MINBOS RESOURCES LIMITED — Annual Report 2011

Sep 29, 2011

Annual Report

For the year ended 30 June 2011

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ABN 93 141 175 493

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Contents

Corporate Directory	3
Chairman’s Address	4
Review of Operations	5
Directors’ Report	11
Lead Auditor’s Independence Declaration	29
Corporate Governance Statement	30
Statement of Comprehensive Income	37
Statement of Financial Position	38
Statement of Changes in Equity	39
Statement of Cash Flows	40
Notes to the Consolidated Financial Statements	41
Directors’ Declaration	80
Independent Auditor’s Report	81
Shareholder Information	83

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Corporate Directory

Directors & Officers

Mr Peter Richards Executive Chairman

Mr David Reeves Non-Executive Director

Mr Faldi Ismail Non-Executive Director

Mr John Ciganek Non-Executive Director

Mr Domingoes Catulichi Non-Executive Director

Mrs Tanya Woolley Company Secretary

Stock Exchange

Australian Securities Exchange Limited (ASX) Home Exchange – Perth (ordinary shares)

Share Registry

Security Transfers Registrars 770 Canning Highway Applecross WA 6153

Registered Office

Suite 2, Level 3 1292 Hay Street West Perth WA 6005

PO Box 1974 West Perth WA 6872

T: +61 (08) 6140 2449 F: +61 (08) 6314 1587 E-mail: info@minbos.com Website: www.minbos.com

Australian Company Number ACN 141 175 493

Australian Business Number

ABN 93 141 175 493

Domicile and Country of Incorporation Australia

Bankers

National Australia Bank Rockingham Business Centre Unit 14, 10 Livingstone Road Rockingham WA 6168

Auditors

BDO Audit (WA) Pty Ltd 38 Station Street

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Chairman’s Address

Dear Shareholders,

On behalf of the Directors, I am pleased to present to you Minbos Resources Limited’s (“Minbos” or “the Company”) Annual Report to shareholders for the year ended 30 June 2011.

Following our successful listing on October 18, 2010 and completion of the acquisition of 100% of Tunan Mining Limited, the Company secured potentially world class phosphate prospects in the Cabinda province of Angola and in contiguous leases in the Democratic Republic of Congo ("DRC"). A total of $8 million was raised which allowed the Company to immediately begin planning and implementing its drilling programs.

This exploration has resulted in significant success at our Cabinda phosphate deposits. Six previously explored areas were drilled and assayed and the results confirmed the potential of the historical drilling and test work previously undertaken in the 1960-1980's period. Based on this data, Coffey Mining opined the province has an exploration target of between 333-538 million tonnes ("Mt") grading between 10-20% P2O5.

Our drilling commenced in November 2010 and 20,000m of aircore drilling have been completed to-date. The initial program focussed on the Mongo Tando deposit and the Company recently was pleased to announce an upgrade of its inferred resource to 117 Mt grading 13.6% P2O5. Importantly, bench scale test work demonstrated that ore grading 8.5% is readily upgraded to +34% P2O5 concentrate at a recovery of 62%.

Drilling then focussed upon our remaining prospects and results for both Cacata and Chivovo have shown large deposits of high grade, potentially direct shipping ore at shallow depths. Post year end we announced that Cacata had an Indicated resource of 22.5 Mt at 21.4% P2O5, including a high grade zone of 6.8 Mt at 32.3% P2O5, which highlights the potential to produce a Direct Shipping Ore (“DSO”) from the region. These results were considered so encouraging we initiated a scoping study to define the commercial potential of Cacata as a standalone project.

The remaining deposits in Cabinda are still under examination and results and resource estimates for these are due for release in the 4th quarter of 2011.

The first phase of our Kanzi drilling program in the DRC was also undertaken with results confirming historical drilling data with respect to phosphate mineralisation thickness (average 8.6 metres) and grades (average 15.4% P2O5).

The Board is justifiably proud of our team who have steered the Company through the initial development of the Cabinda and Kanzi Project areas which, as demonstrated above, have the potential to transform the Company into a significant producer of phosphate concentrates. Such is the potential to add significantly to the resource stated above, downstream processing of these concentrates remains an option for the company to pursue.

The efforts of our team and that of the Project group lead by our partner, Petril Projects Ltd, have not been without their challenges, with the Angolan wet season posing many pitfalls and delays. The achievements of the Company over the past year would not have occurred without the dedication and efforts of our Chief Executive Officer, Robbie McCrae and our site-based management, employees and contractors for whom I am most thankful and appreciative.

To you, our Shareholders, I thank you on behalf of the Board for your support and belief in the Company.

Yours sincerely,

Peter Richards Executive Chairman

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Review of Operations

1.1 GROUP OVERVIEW

Minbos Resources Limited was incorporated on 17 December 2009 and listed on the Australian Securities Exchange (“ASX”) on 18 October 2010 (ASX code: MNB). Minbos is a Company limited by shares that is incorporated and domiciled in Australia. The information presented in this section is applicable to the year ended 30 June 2011 and up until the date of this report being lodged with the ASX.

The Company successfully raised A$8,000,000 under its initial public offering to fund exploration and prefeasibility work on its undeveloped rock phosphate prospects in the Cabinda Province of Republic of Angola and the contiguous areas across the border western part of the Democratic Republic of Congo (DRC) (See Figure 1). Since listing and up to reporting date, the Group has used its funds in accordance with the business objectives stated in its prospectus. It is the intention of the Company to continue to use funds on the ongoing development of its current projects and in accordance with its business objectives as stated in the prospectus.

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Figure 1: Project Locations

At the time of the listing Coffey Mining defined an exploration target of 333Mt to 538Mt grading 10% to 20% of phosphate bearing material located within the Cabinda licence area with further exploration potential in adjacent DRC licences and applications.

The Company’s projects have the added benefit of minimal infrastructure requirement to reach markets and being strategically located adjacent to existing road and port infrastructure, thereby providing major operating cost advantages over competitors.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Review of Operations

The Cabinda Project – History and Ownership

The Cabinda project license area covers an area of approximately 200,000 hectares and covers all the known and historically explored phosphate prospects in Cabinda.

Historical work was completed by Companhia de Fosfatos de Angola (“COFAN”) during the period 1969 to 1973 and then during the early 1980’s by Energo from Bulgaria. The work included over 45,000 metres of drilling, which identified 6 orebodies within the license area, and preliminary metallurgical test work. Based on this historical work an exploration target of 333Mt to 538Mt at approximately 10% to 20% P2O5 was defined for the project by Coffey Mining[1] .

The Cabinda project is held in a 50:50 equally contributing JV between Minbos and Petril Projects Ltd.

The DRC Project - History and Ownership

The DRC project exploration licences and applications cover an area of approximately 200,000 hectares and host the previously drilled Kanzi and Fundu-Nzobe prospects. The tenements lie contiguous to the eastern portion of Minbos’ licences in Cabinda and are a direct extension of the Cacata prospect. Historical work included approximately 4,000 metres of drilling and some initial metallurgical testwork.

Minbos own 100% of 2 granted exploration licenses and have 6 pending applications in the area (see Figure 2).

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Figure 2: DRC licence applications.

1 The exploration target being reported is conceptual in nature as there has been insufficient exploration to define a mineral resource under JORC Code guidelines. However, this target is based on assessments of prospects within Minbos’ tenure which are supported by drilling, geological studies, imagery analysis, metallurgical test-work and preliminary modelling.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Review of Operations

1.2 CABINDA PROJECT OVERVIEW

Current Exploration

• (a) Mongo Tando deposit – Maiden JORC Compliant Inferred Resource of 117Mt @ 13.6% announced in June 2011

Mongo Tando was the focus of the historical exploration and hence was the 1[st] deposit drilled by Minbos. A total of 134 drill holes for 6,700 metres were drilled during the period from November 2010 through to January 2011. This drilling formed the basis for the maiden JORC compliant inferred resource which was announced in June 2011 of 117Mt @ 13.6% P2O5. Post this announcement a detailed review of the resource was carried out and additional areas were identified for infill drilling which was subsequently carried out; this drilling has the potential to significantly increase the resource estimate.

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Figure 3: Mongo Tando Deposit

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Review of Operations

(b) Cacata deposit – Indicated resource of 22.5Mt @ 21.4% P2O5 - High Grade, DSO Potential

Three holes were drilled on Cacata during December of 2010 before the drilling program was halted for the scheduled wet season break; the results from the three holes demonstrated the high grade potential of the deposit (see Figure 4). These results were as follows:

• 6m to 23m, 17 metres grading 29.1% P205 including an interval of 10 metres grading 32.5% P205;

• 30m to 56m, 26 metres grading 23% P205 including an interval of 10 metres grading 31.32% P205;

• 2m to 18m, 16 metres grading 26.3% P205 including an interval of 10 metres grading 30.21% P205.

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Figure 4: Cacata Deposit

Drilling then recommenced at Cacata prospect during May 2011 with an additional 59 holes for a total of 2,561 metres.

Post 30 June 2011, Minbos published an indicated resource of 22.5Mt @ 21.4% P205 and commenced a scoping study to assess the economics of developing a standalone phosphate rock export operation.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Review of Operations

(c) Chivovo and Cambota deposits – Additional High Grade potential

Post the 2011 year end, a 500 metres drill program was carried out on Chivovo to test for the high grade potential documented in historical data. A short program was also carried on Cambota, which lies on strike between Cacata and Chivovo to test its high grade potential.

(d) Ueca and Chibuete deposits – Growing the Cabinda resources

Ueca was the 2[nd] deposit to be drilled by Minbos; a first program was completed in November 2010 and after receiving results from this initial drilling a second program was approved and completed post 2011 year end.

The first drilling program comprised 41 holes for a total of 4,168 metres. The mineralisation identified comprised an orebody of 6.3 kilometres long, 400 metres wide and an average mineralisation thickness of 12.5 metres.

Chibuete was the 5[th] deposit to be drilled by Minbos. The drilling program on Chibuete comprised 61 holes for a total of 4,168 metres. The mineralisation identified comprised an orebody of 8.0 kilometres long, 500 metres wide and an average mineralisation thickness of 36 metres. See Figure 5.

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Figure 5: Chibuete Deposit

1.3 DRC PROJECT OVERVIEW

Project Location

The DRC phosphate prospects are a direct extension of the Cabinda prospects and local occurrences of phosphate continue across DRC towards the Congo River.

Kanzi Deposit

A first pass drilling program to confirm historical exploration results (depth of mineralisation, overburden and grade) commenced on Kanzi during May 2011. In total 52 holes were drilled for approximately 3,500 metres. See Figure 6.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Review of Operations

Results received post year end provided confirmation of historical data with the identification of mineralisation including an 8 kilometre orebody, 500 metres wide, average thickness of 8.6 metres and average grade of 15.4% P2O5. After receipt of the mineral resource estimate Minbos plan to commence a scoping study to assess the economics of a phosphate rock export operation from Kanzi.

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Figure 6: Kanzi Deposit
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Figure 6: Kanzi Deposit

Competent Persons Statement

The information in this report has been reviewed and approved for release by Mr. Tom Evers, MSc, Pr.Sci.Nat, who has over 20 years’ experience in mineral exploration, and who is the companies Chief Geologist and fulltime employee and has sufficient experience in relation to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined by the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (The JORC Code 2004 Edition). Mr Evers has consented to inclusion of this information in the form and context in which it appears.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

The Directors submit their report of the “Consolidated entity” or “Group”, being Minbos Resources Limited (“Minbos” or “the Company”) and its Controlled entities, for the financial year ended 30 June 2011.

1. BOARD OF DIRECTORS

The Directors and the Company Secretary of the Company at any time during or since the end of the financial year are as follows.

Mr Peter Richards–Executive Chairman (appointed 16 June 2010)

B.Com

Mr Richards is an internationally experienced business executive with a proven track record in the mining services industry. His roles have included more than 30 years’ experience with companies such as British Petroleum (including its mining arm Seltrust Holdings), Wesfarmers, and Dyno Nobel.

Mr Richards has managed and supported complex financial and corporate activities, with significant exposure to the investment, broking and analyst community. He has international experience with a diversity of cultures and has undertaken business in a range of international locations.

Mr Richards was most recently CEO of the ASX-listed Dyno Nobel Limited and prior to this was based in Salt Lake City, USA, where he was the President of Dyno Nobel North America. Following the takeover of Dyno Nobel in 2008, Peter became a Non-Executive Director of Bradken Limited. He is also currently the NonExecutive Chairman of Kangaroo Resources Ltd and Non-Executive Director of NSL Consolidated Limited, Emeco Holdings Limited, Sedgman Limited, and Norfolk Group Limited. Mr Richards was previously a director of Dyno Nobel Limited during the past three years.

Mr David Reeves – Non Executive Director (appointed 20 July 2010) BSc (Min Eng), F Fin, MAusIMM, MSAIMM

Mr Reeves holds a first class honours degree in mining engineering from the University of New South Wales, a graduate diploma in applied finance and investment from the Securities Institute of Australia, and a Western Australian first class mine managers certificate of competency.

Mr Reeves has been involved with mining precious, base and industrial minerals throughout his 20 year career. He has spent the last 14 years operating in mining companies in Southern Africa.

Mr Reeves is currently Managing Director of Ferrex Plc, a UK listed company and is a Non-Executive Director on ASX listed Southern Crown Resources. Mr Reeves has held no other directorships during the past three years.

Mr Faldi Ismail – Non Executive Director (appointed 17 December 2009) B.Bus, MAICD

Mr Ismail has many years of experience as a corporate consultant specialising in the restructure and recapitalisation of a wide range of ASX-listed companies. Mr Ismail spent +4 years working as a tax supervisor with a major Perth based accounting firm as well as being a senior within their Corporate Restructuring Division.

Mr Ismail is the co-founder of Otsana Capital, a boutique advisory firm that specialises in mergers & acquisitions, capital raisings and Initial Public Offerings (IPO's). Mr Ismail has many years of investment banking experience covering a wide range of sectors, with a specific focus on the resources sector.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

During the past three years, Mr Ismail held the following ASX listed directorships: Epic Resources Limited (current), Kalimantan Gold Corporation Limited (current), Coventry Resources Limited (current), Kangaroo Resources Limited (ceased on 21/1/2011), Energio Limited (ceased on 2/12/2010), Cape Range Limited (ceased on 4/3/2010) and Sam’s Seafood Holdings Limited (now Pan Asia Corporation Limited) (ceased on 10/8/2009).

Mr John Ciganek – Non Executive Director (appointed 16 June 2010) BA Mining Eng, MBA

Mr Ciganek has over 20 years’ experience in the mining industry, combining extensive mining engineering and operational experience with more recent experience in resources investment banking.

Mr Ciganek is currently Senior Resources Analyst (Co-Head of Resources) with BBY Limited, a boutique investment firm focused on equity capital markets and M&A. Mr Ciganek has worked as an Associate Director with BurnVoir Corporate Finance working on a range of corporate advisory transactions focused on the mining sector including mergers and acquisitions, project finance and equity capital markets.

Prior to this role, he worked in project and corporate debt finance roles in Institutional Banking at Commonwealth Bank and worked on a range of new mine development project financings and corporate level debt transactions. Mr Ciganek has also worked as a mining engineer with various mining companies including ILA Pty Ltd (as part of Hargraves Resources, Danae Resources and Namibian Copper Mines), Byrnecut Mining, Reynolds Yilgarn Gold and Comalco.

