METEORIC RESOURCES NL — Annual Report 2011

Sep 29, 2011

NL

NL

ABN: 64 107 985 651

ANNUAL REPORT FINANCIAL YEAR ENDED 30 JUNE 2011

	CONTENTS
	Corporate Directory	3
	Review of Operations	4
	Directors’ Report	9
	Auditor’s Independence Declaration	15
	Corporate Governance Statement	16
	Statement of Comprehensive Income	20
	Statement of Financial Position	21
	Statement of Changes in Equity	22
	Statement of Cash Flows	23
	Notes to and forming part of the Financial Statements	24
	Directors’ Declaration	40
	Independent Audit Report	41
	Tenement Schedule	43
	Other Information	44
	-2-

CORPORATE DIRECTORY

DIRECTORS

PETER THOMAS Non-Executive Chairman

ROGER THOMSON Managing Director

GEORGE SAKALIDIS Executive Director

COMPANY SECRETARY

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FOR INFORMATION ON THE COMPANY CONTACT

PRINCIPAL & REGISTERED OFFICE

2[nd] Floor

16 Ord Street, West Perth WA 6005 Telephone (08) 9485 2836 Facsimile (08) 9485 2840

BANKERS

Bank of Western Australia Ltd Hay Street, West Perth WA 6005

Rudolf Tieleman

AUDITORS

REGISTERED OFFICE

2[nd] Floor 16 Ord Street, West Perth WA 6005 Telephone (08) 9485 2836 Facsimile (08) 9485 2840

Somes & Cooke Chartered Accountants Level 1, 1304 Hay Street, West Perth WA 6005

STOCK EXCHANGE

Australian Securities Exchange

WEBSITE

www.meteoric.com.au

FOR SHAREHOLDER INFORMATION CONTACT

COMPANY CODE

MEI (Fully paid shares) MEICA (Partly paid contributing shares)

SHARE REGISTRY

Security Transfer Registrars Pty Ltd 770 Canning Highway, Applecross WA 6153 Telephone (08) 9315 2333 Facsimile (08) 9315 2233

ISSUED CAPITAL

74,029,251 fully paid ordinary shares

27,504,727 partly paid shares, $0.20 unpaid

2,400,000 options to acquire partly paid shares exercisable at $0.065 by 16 November 2011

2,580,000 options to acquire fully paid shares exercisable at $0.2249 by 23 December 2014

230,000 options to acquire fully paid shares exercisable at $0.2370 by 21 December 2015

• 3 -

REVIEW OF OPERATIONS

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PROJECT SUMMARIES

Meteoric Resources is a gold, iron and base metal explorer with a portfolio of prospects in Western Australia, Northern Territory and New South Wales ranging from grass roots to resource definition stage. During the year Meteoric advanced its Coorara iron project, Tibooburra gold project and Unaly Hill South vanadium project. Project locations are shown in Figure 1.

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Figure 1 Location Map

COORARA (Meteoric right to 100%)

The Coorara iron project is situated between Koolyanobbing and Coolgardie in the emerging South Yilgarn Iron Province, and within trucking distance of the Indian Pacific standard gauge railway line. During the year Meteoric Resources completed 25 reverse circulation (RC) drill holes totalling 1,659m as part of an initial drilling programme.

The drilling was carried out over an aggregate 1km strike length of targets within a 4km strike length of multiple banded iron formations (BIF) in the northern part of the project area, representing only a very small part of the total 40km BIF strike length within the project tenements. The drilling was designed to test for goethite-hematite with direct shipping ore (DSO) potential associated with the magnetite BIF horizons and targeted areas where sampling has indicated surface grades in excess of 50%Fe and areas where gravity anomalies indicate potential for iron enrichments. Limitations in gaining drilling access over BIF ridges resulted in less than optimum drill hole positions to test some targets and a track-mounted drilling rig may be required in future.

The drilling intersected an intercalated sequence of BIF and ultramafic rocks with the BIF horizons ranging from a few metres up to 60m in apparent thickness, weathered or altered to depths of 30m to 60m below surface. Results are summarised in Table 1.

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REVIEW OF OPERATIONS

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Table 1 Coorara RC Drilling Results

Hole Number	Coordinates	Coordinates	From m	To m	Interval m	Fe %	SiO2 %	LOI %
	E	N
CRC02	218620	6664354	0	16	16	43.2	29.8	6.2
		including	0	4	4	53.9	14.1	6.6
CRC06	217872	6664813	15	19	4	59.1	9.4	4.7
CRC07	217905	6664837	0	6	6	41.7	20.3	7.4
CRC09	217983	6664888	0	8	8	48.2	16.7	8.9
	including		4	6	2	54.5	10.1	8.7
CRC10	218042	6664691	0	6	6	46.9	19.1	7.6
	including		0	2	2	58.6	7.9	5.3
			42	44	2	50.6	19.6	6.9
			48	50	2	49.2	22.7	6.0
CRC12	219246	6663332	0	8	3	47.4	14.9	9.7
	including		4	8	4	50.3	13.7	8.9
CRC14	219312	6663264	8	16	8	37.1	22.7	10.4
CRC15	219366	6663167	6	14	8	43.4	25.6	6.8
CRC17	219192	6663280	0	4	4	52.4	16.3	5.8
CRC23	220037	66661706	0	6	6	41.0	29.5	7.5
CRC24	220023	66661734	32	42	10	40.3	37.5	3.9

2m composite samples. Fused disc XRF determination of Fe and SiO2. LOI: Loss on Ignition All holes dip at 60°, azimuth 055°, except for azimuths of CRC15 (050°) and CRC23 (070°)

The drilling confirmed goethite-hematite enrichments in the weathered zone of the BIF, however thicknesses are generally lower and silica content higher than expected when compared to the surface sampling results.

Following the initial reverse circulation, further geological mapping and rock sampling was carried out to identify areas where hematite-goethite enrichments with direct shipping ore (DSO) potential may be developed over greater thicknesses than those intersected in the initial drilling. The mapping and sampling identified several elevated areas with encouraging surface grades. 105 rock samples were taken with significant results shown in Table 2.

Some of the target areas, aggregating several kilometres in length, appear to be remnants of an older land surface where preservation of hematitegoethite alteration of the magnetite BIF maybe deeper and more extensive. Assessment of the potential of the primary BIF for magnetite ore has yet to commence.

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REVIEW OF OPERATIONS

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		Table 2 Coorara Rock Sampling Results	Table 2 Coorara Rock Sampling Results	Table 2 Coorara Rock Sampling Results
Sample **Number **	Easting	Northing	Fe %	SiO2 %	Al2O3 %	LOI %
BIF101	216855	6664796	57.39	7.9	5.1	4.4
BIF102	216926	6664834	56.01	14.6	1.5	3.5
BIF109	216670	6666280	52.99	15.2	2.8	5.8
BIF116	215943	6667665	53.76	11.4	5.9	5.4
BIF131	222377	6656148	53.89	16.0	2.7	2.3
BIF142	217075	6665089	55.17	8.9	3.9	7.7
BIF161	217268	6663804	51.27	9.9	4.2	11.7
BIF164	216934	6664789	57.11	9.4	3.2	5.3
BIF172	215970	6667600	53.92	14.9	3.5	4.0
BIF178	219580	6660830	60.76	10.8	1.2	0.6
BIF179	228349	6648346	60.34	4.5	3.5	4.6
BIF195	219489	6661401	58.88	5.8	4.0	3.2
BIF198	219432	6661558	60.79	3.9	3.1	5.5

Fused disc XRF determination of Fe, SiO2, Al2O3. LOI: Loss on Ignition

ROBINSON RANGE (Meteoric 100%)

Discussions with the legal representative of the traditional owners regarding terms for aboriginal heritage surveys are continuing and although some progress has been made, agreement on terms has not yet been reached. Planning of botanical surveys is in hand but unlikely to proceed until September when seasonal conditions are more favourable for this type of survey.

WEBB IOCG Targets (Meteoric 100% or right to earn up to 70%)

The geological Survey of WA has identified the Webb area as being prospective for iron oxide-copper-gold (IOCG) mineralisation. Typically this mineralisation style is characterised by coincident or near coincident magnetic and gravity anomalies related to iron oxides associated with coppergold mineralisation. Meteoric has identified three strong aeromagnetic targets on tenements held in joint venture with Beadell Resources Ltd - see Figure 2. A gravity survey outlined a pronounced gravity anomaly at one of these targets and was drilled in the previous year with some anomalous copper results. Negotiations for access to the remaining two targets, which occur on a separate aboriginal reserve from the first target, are continuing.

WEBB Kimberlite Targets (Meteoric 100% or right to earn a majority interest, diluting)

As part of its regional appraisal of the unexplored West Arunta region, Meteoric Resources acquired a 500sq km package of exploration licences over a cluster of more than 50 discrete magnetic anomalies evident from regional aeromagnetic data in the Webb area - see Figure 2. Meteoric’s geophysical consultants advised that the magnetic character of these anomalies is consistent in shape, size and amplitude with those associated with some kimberlite and lamproite pipes in Archean cratons and Proterozoic mobile belts. The magnetic targets may represent a kimberlite or lamproite pipe field, however they are conceptual in nature and are not based on field evidence as they occur in an area of extensive windblown sand cover with no evident outcrop.

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REVIEW OF OPERATIONS

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Figure 2

Webb Regional Aeromagnetic Image and Tenure

Meteoric holds a 100% interest in three granted tenements (E80/4235, 4407 and 4408), with rights to acquire up to a 90% interest in tenement application E80/2506. Modelling of selected anomalies by Meteoric’s geophysical consultants indicates vertical pipe-like bodies with depths to the unweathered top of the modelled bodies ranging from 50m to 150m below surface and with diameters ranging from 180m to 300m. The age of the pipe targets is interpreted as post Permian, occurring in a structural depression close to a major faulted margin of the Amadeus Basin and the Arunta Complex. There are no records of any previous diamond exploration having been carried out in this area and the targets are considered to be completely untested.

