

	CouNtRy of INCoRPoRAtIoN	owNERSHIP INtERESt 2012 2011	owNERSHIP INtERESt 2012 2011
Liontown Resources (Tanzania) Limited	Tanzania	100%	-

21. PARent entity DiscLosuRes

The Consolidated financial statements for 30 June 2012 represent the subsidiaries and parent entity within the Liontown Group, whereas the comparatives for 2011 represent the parent entity only as the Tanzanian subsidiary was not incorporated until the 2012 financial year. Refer to note 20 for further details. As at, and throughout the financial year ended 30 June 2012 the parent entity of the Group was Liontown Resources Limited.

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2012 2011
$ $
Results of parent entity
Loss for the period (1,215,219) (1,189,946)
Total comprehensive loss for the period (1,215,219) (1,189,946)
financial position of parent entity at year end
Current assets 1,827,856 1,558,100
Total assets 5,270,108 3,398,458
Current liabilities 675,478 140,372
Total liabilities 675,478 140,372
total equity of the parent entity comprising of:
Issued capital 22,884,163 20,343,846
Share based payments reserve 1,623,027 1,611,581
Accumulated losses (19,912,560) (18,697,341)
total equity 4,594,630 3,258,086
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22. suBsequent eVents

On 20 August 2012, Liontown Resources Limited announced a fully underwritten entitlement issue to raise approximately $3.43 million. The raising is to be undertaken through a 1-for-3 pro-rata non-renounceable rights issue (‘Offer’) to existing shareholders at 3.5 cents per share. The Company will also be issuing 1 free attaching New Option for every 3 New Shares subscribed. Each New Option will have an exercise price of 5 cents and will expire on 27 September 2015. The Offer is underwritten by Bell Potter Securities Limited.

Funds raised from the raising will be used to underpin a major new drilling program comprising over 14,000 metres of reverse circulation and aircore drilling at the Jubilee Reef Project and for working capital.

23. continGent Assets AnD LiABiLities

There are no contingent assets or liabilities.

Liontown ResouRces LiMiteD 2012

Directors’ DeclArAtion

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1 In the opinion of the directors of Liontown Resources Limited (‘the Company’):
(a) the financial statements, notes and additional disclosures of the Group are in accordance with the Corporations Act 2001 including:
- (i) giving a true and fair view of the financial position of the Group 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; and
(c) the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.
2 This declaration has been made after receiving the declaration 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 Directors:

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D R Richards Managing Director

Dated this 24th day of September 2012

48 Liontown ResouRces LiMiteD 2012

inDepenDent AuDitor’s report

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INDEPENDENT AUDITOR’S REPORT

To the members of Liontown Resources Limited

Report on the Financial Report

We have audited the accompanying financial report of Liontown 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(a), 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 .

Liontown ResouRces LiMiteD 2012

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 repo r t relates to the financial report and remunerati o n report of Liontown R e sources Limited for the fina n cial year en d ed 30 Jun e 2012 publi s hed in the a nnual repor t and includ e d on the compa n y’s website. The com p any’s directors are res p onsible for the integri t y of the c o mpany’s website. We have n ot been en g aged to re p ort on the i ntegrity of t h is website. The audito r ’s report refers o nly to the f i nancial rep o rt and rem u neration report. It doe s not provid e an opinio n on any other i n formation w hich may h a ve been h y perlinked t o /from the fi n ancial rep o rt and rem u neration report. If users of t h e financial report and r e muneration report are c oncerned w ith the inhe r ent risks arising from public a tion on a w ebsite, the y are advis e d to refer t o the hard copy of the audited financi a l report and remunerati o n report to c onfirm the i nformation c ontained in this websit e version of the fi n ancial report and remu n eration rep o rt.

Auditor’s opinion

In our opinion:

(a ) the financial report of L iontown Re s ources Lim i ted is in accordance wit h the Corpo ra tions Act 2001 , including:
(i) giving a true and f a ir view of the consolidated entity’s fi n ancial posi t ion as at 30 June 2012 a nd of its pe r formance f o r the year e n ded on that date; and
(ii) compl y ing with Au s tralian Acc o unting Stan d ards and t h e Corporati o ns Regulati o ns 2001 ; and
(b ) the financial report als o complies w ith Internati o nal Financi a l Reporting Standards a s disclosed i n Note 1(a).