Mr Ciganek was non-executive director of ASX listed company Conto Resources Limited until September 2011. Mr Ciganek has held no other directorships during the past three years.

Mr Domingoes Catulichi – Non Executive Director (appointed 20 July 2010)

Mr Catulichi is a mining industry professional and a qualified diamond evaluator. He has over 12 years’ experience in the exploration and mining industry in Angola. Mr Catulichi has been directly involved with several alluvial and kimberlite diamond projects in Angola, many of which are now owned and operated by listed entities. Mr Catulichi holds various business interests in Angola including hotels, transportation, general trading and mining.

Mr Catulichi has held no other directorships during the past three years.

2. COMPANY SECRETARIES

Mrs Tanya Woolley - Company Secretary (appointed 17 February 2011) B.Com, Grad.ICSA

Mrs Woolley’s qualifications include a Bachelor of Commerce degree with a triple major (International Business, Finance and Accounting from Notre Dame University, Perth, Western Australia); and a Graduate Diploma in Applied Corporate Governance that was successfully completed in June 2010 from Chartered Secretaries Australia. Mrs Woolley previously worked as an accountant and company secretary for Kingsrose Mining Limited and prior to this worked as an auditor for an accounting firm in Perth which included a secondment to an international firm in the United Kingdom.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

Sean Henbury - Company Secretary (appointed 16 June 2010, resigned 17 February 2011) CA, FTIA

Mr Henbury is a Chartered Accountant with over 13 years’ experience in public practice with three of Perth’s major Accounting firms. Recently, he was a founding director of the accounting firm FJH Solutions Pty Ltd, where he continues to provide client support across a wide range of industries including mining, exploration, research and development, construction and manufacturing. Mr Henbury’s primary areas of expertise include taxation consulting, taxation compliance, corporate restructuring, financial reporting, and company secretarial requirements. Mr Henbury has extensive experience in all areas of compliance and taxation services.

3. DIRECTORS’ SHAREHOLDINGS

The following table sets out each current Director’s relevant interest in shares and rights or options to acquire shares of the Company or a related body corporate as at the date of this report.

Peter Richards Faldi Ismail David Reeves John Ciganek Domingoes Catulichi	Ordinary Shares Unlisted Options
	Fully Paid Ordinary Shares Portion Restricted Ref. Unlisted Share Options Portion Restricted (a) Ref.
	435,000 142,000 3,000,000 3,000,000 (b) 2,100,000 1,662,500 1,150,000 1,150,000 (c) 12,138,667 11,991,667 (d) 500,000 500,000 (d) 250,000 237,500 500,000 500,000 (e) 17,640,000 17,640,000 (f) 500,000 500,000 (f) 32,563,667 31,673,667 5,650,000 5,650,000

• (a) All Directors Options (Class A, B and C) are escrowed for a period of 24 months from quotation on the ASX, this being 18/10/2012.

• (b) Mr Richards received Class A, B and C Director Options each exercisable at $0.20, $0.30 and $0.50 respectively, on or before 13/10/2013.

• (c) Mr Ismail received 500,000 Class A Director Options exercisable at $0.20 each on or before 13/10/2013 and 650,000 Broker Options exercisable at $0.20 each on or before 13/10/2013.

• (d) The 12,138,667 shares issued to Mr Reeves are Vendor Shares issued as part of the Tunan Acquisition. Refer to Note 22 for more details. Mr Reeves also received Class A Director Options exercisable at $0.20 each on or before 13/10/2013.

• (e) Mr Ciganek received Class A Director Options exercisable at $0.20 each on or before 13/10/2013.

• (f) The 17,640,000 shares issued to Mr Catulichi are Vendor Shares issued as part of the Tunan Acquisition. Refer to Note 22 for more details. Mr Catulichi also received Class A Director Options exercisable at $0.20 each on or before 13/10/2013.

4. DIVIDENDS

No dividend has been paid during the Period and no dividend is recommended for the Period.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

5. DIRECTORS’ MEETINGS

The number of Directors’ meetings held during the Period and the number of meetings attended during the Period by each Director are:

Directors	Board of Directors	Board of Directors
	Number eligible to attend	Number attended
Peter Richards Faldi Ismail David Reeves John Ciganek Domingoes Catulichi	6 8 6 6 6	6 8 6 6 2

Due to the size and scale of the Company, there is no Remuneration and Nomination Committee or Audit Committee at present. Matters typically dealt with by these Committees are, for the time being, reverted to the Board. For details of the function of the Board, Audit Committee and Nomination and Remuneration Committee, please refer to Corporate Governance Statement.

6. CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Minbos Resources Limited support and have adhered to the principles of sound corporate governance. The Board recognises the recommendations of the Australian Stock Exchange Corporate Governance Council, and considers that the Company is in compliance with those guidelines which are of importance to the commercial operation of a junior listed resource Company. During the financial year, shareholders continued to receive the benefit of an efficient and cost-effective corporate governance policy for the Company. A Corporate Governance Statement is included as part of this report.

7. PRINCIPAL ACTIVITIES

Minbos Resources Limited is an exploration company focused on the development of phosphate bearing ore within the Cabinda Province of Angola and the adjoining areas of the far western DRC.

8. CORPORATE STRUCTURE

Minbos Resources Limited is a Company limited by shares that is incorporated and domiciled in Australia. The Company is listed on the Australian Stock Exchange under code MNB and whose shares are publicly traded on the Australian Securities Exchange Limited. During the financial year the Company acquired 100% of Tunan Mining Limited and its subsidiaries. An overview of the ownership structure for Minbos Resources after completion of the acquisition is shown below:

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

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

Minbos Resources
Ltd
Mongo Tando
Holdings
(subsidiary of
LR-Group Tunan Mining Ltd
Limited)
(BVI)
50
%
50% 100 100 100 100
% % % %
Mongo Tando SOFOSA Tunan Mining RDC Phosphate Agrim SPRL
Limited (ANG) Pty Ltd ( SA) SPRL ( DRC) (DRC)
(BVI)
50
%
100%
Mongo Tando
Ltda Angola
"DRC Phosphate Project"
"Cabinda Phosphate
Project"
Applications for: Granted
Cabinda License
1449, 1450, 1451, Licenses: 10798
0006/06/01/LP/GOV.
1452, 1453, 9322 & 12040
ANG.MGM/2010
----- End of picture text -----

KEY:

Refers to ownership change during the year. See note 29 (i) for further details. DRC Incorporated in the Democratic Republic of Congo. ANG Incorporated in Angola. BVI Incorporated in the British Virgin Isles.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

9. FINANCIAL RESULTS

The cash and cash equivalents as at 30 June 2011 totalled $3,254,882 (2010: $825,272). The net asset position as at 30 June 2011 was $16,520,747 (2010: $891,995). The net loss after tax for the Period attributable to the members of the Company was $2,481,251 (2010: $70,305).

The following table shows the gross revenue, losses, share prices and dividends of the Company for the Period ended 30 June 2011.

	30-Jun-11	30-Jun-10
Revenue ($)	116,043	14,221
Net profit/(loss) ($)	(2,481,251)	(70,305)
Share price (cents)	(0.05)	(0.01)
Dividend($)	-

10. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

On the 18 October 2010, the Company was officially listed on the ASX after its Initial Public Offering whereby $8,000,000 was raised from the allotment of 40,000,000 shares at an issue price of $0.20 each.

In accordance with the Notice of Meeting dated 7 May 2010, the Company completed the purchase of Tunan Mining Limited with the issue of 15,000,000 ordinary shares, 25,000,000 Class A shares, and 10,000,000 Class B shares. The Class A and B Performance Shares are conditional on certain milestones being met before they can be converted into fully paid, ordinary shares.

11. EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

There have not been any significant events that have arisen since 30 June 2011 and up to the date of this report that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

12. REMUNERATION REPORT (Audited)

This report for the year ended 30 June 2011 outlines the remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C) of the Act.

The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Parent company, and includes other executives in the Parent and Group receiving the highest remuneration.

For the purposes of this report, the term ‘Executive’ includes the Chief Executive Officer (CEO), Executive Directors, senior executives, general managers and secretaries of the Parent and the Group, whilst the term ‘NED’ refers to Non-Executive Directors only.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

Individual key management personnel disclosure

Details of KMP of the Parent and the Group who held office during the year are as follows:

Directors Peter Richards Faldi Ismail David Reeves John Ciganek Domingoes Catulichi Other Key Management Personnel Robert McCrae Tom Evers Other Executives Mark Green Tanya Woolley Sean Henbury	Position Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Chief Executive Officer Chief Geologist Operations Manager Company Secretary Company Secretary	Appointment 16/06/2010 17/12/2009 20/07/2010 16/06/2010 20/07/2010 29/06/2010 1/10/2010 1/10/2010 17/02/2011 17/12/2009	Resignation
			- - - - - - - - - - 17/02/2011

There have been no other changes after reporting date and before the date the financial report was authorised for issue.

The Remuneration Report is set out under the following main headings:

• A Remuneration Philosophy

• B Remuneration Policy and Structure

• C Remuneration and Performance

• D Remunerations Arrangements

• E Equity Instruments Issued on Exercise of Remuneration Options F Value of Options to Directors

A Remuneration Philosophy

Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company. Key management personnel comprise the Directors, Chief Executive Officer and Chief Geologist of the Company. The performance of the Company depends upon the quality of its key management personnel. To prosper the Company must attract, motivate and retain appropriately skilled directors and executives. The Company’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality.

B Remuneration Policy and Structure

In accordance with best practice corporate governance, the structure of NED and Executive remuneration is separate and distinct. The Board has not established a Remuneration Committee at this point in the

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

Company’s development. It is considered that the size of the Board along with the level of activity of the Company renders this impractical and the full Board considers in detail all of the matters for which the directors are responsible.

Non-Executive remuneration policy

Remuneration to all Directors is by way of fees, with the level of such fees having been set by the Board to an amount it considers to be commensurate for a company of its size and level of activity. There is currently no link between performance and remuneration. Further there are no schemes for retirement benefits in existence.

Non-Executives (“NED’s) are paid consulting fees on time spent on Company business, including reasonable expenses incurred by them on business of the Company, details of which are contained in the Remuneration Table disclosed as Section D of this Report. Remuneration of NED’s is based on fees approved by the Board of Directors and is set at levels to reflect market conditions and encourage the continued service of the Directors.

NED’s are encouraged by the Board to hold shares in the Company (purchased by the Director on market). It is considered good governance for Directors to have a stake in the Company upon whose Board he or she sits.

Non-Executive remuneration structure

Since listing on the ASX up to the end of the reporting period, the Non-Executive Directors have received combined fees totalling $120,500. The Board, in accordance with the Company’s constitution and the ASX listing rules specify that the NED fee pool shall be determined from time to time by a general meeting. The latest determination was at the 2010 Annual General Meeting (AGM) held on 30 November 2010 when shareholders approved an aggregate fee pool of $300,000 per year (in accordance with the terms and conditions set out in the Explanatory Statement that accompanied the Notice of Meeting). The Board will not seek any increase for the NED pool at the 2011 Annual General Meeting.

Payment of Directors’ fees for Messrs Reeves, Ciganek and Catulichi took effect from the Company’s listing date, and Mr Ismail’s fee took effect from January 2010 following his appointment. The remuneration of Non-Executives are detailed in Table 1. Details of NED’s contracts are disclosed in “Section D – Remuneration Arrangements”.

Executive remuneration policy

The Group aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Group and aligned with market practice.

Executive remuneration and incentive policies and practices must be aligned with the Company’s vision, values and overall business objectives. Executive remuneration and incentive policies and practices must be designed to motivate the directors and management to pursue the Company’s long term growth and success and demonstrate a clear relationship between the Company’s overall performance and the performance of executives.

The Company undertakes an annual remuneration review to determine the total remuneration positioning against the market.

Executive remuneration structure

Executive contracts are reviewed annually by the Board, in the absence of a Remuneration Committee, for their approval. The process consists of a review of company, business unit and individual performance, relevant comparative remuneration internally and externally and, where appropriate, external advice

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

independent of management. The nature and amount of remuneration of executives are assessed on a periodic basis with the overall objective of ensuring maximum stakeholder benefit from the retention of a high performing Director and executive team.

The main objectives sought when reviewing executive remuneration is that the Company has:

• coherent remuneration policies and practices to attract and retain executives;

• directors who will create value for shareholders;

• competitive remuneration offered benchmarked against the external market; and

• fair and responsible rewards to executives having regard to the performance of the Company, the performance of the executives and the general pay environment.

The Board approves the remuneration arrangements of the CEO and executives. The remuneration of Executives is detailed in Table 1. Details of Executive contracts are disclosed in “Section D – Remuneration Arrangements”.

C Remuneration & Performance

Director and Executive remuneration is currently not linked to either long term or short term performance conditions. The Board feels that the expiry date and exercise price of the options currently on issue to the Directors and Executives is a sufficient, long term incentive (LTI) to align the goals of the Directors and Executives with those of the shareholders to maximise shareholders wealth, and as such, has not set any performance conditions for the Directors or the Executives of the Company. The Board will continue to monitor this policy to ensure that it is appropriate for the Company in future years.

(a) Variable remuneration – short term incentive (STI)

Objective

The Company does not currently have an STI program in place. However, if the Company were to look toward implementing a STI plan it would be to link the achievement of the Group’s operational targets with the remuneration received by the Executives with meeting those targets. The total potential STI available would be set at a level so as to provide sufficient incentive to the Executive to achieve the operational targets.

Given the small number of Executives and the need for them to be flexible and multi-tasked there is no formal process currently in place for defining Key Performance Indicators (KPI’s) and setting targets against the KPI’s. Due to the absence of any set KPI’s the existing remuneration is not linked to Company Performance. As such there were no STI-based payments made during the financial year.

(b) Variable remuneration – long term incentive (LTI)

Objective

The objective of creating LTI’s is to reward executives in a manner which aligns the element of remuneration with the creation of shareholder wealth. As such LTI’s are made to executives who are able to influence the generation of shareholder wealth and thus have an impact on the Group’s performance.

Structure

LTI grants to executives are delivered in the form of Director options, employee share options and contractor options. These options are issued at an exercise price determined by the Board at the time of issue.

The employee share options are generally issued in accordance with an Employee Share Option Plan (“ESOP”); however certain unlisted options issued to Executives were issued outside of the Plan.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

Directors Options issued to members of the Board on 13 October 2010 were issued prior to the Company’s listing on the ASX on 18 October 2010 and options issued after listing were under the Company’s 15% Facility. Since listing, 600,000 employee options and consultancy options were issued under the Company’s 15% Facility.

To date, 8,600,000 options have been issued to Directors, other Key Management Personnel and Executives. Details of options granted during the financial year are set out in Table 2.

The issue of options are not linked to performance conditions because by setting the option price at a level above the current share price at the time the options are granted, provides incentive for management to improve the Company’s performance. There were no options exercised during the year. When exercisable, each option is convertible into one ordinary share of the Company.

Typically, the grant of LTI’s occurs at the commencement of employment or in the event that the individual receives a promotion and, as such, is not subsequently affected by the individual’s performance over time. However, under certain circumstances, including breach of employment conditions, the Directors may cause the options to expire prior to their vesting date. In addition, individual performance is more commonly rewarded over time through the STI program.