During the year Meteoric signed a Heads of Agreement with North Australian Diamonds Limited (ASX:NAD) for NAD to explore the tenement package for diamonds. NAD is Australia’s most active diamond explorer and has a long term commitment to diamond exploration and development in Australia. NAD has extensive diamond holdings in northern Australia and has announced an upgraded resource at its Merlin project in the Northern Territory of 30 million tonnes containing a total of 7.2 million carats of diamonds. NAD has completed pre-feasibility production trials at Merlin prior to commencing a feasibility study this year.

Under the terms of the agreement, and subject to completion of an exploration access agreement with the traditional owners, NAD may earn 70% of Meteoric’s rights in the tenements by expenditure of $2.5M within five years of signing an access agreement. A minimum programme of sampling and 1,000m of drilling is required during the first two years prior to NAD’s right of withdrawal. Meteoric has reached agreement with the traditional owners for exploration of the tenements and a helicopter-supported heritage survey has been completed. Subject to clearances from the heritage survey it is anticipated that NAD will commence field work in the next six month period.

TIBOOBURRA (Meteoric right to earn up to 75%)

Heritage clearances have been obtained for a RAB/aircore drilling programme at the New Bendigo, Kink and Mt Poole areas where gold, antimony and arsenic geochemical anomalies have been identified over a cumulative strike length of 10km. The gold anomalies occur within the old Tibooburra goldfield, an area where extensive quartz veining is evident yet where very little exploration or drilling has been completed. Drilling of these gold targets is scheduled to commence in August 2011.

UNALY HILL SOUTH (Meteoric 100%, diluting)

Meteoric’s Unaly Hill South tenement covers a 2km strike length of the Atley Igneous Complex, a differentiated mafic intrusion containing vanadiumbearing magnetite horizons. As previously reported, Meteoric has entered a joint venture agreement with Black Ridge Mining which has identified an 11km-long magnetic zone hosting magnetite-vanadium-titanium mineralisation immediately along strike from the Meteoric tenement. During the year Black Ridge Mining completed five RC drill holes (total 850m) over a 1.2km strike length of the interpreted magnetite horizon. The drilling results are summarised in Table 3.

• 7 -

REVIEW OF OPERATIONS

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Table 3 Unaly Hill South RC Drilling Results

Hole Number	Collar Coordinates	Collar Coordinates	From m	To m	Interval m	Fe %	V2O5 %	TiO2 %
	E	N
UHS01	686690	6851570	109	133	24	25.2	0.48	6.54
UHS02	686770	6851540	62	95	33	27.9	0.51	7.34
UHS03	687290	6852200	39	63	24	24.0	0.45	6.19
UHS04	687345	6852175	29	56	27	28.3	0.51	7.58
UHS05	687705	6852790	98	104	6	19.5	0.37	5.15
			174	186	12	26.1	0.47	6.65

Drill azimuth 110°, dip -60° True width of intersections yet to be determined Analyses by fused disc XRF method

The drilling intersected vanadiferous magnetite mineralisation in all holes, with an average intersection width of 21m and a weighted average grade of 0.48%V2O5 . This grade compares favourably with the quoted resource grade of 0.48%V2O5 at the nearby Windimurra Vanadium Project situated some 30km to the west.

Vanadium is used in the production of high performance steels for the pipeline, construction and automotive industries and in the production of titanium alloys. Potential future uses include lithium-vanadium batteries in electric vehicles and industrial vanadium-redox batteries.

The information in this report that relates to exploration is based on information compiled or reviewed by Roger Thomson BSc, ARSM, MAusIMM, who is a Member of the Australian Institute of Geoscientists. Roger Thomson is a director of Meteoric Resources NL. Roger Thomson has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Roger Thomson consents to the inclusion of this information in the form and context in which it appears in this report

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DIRECTORS’ REPORT

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Your directors present their report on the Company for the year ended 30 June 2011.

DIRECTORS

The following persons were directors of Meteoric Resources NL (“ Meteoric ”) during the whole of the year and up to the date of this report:

Peter Thomas Roger Thomson George Sakalidis

PRINCIPAL ACTIVITIES

The principal activities of the Company during the year were the exploration of mineral tenements in Western Australia, Northern Territory and New South Wales.

RESULTS FROM OPERATIONS

During the year the Company recorded an operating loss of $1,585,685 (2010: $1,708,118).

The previous year’s operating loss includes $90,300 in respect of “equity-settled share based payments”. This was not a cash outlay and was brought to account by virtue of a requirement at law. Net of this figure, the operating loss for that year was $1,617,818.

DIVIDENDS

No amounts have been paid or declared by way of dividend by the Company since the end of the previous financial year and the Directors do not recommend the payment of any dividend.

REVIEW OF OPERATIONS

A review of operations is covered elsewhere in this Annual Report.

EARNINGS PER SHARE

Basic and diluted loss per share for the financial period was 2.25 cents (2010: 2.70 cents).

FINANCIAL POSITION

The Company’s cash position as at 30 June 2011 was $1,568,233, a reduction from the 30 June 2010 cash balance which was $2,604,951. The decreased cash position is adequate to fund committed exploration expenditure.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

Significant changes in the state of affairs of the Company during the financial period were the placement of 6,000,000 fully paid shares at an issue price of $0.15 each. Those applicants were also issued with 4,000,000 partly paid shares for no consideration although an amount of $0.20 in respect of each of those shares is due to be paid when called by the Company.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

No material matters have occurred subsequent to the end of the financial year which require reporting on other than the matters as reported to ASX.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Likely developments in the operations of the Company and the expected results of those operations in future financial years have not been included in this report as the directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in unreasonable prejudice to the Company.

ENVIRONMENTAL ISSUES

The Company carries out operations in Australia which are subject to environmental regulations under both Commonwealth and State legislation in relation to those exploration activities.

The Company’s exploration manager is responsible for being aware of and monitoring compliance with regulations. During or since the financial period there have been no known significant breaches of these regulations.

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DIRECTORS’ REPORT

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INFORMATION ON DIRECTORS AND COMPANY SECRETARIES

Peter Thomas

Chairman

Mr Thomas was a practising solicitor from 1980 until June 2011, specialising in the provision of corporate and commercial advice to explorers and miners. Since the mid-1980s, he has served on the boards of various listed companies. He is also non-executive founding chairman of Image Resources NL (since 19 April 2002), Magnetic Resources NL (since the company was incorporated on 23 August 2006), Emu Nickel NL (since the company was incorporated on 29 August 2007) and Middle Island Resources Limited (since 2 March 2010), all four of whom are ASX listed. He was also appointed non-executive director of ANCOA Pty Ltd (previously known as Court Resources WA Pty Ltd) on 28 July 2010. Within the last three years, he was the founding chairman of Sandfire Resources NL for the period June 2003 to December 2006 and non-executive director of GoldLink IncomePlus Limited from 4 April 2008 to 18 June 2008.

Mr Thomas has a relevant interest in 422,000 ordinary fully paid shares, 33,000 contributing shares, 800,000 options to acquire contributing shares and 650,000 options to acquire fully paid shares.

Roger Thomson

Managing Director

Mr Thomson is a geologist with more than 35 years’ experience in mineral exploration, mining geology and management in Australia, Africa, South America and Southeast Asia. He has held the positions of General Manager Exploration with Delta Gold Ltd and Sons of Gwalia Ltd and has been responsible for, or closely associated with, making economic discoveries of gold and tantalum in Australia. Mr Thomson successfully managed the exploration programme that led to the discovery of the multi-million ounce Sunrise gold deposit near Laverton in Western Australia. He is an Associate of the Royal School of Mines, a Member of the Australasian Institute of Mining and Metallurgy and a Member the Australian Institute of Geoscientists. Mr Thomson is also an executive director of Image Resources NL (since 19 April 2002), Magnetic Resources NL (since the company was incorporated on 23 August 2006) and Emu Nickel NL (since the company was incorporated on 29 August 2007), all three of whom are ASX listed. He was a non-executive director of Mariana Resources Limited for the period from 20 February 2006 to 28 November 2008.

Mr Thomson has a relevant interest in 625,000 ordinary fully paid shares, 2,022,500 contributing shares, 800,000 options to acquire contributing shares and 750,000 options to acquire fully paid shares.

George Sakalidis

Executive Director

Mr Sakalidis is an exploration geophysicist with over 25 years’ industry experience, during which time his career has included extensive gold, diamond, base metals and mineral sands exploration. Mr Sakalidis has been involved in a number of significant mineral discoveries, including the Three Rivers and Rose gold deposits in Western Australia and the tenement applications over the Silver Swan nickel deposit. He was also instrumental in the design of the magnetic surveys and exploration drilling program that led to the discovery of the large mineral sands resources at Magnetic Minerals Limited's Dongara Project. He is also managing director of Image Resources NL (director since 13 May 1994, managing director since 13 June 2007), Magnetic Resources NL (since the company was incorporated on 23 August 2006), non-executive director of Potash West NL (since the company was incorporated 12 November 2010) and Emu Nickel NL (since the company was incorporated 29 August 2007), all three of whom are ASX listed. He is also non-executive chairman of unlisted Imperium Resources Limited (appointed 23 June 2008).

Mr Sakalidis has a relevant interest in 4,730,150 ordinary fully paid shares, 2,688,462 contributing shares, 800,000 options to acquire contributing shares and 750,000 options to acquire fully paid shares.

Rudolf Tieleman

Company Secretary

Mr Tieleman is an accountant with over 25 years’ experience in public practice. He has extensive knowledge in matters relating to the operation and administration of listed mining companies in Australia.