Report on the Remuneration Report

We ha v e audited th e remuneration report in c luded in th e directors’ r e port for the year ended 30 June 2012. The directo r s of the company are responsible for the pre p aration and presentati o n of the remuneration repor t in accorda n ce with section 300A of t he Corpora t ions Act 20 0 1 . Our resp o nsibility is to e x press an o p inion on th e remuneration report, based on ou r audit conducted in ac c ordance with Au s tralian Auditing Standa r ds.

Auditor’s opinion

In our o pinion the r emuneratio n report of L iontown Re s ources Limited for the y ear ended 30 June 2012 c o mplies with section 300 A of the Cor p orations Ac t 2001 .

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HLB MANN JUDD Chartered Accountants

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Perth, Western Australia W M CLARK 24 September 2012 Partner

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43
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50 Liontown ResouRces LiMiteD 2012

corporAte governAnce

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Approach to Corporate Governance

Liontown Resources Limited (“Company”) has made it a priority to adopt systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised in this statement. Commensurate with the spirit of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 2nd edition (“Principles & Recommendations”), the Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company’s corporate governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with the “if not, why not” regime, where, after due consideration, the Company’s corporate governance practices depart from a recommendation, the Board has offered full disclosure and an explanation for the adoption of its own practice.

Further information about the Company’s corporate governance practices may be found on the Company’s website at , under the section marked “Corporate Governance”.

The Company reports below on how it has followed (or otherwise departed from) each of the Principles & Recommendations during the 2011/2012 financial year (“Reporting Period”).

Board

Roles and responsibilities of the Board and Senior Executives

(Recommendations: 1.1, 1.3)

The Company has established the functions reserved to the Board, and those delegated to senior executives and has set out these functions in its Board Charter.

The Board is collectively responsible for promoting the success of the Company through its key functions of overseeing the management of the Company, providing overall corporate governance of the Company, monitoring the financial performance of the Company, engaging appropriate management commensurate with the Company’s structure and objectives, involvement in the development of corporate strategy and performance objectives, and reviewing, ratifying and monitoring systems of risk management and internal control, codes of conduct and legal compliance.

Senior executives are responsible for supporting the Managing Director and assisting the Managing Director in implementing the running of the general operations and financial business of the Company in accordance with the delegated authority of the Board. Senior executives are responsible for reporting all matters which fall within the Company’s materiality thresholds at first instance to the Managing Director or, if the matter concerns the Managing Director, directly to the Chair or the lead independent director as appropriate.

The Company’s Board Charter is available on the Company’s website at

Skills, experience, expertise and period of office of each director (Recommendation: 2.6)

A profile of each director setting out their skills, experience, expertise and period of office is set out in the Directors’ Report. The mix of skills and diversity for which the Board is looking to achieve in the membership of the Board is represented by the Board’s current composition. The Board considers that its current composition is appropriate for the Company’s current size and operations and the following mix of skills and expertise which the directors possess is relevant to the Company’s business: public company management experience; resource industry experience; geological qualifications; and legal qualifications.

Liontown ResouRces LiMiteD 2012 51

corporAte governAnce

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Director independence

(Recommendations: 2.1, 2.2, 2.3, 2.6)

The Board does not have a majority of directors who are independent. The Board considers that the current composition of the Board is adequate for the Company’s current size and operations, and includes an appropriate mix of skills and expertise relevant to the Company’s business. The Board continues to monitor its composition as the Company’s operations evolve and will appoint further independent directors if considered appropriate.

The independent directors of the Company are Anthony Kiernan and Craig Williams. These directors are independent as they are non-executive directors who are not members of management and who are free of any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the independent exercise of their judgement.

Independence is measured having regard to the relationships listed in Box 2.1 of the Principles & Recommendations and the Company’s materiality thresholds. The materiality thresholds are set out below.