Table 2 provides details of LTI options granted, Table 3 provides details of the value of options granted, exercised and lapsed during the year; and Table 4 provides details on the value of options not yet vested.

D Remuneration Arrangements

Details of the remuneration of the Directors, Key Management Personnel and other Executives of the Company are set out below in Table 1a and Table 1b.

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Minbos Resources Limited - Annual Report For the year ended 30 June 2011

Directors’ Report

Table 1a: Remuneration of Key Management Personnel and highest paid Executives of the Company and the Group for the year ended 30 June 2011

As at 30/06/2011	Post- employment benefits Share-based payment Salary & fees Bonus Non- monetary Other Superannuation Options & rights Total $ $ $ $ $ $ $ $ Short-term employment benefits Percentage remuneration consisting of options for the year Total Performance Related
Directors Mr Richards 75,000 - - - - 216,478 291,478 - 74% Mr Ismail 39,500 - - - - 43,881 83,381 - 53% Mr Reeves 45,000 - - - - 43,881 88,881 - 49% Mr Ciganek 18,000 - - - - 43,881 61,881 - 71% Mr Catulichi 18,000 - - - -43,881 61,881 - 71% Sub-total 195,500 - - - - 392,002 587,502 - Robert McCrae 135,000 - - - - 216,478 351,478 - 62% Tom Evers 82,034 - - - - 112,633 194,667 - 58% Mark Green 57,424 - - - - 75,089 132,513 - 57% Tanya Woolley (i) 43,750 - - - - 29,033 72,783 - 40% Sub-total 318,208 - - - - 433,233 751,441 - Total 513,708 - - - - 825,235 1,338,943 - Other Key Management & Executives	75,000 - - - - 216,478 291,478 - 74% 39,500 - - - - 43,881 83,381 - 53% 45,000 - - - - 43,881 88,881 - 49% 18,000 - - - - 43,881 61,881 - 71% 18,000 - - - -43,881 61,881 - 71%
	195,500 - - - - 392,002 587,502 -
Robert McCrae Tom Evers Mark Green Tanya Woolley (i) Sub-total Total
	318,208 - - - - 433,233 751,441 -
	513,708 - - - - 825,235 1,338,943 -

All Directors, Other Key Management Personnel and Executives (excluding Mr Ismail and Mrs Woolley) commenced receiving remuneration from October 2010. Mr Ismail received non-executive fees for the entire year ended 30 June 2011.

• (i) Mrs Woolley works with Blue Horse Corporate Pty Ltd and the Company has an agreement with, and pays services to, Blue Horse Corporate Pty Ltd. Refer to note 23 to the Financial Statements for further detail. Mrs Woolley commenced receiving fees from February 2011.

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Minbos Resources Limited - Annual Report For the year ended 30 June 2011

Directors’ Report

Table 1b: Remuneration of Key Management Personnel and highest paid Executives of the Company and the Group for the year ended 30 June 2010

			Post-employment	Share-based	Percentage
	Short-term employment benefits		benefits	payment Total	remuneration
	Salary	Non-		Options & Performance	consisting of
	& fees Bonus	monetary	Other Superannuation	rights Total Related	options for the
As at 30/06/2010	$ $	$	$ $	$ $ $	year
Directors
Mr Richards (i)	-	- -	- -	- - -	-
Mr Ismail (ii)	12,000	- -	- -	- 12,000 -	-
Mr Ciganek (i)	-	- -	- -	- - -	-
Mr Athan Lekkas (i)	6,000	- -	- -	- 6,000 -	-
Mr Nathan Taylor (i)	6,000	- -	- -	- 6,000 -	-
Sub-total	24,000	- -	- -	- 24,000 -	-
Other Key Management & Executives
None	-	- -	- -	- - -	-
Sub-total	-	- -	- -	- - -
Total	24,000	- -	- -	- 24,000 -	-

(i) Messrs Richards and Ciganek were appointed on 16 June 2010 and commenced receiving Directors Fees from October 2010.

(ii) Messrs Ismail, Lekkas and Taylor received Directors Fees from January 2010. Messrs Lekkas and Taylor ceased as Directors of the Company on 16 June 2010.

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Minbos Resources Limited - Annual Report For the year ended 30 June 2011

Directors’ Report

Table 2: Compensation Options granted to Key Management Personnel and Other Executives during the financial year.

Key Management Personnel and Other Executives Class of Options	Granted Options Grant Date Issue Date Vesting Date Fair Value per Option at Grant Date Total Value of Options as Grant Date Exercise price per Option Expiry Date First Exercise Date Vested Number of Options % Options Vested
Mr Richards Class A Mr Richards Class B Mr Richards Class C Mr Ismail Class A Mr Reeves Class A Mr Ciganek Class A Mr Catulichi Class A Mr McCrae Class A Mr McCrae Class B Mr McCrae Class C Mr Evers Employee Mr Green Employee Mrs Woolley Consultancy	1,000,000 30-Jul-10 13-Oct-10 - $ 0.088 87,762 $ $ 0.20 13-Oct-13 18-Oct-12 1,000,000 100% 1,000,000 30-Jul-10 13-Oct-10 13-Oct-11 $ 0.073 73,315 $ $ 0.30 13-Oct-13 18-Oct-12 - - 1,000,000 30-Jul-10 13-Oct-10 13-Oct-12 $ 0.055 55,402 $ $ 0.50 13-Oct-13 18-Oct-12 - - 500,000 30-Jul-10 13-Oct-10 - $ 0.088 43,881 $ $ 0.20 13-Oct-13 18-Oct-12 500,000 100% 500,000 30-Jul-10 13-Oct-10 - $ 0.088 43,881 $ $ 0.20 13-Oct-13 18-Oct-12 500,000 100% 500,000 30-Jul-10 13-Oct-10 - $ 0.088 43,881 $ $ 0.20 13-Oct-13 18-Oct-12 500,000 100% 500,000 30-Jul-10 13-Oct-10 - $ 0.088 43,881 $ $ 0.20 13-Oct-13 18-Oct-12 500,000 100% 1,000,000 30-Jul-10 13-Oct-10 - $ 0.088 87,762 $ $ 0.20 13-Oct-13 18-Oct-12 1,000,000 100% 1,000,000 30-Jul-10 13-Oct-10 13-Oct-11 $ 0.073 73,315 $ $ 0.30 13-Oct-13 18-Oct-12 - - 1,000,000 30-Jul-10 13-Oct-10 13-Oct-12 $ 0.055 55,402 $ $ 0.50 13-Oct-13 18-Oct-12 - - 300,000 01-Oct-10 18-Apr-11 01-Oct-12 0.375 $ 112,633 $ 0.20 $ 18-Apr-14 01-Oct-12 - - 200,000 01-Oct-10 18-Apr-11 01-Oct-12 0.375 $ 75,089 $ 0.20 $ 18-Apr-14 01-Oct-12 - - 100,000 18-Apr-11 18-Apr-11 18-Apr-13 0.290 $ 29,033 $ 0.50 $ 18-Apr-14 18-Apr-13 - - 8,600,000 825,237 $

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

Table 3: Value of options granted, exercised and lapsed during the year.

Key Management Personnel and Other Executives	Value of options granted during the year Value of options lapsed during the year Remuneration consisting of options for the year $ $ % Value of options exercised during the year $
Peter Richards Faldi Ismail David Reeves John Ciganek Domingoes Catulichi Robert McCrae Tom Evers Mark Green Tanya Woolley	216,478 - 74% 43,881 - 53% 43,881 - 49% 43,881 - 71% 43,881 - 71% 216,478 - 62% 112,633 - 58% 75,089 - 57% 29,033 - 40% 825,235 - - - - - - - - - - -

Table 4: Value of options granted yet to vest.

Key Management Personnel and Other Executives	Year granted	Vested %	Forfeited %	Financial years in which options vest	Maximum total value of grant yet to vest
Peter Richards	2010 2010 2010	33% - -	-	30/06/2011 30/06/2012 30/06/2013	- 21,090 35,697
Faldi Ismail	2010	100%	-	30/06/2011	-
David Reeves	2010	100%	-	30/06/2011	-
John Ciganek	2010	100%	-	30/06/2011	-
Domingoes Catulichi	2010	100%	-	30/06/2011	-
Robert McCrae	2010 2010 2010	33% - -	-	30/06/2011 30/06/2012 30/06/2013	- 21,090 35,697
Tom Evers	2011	-	-	30/06/2013	97,178
Mark Green	2011	-	-	30/06/2013	64,785
Tanya Woolley	2011	-	-	30/06/2013	26,134
-					301,671

Following appointment to the Board, all executive and non-executive Directors enter into a service agreement with the Company in the form of an agreement or letter of appointment, respectively. The agreements summarise the Board policies and terms, including compensation, relevant to the office holding of the Director. Details of the agreements are listed below.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

(a) Contractual Arrangements - Directors

Mr Peter Richards – Executive Chairman

• Contract date: 16 June 2010.

• Director’s Fee: $100,000 per annum (plus GST). Remuneration commenced from October 2010. Remuneration is reviewed annually.

• Mr Richard’s contract is valid for a period of two years from contract date.

• The Company or the Consultant may terminate the contract by giving three months’ notice.

• Prior to listing on the ASX, Mr Richards received the following Directors Options subject to the following terms:

• 1,000,000 “Class A” options, exercisable at $0.20 each (vested following shareholder approval in July 2010);

• 1,000,000 “Class B” options exercisable at $0.30 each (vesting 13 October 2011);

• 1,000,000 “Class C” options exercisable at $0.50 each (vesting 13 October 2012); and

• All options are exercisable on or before 13 October 2013.

Mr Faldi Ismail– Non-Executive Director

• Contract date: 17 December 2009.

• Director’s Fee: $2,000 per month (plus GST). An incremental increase occurred during the year that was commensurate with an increase in responsibilities and within the aggregate fee pool of $300,000 per year (previously approved by shareholders at the 2010 annual general meeting held 30 November 2010). Remuneration commenced from October 2010.

• See Note 1 below for details pertaining to annual review of remuneration and appointment as nonexecutive director.

• Prior to listing on the ASX, Mr Ismail received the following Directors Options subject to the following terms:

• 500,000 “Class A” options, exercisable at $0.20 each on or before 13 October 2013 (vested following shareholder approval in July 2010).

Mr David Reeves – Non-Executive Director

• Contract date: 20 July 2010.

• Director’s Fee: $5,000 per month (plus GST). Remuneration commenced from October 2010.

• See Note 1 below for details pertaining to annual review of remuneration and appointment as nonexecutive director.

• Prior to listing on the ASX, Mr Reeves received the following Directors Options subject to the following terms:

  • 500,000 “Class A” options, exercisable at $0.20 each on or before 13 October 2013 (vested following shareholder approval in July 2010).

Mr John Ciganek – Non- Executive Director

• Contract date: 16 June 2010.

• Director’s Fee: $2,000 per month (plus GST). Remuneration commenced from October 2010.

• See Note 1 below for details pertaining to annual review of remuneration and appointment as nonexecutive director.

• Prior to listing on the ASX, Mr Ciganek received the following Directors Options subject to the following terms:

  • 500,000 “Class A” options, exercisable at $0.20 each on or before 13 October 2013 (vested following shareholder approval in July 2010).

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

Mr Domingoes Catulichi – Non-Executive Director

• Contract date: 20 July 2010.

• Director’s Fee: $2,000 per month (excluding GST). Remuneration commenced from October 2010.

• See Note 1 below for details pertaining to annual review of remuneration and appointment as nonexecutive director.

• Prior to listing on the ASX, Mr Catulichi received the following Directors Options subject to the following terms:

• 500,000 “Class A” options, exercisable at $0.20 each on or before 13 October 2013 (vested following shareholder approval in July 2010).

Note 1: All Non-Executive Directors remuneration is reviewable annually by the Board and subject to shareholder approval (if applicable). Each Non-Executive Director holds office subject to retirement by rotation, as per the Company’s Constitution, at each annual general meeting and is eligible for re-election as a director at that meeting.

(b) Contractual Arrangements – Other Key Management Personnel & Executives

Other Key Management Personnel that have service contracts in place with the Company are as follow:

Mr Robert McCrae – Chief Executive Officer

• Contract date: 1 October 2010.

• Base Salary: $180,000 per annum (remuneration commenced from October 2010).

• Remuneration is reviewable annually with the first review commencing on the anniversary of the Company listing on the ASX.

• Mr McCrae’s contract is valid for a period of two years from listing date on the ASX: 18/10/2010.

• The Company may terminate the contract by giving two months’ notice.

• The Consultant may terminate the contract by giving three months’ notice.

• Prior to listing on the ASX, Mr McCrae received the following Management Options subject to the following terms:

• 1,000,000 “Class A” options, exercisable at $0.20 each (vested following shareholder approval in July 2010);

• 1,000,000 “Class B” options exercisable at $0.30 each (vesting 13 October 2011);

• 1,000,000 “Class C” options exercisable at $0.50 each (vesting 13 October 2012); and

• All options exercisable on or before 13 October 2013.

Mr Tom Evers – Chief Geologist

• Contract date: 1 October 2010.

• Base salary: $9,115 per month (equivalent of USD $10,000 at 30/6/2011 spot rate).

• Contract expires after a period of 18 months from contract date, this being 31 March 2012.

• The Company or Employee may terminate employment by giving not less than two weeks’ notice.

• During the year, Mr Evers received employment options under the Company’s 15% Facility, subject to the following terms:

• 300,000 options exercisable $0.20 each on or before 18 April 2014 (vesting 1 October 2012).

Mr Mark Brendon Green – Operations Manager

• Contract date: 1 October 2010.

• Base Salary: $6,380 per month (equivalent of USD $7,000 at 30/6/2011 spot rate).

• Contract expires after a period of 18 months from contract date, this being 31 March 2012.

• The Company or Employee may terminate employment by giving not less than two weeks’ notice.

• During the year Mr Green received employment options under the Company’s 15% Facility, subject to the following terms:

• 200,000 options exercisable $0.20 each on or before 18 April 2014 (vesting 1 October 2012).

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

Mrs Tanya Woolley (Blue Horse Corporate – Company Secretary & Financial Reporting Services)

• Contract date: 24 January 2011.

• Base Fee: $105,000 (plus GST) per annum.

• Contract term is for a period of 24 months unless otherwise agreed.

• The Company or the Consultant may terminate the contract by giving three months’ notice.

• During the year Mrs Woolley received employment options under the Company’s 15% Facility, subject to the following terms:

• 100,000 options exercisable $0.50 each on or before 18 April 2014 (vesting 18 April 2014).

E Equity Instruments Issued on Exercise of Remuneration Options

No shares were issued during the Period to Directors or Key Management as a result of exercising remuneration options

End of Audited Remuneration Report

13. OPTIONS

At the date of this report, the unissued ordinary shares of Minbos under option are as follows:

Class Date of Expiry Exercise Price	Number Under Option
Class A Options 13/10/2013 $0.20 Class B Options 13/10/2013 $0.30 Class C Options 13/10/2013 $0.50 Broker Options 13/10/2013 $0.20 Employee Options 18/04/2014 $0.20 Consultancy Options 18/04/2014 $0.50	4,000,000 2,000,000 2,000,000 6,000,000 500,000 100,000
	14,600,000

No person entitled to exercise these options had or has any right by virtue of the option to participate in any share issue of any other body corporate. There were no shares issued on the exercise of any options during the year.