AUDIT COMMITTEE

At the date of this report the Company does not have a separately constituted Audit Committee as all matters normally considered by an audit committee are be dealt with by the full board.

MEETINGS OF DIRECTORS

During the financial year ended 30 June 2011, there were seven meetings of directors, all of which were attended by all the directors.

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DIRECTORS’ REPORT

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REMUNERATION REPORT (Audited)

Names and positions held of key management personnel in office at any time during the financial year are:

MUNERATION REPORT (Audited) mes and positions held of key management personnel	in office at any time during the financial year are:
Key Management Person	Position
Peter Thomas	Non-Executive Chairman
Roger Thomson	ManagingDirector
George Sakalidis	Executive Director
Rudolf Tieleman	CompanySecretary

The Company’s policy for determining the nature and amount of emoluments of key management personnel is set out below:

Key Management Personnel Remuneration and Incentive Policies

The Remuneration Committee (“ committee ”) makes decisions with respect to appropriate and competitive remuneration and incentive policies (including basis for paying and the quantum of any bonuses), for key management personnel and others as considered appropriate to be singled out for special attention, which:

• motivates them to contribute to the growth and success of the Company within an appropriate control framework; aligns the interests of key leadership with the interests of the Company’s shareholders;

• are paid within any limits imposed by the Constitution and make recommendations to the Board with respect to the need for increases to any such amount at the Company’s annual general meeting; and

• in the case of directors, only permits participation in equity-based remuneration schemes after appropriate disclosure to, due consideration by and with the approval of the Company’s shareholders.

The committee is to ensure that recommendations are made to the Board with respect to the above.

Non-Executive Directors

• The committee is to ensure that non-executive directors are not provided with retirement benefits other than statutory superannuation entitlements.

• To the extent that the Company adopts a remuneration structure for its non-executive directors other than in the form of cash and superannuation, the committee shall document its reasons for the purpose of disclosure to stakeholders.

Incentive Plans and Benefits Programs

The committee is to:

• review and make recommendations concerning long-term incentive compensation plans, including the use of equity-based plans. Except as otherwise delegated by the Board, the committee will act on behalf of the Board to administer equity-based and employee benefit plans, and as such will discharge any responsibilities under those plans, including making and authorising grants, in accordance with the terms of those plans;

• ensure that, where practicable, incentive plans are designed around appropriate and realistic performance targets that measure relative performance and provide remuneration when they are achieved; and

• continually review and, if necessary, improve any existing benefit programs established for employees.

Retirement and Superannuation Payments

Prescribed benefits were provided by the Company to all directors by way of superannuation contributions to externally managed complying superannuation funds during the year. These benefits were paid as superannuation contributions to satisfy (at least) the requirements of the Superannuation Contribution Guarantee Act and in satisfaction of any salary sacrifice requests. All contributions were made to accumulation type funds selected by the director and accordingly actuarial assessments were not required.

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DIRECTORS’ REPORT

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Key Management Personnel Remuneration

Year ended 30 June 2011

Year ended 30 June 2011	Year ended 30 June 2011	Year ended 30 June 2011	Year ended 30 June 2011	Year ended 30 June 2011	Year ended 30 June 2011
Key Management Person	Short-term benefits Fees & contractual payments ($)	Post- employment Statutory superannuation ($)	Total cash and cash equivalent benefits ($)	Equity-settled share based payments ($)	Total ($)
Peter Thomas Non-Executive Chairman	30,000	2,700	32,700	-	32,700
Roger Thomson Executive Managing Director	102,090	2,700	104,790	-	104,790
George Sakalidis Executive Director	72,005	2,700	74,705	-	74,705
Rudolf Tieleman Company Secretary	44,055	-	44,055	-	44,055
Total	248,150	8,100	256,250	-	256,250
		Year ended 30 June	2010
Key Management Person	Short-term benefits Fees & contractual payments ($)	Post- employment Statutory superannuation ($)	Total cash and cash equivalent benefits ($)	Equity-settled share based payments (1) ($)	Total ($)
Peter Thomas Non-Executive Chairman	31,005	2,700	33,705	22,750	56,455
Roger Thomson Executive Managing Director	91,303	2,700	94,003	26,250	120,253
George Sakalidis Executive Director	82,425	2,700	85,125	26,250	111,375
Rudolf Tieleman Company Secretary	43,275	-	43,275	8,750	52,025
Total	248,008	8,100	256,108	84,000	340,108

Note (1) Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 30 November 2009. These options were valued in accordance with International Financial Reporting Standards which specifies that an option-pricing model be applied to employees’ or directors’ stock options to estimate their fair value as at their grant date. The independent valuer used a range of open form models (Basic and Binomial). The options vested immediately.

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DIRECTORS’ REPORT

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Consultant Agreements

A consulting agreement has been executed between the Company and Mr Sakalidis’ nominated associated entity under which Mr Sakalidis deliver consulting services to the Company. Either party may, in its sole and absolute discretion, terminate the engagement by providing 30 days written notice. The Company may, at its option, elect to pay the consultant the equivalent remuneration for the period of the notice and dispense with the notice period. There are no provisions for the payment of any other termination payments.

There is another consulting agreement between the Company and Mr Thomson’s nominee which is in the same form as the one above described.

Other major provisions of those agreements are set out as follows:

Contracted entity	Term of agreement	Rate	Reviewperiod	Increase
Leeman Pty Ltd (G Sakalidis)	No set term	$155.00 per hour	Annually on 1 July	Discretionary by Board
Regor Consulting Pty Ltd (R Thomson)	No set term	$135.00 per hour	Annually on 1 July

Guaranteed Rate Increases

There are no guaranteed rate increases fixed in the contracts of any of the key management personnel.

DIRECTORS’ INTERESTS

The relevant interest of each director in the shares and options over such instruments issued by the Company as notified by the directors to the Australian Securities Exchange in accordance with Section 205G(1) of the Corporations Act 2001, at the date of this report is as follows:

	Fully Paid Ordinary Shares	Partly Paid Contributing Shares	Options over Partly Paid Contributing Shares	Options over Fully Paid Ordinary Shares
			Expiring 16.11.2011	Expiring 23.12.2012
Peter Thomas	422,000	33,000	800,000	650,000
Roger Thomson	625,000	2,022,500	800,000	750,000
George Sakalidis	4,730,150	2,688,462	800,000	750,000

SHARE OPTIONS GRANTED TO DIRECTORS AND OFFICERS

No options have been issued to directors and officers during or since the end of the financial year.

END OF AUDITED SECTION

EMPLOYEES

Aside from directors (all of whom were, for tax purposes treated as employees), the Company had no non-casual employees at 30 June 2011 (2010: None).

CORPORATE STRUCTURE

Meteoric is a no liability company incorporated and domiciled in Australia.

ACCESS TO INDEPENDENT ADVICE

Each director has the right, so long as he is acting reasonably in the interests of the Company and in the discharge of his duties as a director, to seek independent professional advice and recover the reasonable costs thereof from the Company.

The advice shall only be sought after consultation about the matter with the chairman (where it is reasonable that the chairman be consulted) or, if it is the chairman that wishes to seek the advice or it is unreasonable that he be consulted, another director (if that be reasonable).

The advice is to be made immediately available to all board members other than to a director against whom privilege is claimed.

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DIRECTORS’ REPORT

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INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The Company has entered into agreements indemnifying, to the extent permitted by law, all the directors and officers of the Company against all losses or liabilities incurred by each director and officer in their capacity as directors and officers of the Company. During the year an amount of $5,656 (2010: $5,884) was incurred in insurance premiums for this purpose.

OPTIONS

As at the date of this report there are the following unquoted options over unissued ordinary shares in the Company:

• (a) 2,400,000 exercisable at $0.065 per option on or before 16 November 2011 to acquire a contributing share on which $0.20 is payable;

• (b) 2,580,000 exercisable at $0.2249 per option on or before 23 December 2014 to acquire a fully paid share.

• (c) 230,000 exercisable at $0.2370 per option on or before 21 December 2015 to acquire a fully paid share.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out in this annual report.

Signed in accordance with a resolution of the directors

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GEORGE SAKALIDIS

Executive Director Perth 30 September 2011

• 14 -

AUDITOR’S INDEPENDENCE DECLARATION

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Auditors Independence Declaration

To those charged with governance of Meteoric Resources NL

As auditor for the audit of Meteoric Resources NL for the year ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been:

• a) No contraventions of the independence requirements of the Corporations Act 2001 in relation to the audit; and

• b) No contraventions of any applicable code of professional conduct in relation to the audit.

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Somes and Cooke

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Nicholas Hollens

1304 Hay Street West Perth WA 6005 Date: 30 September 2011

• 15 -

CORPORATE GOVERNANCE STATEMENT

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Preamble

This statement is provided in compliance with the recommendations ( Recommendations ) in the ASX Corporate Governance Council’s second edition of the Corporate Governance Principles and Recommendations.

Reference is to be made to this Statement or the Directors’ Report for the information required by the Recommendations to appear in an Annual Report.

Except to the extent indicated in the “if not, why not” exception report appearing below, the Company has resolved that for so long as it is admitted to the official lists of the ASX, it shall abide by the ASX Recommendations.

Due to the exigencies and vagaries of commercial life and changing circumstances, there will, no doubt, be occasions when, especially because of the size of the Company and the composition of its Board, that it can be expected to depart from the policies and charters which it has adopted. These policies have been adopted on the basis that, in the circumstances of the Company, they reflect what is considered to reflect a reasonable aspiration. It is not expected that they will be slavishly adhered to. Their object is to focus attention upon the issues they address and provoke thought about and awareness of those issues and the pitfalls that one could otherwise fall into inadvertently. The important thing is to develop a culture conducive only to good and appropriate conduct and practices.