The Board has agreed on the following guidelines for assessing the materiality of matters, as set out in the Company’s Board Charter:

Statement of Financial Position items are material if they have a value of more than 10% of pro-forma net asset.
Statement of Comprehensive Income items are material if they will have an impact on the current year operating result of 10% or more.
Items are also material if they impact on the reputation of the Company, involve a breach of legislation, are outside the ordinary course of business, could affect the Company’s rights to its assets, if accumulated would trigger the quantitative tests, involve a contingent liability that would have a probable effect of 10% or more on balance sheet or profit and loss items, or will have an effect on operations which is likely to result in an increase or decrease in net income or dividend distribution of more than 10%.
Contracts will be considered material if they are outside the ordinary course of business, contain exceptionally onerous provisions in the opinion of the Board, impact on income or distribution in excess of the quantitative tests, there is a likelihood that either party will default, and the default may trigger any of the quantitative or qualitative tests, are essential to the activities of the Company and cannot be replaced or cannot be replaced without an increase in cost which triggers any of the quantitative tests, contain or trigger change of control provisions, are between or for the benefit of related parties, or otherwise trigger the quantitative tests.

The non-independent directors of the Company are Tim Goyder, Douglas Jones and David Richards.

The non-independent Chair of the Board is Tim Goyder. The Chair does not satisfy the test of independence as set out in Box 2.1 of the Principles and Recommendations. The Board believes that Tim Goyder is the most appropriate person for the position as Chair because of his seniority and industry experience. However, the Board will appoint Craig Williams to act as lead independent director when any conflicts of interest arise.

The Managing Director is David Richards who is not Chair of the Board.

Independent professional advice

(Recommendation: 2.6)

To assist directors with independent judgement, it is the Board’s policy that if a director considers it necessary to obtain independent professional advice to properly discharge the responsibility of their office as a director then, provided the director first obtains approval from the Chair for incurring such expense, the Company will pay the reasonable expenses associated with obtaining such advice.

52 Liontown ResouRces LiMiteD 2012

corporAte governAnce

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Selection and (Re)Appointment of Directors (Recommendation: 2.6)

In determining candidates for the Board, the Nomination Committee (or equivalent) follows a prescribed process whereby it evaluates the mix of skills, experience and expertise of the existing Board. In particular, the Nomination Committee (or equivalent) is to identify the particular skills that will best increase the Board’s effectiveness. Consideration is also given to the balance of independent directors. Potential candidates are identified and, if relevant, the Nomination Committee (or equivalent) recommends an appropriate candidate for appointment to the Board. Any appointment made by the Board is subject to ratification by shareholders at the next general meeting.

The Board recognises that Board renewal is critical to performance and the impact of Board tenure on succession planning. Each director other than the Managing Director, must not hold office (without re-election) past the third annual general meeting of the Company following the director’s appointment or three years following that director’s last election or appointment (whichever is the longer). However, a director appointed to fill a casual vacancy or as an addition to the Board must not hold office (without re-election) past the next annual general meeting of the Company. At each annual general meeting a minimum of one director or a third of the total number of directors must resign. A director who retires at an annual general meeting is eligible for re-election at that meeting. Re-appointment of directors is not automatic.

The Company’s Policy and Procedure for the Selection and (Re)Appointment of Directors is available on the Company’s website at .

Board committees

Nomination Committee

(Recommendations: 2.4, 2.6)

The Company has not established a separate Nomination Committee. Given the current size and composition of the Board, the Board believes that there would be no efficiencies gained by establishing a separate Nomination Committee. Accordingly, the Board performs the role of the Nomination Committee. Items that are usually required to be discussed by a Nomination Committee are marked as separate agenda items at Board meetings when required. When the Board convenes as the Nomination Committee it carries out those functions which are delegated to it in the Company’s Nomination Committee Charter. The Board deals with any conflicts of interest that may occur when convening in the capacity of the Nomination Committee by ensuring that the director with conflicting interests is not party to the relevant discussions.