14. 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 purposes of taking responsibility on behalf of the Company for all or part of those proceedings.

15. INDEMNIFYING OFFICERS

During the financial Period, the Company paid a premium in respect of a contract insuring all its Directors and current and former executive officers against a liability incurred as such a director or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

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Minbos Resources Limited – Annual Report For the year ended 30 June 2011

Directors’ Report

The Company has not otherwise, during or since the financial Period, indemnified or agreed to indemnify an officer or auditor of the Company against a liability incurred as such an officer or auditor.

16. FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

The Directors continue to examine other investment opportunities. Further information about likely developments in the operations of the Company and the expected results of those operations in future financial years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Company.

17. ENVIRONMENTAL REGULATIONS

The Company is not subject to any significant environmental regulations under either Commonwealth or State legislation. The Group is subject to environmental regulation in respect to its activities in Angola and the DRC. The Group aims to ensure that appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The Directors of the Company are not aware of any breach of environmental legislations as they apply to the Company during the year under review.

Greenhouse gas and energy data reporting requirements

The Group has not yet fully reviewed the reporting requirements under the Energy Efficiencies Opportunity Act 2006 or the National Greenhouse and Energy Efficient Reporting Act 2007, but believes it has adequate processes in place to ensure compliance with these Acts.

18. NON-AUDIT SERVICES

The Board of Directors advises that non-audit services were provided by the Company’s auditors during the Period. During the year the following non-audit services were provided by related entities of BDO Audit (WA) Pty Ltd.

Non-Audit Services	30-Jun-11	30-Jun-10
BDO Audit(WA) Pty Ltd - Related entity	$	$
Remuneration for other services - InvestigatingAccountant's Report	22,249	12,109
Total Non-Audit Services	22,249	12,109

19. LEAD AUDITOR’S INDEPENDENCE DECLARATION

The Lead Auditor’s Independence Declaration is set out on page 29 and forms part of the Directors’ Report for the financial year ended 30 June 2011.

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

==> picture [158 x 57] intentionally omitted <==

Peter Richards Executive Chairman Perth, 29 September 2011

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38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

==> picture [77 x 30] intentionally omitted <==

29 September 2011

Minbos Resources Limited The Directors Level 3, 1292 Hay Street West Perth WA 6005

Dear Sirs,

DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF MINBOS RESOURCES LIMITED

As lead auditor of Minbos Resources Limited for the year ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

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

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

This declaration is in respect of Minbos Resources Limited and the entities it controlled during the period.

==> picture [131 x 49] intentionally omitted <==

Phillip Murdoch Director

==> picture [42 x 20] intentionally omitted <==

BDO Audit (WA) Pty Ltd Perth, Western Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

29 | Page

Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Corporate Governance Statement

The Board of Directors of Minbos Resources Limited (the “Company” or “Minbos”) is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of Minbos on behalf of the shareholders by whom they are elected and to whom they are accountable. To ensure that the Board is well equipped to discharge its responsibilities, it has established guidelines for the nomination and selection of directors and for the operation of the Board.

COMPOSITION OF THE BOARD

The composition of the Board is determined in accordance with the following principles and guidelines:

• the Board should comprise at least three directors and it intends to establish a majority of nonexecutive directors;

• the Chairman should be a non-executive director, although this has not yet been achieved;

• the Board should comprise directors with an appropriate range of qualifications and expertise; and

• the Board shall meet at regular intervals and follow meeting guidelines set down to ensure all directors are made aware of, and have available all necessary information, to participate in an informed discussion of all agenda items.

When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the service of a new director with particular skills, the Board selects a candidate or panel of candidates with the appropriate expertise. The Board then appoints the most suitable candidate, who must stand for election at the next general meeting of shareholders. The Company does not have a formal Nomination Committee.

REMUNERATION COMMITTEE

Due to the size and scale of its operations, the Company currently does not have a separate committee to deal with the remunerations of current and new directors. Currently the roles and responsibilities of a Remuneration Committee are undertaken by the full Board. Remuneration levels are set by the Board in accordance with industry standards to attract suitable qualified and experienced directors and senior executives.

AUDIT COMMITTEE

The Company is not of a size that justifies having a separate Audit Committee. However, matters typically dealt with by such a committee are dealt with by the full Board.

BOARD RESPONSIBILITIES

As the Board acts on behalf of and is accountable to the shareholders, it seeks to identify the expectations of the shareholders, as well as other regulatory and ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately manage those risks. The Board seeks to discharge these responsibilities in a number of ways.

The responsibility for the operation and administration of the Company is delegated by the Board to the Chief Executive Officer. The Board ensures that the Chief Executive Officer is appropriately qualified and experienced to discharge his responsibilities, and has in place procedures to assess the performance for the Company’s officers, contractors and consultants.

The Board is responsible for ensuring that management’s objectives and activities are aligned with the expectations and risks identified by the Board. It has a number of mechanisms in place to ensure this is achieved, including the following:

• Board approval of a strategic plan, designed to meet shareholder needs and manage business risk;

• implementation of operating plans and budgets by management and Board monitoring progress against budget; and

• procedures to allow directors, in the furtherance of their duties, to seek independent professional advice at the Company’s expenses.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Corporate Governance Statement

MONITORING OF THE BOARD’S PERFORMANCE AND COMMUNICATION TO SHAREHOLDERS

In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of Non-Executive Directors are reviewed annually by the Chairman; and the Chairman is reviewed by the rest of Board. Directors whose performance is unsatisfactory are asked to retire.

This Corporate Governance Statement sets out the Company’s current compliance with the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations (Best Practice Recommendations). The Best Practice Recommendations are not mandatory. However, the Company will be required to provide a statement in its future annual reports disclosing the extent to which the Company has followed the Best Practice Recommendations.

The Board of the Company currently has in place a comprehensive Corporate Governance Plan, which has been posted in a dedicated corporate governance information section on the Company’s website at www.minbos.com.

PRINCIPLES AND RECOMMENDATIONS	PRINCIPLES AND RECOMMENDATIONS	COMMENT
1.	Lay solid foundations for management and oversight
1.1	Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.	The Directors monitor the business affairs of the Company on behalf of Shareholders and have formally adopted a corporate governance policy which is designed to encourage Directors to focus their attention on accountability, risk management and ethical conduct. The Company’s main corporate governance policies and practices are available on the Company’s website.
1.2	Companies should disclose the process for evaluating the performance of senior executives.	Performance evaluation in respect of remuneration policies applicable to Executive Officers is performed on an as needed basis. The process for performance evaluation is outlined in the Directors’ Report contained within this Annual Report.
1.3	Companies should provide the information indicated in the_Guide to_ reporting on Principle 1.	The Company has explained any departures from best practice recommendations 1.1 and 1.2. (if any) in the above section 1.1 and 1.2.
2.	Structure the board to add value
2.1	A majority of the board should be independent directors.	Currently Messrs Ciganek and Ismail are the only independent directors. Please refer to Point 2.1a below for further explanation.
2.2	The chair should be an independent director.	The Chairman is currently not independent. The Company intends to seek out and appoint an independent chairman in the future; however, due to the current limited size of the Company’s operations it may not be appropriate to appoint an independent chairman for some time. Please refer to Point 2.1a below for further explanation.
2.3	The roles of chair and chief executive officer should not be exercised by the same individual.	The chief executive officer role is not being fulfilled by the Executive Chairman.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Corporate Governance Statement

2.1 a Comment pertaining to Principle 2 – Structure the Board to add value

The Company recognises that independent Directors are important in assuring shareholders that the Board is properly fulfilling its role and is diligent in holding senior management accountable for its performance.

Directors of Minbos Resources Limited are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement.

In making this assessment, the Board considers all relevant facts and circumstances. Relationships that the Board will take into consideration when assessing independence are whether a Director:

• is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;

• is employed, or has previously been employed in an executive capacity by the Company or another Company member, and there has not been a period of at least three years between ceasing such employment and serving on the Board;

• has within the last three years been a principal of a material professional advisor or a material consultant to the Company or another Company member, or an employee materially associated with the service provided;

• is a material supplier or customer of the Company or other Company member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; or

• has a material contractual relationship with the Company or another Company member other than as a Director.

Mr Ismail previously, through his private company Otsana Capital, had dealings with the Company as the Financial Arranger to the Company’s Initial Public Offering in September 2010. Mr Ismail also held the position as Executive Chairman when the Company was incorporated in December 2009. The Company was a shell and had no assets at this time. In light of the abovementioned details pertaining to Mr Ismail, the Company has considered all relevant facts and does not believe that this has adversely or significantly affected Mr Ismail’s current independent status as non-executive director, a position that he has held for the entire 2011 financial year.

Currently the Chairman holds an executive position on the Board and Messrs Reeves and Catulichi hold more than 5% of the shares in the Company, therefore deeming them to be not independent.

The Company intends to seek out and appoint independent directors to the Board however, believes that the Company is not of sufficient size to warrant the inclusion of more independent non-executive Directors in order to meet the ASX recommendation of maintaining a majority of independent non-executive Directors. The Company maintains a mix of Directors from different backgrounds with complementary skills and experience.

2.4	The board should establish a nomination committee.	The Company is not of a size at the moment that justifies having a separate Nomination Committee. However, matters typically dealt with by such a committee are dealt with by the Board of Directors.
2.5	Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.	The Board has outlined its process for performance evaluation in the Directors’ Report contained within this Annual Report.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Corporate Governance Statement

2.6	Companies should provide the information indicated in the_Guide to_ reporting on Principle 2.	The Company has provided details of each Director, and their skills, experience and expertise relevant to their position in the Directors’ Report contained within this Annual Report. The Company has provided an explanation of any departures from best practice recommendations 2.1, 2.2, 2.3, 2.4 and 2.5, (if any) in sections 2.1 to 2.5 above.
3.	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 practices necessary to maintain confidence in the company’s integrity  the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders  the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.	The Board has adopted a Code of Conduct which forms part of the Company’s Corporate Governance Plan that is disclosed on the Company’s website. The Board understands the obligations for ethical and responsible decision making.
3.2	Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measureable objectives for achieving gender diversity and for the board to assess annually both the objectives and progress in achieving them.	The Company adopted a diversity policy on the 1 July 2011 as part of their Corporate Governance Plan which is available on the Company’s website.
3.3	Companies should disclose in each annual report the measureable objectives for achieving set by the board in accordance with the diversity policy and progress in achieving them.	The Company has not yet set measurable objectives. Due to the size and scale of the Company, setting measureable objectives in respect of its diversity policy is not yet possible. The diversity policy adopted by the Company is available on the Company’s website.
3.4	Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.	An executive office holding below the Board level, this being the position of Company Secretary and Financial Accountant; is held by a female contractor to the Company.
3.5	Companies should provide the information indicated in the_Guide to_	The Board will include in the Annual Report each year measurable objectives(if any)set bythe Board;andprogress

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Corporate Governance Statement

	reporting on Principle 3.	against the objectives. The Company has provided an explanation of any departures from best practice recommendations 3.1, 3.2, 3.3 and 3.4 (if any) in sections 3.1 to 3.4 above.
4.	Safeguard integrity in financial reporting
4.1	The board should establish an audit committee.	The Company is not of a size at the moment that justifies having a separate Audit Committee. However, matters typically dealt with by such a committee are dealt with by the Board of Directors which consists of the Executive Chairman and four Non-Executive Directors.
4.2	The audit committee should be structured so that it:  consists only of non-executive directors  consists of a majority of independent directors  is chaired by an independent chair, who is not chair of the board  has at least three members.	With matters typically dealt with the Audit Committee currently dealt with the Board of Directors, this comprises one Executive Chairman and four Non-Executive Directors of which two of them are independent.
4.3	The audit committee should have a formal charter.	Such a charter is not considered necessary for the proper function of the committee given the composition of the Board of Directors.
4.4	Companies should provide the information indicated in the_Guide to_ reporting on Principle 4.	The Company has explained any departures from best practice recommendations 4.1, 4.2 and 4.3 (if any) in the above sections 4.1 to 4.3 above.
5.	Make timely and balanced disclosure
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.	The Company has a continuous disclosure program in place designed to ensure the compliance with ASX Listing Rule disclosure and to ensure accountability at a senior executive level for compliance and factual presentation of the Company’s financial position.
5.2	Companies should provide the information indicated in_Guide to_ Reporting on Principle 5.	The Company has provided an explanation of any departures from best practice recommendation 5.1 (if any) in section 5.1 above.
6.	Respect the rights of shareholders
6.1	Companies should design a communications policy for promoting effective communication with shareholders and encouraging	Given the size of the company, Minbos Resources Ltd shall revert all communication with shareholders to that of the Board and its Company Secretary.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Corporate Governance Statement

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 .

The Company has provided an explanation of any departures from best practice recommendation 6.1 (if any) in section 6.1 above.

7. Recognise and manage risk

• 7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.

The Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. In summary, the Company’s policies are designed to ensure strategic, operational, legal, reputational and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the Company’s business objectives.

	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.	The Company has provided an explanation of any departures from best practice recommendation 6.1 (if any) in section 6.1 above.
7.	Recognise and manage risk
7.1	Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.	The Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. In summary, the Company’s policies are designed to ensure strategic, operational, legal, reputational and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the Company’s business objectives.
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.		The Board’s collective experience will enable accurate identification of the principal risks that may affect the Company’s business. Key operational risks and their management will be recurring items for deliberation at Board meetings.
7.3			A written declaration has been provided by the Chief Executive Officer and Executive Chairman in accordance with section 295A of the Corporations Act to the Board in regards to the preparation of financial reports.
	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_Guide to_ Reporting on Principle 7.		The Company has provided an explanation of any departures from best practice recommendations 7.1, 7.2 and 7.3 in sections 7.1 to 7.3 above.
8.	Remunerate fairly and responsibly
8.1	The board should establish a remuneration committee.		The Board has not established a Remuneration Committee at this point in the Company’s development. It is considered that the size of the Board alongwith the level of activityof the

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Corporate Governance Statement

Company renders this impractical and the full Board considers in detail all of the matters for which the Directors are responsible. Remuneration to the Non-Executive Directors is by way of Director Fees only, with the level of such fees, having been set by the Board and approved by shareholders, to an amount it considers to be commensurate for a company of its size and level of activity.

• 8.2 The remuneration committee should be structured so that it:  consists of a majority of independent directors

• is chaired by an independent director

• has at least three members

The Company is not currently of a size to justify the existence of a separate Remuneration Committee. However, matters typically dealt with by such a committee are dealt with by the Board of Directors.