Honesty and integrity must be the overriding and guiding principle in all things- substance must prevail over form and lip service. The Company intends that adherence to these policies be a condition of each contract of employment or service.

The Board encourages all key management personnel, other employees, contractors and other stakeholders to monitor compliance with this Corporate Governance manual and periodically, by liaising with the Board, management and staff, especially in relation to observable departures from the intent of hereof and with and any ideas or suggestions for improvement. Suggestions for improvements or amendments can be made at any time by providing a written note to the chairman.

If not why not exception report

Except to the extent stated below, during the financial year ended 30 June 2011, the Company complied with each of The Recommendations (set out below). Exceptions are stated in italics following an “If not, why not”: heading.

1. LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Companies should establish and disclose the respective roles and responsibilities of board and management.

• 1.1. Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.

• 1.2. Companies should disclose the process for evaluating the performance of senior executives.

• 1.3. Companies should provide the information indicated in the Guide to reporting on Principle 1 .

2. STRUCTURE THE BOARD TO ADD VALUE

• Companies should have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties.

• 2.1. A majority of the board should be independent directors.

“If not, why not”:

The Company has a three person board. Two of the directors (namely, Messrs G Sakalidis and RM Thomson) serve as executives and are not considered to be independent directors. As to the other director (namely, PS Thomas), see the “If not, why not” response to Recommendation 2.2.

The Company has a small close knit team which has a positive interactive working history.

Given all the circumstances attendant upon the Company including its objectives, the nature and extent of its actual and proposed operations, its capital base and other resources, the costs associated with a board comprised of more than the minimum number and the need for a board comprised of persons with a blend of traits, skills, experience, expertise, entrepreneurialism, innovation, tenacity, vision and dedication in order to enliven the prospects of creating value for shareholders, this recommendation is thought by the board to be inappropriate.

• 2.2. The chair should be an independent director.

• 16 -

CORPORATE GOVERNANCE STATEMENT

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“If not, why not”:

The chair, namely Mr PS Thomas, holds securities in the Company (directors are encouraged to own the same), and contributes to the development of its corporate strategy and promotion.

The chair considers himself to be an independent director as he is neither part of nor expected to be a part of the day to day management team. The chair regards himself as being free of any relationship that could materially interfere with his independent exercise of judgement and ability to act in an entirely disinterested manner in all things.

The remaining directors consider Mr Thomas to be an independent director for the same reasons. Refer to the Company’s website to view a copy of its formal policies for further details regarding independence.

2.3.

• The roles of the chair and chief executive officer (or equivalent) should not be exercised by the same individual.

• 2.4. The board should establish a Nomination Committee.

“If not, why not”:

The Company has a small board which does not perceive that any gains are to be derived through the operation of a formal committee structure. The board will deal with nomination issues on an ad hoc unstructured basis.

• 2.5. Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.

“If not, why not”:

No formal performance evaluation has been conducted because of the size of the Company and the fact that the directors (of which there are only three) work as a close knit team and each is cognisant of what the others are doing and constantly encouraging the others to secure better outcome for shareholders.

• 2.6. Companies should provide the information indicated in the Guide to Reporting on Principle 2.

3. PROMOTE ETHICAL AND RESPONSIBLE DECISION- MAKING

Companies should actively promote ethical and responsible decision-making.

• 3.1. Companies should establish a Code of Conduct and disclose the code or a summary of the code as to the:

• 3.1.1. practices necessary to maintain confidence in the Company’s integrity;

• 3.1.2. practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders;

• 3.1.3. responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

• 3.2. Companies should establish a policy concerning trading in Company securities by directors, senior executives and employees and disclose the policy or a summary of that policy.

• 3.3. Companies should provide the information indicated in the Guide to reporting on Principle 3.

4. SAFEGUARD INTEGRITY IN FINANCIAL REPORTING

Companies should have a structure to independently verify and safeguard the integrity of their financial reporting.

• 4.1. The board should establish an audit committee.

• 4.2. The audit committee should be structured so that it:

• 4.2.1. consists only of non-executive directors;

• 4.2.2. consists of a majority of independent directors;

• 4.2.3. is chaired by an independent chair, who is not chair of the board; and

• 4.2.4. has at least three members.

• 4.3. The audit committee should have a formal charter.

• 4.4. Companies should provide the information indicated in the Guide to reporting on Principle 4.

• 17 -

CORPORATE GOVERNANCE STATEMENT

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“If not, why not”:

	“If not, why not”:
	The Company has a policy regarding the formation, composition, role, powers and responsibilities of an audit committee although it has
	not yet established such a committee.
	The Company is small, has a small board with a tight management structure, relies on equity capital for funding and in all the
	circumstances of the Company the board does not perceive that any gains are to be derived through the operation of a formal committee
	structure.
5.	MAKE TIMELY AND BALANCED DISCLOSURE
	Companies should promote timely and balanced disclosure of all material matters concerning the Company.
5.1.	Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to
	ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.
5.2.	Companies should provide the information indicated in the_Guide to reporting on Principle 5._
6.	RESPECT THE RIGHTS OF SHAREHOLDERS
	Companies should respect the rights of shareholders and facilitate the effective exercise of those rights.
6.1.	Companies should design a communications policy for promoting effective communication with shareholders and encouraging their
	participation at general meetings and disclose their policy or a summary of that policy.
6.2.	Companies should provide the information indicated in the Guide to reporting on Principle 6.
7.	RECOGNISE AND MANAGE RISK
	Companies should establish a sound system of risk oversight and management and internal control.
7.1.	Companies should establish policies for the oversight and management of material business risks and disclose a summary of those
	policies.
7.2.	The board should require management to design and implement the risk management and internal control system to manage the
	company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that
	management has reported to it as to the effectiveness of the company’s management of its material business risks.
7.3.	The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial
	officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound
	system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial
	reporting risks.
7.4.	Companies should provide the information indicated in the Guide to reporting on Principle 7.
	“If not, why not”:
	Management has not reported to the board as to the effectiveness of the Company’s management of its material business risks as the
	board has not required this of it.
	Whilst the board recognises the benefit of the discipline of documenting such matters, the board has deployed its scarce resources to
	other endeavours in priority to the preparation of a written report on the matter of risk given the Company has strict procedures in place
	and the board has two executive directors so they are well versed in the day to day affairs of the Company and know what measures are
	in place.
8.	REMUNERATE FAIRLY AND RESPONSIBLY
	Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to
	performance is clear.
8.1.	The board should establish a Remuneration Committee.
8.2.	Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior
	executives.
8.3.	Companies should provide the information indicated in the Guide to reporting on Principle 8.

• 18 -

CORPORATE GOVERNANCE STATEMENT

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ADDITIONAL INFORMATION

The following information is required by the Recommendations to appear in this Statement.

The board has agreed on the following guidelines for assessing the materiality of matters:

1. MATERIALITY – QUANTITATIVE

• 1.1. Statement of Financial Position items:

Statement of Financial Position items are material if they have a value of more than 5% of pro-forma net assets.

• 1.2. Statement of Comprehensive Income items:

Profit and loss items are material if they will have an impact on the current year operating result of 10% or more.

2. MATERIALITY – QUALITATIVE

Items are also material if:

• 2.1. they are of a character that enlivens the obligation to disclose under either ASX Listing Rule 3.1 or the continuous disclosure obligations arising in terms of the Corporations Act;

• 2.2. they impact on the reputation of the Company;

• 2.3. they involve a breach of legislation;

• 2.4. they are outside the ordinary course of business;

• 2.5. they could affect the Company’s rights to its assets;

• 2.6. if accumulated they would trigger the quantitative tests;

• 2.7. they involve a contingent liability that would have a probable effect of 5% or more on Statement of Financial Position or Statement of Comprehensive Income items; or

• 2.8. they 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%.

3. MATERIAL CONTRACTS

Contracts will be considered material if:

• 3.1. they are outside the ordinary course of business; 3.2. they contain exceptionally onerous provisions in the opinion of the Board;

• 3.3. they impact on income or distribution in excess of the quantitative tests;

• 3.4. there is a likelihood that either party will default, and the default may trigger any of the quantitative tests;

• 3.5. they are essential to the activities of the Company and cannot be replaced, or cannot be replaced without an increase in cost of such a quantum, triggering any of the quantitative tests;

• 3.6. they contain or trigger change of control provisions;

• 3.7. they are between or for the benefit of related parties; or

• 3.8. they otherwise trigger the quantitative tests.

• 19 -

STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 2011

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Notes Revenue: Interest income Expenses: Depreciation expense 11 Exploration and tenement expenses written off 12 Share based payments expense 22 Other expenses 3 (Loss) before income tax expense Income tax expense 4 (Loss) from continuing operations Other comprehensive income: Changes in the fair value of available-for-sale financial assets Other comprehensive income for the year, net of tax Total comprehensive income for the year Total comprehensive income for year attributable to members of the Company Basic (loss) per share (cents per share) 7 Diluted (loss) per share (cents per share) 7	2011 ($) 103,429 (15,943) (1,288,774) - (384,397) (1,585,685) - (1,585,685) (18,691) (18,691) (1,604,376) (1,604,376) (2.25) (2.25)	2010 ($) 117,382 (17,029) (1,338,402) (90,300) (379,769)
		(1,708,118) -
		(1,708,118)
		21,964
		21,964
		(1,686,154)
		(1,686,154)
		(2.70) (2.70)

The accompanying notes form part of these financial statements.