The full Board did not officially convene as a Nomination Committee during the Reporting Period, however nominationrelated discussions occurred from time to time during the year as required. The Board has adopted a Nomination Committee Charter which describes the role, composition, functions and responsibilities of the Nomination Committee. The Company’s Nomination Committee Charter is available on the Company’s website at .

Audit Committee (Recommendations: 4.1, 4.2, 4.3, 4.4)

The Company has established an Audit Committee.

The Audit Committee is structured in compliance with Recommendation 4.2. During the Reporting Period the Audit Committee comprised of Anthony Kiernan, Vince Gauci (resigned 3 October 2011) and Craig Williams (the Board’s independent non-executive directors) and was chaired by Vince Gauci, who was not Chair of the Board. The Audit Committee currently consists of Anthony Kiernan and Craig Williams and is chaired by Anthony Kiernan.

The Board considers this present structure is the best mix of skills and expertise to carry out the function of an Audit Committee available to the Company and appropriate for its current needs. The Board has adopted an Audit Committee Charter which the Audit Committee applies to assist it to fulfil its function. The Audit Committee Charter makes provision for the Audit Committee to meet with the external auditor as required.

The Audit Committee held two meetings during the Reporting Period. Details of the directors who are members of the Audit Committee and their attendance at Audit Committee meetings are set out in the Directors’ Report.

Details of each of the director’s qualifications are set out in the Directors’ Report. No members of the Audit Committee have formal accounting or financial qualifications, however, all are considered to be financially literate.

The Company has established procedures for the selection, appointment and rotation of its external auditor. The Board is responsible for the initial appointment of the external auditor and the appointment of a new external auditor when any vacancy arises, as recommended by the Audit Committee. Candidates for the position of external auditor must demonstrate complete independence from the Company through the engagement period. The Board may otherwise select an external auditor based on criteria relevant to the Company’s business and circumstances. The performance of the external auditor is reviewed on an annual basis by the Audit Committee and any recommendations are made to the Board.

The Company’s Audit Committee Charter and the Company’s Procedure for Selection, Appointment and Rotation of External Auditor are available on the Company’s website at .

Liontown ResouRces LiMiteD 2012

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corporAte governAnce

Remuneration Committee

(Recommendations: 8.1, 8.2, 8.3)

The Company has not established a separate Remuneration Committee. Given the current size and composition of the Board, the Board believes that there would be no efficiencies gained by establishing a separate Remuneration Committee. Accordingly, the Board performs the role of the Remuneration Committee. Items that are usually discussed by a Remuneration Committee are marked as separate agenda items at Board meetings when required. When the Board convenes as the Remuneration Committee it carries out those functions which are delegated to it in the Company’s Remuneration Committee Charter. The Board deals with any conflicts of interest that may occur when convening in the capacity if the Remuneration Committee by ensuring that the director with conflicting interests is not party to the relevant discussions.

The full Board did not officially convene as a Remuneration Committee during the Reporting Period, however remunerationrelated discussions occurred from time to time during the year as required.

Details of remuneration, including the Company’s policy on remuneration, are contained in the “Remuneration Report” which forms of part of the Directors’ Report. Non-executive directors are remunerated at a fixed fee for time, commitment and responsibilities. Remuneration for non-executive directors is not linked to individual performance. Pay and rewards for executive directors and senior executives consists of a base salary and performance incentives. Long term performance incentives may include options granted at the discretion of the Board and subject to obtaining the relevant approvals. Executives are offered a competitive level of base pay at market rates and are reviewed annually to ensure market competitiveness.

There are no termination or retirement benefits for non-executive directors (other than for superannuation).

The Company’s Remuneration Committee Charter includes a statement of the Company’s policy on prohibiting transactions in associated products which limit the risk of participating in unvested entitlements under any equity based remuneration schemes. The Company’s Remuneration Committee Charter is available on the Company’s website at .

Performance evaluation

Senior executives

(Recommendations: 1.2, 1.3)

The Managing Director and Chairman review the performance of the senior executives. This is conducted by informal interviews. During the Reporting Period a formal evaluation of senior executives did not occur. However, due to the size of the group, the Chairman takes an active role in assessing the performance of executives on an informal basis.