8.3 Companies should clearly distinguish The Company clearly distinguishes the policy and structure of the structure of non-executive Executive and Non-Executive Directors’ remuneration. All directors’ remuneration from that of Non-Executive Directors are paid in accordance with the executive directors and senior Company’s Constitution that sets the current total aggregate executives. sum per annum paid to Non-Executive Directors at $300,000 per annum. Non-Executive Directors do not receive performance based bonuses of the Company nor are they entitled to retirement allowances. Executive contracts are reviewed annually by the Board, in the absence of a Remuneration Committee, for their approval. The process consists of a review of company, business unit and individual performance, relevant comparative remuneration internally and externally and, where appropriate, external advice independent of management. 8.4 Companies should provide the The Company has provided an explanation of any departures information indicated in the Guide to from best practice recommendations 8.1 to 8.3 (if any) in reporting on Principle 8 . sections 8.1 to 8.3 above.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Consolidated Statement of Comprehensive Income

Revenue from continuing operations Other income Share -based payments Administration fees Foreign exchange loss Personnel expenses Finance costs Share of net loss from associate Loss from continuing operations before income tax Income tax expense Loss from continuing operations after income tax Other comprehensive income Foreign currency translation Other comprehensive loss for the year, net of tax Total comprehensive loss for the year Loss for the year is attributable to the owners of Minbos Resources Limited Total comprehensive loss for the year is attributable to the owners of Minbos Resources Loss per share attributable to ordinary equity holders - Basic loss per share - Diluted loss per share	Notes	30-Jun-11 $	30-Jun-10 $ - 14,221 (60,526) - (24,000) - - (70,305) - (70,305) - - (70,305) (70,305) (70,305) $ (0.01) (0.01)
	6 6 7 7 7 13 9 9	- 116,043 (523,563) (1,003,716) (350,482) (484,460) (88) (234,985) (2,481,251) - (2,481,251) 114,240 114,240 (2,367,011) (2,481,251) (2,367,011) $ (0.05) (0.05)

The consolidated statement of comprehensive income is to be read in conjunction with the accompanying notes.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Consolidated Statement of Financial Position

ASSETS Current assets Cash and cash equivalents Trade and other receivables Total current assets Non-current assets Property, plant & equipment Investments in associate Exploration & evaluation expenditure Other financial assets Total non-current assets Total Assets LIABILITIES Current liabilities Trade and other payables Total current liabilities Non-Current liabilities Deferred tax liabilities Total Non-Current liabilities Total Liabilities Net assets EQUITY Contributed Equity Reserves Accumulated losses Total equity	Notes	30-Jun-11 $	30-Jun-10 $
	10 11 14 13 15 12 16 8 17 18 19	3,254,882 345,940 3,600,822 188,785 11,009,694 6,168,652 1,610,495 18,977,626 22,578,448 172,986 172,986 5,884,715 5,884,715 6,057,701 16,520,747 18,344,500 727,803 (2,551,556) 16,520,747	825,272 202,688
			1,027,960
			- - - -
			-
			1,027,960
			135,965
			135,965
			-
			-
			135,965
			891,995
			962,300 - (70,305)
			891,995

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Consolidated Statement of Changes in Equity

At 1 July 2010 Loss for the period Other comprehensive Income/(loss) for the period Total comprehensive income/(loss) for the period Transactions with owners in their capacity as owners: Issue of share capital Capital raising costs Share-based payments At 30 June 2011 Incorporation 17/12/2009 Loss for the period Other comprehensive Income/(loss) for the period Total comprehensive income/(loss) for the period Transactions with owners in their capacity as owners: Issue of share capital Capital raising costs Share-based payments At 30 June 2010	Contributed Equity Share-based Payment Reserve Foreign Currency Translation Reserve Accumulated Losses Total Equity $ $ $ $ $
	962,300 - - (70,305) 891,995
	- - - (2,481,251) (2,481,251) - - 114,240 - 114,240
	- - 114,240 (2,481,251) (2,367,011) 18,000,000 - - - 18,000,000 (617,800) - - - (617,800) - 613,563 - - 613,563
	18,344,500 613,563 114,240 (2,551,556) 16,520,747
	Contributed Equity Share-based Payment Reserve Foreign Currency Translation Reserve Accumulated Losses Total Equity $ $ $ $ $
	- - - - -
	- - - (70,305) (70,305) - - - - -
	- - - (70,305) (70,305) 1,070,000 - - - 1,070,000 (107,700) - - - (107,700) - - - - -
	962,300 - - (70,305) 891,995

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Consolidated Statement of Cashflows

Note Cash flows from operating activities Payment to suppliers and employees Interest received Interest paid Net cash (outflow) from operating activities 10 Cash flows from investing activities Payments for plant and equipment Payments for exploration and evaluation assets Payment for purchase of subsidiary, net of cash acquired Payments to Tunan Mining Net cash (outflow) from investing activities Cash flows from financing activities Proceeds from the issue of shares, net of issue costs Loans to Associate Net cash inflow from financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Effect of exchange rate fluctuations on cash held Cash and cash equivalents at the end of the year 10	30-Jun-11 30-Jun-10 $ $
	(1,956,918) (18,331)
	116,043 11,153 88 -
	(1,840,787) (7,178)
	(205,350) - (1,358,769) - 62,811 -
	- (186,300)
	(1,501,308) (186,300)
	7,382,200 1,018,750 (1,610,495) -
	5,771,705 1,018,750
	2,429,610 825,272
	825,272 - - -
	3,254,882 825,272

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

1. REPORTING ENTITY

Minbos Resources Limited (referred to as ‘Minbos’ or the ‘Company’ or Parent Entity’) is a company domiciled in Australia. The address of the Company’s registered office is Suite 2, Level 3, 1292 Hay Street, West Perth, WA 6005. The address of the Company’s representative office in Johannesburg is 42 Kyalami Boulevard, Kyalami Business Park, Kyalami, Johannesburg, South Africa. The consolidated financial statements of the Company as at and for the year ended 30 June 2011 comprise the Company and its subsidiaries (together referred to as the ‘consolidated entity’ or the ‘Group’). The Group is primarily involved in phosphate exploration in Africa.

2. BASIS OF PREPARATION

(a) Statement of Compliance

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (‘AASBs’) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001. The financial report of the consolidated entity also complies with IFRSs and interpretations adopted by the International Accounting Standards Board.

Separate financial statements for Minbos Resources Limited, as an individual entity, are no longer presented as a consequence of a change to the Corporations Act 2001. Financial information for Minbos Resources Limited as an individual entity is included in note 23.

The financial report was authorised for issue by the Directors on 29 September 2011.

(b) Functional and presentation currency

These consolidated financial statements are presented in Australian dollars. The functional and presentation currency of the Company is Australian dollars. The functional currency of the subsidiaries are United States dollars (USD) and South African Rand.

• (c) Going concern

The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

During the year the consolidated entity incurred a net loss of for the year of ($2,481,251) and incurred net cash outflows from operating and investing activities of ($3,342,095).

The ability of the consolidated entity to continue as a going concern is dependent on the consolidated entity being able to raise additional funds as required to meet ongoing exploration commitments and for working capital. The Directors believe that they will be able to raise additional capital as required and are in the process of evaluating the consolidated entity’s cash requirements. The Directors believe that the consolidated entity will continue as a going concern. As a result the financial report has been prepared on a going concern basis. However should the consolidated entity be unsuccessful in undertaking additional raisings the consolidated entity may not be able to continue as a going concern. No adjustments have been made relating to the recoverability and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.

(d) Use of estimates and judgments

The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of policies and

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. These accounting policies have been consistently applied by each entity in the consolidated entity.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes:

• (i) Note 21 – Share-based payment arrangements - The Group measures the cost of equity settled share based payments at fair value at the grant date using the Black-Scholes model taking into account the exercise price, the term of the option, the impact of dilution, the share price at grant date, the expected volatility of the underlying share, the expected dividend yield and risk free interest rate for the term of the option.

• (ii) Note 15 – Exploration & evaluation expenditure - The Group’s accounting policy for exploration and evaluation is set out in note 3(e). If, after having capitalised expenditure under this policy, the Directors conclude that the Group is unlikely to recover the expenditure by future exploration or sale, then the relevant capitalised amount will be written off to the Statement of Comprehensive Income.

• (iii)Note 8 – Income Taxes – The Group is subject to income taxes in Australia, Angola and Democratic Republic of Congo. Significant judgement is required when determining the Group’s provision for income taxes. The Group estimates its tax liabilities based on the Group’s understanding of the tax law.

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Company. The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the Consolidated Entity, being Minbos Resources Limited (“Company” or “Parent Entity”) and its subsidiaries as defined in AASB 127: Consolidated and Separate Financial Statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity. Acquisitions of entities are accounted for using the acquisition method of accounting.

In preparing the consolidated financial statements, all inter-company balances and transactions, income and expenses and profit and losses resulting from intra-group transactions are eliminated in full.

Non-controlling interests' in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income and statement of financial position respectively. Total comprehensive

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

income is attributable to the owners of Minbos Resources Limited and non-controlling interests even if this results in the non-controlling interests having a debit balance.

Investments in subsidiaries are accounted for at cost in the financial report of Minbos Resources Limited.

(ii) Transactions eliminated on consolidation

All intra-group balances and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of the consolidated entity’s interest in the entity with adjustments made to the ‘Investment in Associates’ and ‘Share of Associates Net Profit’ accounts.

Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Gains and losses are recognised as the contributed assets are consumed or sold by the associate or, if not consumed or sold by the associate, when the consolidated entity’s interest in such entity is disposed of.

(iii) Changes in ownership interests

The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interest in the subsidiary. Any differences between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of Minbos Resources Ltd.

When the group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership in a jointly controlled entity or an associate is reduced, but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss, where appropriate.

(b) Comparatives

Prior period comparatives are for the period from incorporation being 17 December 2009 to 30 June 2010.

• (c) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Statement of Financial Position date are translated to Australian dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the Statement of Comprehensive Income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Australian dollars at foreign exchange rates ruling at the dates the fair value was determined.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(ii) Financial statements of foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to Australian dollars at foreign exchange rates ruling at the Statement of Financial Position date. The revenues and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to Australian dollars at rates approximating to the foreign exchange rates ruling at the dates of the transactions.

Foreign exchange differences arising on retranslation are recognised directly in other comprehensive income via the foreign currency translation reserve (FCTR), as a separate component of equity.

(iii) Net investment in foreign operations

Exchange differences arising from the translation of the net investment in foreign operations, and of related effective hedges are taken to translation reserve and released into the Statement of Comprehensive Income upon disposal. When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to profit or loss, as part of the gain or loss on sale where applicable.

(d) Financial instruments

(i) Non-derivative financial instruments

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.

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

(ii) Subsequent measurement

Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.

Details on how the fair value of financial instruments is determined are disclosed in note 5.

(iii) Impairment

The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the assets (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost it considered an indicator that the assets are impaired.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(i) Assets carried at amortised cost

For loans and receivables, the amount of loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to maturity investment has a variable interest rate, the discount rate or measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the group may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated income statement.

(e) Property, plant and equipment

(i) Owned assets

Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see accounting policy (i)).

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of selfconstructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a work condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components).

(ii) Subsequent costs

The consolidated entity recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the consolidated entity and the cost of the item can be measured reliably. All other costs are recognised in the Statement of Comprehensive Income as an expense as incurred.

(iii) Depreciation

With the exception of freehold land and mineral property and development assets, depreciation is charged to the Statement of Comprehensive Income using a diminishing value method over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. Mineral property and development assets are depreciated on the units of production basis over the life of the economically recoverable reserves.

The estimated useful lives in the current and comparative periods are as follows:

• Plant and equipment 2.5 to 10 years

The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(f) Exploration and development expenditure

(i) Exploration and evaluation expenditure

Exploration and evaluation costs, which are intangible costs, including the costs of acquiring licences, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the consolidated entity has obtained the legal rights to explore an area are recognised in the Statement of Comprehensive Income.

Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:

• (i) the expenditures are expected to be recouped through successful development and exploitation of the area of interest; or

• (ii) activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable assessment of the existence or other wise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from intangible assets to mineral property and development assets within property, plant and equipment.

(ii) Development expenditure

Development costs are accumulated in respect of each separate area of interest. Development costs related to an area of interest are carried forward to the extent that they are expected to be recouped either through sale or successful exploitation of the area of interest.

When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated cost in respect of that area is written off in the financial period the decision is made. Each area of interest is reviewed at the end of each accounting period and accumulated cost written off to the extent that they will not be recoverable in the future. Impairment of assets is discussed in Note 3(i).

Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. When production commences, carried forward exploration and development costs are amortised on a units of production basis over the life of economically recoverable reserves.

Development assets are assessed for impairment if facts and circumstances suggest that the carrying amount exceeds the recoverable amount (see impairment accounting policy 3(i)). For the purposes of impairment testing, development assets are allocated to cash-generating units to which the development activity relates. The cash generating unit shall not be larger than the area of interest.

(g) Cash and cash equivalents

Cash and cash equivalents comprise cash balances, short term bills and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the consolidated entity’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(h) Trade and other receivables

Trade and other receivables are recorded at amounts due less any allowance for doubtful debts.

(i) Other financial assets

The Group classifies its other financial assets in the following categories: loans and receivables. The classification depends on the purpose for which the other financial assets were acquired. Management determines the classification of its other financial assets at initial recognition and re-evaluates this designation at each reporting date.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the Statement of Financial Position date which are classified as non-current assets.

Investments in subsidiaries are carried at cost, net of any impairment losses in the Parent entity’s financial statements (see note 3(c)(iii)).

(j) Impairment

The carrying amounts of the consolidated entity’s assets, other than exploration assets (see accounting policy (e)), and deferred tax assets, are reviewed at each Statement of Financial Position date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each Statement of Financial Position date.

An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the Statement of Comprehensive Income unless the asset has previously been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through profit or loss.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

(i) Calculation of recoverable amount

The recoverable amount of the consolidated entity’s receivables carried at amortised cost is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e. the effective interest rate computed at initial recognition of these financial assets). Receivables with a short duration are not discounted.

Impairment of receivables is not recognised until objective evidence is available that a loss event has occurred. Significant receivables are individually assessed for impairment. Impairment testing of significant receivables that are not assessed as impaired individually is performed by placing them into portfolios of significant receivables with similar risk profiles and undertaking a collective assessment of impairment. Non-significant receivables are not individually assessed. Instead, impairment testing is performed by placing non-significant receivables in portfolios of similar risk profiles, based on objective evidence from historical experience adjusted for any effects of conditions existing at each reporting date.

The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

(ii) Reversals of impairment

Impairment losses, other than in respect of goodwill, are reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimate used to determine the recoverable amount.

An impairment loss in respect of goodwill is not reversed. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(k) Business Combinations

The acquisition method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquire and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the group’s share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.

(l) Contributed equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.

If the entity reacquires its own equity instruments, for example as a result of a share buy-back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

in the profit or loss and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in equity.

(m) Dividends

Dividends are recognised as a liability in the period in which they are paid and appropriately authorised.

(n) Employee Benefits

(i) Share-based payment transactions

The share option program allows the consolidated entity employees and consultants to acquire shares of the Company. The fair value of options granted is recognised as an employee or consultant expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using a Black-Scholes option-pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is only due to share prices not achieving the threshold for vesting.

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.

(ii) Wages, salaries and annual leave

Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12 months of the reporting date represent present obligations resulting from employees’ services provided to reporting date, are calculated at undiscounted amounts based on remuneration wage and salary rates that the consolidated entity expects to pay as at reporting date including related on-costs, such as workers compensation insurance and payroll tax.

(o) Provisions

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

(i) Site restoration

In accordance with the consolidated entity’s environmental policy and applicable legal requirements, a provision for site restoration in respect of contaminated land is recognised when the land is contaminated.

The provision is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date, based on current legal requirements and technology. Future restoration costs are reviewed annually and any changes are reflected in the present value of the restoration provision at the end of the reporting period.

The amount of the provision for future restoration costs is capitalised and is depreciated over the useful life of the mineral reserve. The unwinding of the effect of discounting on the provision is recognised as a finance cost.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(p) Trade and other payables

Trade and other payables are non-interest bearing liabilities stated at cost and settled within 30 days.