• 20 -

STATEMENT OF FINANCIAL POSITION As at 30 June 2011

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Notes Current Assets Cash and cash equivalents 8 Trade and other receivables 9 Other assets 10 Total Current Assets Non-Current Assets Property, plant and equipment 11 Mineral interests 12 Other financial assets 13 Total Non-Current Assets TOTAL ASSETS Current Liabilities Trade and other payables 14 Provisions 15 Total Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Contributed equity 16 Reserves 16 Accumulated losses TOTAL EQUITY	2011 ($) 1,568,233 44,061 4,806 1,617,100 61,277 - 46,905 108,182 1,725,282 138,609 816 139,425 139,425 1,585,857 10,321,656 628,293 (9,364,092) 1,585,857	2010 ($) 2,604,951 61,230 2,681
		2,668,862
		76,718 - 63,596
		140,314
		2,809,176
		472,452 366
		472,818
		472,818
		2,336,358
		9,467,781 646,984 (7,778,407)
		2,336,358

The accompanying notes form part of these financial statements.

• 21 -

STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2011

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Balance at 1.7.2009 Operating (loss) for the year Other comprehensive income Shares issued during the year Share issue costs Share based payments expense Balance at 30.6.2010 Balance at 1.7.2010 Operating (loss) for the year Other comprehensive income Shares issued during the year Share issue costs Balance at 30.6.2011	Ordinary Share Capital (Net of Costs) ($) Available for Sale Financial Assets Reserve Capital ($) Employee Benefits Reserve ($) Accumulated Losses ($) Total ($)
	6,511,893 - 534,720 (6,070,289) 976,324 - - - (1,708,118) (1,708,118) - 21,964 - - 21,964 3,062,775 - - - 3,062,775 (106,887) - - - (106,887) - - 90,300 - 90,300
	9,467,781 21,964 625,020 (7,778,407) 2,336,358
	9,467,781 21,964 625,020 (7,778,407) 2,336,358 - - - (1,585,685) (1,585,685) - (18,691) - - (18,691) 900,000 - - - 900,000 (46,125) - - - (46,125)
	10,321,656 3,273 625,020 (9,364,092) 1,585,857

The accompanying notes form part of these financial statements.

• 22 -

STATEMENT OF CASH FLOWS For the year ended 30 June 2011

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Notes CASH FLOWS FROM OPERATING ACTIVITIES Cash payments to suppliers and contractors Interest received Net cash (used in) operating activities 17 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant and equipment Payments for exploration and evaluation Purchase of new prospects Payment of security bond Purchase of investments Proceeds from sale motor vehicle Net cash (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from new issues of shares Share issue expenses Net cash provided by financing activities Net increase/(decrease) in cash held Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year 8	2011 ($) (341,739) 103,429 (238,310) (501) (1,641,854) (7,928) - (2,000) - (1,652,283) 900,000 (46,125) 853,875 (1,036,718) 2,604,951 1,568,233	2010 ($) (340,941) 117,382
		(223,559)
		(80,455) (936,669) (18,889) (19,000) - 20,909
		(1,034,104)
		3,035,275 (106,887)
		2,928,388
		1,670,725 934,226
		2,604,951

The accompanying notes form part of these financial statements.

• 23 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The financial statements were authorised for issue on 30 September 2011.

The following is a summary of the material accounting policies adopted by the Company in the preparation of the financial report.

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

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Going Concern

The directors have prepared the financial statements of the Company on a going concern basis. In arriving at this position, the directors have considered the following pertinent matters:

• (a) cash on hand at the date of this report is approximately $1,442,615;

• (b) current cash resources are considered adequate to fund the entity’s immediate operating and exploration activities.

• In the directors’ opinion, the Company is able to continue as a going concern and therefore realise its assets and extinguish its liabilities in the normal course of business at the amounts stated in the financial report.

Accounting Policies

• (a) Revenue

Interest revenue is recognised on a proportional basis taking into account interest rates applicable to the financial asset. All revenue is stated net of the amount of goods and services tax (GST).

(b) Employee Benefits

Provision is made for the Company’s liability for employee benefits arising from services rendered by non-casual employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. There is no liability for long service leave entitlements.

(c) Exploration and Evaluation Expenditure

All exploration and evaluation expenditure is expensed to Statement of Comprehensive Income as incurred. The effect of this write-off is to increase the loss incurred from continuing operations as disclosed in the Statement of Comprehensive Income and to decrease the carrying values in the Statement of Financial Position. That the carrying value of mineral assets, as a result of the operation of this policy, is zero does not necessarily reflect the board’s view as to the market value of that asset.

• (d) Acquisition of Assets

The cost method is used for all acquisitions of assets regardless of whether shares or other assets are acquired. Cost is determined as the fair value of assets given up at the date of acquisition plus costs incidental to the acquisition.

Costs relating to the acquisition of new areas of interest are classified as either exploration and evaluation expenditure or mine properties based on the stage of development reached at the date of acquisition.

(e) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST except where the GST incurred on a purchase of goods and services 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 item as applicable. Receivables and payables in the Statement of Financial Position are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial Position.

• 24 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(f) Income Tax

The income tax expense for the year comprises current income tax expense and deferred tax expense.

Current income tax expense charged to the Statement of Comprehensive Income is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities and assets are therefore measured at the amounts expected to be paid to or recovered from the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses, if any in fact are brought to account.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

• (g) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, and other short-term highly liquid investments with original maturities of three months or less.

(h) Impairment of Assets

At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the Statement of Comprehensive Income. This policy has no application where paragraph (c) (Exploration and Evaluation Expenditure) applies.

• (i) Earnings per Share

• (i) Basic Earnings per Share – Basic earnings per share is determined by dividing the loss from continuing operations after related income tax expense by the weighted average number of ordinary shares outstanding during the financial period.

• (ii) Diluted Earnings per Share – Diluted EPS is calculated as net loss attributable to members, adjusted for:

• costs of servicing equity (other than dividends);

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

• other discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares.

(j) Property, plant and equipment

Each class of plant, equipment and motor vehicles is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Plant, equipment and motor vehicles are measured on the cost basis.

The carrying amounts of plant, equipment and motor vehicles are reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

• 25 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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Depreciation

The depreciable amount of all plant, equipment and motor vehicles are depreciated on a straight-line basis over the asset’s useful life to the Company commencing from the time the asset is held ready for use.

The depreciation rates used for the class of plant, equipment and motor vehicle depreciable assets range between 20% and 100%.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each Statement of Financial Position date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

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

(k) Financial Instruments

Recognition and Initial Measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Company commits itself to either the purchase or sale of the asset.

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified at fair value through profit and loss, in which case transaction costs are expensed to profit and loss immediately.

Classification and Subsequent Measurement

Finance instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as:

the amount at which the financial asset or financial liability is measured at initial recognition;

less principal repayments;

• plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount

• calculated using the effective interest method ; and

less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit and loss.

The Company does not designate any interests in joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Company’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity or determinable payments.

They are subsequently measured at fair value with changes in such fair value (i.e. gains and losses) recognised in other comprehensive income (except for impairment losses and foreign exchange gains and losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit and loss.

Available-for-sale financial assets are included in current assets where they are expected to be sold within 12 months after the end of the reporting period. All other financial assets are classified as non-current assets.

Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

• 26 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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Fair Value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

Impairment

At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the profit or loss.

Financial Guarantees

Where material, financial guarantees issued, which require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due, are recognised as a financial liability at fair value on initial recognition. The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.

The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow approach. The probability has been based on:

the likelihood of the guaranteed party defaulting in a year period;

the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and the maximum loss exposed if the guaranteed party were to default.

De-recognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

(l) Provisions

Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

(m) Leases

Lease payments for operating leases (where substantially all the risks and benefits remain with the lessor) are charged as an expense in the periods in which they are incurred.

Lease incentives under operating leases, if any, are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

(n) Interest in Joint Ventures

Interest in joint venture operations are brought to account by including in the respective classifications, the share of individual assets employed, liabilities and expenses incurred and revenue from the sale of joint venture output. Interest in joint venture operations are brought to account by including assets and liabilities in their respective classifications using the cost method.

(o) Contributed Equity

Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(p) Share-based Payments and Value Attribution to Equity Remuneration/Benefits

Share-based compensation benefits provided to directors are approved in general meeting by members. Share-based benefits provided to non-directors are approved by the Board of Directors and form part of that employee’s remuneration package.

The International Financial Reporting Standards specifies that a valuation technique must be applied in determining the fair value of employees’ or directors’ stock options as at their grant date. No particular model is specified.

In respect of share options granted, the (theoretical) fair value is recognised over the vesting period as an employee benefit expense with a corresponding increase in equity. The theoretical fair value of the options is calculated at the date of grant taking into account the terms and conditions upon which the options were granted, the effects of non-transferability, exercise restrictions and behavioural considerations. Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital.

• 27 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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(q) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial period.

(r) Segment Reporting

Operating segments are reported in a manner that is consistent with the internal reporting to the chief operating decision maker (“CODM”), which has been identified by the company as the Managing Director and other members of the Board of directors.

(s) Critical Accounting Estimates and Judgements

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

Key Estimates - Taxation

Balances disclosed in the financial statements and the notes thereto related to taxation are based on best estimates by directors. These estimates take into account both the financial performance and position of the Company as they pertain to current income tax legislation and the directors understanding thereof. No adjustment has been made for pending or future taxation legislation. The current tax position represents the directors’ best estimate pending an assessment being received from the Australian Taxation Office.

Key Judgment – Environmental Issues

Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental legislation and the directors understanding thereof. At the current stage of the Company’s development and its current environmental impact, the directors believe such treatment is reasonable and appropriate.

Key Estimates - Impairment

The Company assesses impairment at each reporting date by evaluating conditions specific to the Company that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

(t) Changes in Accounting Policies

The Company has adopted the following revisions and amendments to AASB’s issued by the Australian Accounting Standards Board and IFRS issued by the International Accounting Standards’ Board, which are relevant to and effective for the Company’s financial statements for the annual period beginning 1 July 2010:

• a) Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project – AASB 2009-5: The amendment requires that leases are classified as finance or operating by applying the general principles of AASB 117. The Company has assessed that none of its leases require reclassification.