Board, its committees and individual directors

(Recommendations: 2.5, 2.6)

The Chair evaluates the performance of the Board, individual directors, the Managing Director and any applicable committees of the Board. These evaluations are undertaken by each director completing a questionnaire which is then evaluated by the Chair.

During the Reporting Period an evaluation of the Board took place in accordance with the process disclosed. However, an evaluation of the individual directors and the committees of the Board did not occur during the Reporting Period.

54 Liontown ResouRces LiMiteD 2012

corporAte governAnce

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ethical and responsible decision making

Code of Conduct

(Recommendations: 3.1, 3.3)

The Company has established a Code of Conduct as to the practices necessary to maintain confidence in the Company’s integrity, practices necessary to take into account their legal obligations and the expectations of their stakeholders and responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

A summary of the Company’s Code of Conduct is available on the Company website at

Diversity

(Recommendations: 3.2,3.3,3.4,3.5)

The Company has established a Diversity Policy, which includes requirements for the Board to establish in the long term, measurable objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress in achieving them.

However, due to the current size of the Company the Board has not set measurable objectives for achieving gender diversity. The Board intends to revisit the establishment of measurable objectives during the forthcoming financial year.

The proportion of women employees in the whole organisation, women in senior executive positions and women on the Board are set out in the following table:

Proportion of women Whole organisation 1 out of 8 (13%) Senior executive positions 1 out of 3 (33%) Board 0 out of 5 (0%)

The Company’s Diversity Policy is available on the Company’s website.

Continuous Disclosure

(Recommendations: 5.1, 5.2)

The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure and accountability at a senior executive level for that compliance.

A summary of the Company’s Policy on Continuous Disclosure and a summary of the Company’s Compliance Procedures are available on the Company’s website at .

Shareholder Communication

(Recommendations: 6.1, 6.2)

The Company has designed a communications policy for promoting effective communication with shareholders and encouraging shareholder participation at general meetings.

The Company’s Shareholder Communication Policy is available on the Company’s website at

Liontown ResouRces LiMiteD 2012 55

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corporAte governAnce

Risk Management

Recommendations: 7.1, 7.2, 7.3, 7.4)

The Board has adopted a Risk Management Policy, which sets out the Company’s risk profile. Under the policy, the Board is responsible for approving the Company’s policies on risk oversight and management and satisfying itself that management has developed and implemented a sound system of risk management and internal control.

Under the policy, the Board delegates day-to-day management of risk to the Managing Director, who is responsible for identifying, assessing, monitoring and managing risks. The Managing Director is also responsible for updating the Company’s material business risks to reflect any material changes, with the approval of the Board. In fulfilling the duties of risk management, the Managing Director may have unrestricted access to Company employees, contractors and records and may obtain independent expert advice on any matter they believe appropriate, with the prior approval of the Board.

The Board has established a separate Audit Committee to monitor and review the integrity of financial reporting and the Company’s internal financial control systems and risk management systems.

As the Company continues to evolve, the Board will enhance the processes and procedures to manage and report on material business risk, and may engage external risk management consultants to assist.

In addition, the following risk management measures have been adopted by the Board to manage the Company’s material business risks:

Due to the size of the Company, all payments must be approved by the Managing Director and Chief Financial Officer;
the Board has developed a range of emergency response and other health and safety policies and procedures relevant to its operations;
the Board has adopted a compliance procedure for the purpose of ensuring compliance with the Company’s continuous disclosure obligations; and
the Board has adopted a corporate governance manual which contains other policies to assist the Company to establish and maintain its governance practices.

The Board has implemented a system to review, formalise and document the management of its material business risks. This system includes a risk register used by management to identify the Company’s material business risks and risk management strategies for these risks. In addition, the process of managing material business risks is allocated to members of senior management. The risk register is currently being prepared by management and will be provided to the Board along with a report as to the effectiveness of the Company’s management of material business risks for the next reporting period.