(q) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares, by weighted average number of ordinary shares outstanding during the financial year, adjusted for the bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(r) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured.

Net financial income

Net financial income comprise interest payable on borrowings calculated using the effective interest method, interest income on funds invested, dividend income and foreign exchange gains and losses.

Interest income is recognised in the Statement of Comprehensive Income as it accrues, using the effective interest method.

Management fees – The right of the Company to receive the management fee must exist.

(s) Income tax

The income tax expense for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax assets and liabilities are recognised for all temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and their respective tax losses, at the tax rates expected to apply when the assets are recovered or liabilities settled based on those tax rates which are enacted or substantively enacted for each jurisdiction. Exceptions are made for certain temporary differences arising on initial recognition of an asset or a liability if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit.

Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available to utilise those temporary difference and losses.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax base of investments in subsidiaries, associated and interests in joint ventures where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Current and deferred tax balances relating to amounts recognised directly in other comprehensive income are also recognised directly in other comprehensive income.

• (t) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers. The chief operating decision makers, who are responsible for allocating resources and assessing performance of the operating segments, have been identified as the Board of Directors and the Chief Executive Officer, Mr Robert McCrae.

(u) Goods and Services Tax

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

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

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

(v) New and amended standards adopted by the Group

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 July 2011:

• AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project;

• AASB 2009-8 Amendments to Australian Accounting Standards - Group Cash-settled Share-based Payment Transactions;

• AASB 2009-10 Amendments to Australian Accounting Standards - Classification of Rights Issues; and

• AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project.

(w) New accounting standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2011 reporting periods and have not yet been applied in the financial report. The Group’s assessment of the impact of these new standards and interpretations is set out below.

• AASB 2010-6 Amendments to Australian Accounting Standards - Disclosures on Transfers of Financial Assets (effective for annual reporting periods beginning on or after 1 July 2011). Amendments made to AASB 7 Financial Instruments: Disclosures in November 2010, introduce additional disclosures in respect of risk exposures arising from transferred financial assets. The amendments are not expected

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

to have any significant impact on the Group’s disclosures. The Group intends to apply the amendment from 1 July 2011.

• AASB 10 Consolidated Financial Statements (effective for the annual reporting periods commencing on or after 1 January 2013). AASB 10 introduces certain changes to the consolidation principles, including the concept of de facto control and changes in relation to the special purpose entities. The Group is continuing to assess the impact of the standard.

• AASB 11 Joint Arrangements (effective for the annual reporting periods commencing on or after 1 January 2013). AASB 11 introduces certain changes to the accounting for joint arrangements. Joint arrangements will be classified as either joint operations (where parties with joint control have rights to assets and obligations for liabilities) or joint ventures (where parties with joint control have rights to the net assets of the arrangement). Joint arrangements structured as a separate vehicle will generally be treated as joint ventures and accounted for using the equity method. The Group is continuing to assess the impact of the standard.

• AASB 13 Fair Value Measurement (effective for annual reporting periods commencing on or after 1 January 2013). AASB 13 establishes a single framework for measuring fair value of financial and nonfinancial items recognised at fair value on the balance sheet or disclosed in the notes to the financial statements. The Group is continuing to assess the impact of the standard.

• AASB 2011-9 Presentation of Financial Statements (effective for annual reporting periods commencing on or after 1 July 2013). AASB 101, amended in June 2011, introduces amendments to align the presentation items of other comprehensive income with US GAAP. The Group will apply the amended standard from 1 July 2013. When the standard is first adopted, there will be changes to the presentation of the statement of comprehensive income. However, there will be no impact on any of the amounts recognised in the financial statements.

• AASB 1054 Australian Additional Disclosures (effective for annual reporting periods beginning on or after 1 July 2011). AASB 1054, issued in May 2011, moves additional Australian specific disclosure requirements for for-profit entities from various Australian Accounting Standards into this Standard as a result of Trans-Tasman Convergence Project. AASB 1054 Australian Additional Disclosures removes the requirement to disclose each class of capital commitments contracted for at the end of the reporting period (other than commitments for the supply of inventories). When the standard is adopted for the first time for the financial year ending 30 June 2012, the financial statements will no longer include disclosures about capital and other expenditure commitments as these are no longer required by AASB 1054.

• AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (effective for annual reporting periods beginning on or after 1 January 2013). AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2013 but is available for early adoption. The Group is continuing to assess its full impact.

• Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting Standards (effective for annual reporting periods beginning on or after 1 January 2011). In December 2009 the AASB issued a revised AASB 124 Related Party Disclosures. It is effective for accounting periods beginning on or after 1 January 2011 and must be applied retrospectively. The amendment clarifies and simplifies the definition of a related party. The Group will apply the amended standard from 1 July 2011. When the amendments are applied, The Group will need to

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

disclose any transactions between its subsidiaries and its associates. However, there will be no impact on any of the amounts recognised in the financial statements.

• AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements (effective from 1 July 2013). On 30 June 2010 the AASB officially introduced a revised differential reporting framework in Australia. Under this framework, a two-tier differential reporting regime applies to all entities that prepare general purpose financial statements. The Group is listed on the ASX and is not eligible to adopt the new Australian Accounting Standards - Reduced Disclosure Requirements. The two standards will therefore have no impact on the financial statements of the entity.

• AASB 2010-8 Amendments to Australian Accounting Standards - Deferred Tax: Recovery of Underlying Assets (effective from 1 January 2012). In December 2010, the AASB amended AASB 112 Income Taxes to provide a practical approach for measuring deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model. AASB 112 requires the measurement of deferred tax assets and liabilities to reflect the tax consequences that would follow from the way management expects to recover or settle the carrying amount of the relevant assets or liabilities, that is through use or through sale. The amendment introduces a rebuttable presumption that investment property which is measured at fair value is recovered entirely by sale. The amendment is not expected to have any significant impact on The Group’s financial statements. The Group intends to apply the amendment from 1 July 2012.

• AASB 119 - Elimination of the ‘corridor’ approach for deferring gains/losses for defined benefit plans, actuarial gains/losses on remeasuring the defined benefit plan obligation/asset to be recognised in OCI rather than in profit or loss, and cannot be reclassified in subsequent periods, subtle amendments to timing for recognition of liabilities for termination benefits, and employee benefits expected to be settled (as opposed to due to settled under current standard) within 12 months after the end of the reporting period are short-term benefits, and therefore not discounted when calculating leave liabilities. Annual leave not expected to be used within 12 months of end of reporting period will in future be discounted when calculating leave liability. This standard has no impact as there are no annual leave provision amounts that are non-current. The Group will apply this from 1 July 2013.

4. FINANCIAL RISK MANAGEMENT

The Company’s principal financial instruments comprise cash, short-term deposits, receivables, and payables. At the reporting date, the Group had the following mix of financial assets and liabilities:

Financial assets Cash and cash equivalents Trade and other receivables Other financial assets Financial liabilities Trade and other payables	30-Jun-11 30-Jun-10
	$ $ 3,254,882 825,272 345,940 202,688 1,610,495 -
	5,211,317 1,027,960
	172,986 135,965
	172,986 135,965

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

Risk exposures and responses

The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rate and foreign exchange prices. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future cash flow forecasts.

Primary responsibility for identification and control of financial risks rests with the Board of Directors because, due to the size of the Company, there is currently no audit committee.

Interest rate risk

The Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s cash at bank held with variable interest rates. The Group does not rely on the generation of interest on cash at bank to provide working capital and as a result does not consider this to be material to the Group and have therefore not undertaken any further analysis of exposure other than the analysis in the table below:

Financial assets Cash and cash equivalents Financial liabilities Interest bearing liabilities Net exposure	Weighted Average Interest Rate 30-Jun-11 Weighted Average Interest Rate 30-Jun-10 % $ % $ 3.58% 3,254,882 3.75% 825,272 3,254,882 825,272 - - - - - 3,254,882 825,272

Within this analysis, consideration is given to potential renewals of existing positions and the mix of fixed and variable interest rates. The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date. The 3% increase and 1% decrease in rates is based on reasonably expected possible changes over a financial year, using the observed range of historical rates for the preceding five year period with an emphasis on rates observed during recent years of global financial crisis.

At 30 June 2011, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post tax losses and equity would have been affected as follows:

Judgements of reasonably possible movements:	higher/(lower) higher/(lower) Post tax profit Other comprehensive income
	30-Jun-11 30-Jun-10 30-Jun-11 30-Jun-10
	$ $ $ $
+ 3.0% (300 basis points) - 1.0%(100 basispoints)	68,353 17,331 - - (22,784) (5,777) - -

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

The other financial instruments of the Company that are not included in the above tables are non-interest bearing and are therefore not subject to interest rate risk.

Foreign currency risk

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency and net investments in foreign operations.

The Consolidated entity has Australian Dollars as its functional currency. Currently all subsidiary-level expenditure, as a result of exploration occurring in Angola and the DRC as well administration in South Africa, is funded by the Parent Entity which in turn gives rise to foreign currency movements on retranslation of these intercompany loans . Subsequently the Group's statement of financial position can be affected significantly by movements in the ZAR/A$ and US$/A$ exchange rates. The risk is measured using sensitivity analysis and cash flow forecasting.

The Group’s exposure to foreign currency risk at the reporting date were as follows:

	2011 2011 2010 2010 USD ZAR USD ZAR
	$ R $ R 66,599 606,145 - - - 377,662 - - 719,878 - - -
Financial Assets Cash and cash equivalents Trade and other receivables Other financial assets Financial Liabilities Trade and other payables Net exposure
	786,477 983,807 - -
	(19,226) (64,849) - -
	(19,226) (64,849) - -
	767,251 918,958 - -

At 30 June 2011, had the Australian Dollar moved, as illustrated in the table below, with all other variables held constant, post tax profit and equity would have been affected as follows:

Judgements of reasonably possible movements:	Post tax profit Other comprehensive income higher/(lower) higher/(lower)
	30-Jun-11 30-Jun-10 30-Jun-11 30-Jun-10
	$ $ $ $
AUD/USD +10% AUD/USD - 10%	53,708 - - - (53,708) - - -
AUD/ZAR +10% AUD/ZAR - 10%	64,327 - - - (64,327) - - -

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

The USD and ZAR movements in loss in 2011 are more sensitive than in 2010 due to the fact that the Company was an individual entity with no subsidiaries as at 30 June 2010; and therefore had no cash and cash equivalents, receivables or payables with foreign currency exposure. Since the 100% acquisition of Tunan Mining Limited and its subsidiaries in October 2010, the Group has since entered into foreign currency transactions and therefore was only exposed to foreign currency risk during the current financial year.

Significant assumptions used in the foreign currency exposure sensitivity analysis include:

• Reasonably possible movements in foreign exchange rates were determined based on a review of the last two years historical movements whereby there were movements that ranged between 8% and 20%.

• The reasonably possible movement of 10% was calculated by taking the USD spot rate as at balance date, moving this spot rate by 10% and then re-converting the USD into AUD with the “new spot-rate”. This methodology reflects the translation methodology undertaken by the Group.

• The sensitivity does not include financial instruments that are non-monetary items as these are not considered to give rise to currency risk.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial liabilities as and when they fall due. The Group manages liquidity risk by continually monitoring cash reserves and cashflow forecasts to ensure that financial commitments can be met as and when they fall due.

The table below reflects the respective undiscounted cash flows for financial liabilities existing at 30 June 2011. The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and outflows. Trade payables and other financial liabilities mainly originate from the financing of assets used in the Group’s ongoing operations such as property, plant, equipment and investments of working capital e.g. trade receivables, prepayments and deposits.

As at 30/6/2011 Contractual maturities of financial liabilities Trade and other payables Net exposure As at 30/6/2010 Contractual maturities of financial liabilities Trade and other payables Net exposure	<6 months >6 - 12 months > 12 months Total Contractual Cash Flows Carrying Amount $ $ $ $ $
	172,986 - - 172,986 172,986
	172,986 - - 172,986 172,986
	<6 months >6 - 12 months > 12 months Total Contractual Cash Flows Carrying Amount $ $ $ $ $
	135,965 - - 135,965 135,965
	135,965 - - 135,965 135,965

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

Credit risk

Credit risk is the risk of financial loss to the Group if a counter party to a financial instrument fails to meet its contractual obligations. During the year credit risk has principally arisen from the financial assets of the Group, which comprise cash and cash equivalents and trade and other receivables. The Group’s exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to the carrying amount of these instruments.

The carrying amount of financial assets included in the statement of financial position represents the Group’s maximum exposure to credit risk in relation to those assets. The Group does not hold any credit derivatives to offset its credit exposure. The Group trades only with recognised, credit worthy third parties and as such collateral is not requested nor is it the Group’s policy to securitise its trade and other receivables. Receivable balances are monitored on an ongoing basis with the result that the Group does not have a significant exposure to bad debts.

The Group has no significant concentrations of credit risk within the Group except for cash held with National Australia Bank and various receivables with mostly recognised third parties.

(i) Cash

The Group’s primary banker is National Australia Bank and Standard Bank of South Africa. The Board considers the use of these financial institutions, which has a rating of AA and BBB from Standards and Poor’s, respectively, to be sufficient in the management of credit risk with regards to these funds.

(ii) Trade Debtors

While the Group has policies in place to ensure that transactions with third parties have an appropriate credit history, the management of current and potential credit risk exposures is limited as far as is considered commercially appropriate. Up to the date of this report, the Board has placed no requirement for collateral on existing debtors.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates.

Cash at bank and short-term bank deposits:

Standard & Poors rating AAA BBB	30-Jun-11 30-Jun-10
	$ $ 3,108,364 825,272 146,518 -
	3,254,882 825,272

Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. During the year the Group only held financial instruments that are not traded in active markets. Fair values have been determined for measurement purposes to approximate the cost of the financial instrument. The Company’s Investment in Associate, Mongo Tando Limited, is classified as a level 3 financial asset. Level 3 financial assets are measured with inputs that are not based on observable market data.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

5. SEGMENT INFORMATION

The Group operates only in one reportable segment being predominately in the area of phosphate mineral exploration in the DRC and Angola, within Africa. The Board considers its business operations in phosphate mineral exploration to be its primary reporting function. Results are analysed as a whole by the chief operating decision maker, this being the Board of Directors. Consequently revenue, profit, net assets and total assets for the operating segment are reflected in this financial report.