• b) Improvements to IFRS – AASB 2010-03: Most of these amendments become effective in annual periods beginning on or after 1 July 2010 or 1 January 2011. The 2010 improvements amend certain provisions of AASB 3, clarify presentation of the reconciliation of each of the components of other comprehensive income and clarify certain disclosure requirements for financial instruments. The 2010 improvements did not have a material impact on the Company’s financial statements.

An overview of standards, amendments and interpretations to IFRS’s and AASB’s issued but not effective is given in note ‘u’ below.

(u) Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Company

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Company. Management anticipates that all of the relevant pronouncements will be adopted in the Company’s accounting policies for the first period beginning after the effective date of the pronouncement. The new standards and interpretations are not expected to have a material impact on the Company’s financial statements.

• 28 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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NOTE 2 OPERATING SEGMENTS

Segment Information

Identification of reportable segments

The Company has identified that it operates in only one segment based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The Company's principal activity is mineral exploration.

Revenue and assets by geographical region

The Company's revenue is received from sources and assets are located wholly within Australia.

Major customers

Due to the nature of its current operations, the Company does not provide products and services.

NOTE 3 EXPENDITURE Other Expenses Occupancy costs Filing and ASX Fees Corporate and management Other expenses from continuing operations	2011 ($) 90,000 28,643 158,250 107,504 384,397	2010 ($) 72,500 35,131 159,552 112,586
		379,769

• 29 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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NOTE 4 INCOME TAX EXPENSE The components of tax expense comprise: Current tax Deferred tax asset/liability The prima facie tax on loss from ordinary activities before income tax is reconciled to income tax as follows: Loss from continuing operations before income tax Prima facie tax benefit attributable to loss from continuing operations before income tax at 30% Tax effect of Non-allowable items • Share based payments • Other Deferred tax benefit on tax losses not brought to account Income tax attributable to operating loss Unrecognised temporary differences Net deferred tax assets (calculated at 30%) have not been recognised in respect of the following items: Prepayments Provisions Unrecognised deferred tax assets relating to the above temporary differences	2011 ($) - - - 1,585,685 475,705 - (19,868) (455,837) - (1,442) 10,634 9,192	2010 ($) - -
		-
		1,696,150
		508,845 (27,090) (184) (481,571)
		-
		(804) 17,218
		16,414

Unrecognised deferred tax assets

The Company has accumulated tax losses of $8,691,404 (2010: $7,171,947).

The potential deferred tax benefit of these losses ($2,607,421) will only be recognised if:

(i) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the losses and deductions to be released;

(ii) the Company continues to comply with the conditions for deductibility imposed by the law; and

(iii) no changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the losses.

• 30 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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NOTE 5 KEY MANAGEMENT PERSONNEL COMPENSATION Short-term employee benefits Post-employment benefits Equity-settled share based payments	2011 ($) 248,150 8,100 - 256,250	2010 ($) 248,008 8,100 84,000
		340,108

Further key management personnel remuneration information has been included in the Remuneration Report section of the Directors Report. Information on related party and entity transactions is disclosed in Note 23.

Options held by Key Management Personnel

The number of options over fully paid ordinary shares and partly-paid contributing shares (on which $0.20 is payable to convert those partly-paid shares to fully paid shares) in the Company held during the financial year by key management personnel and/or their statutorily related entities are set out below:

30 June 2011:

Name	Balance at the start of the year	Granted during the year	Lapsed during the year	Other changes during the year	Balance at the end of the year	Vested & exercisable at the end of the year
Peter Thomas	2,250,000	-	(800,000)	-	1,450,000	1,450,000
Roger Thomson	2,350,000	-	(800,000)	-	1,550,000	1,550,000
George Sakalidis	2,350,000	-	(800,000)	-	1,550,000	1,550,000
Rudolf Tieleman	250,000	-	-	-	250,000	250,000
30 June 2010:
Name	Balance at the start of the year	Granted during the year	Exercised during the year	Other changes during the year	Balance at the end of the year	Vested & exercisable at the end of the year
Peter Thomas	1,600,000	650,000	-	-	2,250,000	2,250,000
Roger Thomson	1,600,000	750,000	-	-	2,350,000	2,350,000
George Sakalidis	1,600,000	750,000	-	-	2,350,000	2,350,000
Rudolf Tieleman	-	250,000	-	-	250,000	250,000

• 31 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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Shares held by Key Management Personnel

The number of shares in the company held during the financial year by key management personnel and/or their related entities are set out below:

30 June 2011:

30 June 2011:
Name	Balance at the start of theyear	Share movements	Balance at the end of the year
Peter Thomas Ordinary shares Contributingshares	422,000 33,000	- -	422,000 33,000
Roger Thomson Ordinary shares Contributingshares	485,000 2,022,500	140,000 -	625,000 2,022,500
George Sakalidis Ordinary shares Contributingshares	4,070,160 2,688,462	659,990 -	4,730,150 2,688,462
Rudolf Tieleman Contributingshares	500,000	-	500,000

30 June 2010:

30 June 2010:
Name	Balance at the start of theyear	Share movements		Balance at the end of the year
Peter Thomas Ordinary shares Contributingshares	422,000 33,000		- -	422,000 33,000
Roger Thomson Ordinary shares Contributingshares	485,000 2,022,500		- -	485,000 2,022,500
George Sakalidis Ordinary shares Contributingshares	3,425,657 2,688,462		644,503 -	4,070,160 2,688,462
Rudolf Tieleman Contributingshares	500,000		-		500,000
NOTE 6 AUDITORS REMUNERATION Amounts received or due and receivable by the auditors of the Company for: Auditing and reviewing the financial report Other			2011 ($) 19,500 -
			19,500		17,500

• 32 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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NOTE 7 EARNINGS PER SHARE	2011	2010
	($)	($)
The following reflects the earnings and share data used in the calculation of basic
and diluted earnings per share
Loss for the year	(1,585,685)	(1,708,118)
Earnings used in calculating basic and diluted earnings per share	(1,585,685)	(1,708,118)
Weighted average number of ordinary shares used in calculating basic and diluted
earnings per share	70,478,566	63,248,666
The Company had 27,504,727 (2010 – 23,504,727) partly-paid contributing shares and 5,210,000 options (2010 – 7,380,000) over fully paid
ordinary shares and partly-paid contributing shares on issue at balance date. Options and contributing shares are considered to be potential
ordinary shares. However, they are not considered to be dilutive in this period and accordingly have not been included in		the determination of
diluted earnings per share.
NOTE 8 CASH AND CASH EQUIVALENTS	2011	2010
	($)	($)
Cash at bank	161,265	61,321
Deposits at call	1,406,968	2,543,630
	1,568,233	2,604,951
NOTE 9 TRADE AND OTHER RECEIVABLES	2011	2010
	($)	($)
Trade receivables	2,013	-
GST refundable	42,048	61,230
	44,061	61,230
NOTE 10 OTHER ASSETS	2011	2010
	($)	($)
Prepayments	4,806	2,681
NOTE 11 PROPERTY, PLANT AND EQUIPMENT	2011	2010
	($)	($)
Plant, equipment and motor vehicles	94,315	93,813
Less: Accumulated depreciation	(33,038)	(17,095)
	61,277	76,718
Reconciliations of the carrying amounts of plant and equipment from the beginning to the
end of the financial year.
Plant and equipment
Carrying amount at beginning of year	76,718	34,201
Additions	501	80,455
Disposals	-	(20,909)
Depreciation expense	(15,943)	(17,029)
Total plant, equipment and motor vehicles at end of year	61,277	76,718

• 33 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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NOTE 12 MINERAL INTERESTS Opening balance Net exploration and evaluation expenditure incurred during the year Tenements disposed of during the year Expenditure written off during the year Closing balance NOTE 13 OTHER FINANCIAL ASSETS Non-Current Available-for-sale financial assets – shares in listed corporations Security deposits Investments in related parties Available-for-sale financial assets includes the following investments held in director- related party entities: Magnetic Resources NL – fully paid shares Magnetic Resources NL – partly-paid shares NOTE 14 TRADE AND OTHER PAYABLES Trade creditors and accruals NOTE 15 CURRENT PROVISIONS Employee leave accruals		2011 ($) - 1,288,774 - (1,288,774) - 2011 ($) 10,305 36,600 46,905 6,667 67 6,734 2011 ($) 138,609 2011 ($) 816	2010 ($) - 1,338,402 - (1,338,402) - 2010 ($) 26,996 36,600
			63,596
			17,333 8,667 26,000 2010 ($)
			472,452
			2010 ($)
			366

• 34 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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NOTE 16 ISSUED CAPITAL Contributed Equity – Ordinary Shares At the beginning of the year Issue of shares at $0.11 Issue of shares at $0.15 Issue of shares at $0.1643 Issue of shares at $0.20 Share issuance costs Closing balance: Contributed Equity – Contributing Shares – Partly-paid At the beginning of the year Issue of shares at $0.00 Issue of shares at $0.005 Closing balance: Reserves Available-for sale financial assets reserve Employee benefits reserve Closing balance Options The Company had the following options over un-issued fully paid ordinary shares and partly-paid contributing ordinary shares at the end of the year: Options exercisable at $0.06 on or before 21.11.2010 to acquire partly-paid contributing shares - lapsed Options exercisable at $0.065 on or before 16.11.2011 to acquire partly-paid contributing shares Options exercisable at $0.2249 on or before 23.12.2014 to acquire fully paid ordinary shares Options exercisable at $0.2370 on or before 21.12.2015 to acquire fully paid ordinary shares Total Options	2011	2011
	No.	$
	68,029,251 - 6,000,000 - -
	74,029,251
	23,504,727 4,000,000 -
	27,504,727
	- 2,400,000 2,580,000 230,000 5,210,000

Terms and condition of contributed equity

Ordinary Fully Paid Shares

Ordinary shares have the right to receive dividends as declared and, in the event of winding up of the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares held, regardless of the amount paid up thereon.