The categories of risk to be reported on or referred to as part of the Company’s systems and processes for managing material business risk include market-related, financial reporting, operational, environmental, human capital, sustainability, occupational health and safety, political, strategic, economic cycle/marketing, and legal and compliance.

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

A summary of the Company’s Risk Management Policy is available on the Company’s website at

56 Liontown ResouRces LiMiteD 2012

AsX ADDitionAl informAtion

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Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below.

shareholdings

Substantial shareholders

The number of shares held by substantial shareholders and their associated interests as at 21 September 2012 were:

SHAREHoLDER	NuMBER of oRDINARy SHARES HELD	PERCENtAGE of CAPItAL HELD %
Timothy R B Goyder	81,454,571	27.73
Delta Resource Management	30,000,000	10.21
Balfes (QLD) Pty Ltd	16,500,000	5.62
Graham Kluck Management & Investment	16,156,530	5.50

Class of Shares and voting Rights

At 21 September 2012 there were 940 holders of the ordinary shares of the Company and 8 holders of unlisted options. The Company has 9,650,000 unlisted options on issue at 21 September 2012, all of which were issued under the Employee Share Option Plan.

The voting rights to the ordinary shares set out in the Company’s Constitution are:

“Subject to any rights or restrictions for the time being attached to any class or Classes of shares -

a) at meetings of members or classes of members each member entitled to vote in person or by proxy or attorney: and

b) on a show of hands every person who is a member has one vote and on a poll every person in person or by proxy or attorney has one vote for each ordinary share held.”

Holders of options do not have voting rights.

Distribution of equity security holders as at 21 September 2012:

CAtEGoRy	NuMBER of EquIty SECuRIty HoLDERS
	oRDINARy SHARES uNLIStED SHARE oPtIoNS
1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over total	77 - 162 - 121 - 396 4 184 4
	940 8

The number of shareholders holding less than a marketable parcel at 21 September 2012 was 425.

Liontown ResouRces LiMiteD 2012 57

AsX ADDitionAl informAtion

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twenty largest ordinary Fully Paid shareholders as at 21 september 2012

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NAME PERCENtAGE of
NuMBER of oRDINARy
CAPItAL HELD
SHARES HELD
%
----- End of picture text -----

Timothy R B Goyder Delta Resource Management Balfes (QLD) Pty Ltd Graham Kluck Management & Investment Pty Ltd Lujeta Pty Ltd Calm Holdings Pty Ltd Albion Bay Pty Ltd JP Morgan Nominees Australia Limited Claw Pty Ltd Anthony Kiernan Clement Pty Ltd Melita Station Pty Ltd Colbern Fiduciary Nominees Pty Ltd Calama Holdings Pty Ltd Pindan Exploration Pty Ltd Pershing Australia Nominees Pty Ltd Richard Hacker Mr Michael Joseph Tuite & Mrs Helen Elizabeth Tuite Dr Lynette Hui Ching Wong Craig Williams total	81,454,571 27.72 30,000,000 10.21 16,500,000 5.62 16,156,530 5.50 11,172,060 3.80 10,240,010 3.48 7,840,000 2.67 7,569,895 2.58 6,388,000 2.17 4,267,364 1.45 3,955,771 1.35 3,534,068 1.20 3,500,000 1.19 2,897,250 0.99 2,750,000 0.94 2,740,000 0.93 2,634,000 0.90 2,500,000 0.85 2,500,000 0.85 2,040,129 0.69
	220,639,648 75.09

Timothy R B Goyder
Delta Resource Management
Balfes (QLD) Pty Ltd
Graham Kluck Management & Investment Pty Ltd
Lujeta Pty Ltd
Calm Holdings Pty Ltd
Albion Bay Pty Ltd
JP Morgan Nominees Australia Limited
Claw Pty Ltd
Anthony Kiernan
Clement Pty Ltd
Melita Station Pty Ltd
Colbern Fiduciary Nominees Pty Ltd
Calama Holdings Pty Ltd
Pindan Exploration Pty Ltd
Pershing Australia Nominees Pty Ltd
Richard Hacker
Mr Michael Joseph Tuite & Mrs Helen Elizabeth Tuite
Dr Lynette Hui Ching Wong
Craig Williams
total