6. REVENUE FROM CONTINUING OPERATIONS

	30-Jun-11 30-Jun-10
Revenue	$ $
Interest income	116,043 14,221
Total revenue	116,043 14,221

7. EXPENSES

	30-Jun-11 30-Jun-10
Personnel expenses	$ $
Wages and salaries Directors fees and other benefits	195,318 - 289,142 24,000
Finance costs	484,460 24,000
Interest	88 -
Administration expenses
Operational Professional fees Depreciation expense Administration costs	- 927 275,603 10,450 19,061 - 709,052 49,149
Total administration expenses	1,003,716 60,526

8. INCOME TAX EXPENSE

(a) Income tax expense The components of income tax expense comprise: Current income tax Deferred income tax Income tax expense / (benefit) reported in income statement	30-Jun-11 30-Jun-10
	$ $ - - - -
	- -

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(b) Numerical reconciliation of accounting profit to income tax expense

A reconciliation between income tax expense and the accounting profit before	30-Jun-11	30-Jun-10
income tax multiplied by the entity's applicable income tax rate is as follows:	$	$
Accounting profit / (loss) before income tax	(2,481,251)	(70,305)
At the entity's Australian statutory income tax rate of 30% (2010: 30%)	(428,353)	(21,092)
At the entity's Angolan statutory income tax rate of 35%	(82,245)	-
At the entity's DCR statutory income tax rate of 40%	(48,990)	-
At the entity's South African statutory income tax rate of 28%	(81,592)	-
Adjusted for tax effect of the following amounts:
Non-deductible / (deductible) expenditure	332,158	(6,462)
Income tax benefits not brought to account	309,021	27,554
Income tax expense / (benefit)	-	-
(c) Recognised deferred tax assets and liabilities
Deferred tax liabilities	30-Jun-11	30-Jun-10
	$	$
Investment in associate
Opening balance	-	-
Recognised on business combination	3,935,638	-
Charged / (credited) to income	-	-
Closing balance	3,935,638	-
Exploration expenditure
Opening balance	-	-
Recognised on business combination	1,949,078	-
Charged / (credited) to income	-	-
Closing balance	1,949,078	-
Total deferred tax liability recognised	5,884,715	-
(d) Deferred tax assets and liabilities not brought to account
The directors estimate that the potential deferred tax assets and
liabilities carried forward but not brought to account at year end at the
Australian corporate tax rate of 30% are made up as follows:	30-Jun-11	30-Jun-10
	$	$
On income tax account:
Carried forward tax losses	235,876	15,415
Deductible temporary differences	100,699	12,138
Unrecognised deferred tax assets	336,575	27,554

59 | P a g e

Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

The group has Australian carried forward tax losses of $235,876 (tax effected at 30%, $70,763) as at 30 June 2011. In view of the Group's trading position, the Directors have not included this tax benefit in the Group's balance sheet. A tax benefit will only be recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

The tax benefits of the above deferred tax assets will only be obtained if:

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

• (b) The consolidated entity continues to comply with the conditions for deductibility imposed by law; and

• (c) No changes in income tax legislation adversely affect the consolidated entity from utilising the benefits.

9. EARNINGS PER SHARE

(a) Basic loss per share

The calculation of basic loss per share at 30 June 2011 was based on the loss attributable to ordinary shareholders of ($2,481,251) (2010: $70,305) and a weighted average number of ordinary shares outstanding during the financial year ended 30 June 2011 of 53,236,301 (2010: 13,250,000) calculated as follows:

Net loss attributable to the ordinary equity holders of the Company Weighted average number of ordinary shares for basis per share Continuing operations - Basic earnings/(loss) per share	30-Jun-11 30-Jun-10
	$ $ (2,481,251) (70,305) 53,236,30113,250,000
	(0.05) (0.01)

(b) Diluted loss per share

Potential ordinary shares are not considered dilutive, thus diluted loss per share is the same as basic loss per share.

10. CASH AND CASH EQUIVALENTS

(a) Reconciliation to cash at the end of the year

tion to cash at the end of the year
Cash at bank and in hand Short-term deposit	30-Jun-11 30-Jun-10
	$ $ 3,224,882 175,272 30,000 650,000
	3,254,882 825,272

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(b) Interest rate risk exposure

The Group’s exposure to interest rate risk is discussed in note 4.

(c) Reconciliation of net cash flows from operating activities

Loss for the Period Adjustments for: Depreciation Foreign currency translation Shares based payment Non- Cash Consideration Shares (Vendor) Investment in Associate Exploration and evaluation Deferred tax liabilities Change in assets and liabilities (Increase) in trade receivables (Increase)/decrease in prepayments (Increase)/decrease in trade payables (Increase)/decrease in provisions Net cash from operating activities	30-Jun-11 30-Jun-10
	$ $ (2,481,251) 70,305 16,565 - 114,240 - 613,563 - 10,000,000 - (11,009,694) - (4,872,694) - 5,884,715 - (143,252) 3,068 - 13,320 37,021 (53,115) - (26,400)
	(1,840,787) 7,178

11. TRADE AND OTHER RECEIVABLES (CURRENT)

D OTHER RECEIVABLES (CURRENT)
Trade receivables Loan to Tunan Mining Limited* Deposits and prepayments Other costs receivable Taxes receivable	30-Jun-11 30-Jun-10
	$ $ 55,195 - - 186,300 30,011 - 168,402 - 92,332 16,388
	345,940 202,688

*The loan to Tunan Mining Limited was prior to Minbos acquiring 100% of the issued share capital. For more information refer to note 22.

• (a) Impaired receivables and receivables past due

None of the current receivables are impaired or past due but not impaired.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(b) Risk exposure

Information about the Group's exposure to credit risk, foreign exchange and interest rate risk is provided in note 4.

(c) Other costs receivable

Other costs receivables relate to employee advances at the subsidiary level. Of this amount receivable at reporting date, $146,955 relates to transactions with key management personnel as detailed in note 27c. None of the current receivables are impaired or past due but not impaired.

12. OTHER FINANCIAL ASSETS

Loan to Mongo Tando Limited	30-Jun-11 30-Jun-10
	$ $ 1,610,495 -
	1,610,495 -

The loans to Mongo Tando Limited (the “Associate”) are unsecured interest-free loans for the purpose of obtaining the required working capital for the establishment and ongoing operation of the Project in Angola. LR Group, the ultimate 50% holder in the Associate, along with Minbos Resources ultimate 50% holding in the Associate, each contribute in equal portions loans receivable.

The Group anticipates full repayment of these loans or alternatively part payment with the balance being converted into equal shareholder equity. None of the current receivables are impaired or past due but not impaired.

13. INVESTMENT IN ASSOCIATE

As part of the acquisition of Tunan Mining Limited, Minbos acquired a 50% interest in Mongo Tando Limited BVI, a company incorporated in the British Virgin Isles. By virtue of holding less than 50% of the voting rights the entity has been accounted for as an investment in an associate.

(a) Movements in carrying amounts

Carrying amount at the beginning of the financial year Share of fair value increment on purchase of Tunan Mining Share of loss in associate Carrying amount at the end of the period	30-Jun-11 30-Jun-10
	$ $ - - 11,244,679 - (234,985) -
	11,009,694 -

(b) Summarised financial information of associates

The Group’s share of the results of its principal associate and its aggregated assets and liabilities are as follows:

62 | P a g e

Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

30/06/2011	Ownership interest Assets Liabilities Revenues Profit/(Loss) % $ $ $ $
Mongo Tando Limited 30/06/2010 Mongo Tando Limited	50% 2,521,871 (3,309,454) - (234,985)
	2,521,871 (3,309,454) - (234,985)
	- - - - -
	- - - - -

(c) Contingent liabilities of the associate

There are no contingent liabilities of the associate for which the Company is severally liable.

14. PROPERTY, PLANT & EQUIPMENT

Year ended 30 June 2011 Opening net book amount Additions Depreciation charge Closing net book amount At 30 June 2011 Cost Accumulated depreciation Net book amount Year ended 30 June 2010 Opening net book amount Additions Depreciation charge Closing net book amount At 30 June 2010 Cost Accumulated depreciation Net book amount	Other Motor vehicles Computer equipment TOTAL Furniture & Fittings
	$ $ $ $ $ - - - - - 183,985 12,803 8,201 2,857 207,846 (17,402) (1,324) (218) (117) (19,061)
	166,583 11,479 7,983 2,740 188,785
	183,985 12,803 8,201 2,857 207,846 (17,402) (1,324) (218) (117) (19,061)
	166,583 11,479 7,983 2,740 188,785
	Other Motor vehicles Computer equipment Furniture & Fittings TOTAL
	$ $ $ $ $ - - - - - - - - - - - - - - -
	- - - - -
	- - - - - - - - - -
	- - - - -

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

15. EXPLORATION AND EVALUATION EXPENDITURE

==> picture [323 x 196] intentionally omitted <==

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

30-Jun-11 30-Jun-10
$ $
Carrying amount of exploration and
evaluation expenditure 6,168,652 -
Movement reconciliation
- -
Balance at the beginning of the year
-
Acquisition (i) 4,872,694
Exploration expenditure (ii) 1,295,958 -
Balance at the end of the year 6,168,652 -
Carrying amounts
- -
Balance at the beginning of the year
Balance at the end of the year 6,168,652 -
----- End of picture text -----

The exploration expenditure capitalised as a balance date is a result of the following:

• (i) On 13 October 2010 the Company acquired 100% ownership of Tunan Mining Limited BVI and its controlled entities. On acquisition the Company recognised $4,872,694 exploration expenditure attributable to the fair value attributed to tenements acquired as part of the business combination (inclusive of deferred tax liability uplift). Refer to note 22.

• (ii) During the period since acquisition of Tunan Mining Limited the Company capitalised $1,295,958 in exploration expenditure.

The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitations, or alternatives, sales of the area of interest.

16. TRADE AND OTHER PAYABLES

THER PAYABLES
Trade creditors General accruals Accrued directors fees	30-Jun-11 30-Jun-10
	$ $ 138,266 109,565 30,020 - 4,700 26,400
	172,986 135,965

Trade and other payables are non-interest bearing liabilities stated at cost and settled within 30 days. Information about the Group's exposure to foreign currency risk is provided in note 4.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

17. CONTRIBUTED EQUITY

(a) Issued and fully paid

Ordinary shares Performance shares ) Movement in share capital ORDINARY SHARES OpeningBalance 1 July2009	30-Jun-10 30-Jun-11
	$ No. $ No.
	11,344,500 68,250,000 962,300 13,250,000 7,000,000 35,000,000 - -
	18,344,500 103,250,000 962,300 13,250,000
	Date Quantity Issueprice $
Shares issued on Incorporation (a) Placement shares (b) Share raisingcosts	17/12/2009 7,000,000 0.01 70,000 6/03/2010 6,250,000 0.16 1,000,000 - - - (107,700)
Balance 30 June 2010	13,250,000 962,300
Initial Public Offering Share raising costs Shares issued to Vendor(c)	7/10/2010 40,000,000 0.20 8,000,000 - - - (617,800) 13/10/2010 15,000,000 0.20 3,000,000
Balance 30 June 2011	68,250,000 11,344,500
PERFORMANCE SHARES OpeningBalance 1 July2009	Date Quantity Issueprice $
Shares issued on Incorporation Placement shares Share raisingcosts	- - - - - - - - - - - -
Balance 30 June 2010	- -
Performance A Shares (a) Performance B Shares(b)	13/10/2010 25,000,000 0.20 5,000,000 13/10/2010 10,000,000 0.20 2,000,000
Balance 30 June 2011	35,000,000 7,000,000

(b) Movement in share capital

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proposed winding up of the company in proportion to the number and amount paid on the share hold.

Effective 1 July 1998 the Corporations legislation in place abolished the concepts of authorised capital and par share values. Accordingly, the Company does not have authorised capital or par value in respect of its issued shares.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

• The following escrow restrictions on ordinary shares held in the Company are as follows:

• (a) 2,185,000 and 6,650,000 Incorporation Shares are restricted until 18/10/2011 and 18/10/2012, respectively;

• (b) 42,000 Placement Shares are escrowed until 18/10/2012; and

• (c) 15,000,000 Vendor Shares are escrowed until 18/10/2012.

Performance shares

• (a) The Class A Performance Shares shall convert to Ordinary Shares upon the delineation of a JORC compliant resource at the Cabinda project at least 250mt of greater than 12.5% P2O5 within 18 months. Performance A Shares are escrowed until 18/10/2012.

• (b) The Class B Performance Shares shall convert to Ordinary Shares upon the delineation of a JORC compliant “indicated” resource in the DRC with greater than 25mt of greater than 12.5% P2O5 within 24 months. The Class B Performance shares are escrowed until 18/10/2012.

(c) Options on issue

Class Date of Expiry Exercise Price	Number Under Option
Class A Options 13/10/2013 $0.20 Class B Options 13/10/2013 $0.30 Class C Options 13/10/2013 $0.50 Broker Options 13/10/2013 $0.20 Employee Options 18/04/2014 $0.20 Consultancy Options 18/04/2014 $0.50	4,000,000 2,000,000 2,000,000 6,000,000 500,000 100,000
	14,600,000

Information relating to options issued as share-based payments is set out in note 21 and options issued to key management personnel are set out in note 26.

(d) Capital risk management

The Group's objectives when managing capital are to safeguard their ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Given the stage of the Company’s development there are no formal targets set for return on capital. There were no changes to the Company’s approach to capital management during the year. The Company is not subject to externally imposed capital requirements.

The net equity of the Company are equivalent to capital. Net capital is obtained through capital raisings on the Australian Securities Exchange.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

18. RESERVES

(a) Reserves

==> picture [346 x 345] intentionally omitted <==

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

30-Jun-11 30-Jun-10
$ $
Share-based payments reserve 613,563 -
Foreign currency translation reserve 114,240 -
727,803 -
30-Jun-11 30-Jun-10
$ $
Share-based payments reserve
Balance at the beginning of the year - -
Equity settled share-based payment
-
transactions 613,563
Balance at 30 June 2011 613,563 -
Foreign currency translation reserve
Balance at the beginning of the year - -
Effect of translation of foreign currency
operations to group presentation
currency 114,240 -
Balance at 30 June 2011 114,240 -
----- End of picture text -----

(b) Reconciliation of movement in reserves

(c) Nature and purpose of reserves

Share based payments reserve

The reserve represents the value of options issued under the compensation arrangement that the consolidated entity is required to include in the consolidated financial statements. No gain or loss is recognised in the profit or loss on the purchase, sale, issue or cancellation of the consolidated entity’s own equity instruments.

Translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations where their functional currency is different to the presentation currency of the reporting entity.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

19. ACCUMULATED LOSSES

(a) Accumulated losses

umulated losses At July 1 Net (loss) in current period At 30 June	30-Jun-11 30-Jun-10
	$ $ (2,551,556) (70,305)
	30-Jun-11 30-Jun-10
	$ $ (70,305) - (2,481,251) (70,305)
	(2,551,556) (70,305)

(b) Movement in accumulated losses

20. DIVIDENDS

There are no dividends paid or payable at year end.

21. SHARE-BASED PAYMENTS

(a) Fair value of options granted during the year

The fair value of the equity settled options granted under the options is estimated using Black-Scholes options pricing model taking into account the terms and conditions upon which the instruments were granted. The following table lists the inputs to the model used for the Period:

Fair	value of optionsgranted during theyear	value of optionsgranted during theyear	value of optionsgranted during theyear	ended 30 June	2011
Date Granted	30/07/2010	30/07/2010	30/07/2010	30/07/2010	1/10/2010	18/04/2011
Date Issued	13/10/2010	13/10/2010	13/10/2010	13/10/2010	18/04/2011	18/04/2011
Type of Option	Class A	Class B	Class C	Broker	Employees	Consultant
ESOP or Other	Pre-Listing	Pre-Listing	Pre-Listing	Pre-Listing	15% Facility	15% Facility
Number of options granted	4,000,000	2,000,000	2,000,000	6,000,000	500,000	100,000
Dividend yield	90%	90%	90%	90%	90%	90%
Share price at date of grant	N/A	N/A	N/A	N/A	N/A	N/A
Exercise price	$0.20	$0.30	$0.50	$0.20	$0.20	$0.50
Volatility	60%	60%	60%	60%	60%	60%
Risk free rate	5.00%	5.00%	5.00%	5.00%	5.01%	5.01%
Expiration period	3 years	3 years	3 years	3 years	3 years	3 years
Expiry date	13/10/2013	13/10/2013	13/10/2013	13/10/2013	18/04/2014	18/04/2014
Black & Scholes valuation	$0.088	$0.073	$0.055	$0.015	$0.375	$0.290

68 | P a g e

Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

Volatility was determined based on the volatility of share prices of similar companies listed on the ASX.