On a show of hands, every holder of fully paid ordinary shares present at a meeting in person or by proxy, is entitled to one vote and upon a poll, each member present in person or by proxy or by attorney or duly authorised representative shall have one vote for each fully paid ordinary share.

Contributing Shares

Contributing shares require a further payment of $0.20 to become fully paid.

On a show of hands, every holder of contributing shares present at a meeting in person or by proxy, is entitled to one vote and upon a poll, each member present in person or by proxy or by attorney or duly authorised representative shall have a fraction of a vote for each partly paid contributing share held. The fraction must be equivalent to the proportion which any amount paid (not credited) is of the total amounts paid (if any) and payable (excluding amounts credited). Any amounts paid in advance of a call are ignored when calculating these fractional voting rights.

• 35 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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NOTE 17 CASH FLOW INFORMATION Reconciliation of operating loss after income tax with funds used in operating activities: Operating (loss) after income tax Depreciation and amortisation Exploration expenditure written off Profit on sale/change in value of investments Share based payments Changes in operating assets and liabilities: Decrease in trade and other receivables relating to operating activities (Increase) in prepayments Increase in trade and other payables relation to operating activities Increase in provisions Cash flow from operations	2011 ($) (1,585,685) 15,943 1,288,774 - - 17,169 (2,125) 27,164 450 (238,310)	2010 ($) (1,708,118) 17,029 1,338,402 - 90,300 3,740 (1,556) 36,366 278
		(223,559)

NOTE 18 TENEMENT EXPENDITURES AND LEASING COMMITMENTS

The Company has entered into certain obligations to perform minimum exploration work on tenements held or joint ventured into. These obligations vary from time to time in accordance with contracts signed. Tenement rentals and minimum expenditure obligations which may be varied or deferred on application are expected to be met in the normal course of business. The minimum statutory expenditure requirement on the granted tenements for the next twelve months amounts to $1,053,376. Of this amount, $70,000 is expected to be met by JV participants as a result of various joint ventures entered into.

NOTE 19 JOINT VENTURES

The Company is or has been party to a number of unincorporated exploration joint ventures which involves the Company “farming into” (earning) or “farming out” (diluting) interests in tenements. The following is a list of unincorporated exploration joint ventures under which the Company has earned, is earning or diluting an interest:

Name of Project

Name of Project	%
	Interest
Image Resources JV	100% with a 1% royalty payable to Image
Beadell Resources JV	Earning 70%
Black Ridge Mining JV	100%, diluting
Emmerson Resources JV	51%, diluting
Sipa JV	100%, diluting
Awati JV	Earning 75%

NOTE 20 TENEMENT ACCESS

The interests of holders of freehold land encroached by the Tenements are given special recognition by the Mining Act (WA). As a general proposition, a tenement holder must obtain the consent of the owner of freehold before conducting operations on the freehold land. Unless it already has secured such rights, there can be no assurance that the Company will secure rights to access those portions of the Tenements encroaching freehold land but, importantly, any native title was extinguished by the grant of freehold so wherever the Tenements encroach freehold the Company is in the position of not having to abide by the Native Title Act albeit aboriginal heritage matters still be of concern.

NOTE 21 EVENTS SUBSEQUENT TO REPORTING DATE

No matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years other than the matters referred to in the directors' report or as reported to ASX.

NOTE 22 EQUITY-SETTLED SHARE BASED PAYMENTS

On 27 June 2011, 230,000 share options were granted to employees and contractors to take up ordinary shares at an exercise price of $0.2370 each. The options are exercisable on or before 21 December 2015, are not listed, hold no voting or dividend rights, are transferable and vested immediately upon issue. No share based payment expense is included in the Statement of Comprehensive Income as the options had minimal value on date of issue. The share based payments expense shown in the financial report ended 30 June 2010 amounted to $90,300.

• 36 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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NOTE 23 RELATED PARTY AND RELATED ENTITY TRANSACTIONS Transactions with directors, director-related parties and related entities other than those disclosed elsewhere are as follows: Total amounts owing to directors and/or director-related parties (including GST) at 30 June 2011 amounted to $44,495 (2010: $43,231). The Company has entered into a Serviced Offices Agreement with Image Resources NL ( Image ), a director-related party, whereby Image has agreed to provide the Company with serviced offices at 16 Ord Street, West Perth for a fee of $7,500 per month commencing on 1 January 2010, terminable at will by either party on one month’s notice. The amount owing at 30 June 2011 amounted to $24,750 including GST). NOTE 24 CONTINGENT LIABILITIES Native Title The Company has been notified of a number of native title claims impacting its tenements. The Company is not in a position to assess the likely effect of any native title claim impacting the Company. The existence of native title and the policy of the West Australian state government in particular represent, as a general proposition, a serious threat to explorers and miners, not only in terms of delaying the grant of tenements and the progression of exploration development and mining operations, but also in terms of costs arising consequent upon dealing with aboriginal interest groups, claims for native title and the like. NOTE 25 FINANCIAL INSTRUMENTS DISCLOSURE (a) Financial Risk Management Policies The Company’s financial instruments consist of deposits with banks, receivables, available-for-sale financial assets and payables. Risk management policies are approved and reviewed by the board. The use of hedging derivative instruments is not contemplated at this stage of the Company’s development. Specific Financial Risk Exposure and Management The main risks the Company is exposed to through its financial instruments, are interest rate and liquidity risks. Interest Rate Risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. Liquidity Risk The Company manages liquidity risk by monitoring forecast cash flows, cash reserves, liquid investments, receivables and payables. Capital Risk The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern so that they may continue to provide returns for shareholders and benefits for other stakeholders. Due to the nature of the Company’s activities being mineral exploration, the Company does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Company’s capital risk management is the current working capital position against the requirements of the Company to meet exploration programmes and corporate overheads. The Company’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raising as required.

• 37 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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The working capital position of the Company at 30 June 2011 and 30 June 2010 was as follows:

Cash and cash equivalents Trade and other receivables Trade and other payables Working capital position	2011 ($) 1,568,233 44,061 (138,609) 1,473,685	2010 ($) 2,604,951 61,230 (472,818)
		2,193,363

Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the Statement of Financial Position and notes to the financial statements.

There is no material amounts of collateral held as security at balance date.

The credit risk for counterparties included in trade and other receivables at balance date is detailed below.

Trade and other receivables Trade receivables GST and tax refundable	2011 ($) 2,013 42,048 44,061	2010 ($) - 61,230
		61,230

(b) Financial Instruments

The Company holds no derivative instruments, forward exchange contracts and interest rate swaps.

Financial Instrument composition and maturity analysis

The table below reflects the undiscounted contractual settlement terms for financial instruments.

2011 Weighted Average Effective Interest Rate %	Floating Interest Rate ($) Non-Interest Bearing ($)	Total ($) 1,568,233 44,061 10,305 1,622,599 (138,609) 1,483,990 2011 ($) (138,609)
Financial Assets: Cash and cash equivalents 1,568,090 143 Trade and other receivables - 44,061 Available-for-sale financial assets - 10,305 Total Financial Assets 5.49% 1,568,090 54,509 Financial Liabilities: Trade and other payables - (138,609) Net Financial Assets 1,568,090 (84,100) Trade and other payables are expected to be paid as follows: Less than 6 months	1,568,090 143 - 44,061 - 10,305
	1,568,090 54,509
	- (138,609)
	1,568,090 (84,100)
		(138,609)

• 38 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2011

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2010 Weighted Average Effective Interest Rate %	Floating Interest Rate ($) Non Interest Bearing ($)	Total ($) 2,604,951 61,230 26,996 2,693,177 (472,818) 2,220,359 2010 ($) (472,818)
Financial Assets: Cash and cash equivalents 2,604,951 - Trade and other receivables - 61,230 Available-for-sale financial assets - 26,996 Total Financial Assets 5.64% 2,604,951 88,226 Financial Liabilities: Trade and other payables - (472,818) Net Financial Assets 2,604,951 (384,592) Trade and other payables are expected to be paid as follows: Less than 6 months	2,604,951 - - 61,230 - 26,996
	2,604,951 88,226
	- (472,818)
	2,604,951 (384,592)
		(472,818)

(c) Net Fair Values

Fair value estimation

The fair values of financial assets and liabilities are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arms’ length transaction.

Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may have a material impact on the amounts estimated. Where possible, valuation information used to calculate fair value is extracted from the market, with more reliable information available from markets that are actively traded. In this regard, fair values for listed securities are obtained from quoted bid prices

The carrying values of financial assets and liabilities as presented in the statement of financial position approximate their fair value.

(d) Sensitivity Analysis – Interest rate risk

The Company has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. The sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in this risk.

As at balance date, the effect on loss and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

		2011	2010
		$	$
Change	in loss – increase/(decrease):
-	Increase in interest rate by 2%	(31,362)	(52,099)
-	Decrease in interest rate by 2%	31,362	52,099
Change	in equity – increase/(decrease):
-	Increase in interest rate by 2%	31,362	52,099
-	Decrease in interest rate by 2%	(31,362)	(52,099)

• 39 -

DIRECTORS’ DECLARATION

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The directors of the Company declare that:

1. the accompanying financial statements and notes are in accordance with the Corporations Act 2001 and:

2. (a) comply with Accounting Standards and the Corporations Act 2001; and

3. (b) give a true and fair view of the financial position as at 30 June 2011 and performance for the year ended on that date of the Company;

4. (c) the audited remuneration disclosures set out in the Remuneration Report section of the Directors’ Report for the year ended 30 June 2011 complies with section 300A of the Corporations Act 2001.