81,454,571
27.72
30,000,000
10.21
16,500,000
5.62
16,156,530
5.50
11,172,060
3.80
10,240,010
3.48
7,840,000
2.67
7,569,895
2.58
6,388,000
2.17
4,267,364
1.45
3,955,771
1.35
3,534,068
1.20
3,500,000
1.19
2,897,250
0.99
2,750,000
0.94
2,740,000
0.93
2,634,000
0.90
2,500,000
0.85
2,500,000
0.85
2,040,129
0.69

220,639,648
75.09

58 Liontown ResouRces LiMiteD 2012

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Level 2, 1292 Hay Street, West Perth, WA GPO Box 2890, Perth, WA 6001 Tel: (+61 8) 9322 7431 Fax: (+61 8) 9322 5800

AI assistant

LIONTOWN LIMITED — Annual Report 2012

65274_rns_2012-10-23_99a4b8ae-4720-4d01-9451-35794695de18.pdf

CONTENTS

Chairman’s Letter highLights

direCtors’ report

CORpORaTE DIRECTORy

DIRECTORS

COMpaNy SECRETaRIES

pRINCIpaL pLaCE Of BUSINESS & REgISTERED OffICE

aUDITORS

ShaRE REgISTRy

hOME ExChaNgE

aSx CODE

cHAiRMAn’s LetteR

Dear ShareholDer

HigHLigHts

Jubilee reef JV – NortherN taNzaNia, eaSt africa

NortherN QueeNSlaND, auStralia

Review of opeRAtions

oVerVieW

review of operations

1.0 JubiLee Reef Joint ventuRe (Liontown RigHt to eARn 75%)

goLD pRospects (see figuRe 2)

MAsAbi HiLL

sHAngAzA/pAnApenDesA

otHeR goLD pRospects

2.0 MegA Joint ventuRe (Liontown RigHt to eARn 75%)

3.0 Mount winDsoR Joint ventuRe pRoJect (RAMeLius ResouRces RigHt to eARn 60%)

4.0 pAnHAnDLe pRoJect

(RAMeLius ResouRces RigHt to eARn 60%)

5.0 ReLinquisHeD pRoJects

AfRicAn bARRick iRon oRe Joint ventuRe

foRt constAntine soutH

scHeDuLe of teneMents

Mt winDsoR Joint ventuRe

AppenDices

AppenDix 1 MAsAbi suMMARy Rc inteRsections 2012

AppenDix 1 MAsAbi suMMARy Rc inteRsections 2012 (continueD)

AppenDix 1 MAsAbi suMMARy Rc inteRsections 2012 (continueD)

AppenDix 2 MAsAbi suMMARy RAb inteRsections 2012

AppenDix 3 sHAngAzA / pAnApenDesA suMMARy Rc inteRsections 2012

AppenDix 4 cHeLA suMMARy Rc inteRsections

AppenDix 5 LtR iRon HoLes Rc inteRsections 2012

AppenDix 6 pAnHAnDLe suMMARy inteRsections

1. Directors

t R B Goyder

Chairman

D R Richards

BSc (Hons), MAIG

Managing Director

D A Jones

PhD, AusIMM, RPGeo

Non-executive Director

A w Kiernan

LLB

Non-executive Director

c R williams

BSc (Hons)

Non-executive Director

V P Gauci

B.Eng (Hons)

Non-executive Director

2. company secretaries

R K Hacker

B.Com, CA, ACIS

L Forgione

B.Com, CA

3. Directors’ Meetings

4. Principal Activities

5. Review of operations

5.1 Jubilee Reef Joint Venture Project (Liontown Resources earning up to 75%)

5.2 Mega Joint Venture Project

5.3 Mount windsor Joint Venture

6. significant changes in the state of Affairs

7. Remuneration Report - Audited

7.1 introduction

(i) Directors

(ii) Executives

7.1.1 Remuneration philosophy

LIONTOWN LIMITED Annual Report 2012