5. the Chief Financial Officer has declared pursuant to section 295A(2) of the Corporations Act 2001 that:

6. (a) the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;

7. (b) the financial statements and the notes for the financial year comply with Accounting Standards; and

8. (c) the financial statements and notes for the financial year give a true and fair view.

9. in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

10. the directors have included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards.

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

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George Sakalidis EXECUTIVE DIRECTOR

PERTH

Dated this 30th day of September 2011

• 40 -

INDEPENDENT AUDIT REPORT TO THE MEMBERS OF METEORIC RESOURCES NL

INDEPENDENT AUDITOR’S REPORT

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To the members of Meteoric Resources NL

Report on the Financial Report

We have audited the accompanying financial report of Meteoric Resources NL which comprises the statement of financial position as at 30 June 2011, and the statement of comprehensive income, statement of changes in equity and 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.

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, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply 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 of the financial report that gives a true and fair view 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.

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 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Meteoric Resources NL, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion

In our opinion:

• (a) the financial report of Meteoric Resources NL is in accordance with the Corporations Act 2001 , including:

• (i) giving a true and fair view of the entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date; and

• (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;

• (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

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INDEPENDENT AUDIT REPORT TO THE MEMBERS OF METEORIC RESOURCES NL

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 11 to 13 of the directors’ report for the year ended 30 June 2011. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion the Remuneration Report of Meteoric Resources NL for the year ended 30 June 2011, complies with section 300A of the Corporations Act 2001.

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Somes and Cooke

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Nicholas Hollens

Somes and Cooke 1304 Hay Street West Perth WA 6005

30 September 2011

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TENEMENT SCHEDULE

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Tenement	Nature of Interest	Project	Equity (%)
E16/0372	Granted	Coorara (Ularing)	Earning100%
E16/0423	Granted	Coorara East 1	100%
E16/0424	Granted	Coorara East 2	100%
E16/0426	Application	Coorara Mt Finnerty	100%
E16/0433	Application	Coorara South	100%
E30/0429	Granted	Coorara North East 2	100%
E30/0430	Granted	Coorara North East 1	100%
E37/0957	Granted	Winston Well	100%
E52/1851	Granted	Robinson Range	100%
E52/2067	Application	Wilthorpe	100%
E52/2163	Granted	Robinson Range	100%
E52/2412	Granted	Robinson Range (Flint)	100%
E52/2627	Granted	Wilthorpe	100%
E57/0760	Granted	Four Corners (Black Ridge JV)	Dilutingfrom 100%
E77/1745	Granted	Golden Valley(Bullfinch)	100%
E80/3820	Granted	Webb (Beadell JV)	Earning70%
E80/3821	Granted	Dwarf Well (Beadell JV)	Earning70%
E80/3823	Granted	MackayNth (Beadell JV)	Earning70%
E80/4234	Granted	Webb	100%
E80/4235	Granted	Elizabeth Hills	Dilutingfrom 100%
E80/4294	Application	Gibson (Webb)	100%
E80/4407	Granted	Angas Hill (Webb)	Dilutingfrom 100%
E80/4408	Granted	Kiwirrkurra	Dilutingfrom 100%
E80/4506	Granted	Webb Diamonds	100%
EL23764	Application	Warrego North (Sipa JV)	Dilutingfrom 100%
EL24138	Application	Warrego North (Sipa JV)	Dilutingfrom 100%
EL24255	Granted	Warrego North (Sipa JV) (Chook)	Dilutingfrom 100%
EL24257	Granted	Warrego South (Sipa JV)	Dilutingfrom 100%
EL24363	Granted	Warrego North (Sipa JV) (West)	Dilutingfrom 100%
EL28693	Application	Warrego North (Sipa JV) (West)	Dilutingfrom 100%
EL6286	Granted	Tibooburra (Awati JV)	Earning75%
EL6663	Granted	Tibooburra (Awati JV)	Earning75%
EL7437	Granted	Tibooburra (Awati JV)	Earning75%
MLC217	Application	Barkly(Emmerson JV)	51%
MLC218	Application	Barkly(Emmerson JV)	51%
MLC219	Application	Barkly(Emmerson JV)	51%
MLC220	Application	Barkly(Emmerson JV)	51%
MLC221	Application	Barkly(Emmerson JV)	51%
MLC222	Application	Barkly(Emmerson JV)	51%
MLC223	Application	Barkly(Emmerson JV)	51%
MLC224	Application	Barkly(Emmerson JV)	51%
MLC57	Application	Barkly(Emmerson JV)	51%
SEL28620	Application	Barkly(Emmerson JV)	51%

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OTHER INFORMATION

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The following information was applicable as at 20 September 2011.

Share and Option holdings

and Option holdings
Category(Size of Holding)	Fully Paid Ordinary Shares	Partly-Paid Contributing Shares	Options 16.11.2011	Options 23.12.2014	Options 21.12.2015
1 to 1,000	431	298
1,001 to 5,000	297	429		3	1
5,001 to 10,000	168	57		2	3
10,001 to 100,000	418	84		4	5
100,001 and over	109	48	3	4
Total	1,423	916	3	13	9

The number of shareholdings held in less than marketable parcels is 790 fully paid ordinary shares and 740 partly paid contributing shares. There are no listed options.

Substantial shareholders:

The names of the substantial shareholders listed in the Company's register as at 20 September 2011:

Shareholder Name	Number of Shares	% of Issued **Share Capital **
Custodial Services Ltd	7,943,553	10.73
Image Resources NL	5,846,000	7.90
Total	13,789,553	18.63

Twenty largest shareholders – Quoted fully paid ordinary shares:

	Shareholder Name	Number of Shares	% of Issued **Share Capital **
1.	Custodial Services Ltd	7,943,553	10.73
2.	Image Resources NL	5,846,000	7.90
3.	George Sakalidis	3,303,360	4.46
4.	Corridor Nominees PtyLtd	2,701,500	3.65
5.	CiticorpNominees PtyLtd	2,538,915	3.43
6.	UOB KayHian Private Ltd	2,470,435	3.34
7.	Leeman PtyLtd	1,419,687	1.92
8.	Nicole Gallin and K Haynes	1,250,000	1.69
9.	RosemaryE Green	1,000,000	1.35
10.	Ocean View Nominees PtyLtd	1,000,000	1.35
11.	Garyand J Dickie	750,000	1.01
12.	ABN Amro ClearingSydney	730,220	0.99
13.	Ocean View Nominees PtyLtd	700,000	0.95
14.	Befavo PtyLtd	643,151	0.87
15.	David Victor Christensen	521,434	0.70
16.	Vin Naxo PtyLtd	509,000	0.69
17.	Allua Holdings PtyLtd	500,821	0.68
18.	Bedel & Sowa PtyLtd	500,000	0.68
19.	NEFCO Nominees PtyLtd	500,000	0.68
20.	Mandevilla PtyLtd	500,000	0.68
	Total	35,328,076	47.75

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OTHER INFORMATION

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Twenty largest shareholders – Quoted partly-paid contributing shares:

	Shareholder Name	Number of Shares	% of Issued Share Capital
1.	George Sakalidis	2,653,562	9.65
2.	Roger and R Thomson	2,000,000	7.27
3.	Ian Baron	2,000,000	7.27
4.	Distinct Racing& Breeding	1,488,157	5.41
5.	Meggsies PtyLtd	1,154,466	4.20
6.	Anthonyand J Vetter	1,050,000	3.82
7.	ABN Amro ClearingSydney	817,755	2.97
8.	Denis Ribton	765,000	2.78
9.	N Gallin and K Haynes	683,333	2.48
10.	Corridor Nominees PtyLtd	666,667	2.42
11.	MaryG Neild	633,752	2.30
12.	CappigFinance PtyLtd	625,000	2.27
13.	Cleo Holdings PtyLtd	550,833	2.00
14.	Russell Nominees PtyLtd	500,000	1.82
15.	Goffacan PtyLtd	498,773	1.81
16.	AnthonyJ Vetter	370,000	1.35
17.	GaryC and JA Dickie	366,667	1.33
18.	Custodial Services Ltd	361,250	1.31
19.	QueenswayInvestments PtyLtd	350,000	1.27
20.	Ocean View Nominees PtyLtd	350,000	1.27
	Total	17,885,215	65.00

All option holders – All options are unquoted:

	Optionholder Name	Number of Options Expiring 16.11.2011	% Held	Number of Options Expiring 23.12.2014	% Held	Number of Options Expiring 21.12.2015	% Held
1.	George Sakalidis	800,000	33.33	750,000	29.07
2.	PS Thomas and SA Goodwin Retirement Plan>	800,000	33.33
3.	Roger M Thomson	800,000	33.33	750,000	29.07
4.	Peter S Thomas			650,000	25.19
5.	Rudolf Tieleman			250,000	9.69
6.	Employee Share Option Plan Participants			180,000	6.98	230,000	100.00
	Total	2,400,000	100.00	2,580,000	100.00	230,000	100.00

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OTHER INFORMATION

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There are a total of 74,029,251 fully paid ordinary shares, 27,504,727 partly-paid contributing shares and 5,210,000 options on issue. Only the options are not listed on Australian Securities Exchange Limited.

Buy-Back Plans

The Company does not have any current on-market buy-back plans.

Voting Rights

The voting rights attaching to ordinary shares are governed by the Constitution. On a show of hands every person present who is a Member or representative of a member shall have one vote and on a poll, every member present in person or by proxy or by attorney or duly authorised representative shall have one vote for each fully paid ordinary share held and a fraction of a vote for each partly-paid contributing share held. The fraction must be equivalent to the proportion which any amount paid (not credited) is of the total amounts paid (if any) and payable (excluding amounts credited). Any amounts paid in advance of a call are ignored when calculating these fractional voting rights. None of the options have any voting rights.

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