The Class A, B C and Brokers Options were issued just prior to the Company listing on the ASX however, was set equal to, or at a premium above, the initial public offering share price of $0.20 per share.

The Employee Options were not issued under an Employees Plan but instead under the Company’s 15% Facility. The share price was based on the underlying share price surrounding the date when the employees commenced their employment, this being 1 October 2010. The issue price was set equal to the initial public offering share price of $0.20 per share.

The Consultancy Options were not issued under an Employees Plan but instead under the Company’s 15% Facility. The share price was based on the weighted average share price of the last five days trade prior to the issue date of the options, plus a 5% premium.

(b) Recognised share-based payment expense

The total expense recognised for Director, Employee and Consultant are as follows:

Directors & Management Options	Broker Options	Employee Options	Consultant Options	Total 30/06/2011
Class A Class B Class C
351,045 $ 104,449 $ 39,410 $ 90,000 $ 25,759 $ 2,899 $ 613,563 $

The valuation of the Broker options have been determined based upon the valuation of the services provided. As part of the process management has made an estimate of the fair value of these services provided based upon known commercial rates. Broker options form a part of share issue costs and therefore have not been expensed but have been recognised in equity as equity raising costs.

(c) Summary of options granted during the year

Table 1.1 illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options issued.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

Table 1.1 - Summary of options granted during the year.

Class Issue Date Date of Expiry Exercise Price	Balance at start of the year Granted during the year Exercised during theyear Forfeited during theyear Balance at end of the year Vested and exercisable at the end of theyear Vested but not yet exercisable at end of the year
As at 30 June 2011 Class A Options 13/10/2010 13/10/2013 $0.20 Class B Options 13/10/2010 13/10/2013 $0.30 Class C Options 13/10/2010 13/10/2013 $0.50 Broker Options 13/10/2010 13/10/2013 $0.20 Employee Options 18/04/2011 18/04/2014 $0.20 Consultancy Options 18/04/2011 18/04/2014 $0.50 Weighted average exercise price	- 4,000,000 - - 4,000,000 - 4,000,000 - 2,000,000 - - 2,000,000 - - - 2,000,000 - - 2,000,000 - - - 6,000,000 - - 6,000,000 - 6,000,000 - 500,000 - - 500,000 - - - 100,000 - - 100,000 - -
	- 14,600,000 - - 14,600,000 - 10,000,000
	- $0.26 - - $0.26

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

22. BUSINESS COMBINATION

On 13 October 2010, in accordance with the Notice of Meeting dated 7 May 2010, the Company completed the purchase of 100% of Tunan Mining Ltd BVI and its controlled entities with the issue of 15,000,000 Ordinary Shares, 25,000,000 Class Performance A Shares, and 10,000,000 Class B Performance Shares.

At 30 June 2011, the Tunan Mining Group acquisition has been accounted for provisionally, Minbos Resources Limited management are still in the process of obtaining independent valuations for the assets acquired and liabilities assumed.

Potential tax implications will not be assessed until such time as fair values have been finalised.

Details of the purchase consideration, the net assets acquired and goodwill are as follows:

Purchase consideration comprises: Equity instruments issued Contingent consideration Total purchase consideration*	$ 3,000,000 7,000,000
	10,000,000

The assets and liabilities recognised as a result of the acquisition are as follows:

Cash and cash equivalents Exploration and evaluation expenditure Investment in associate Trade and other receivables Property, plant and equiment Trade and other payables Deferred tax liabilities Net identifiable assets acquired	Fair Value $ 62,811 4,872,694 11,244,679 323,999 6,771 (626,239) (5,884,715)
	10,000,000

** The equity portion of the purchase consideration comprises 15 million ordinary shares in Minbos Resources Limited at $0.20 per share.

*** The equity portion of the contingent consideration comprises 35 million performance shares in Minbos Resources Limited at $0.20 per share. The terms of the performance shares are discussed in Note 17(b).

As disclosed above, certain fair value amounts have been provisionally determined at 30 June 2011.

The acquired business contributed a net loss of $234,985 to the group for the period 13 October 2010 to 30 June 2011.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

23. PARENT ENTITY

Current Assets Non-Current Assets Total Assets Current Liabilities Total Liabilities Net Assets Contributed equity Reserves Accumulated losses Total Equity Profit / (loss) for the year Other comprehensive income / (loss) for the year Total comprehensive income / (loss) for the year Details of any guarantees entered into by the parent entity in relation to the debts of its subsidiaries Details of any contingent liabilities of the parent entity.

30-Jun-11 30-Jun-10 $ $ 3,318,356 1,027,960 14,310,277 - 17,628,633 1,027,960 168,718 135,965 168,718 135,965 17,459,915 891,995 18,344,500 962,300 613,563 - (1,498,148) (70,305) 17,459,915 891,995 (1,427,843) (70,305) -- (1,427,843) (70,305) - - - -

Parent Entity Commitments - Service Agreements

In terms of service agreements, the Company has a commitment to the following expenditure:

Within one year After one year but not more than five years After more than five years Total minimum commitment	30-Jun-11 30-Jun-10 $ $ $ 130,574 - $ 62,137 - - - $ 192,711 -

(a) Company Secretary and Financial Services Agreement

The Company entered into a service agreement (dated 14 February 2011) with Blue Horse Corporate Pty Ltd (Blue Horse) for the provision of company secretarial, accounting, financial reporting services, and associated business services. The amount of $8,750 (plus GST) is payable in arrears per month to Blue Horse plus reimbursement of all reasonable expenses incurred. The agreement is subject to a minimum 24 month term.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

The Company is required to take out and maintain public liability, professional indemnity and workers compensation insurance for the company secretary provided by Blue Horse.

(b) Corporate Development Manager Services Agreement

The Company entered into a service agreement (dated 3 June 2011) with Baga River Pty Ltd for the provision of corporate development services. The amount of $5,000 (plus GST) is payable in arrears per month to Baga River Pty Ltd plus reimbursement of all reasonable expenses incurred. The agreement is subject to a minimum six month term.

24. COMMITMENTS

There are the following commitments contracted for at the reporting date but not recognised as liabilities:

Within one year After one year but not more than five years After more than five years Total minimum commitment	30-Jun-11 30-Jun-10
	$ $ 471,916 - 263,756 - - -
	735,672 -

The above commitments relate to the minimum exploration spend on the Cabinda project. There is no minimum commitment in relation to the DRC project.

25. CONTINGENCIES

There have been no material changes in contingent liabilities or contingent assets since the last annual reporting date. There are no commitments as at 30 June 2011.

26. SUBSEQUENT EVENTS

There have not been any significant events that have arisen since 30 June 2011 and up to the date of this report that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

73 | P a g e

Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

27. KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Key management personnel compensation

The key management personnel compensation is as follows:

Short-term employee benefits Post-employment benefits Equity compensation benefits	30-Jun-11 30-Jun-10
	$ $
	513,708 24000 - - 825,235 -
	1,338,943 24,000

Information regarding individual Directors and executive compensation and some equity instruments disclosures as permitted by Corporations Regulation 2M.3.03 is provided in the remuneration report section of the Directors’ report.

(b) Equity Holdings

(i) Option holdings of Key Management Personnel

The option holdings of key management personnel as at reporting date is detailed in the table below.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

Option holding of Key Management Personnel

30/06/2011	30/06/2011		Balance at 1/07/2010 Granted as compensation Exercised Other changes(a) Balance at 30/06/2011 Vested and exercisable Vested but not exercisable Unvested - 3,000,000 - - 3,000,000 - 1,000,000 2,000,000 - 500,000 - - 500,000 - 500,000 - - 500,000 - - 500,000 - 500,000 - - 500,000 - 650,000 1,150,000 - 1,150,000 - - 500,000 - - 500,000 - 500,000 - - 5,000,000 - 650,000 5,650,000 - 3,650,000 2,000,000 - 3,000,000 - - 3,000,000 - 1,000,000 2,000,000 - 300,000 - - 300,000 - - 300,000 - 8,300,000 - 650,000 8,950,000 - 4,650,000 4,300,000 Balance at 1/07/2009 Granted as compensation Exercised Other changes Balance at 30/06/2010 Vested and exercisable Vested but not exercisable Unvested
Directors Peter Richards David Reeves John Ciganek Faldi Ismail Domingoes Catulichi Robert McCrae Tom Evers Key Management Personnel 30/06/2010 Directors Peter Richards John Ciganek Faldi Ismail Nathan Taylor Athan Lekkas
	Directors Peter Richards John Ciganek Faldi Ismail Nathan Taylor Athan Lekkas		- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
			- - - - - - - -

(a) On 13 October 2010, Mr Ismail received 650,000 Broker Options issued at $0.20 each, exercisable on or before 13 October 2013.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(ii) Share Holdings

30/06/2011	Balance at 1/07/2010 Granted as remuneration On exercise of options Off Market Transfer Net change other Balance at 30/06/2011
Directors Peter Richards - - - - 435,000 435,000 David Reeves - - - - 12,138,667 12,138,667 John Ciganek - - - - 250,000 250,000 Faldi Ismail - - - - 2,100,000 2,100,000 Domingoes Catulichi - - - - 17,640,000 17,640,000 - - - - 32,563,667 32,563,667 Robert McCrae - - - - - - Tom Evers - - - - - - - - - - 32,563,667 32,563,667 Key Management Personnel 30/06/2010 Balance at 1/07/2009 Granted as remuneration On exercise of options Off Market Transfer Net change other Balance at 30/06/2010	- - - - 435,000 435,000 - - - - 12,138,667 12,138,667 - - - - 250,000 250,000 - - - - 2,100,000 2,100,000 - - - - 17,640,000 17,640,000
Robert McCrae Tom Evers 30/06/2010
	- - - - 32,563,667 32,563,667
	Balance at 1/07/2009 Granted as remuneration On exercise of options Off Market Transfer Net change other Balance at 30/06/2010
Directors Peter Richards John Ciganek Faldi Ismail Nathan Taylor Athan Lekkas	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
	- - - - - -

(c) Loans to key management personnel

Details of advances made to a director and key management person of the Company are set out below:

(i) Aggregates for key management personnel

	Balance at	Interest paid		Balance at	Number in the
	the start of	and payable	Interest not	the end of	group at end
	theyear	for theyear	charged	theyear	of theyear
30-Jun-11	-	-	2,698	146,955	2
30-Jun-10	-	-	-	-	-

Advances payable by the director and key management personnel at the end of the current year are noninterest bearing and will be offset against future director fees and salaries.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(ii) Individuals with loans above $100,000 during the financial year

					Highest
	Balance at	Interest paid		Balance at	indebtedness
	the start of	and payable	Interest not	the end of	during the
Name	theyear	for theyear	charged	theyear	year
Mr McCrae	-	-	2,250	135,000	180,000

In 2011, there were no loans to individuals that exceeded $100,000 at any time.

The amounts shown for interest not charged in the tables above represent the difference paid and payable for the year and the amount of interest that would have been charged on an arm’s-length basis.

No write-downs or allowances from doubtful receivables have been recognised in relation to any loans made to key management personnel.

There were no other loans made to any other key management personnel during the year ended 30 June 2011 (2010: nil).

(d) Other transactions with key management personnel

There were no other transactions with key management personnel during the year ended 30 June 2011 (2010: nil).

28. RELATED PARTIES

(a) Ultimate parent

The ultimate Australian parent entity within the group is Minbos Resources Limited. Minbos is limited by shares and is incorporated and domiciled in Australia. During the financial year the Company acquired 100% of Tunan Mining Limited and its subsidiaries. Through Tunan Mining Limited, Minbos holds the Cabinda Phosphate Project and the DRC Phosphate Project licenses.

(b) Subsidiary companies

Interests in subsidiaries are set out in note 29.

(c) Key management personnel

Details of transactions with key management personnel are disclosed in Note 25.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

(d) Loans to Associate

Beginning of the year Loans advanced Loan repayments made Interest charged Interest paid End of the year	30-Jun-11 30-Jun-10
	$ $ - - 1,610,495 - -- -- --
	1,610,495 -

There is no allowance account for impaired receivables in relation to any outstanding balances, and no expense has been recognised in respect of impaired receivables due from related parties.

(e) Other related party transactions

There are no transactions with related parties other than what is disclosed above.

29. SUBSIDIARIES AND TRANSACTIONS WITH NON-CONTROLLING INTERESTS

Minbos Resources Limited owns the following subsidiaries:

100% of Tunan Mining Limited, a company incorporated in the British Virgin Islands. Through Tunan Mining Limited, the Company has the following ownership:

			Ownership	Ownership
		Class of	interest	interest
Name of entity	Country of incorporation	shares	30/06/2011	30/06/2010
Parent entity
Minbos Resources Ltd	Australia	Ordinary and
		Preference
Subsidiary (direct)
Tunan Mining Limited	Bristish Virgin Isles (BVI)	Ordinary	100%	-
Subsidiaries (indirect– direct
subsidiaries of Tunan Mining Limited)
SOFOSA (i)	Angola	Ordinary	100%	-
Mongo Tando Limited (i)	Bristish Virgin Isles (BVI)	Ordinary	50%	-
Mongo Tando Limitada (i)	Angola	Ordinary	50%	-
Tunan Mining Pty Ltd	South Africa	Ordinary	100%	-
RDC Phosphate SPRL DRC	Democratic Republic of Congo	Ordinary	100%	-
Agrim SPRL DRC	Democratic Republic of Congo	Ordinary	100%	-

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Notes to the Consolidated Financial Statements

• (i) On 29 October 2009, Sociedade de Fosfatos de Angola (“SOFOSA”) together with Terra Fertil Limited (an affiliate of Mongo Tando Holdings (the “Associate”) which holds a 50% holding in Mongo Tando Limited “MTL”), incorporated Mongo Tando Limitada (“Angolan Company”). This Angolan Company currently holds the license (“Cabinda Phosphate Project”) in Cabinda Angola.

On the 9 February 2011, SOFOSA, Terra Fertil, MTL, Mongo Tando Holdings and Tunan Mining Limited entered into a Shareholders Agreement whereby SOFOSA and Terra Fertil restructured the ownership so that the Angolan Company (and holder of the concession) became a whollyowned subsidiary of Mongo Tando Limited, whereby Tunan Mining Limited (BVI) and its Associate each hold a 50% interest.

However, since Tunan Mining Limited holds 49.99% of the "voting rights" in Mongo Tando Limited (BVI), the ownership interest is accounted for as an "Investment in an Associate" in the consolidated annual report. Refer to note 13.

30. AUDITOR’S REMUNERATION

Amounts received or due and receivable by BDO (WA) Pty Ltd for: (i) An audit or review of the financial report of the entity. (ii) Other services in relation to the entity and any other entity in the consolidated group – Independent Accountant's Report (iii) Other services in relation to the entity and any other entity in the consolidated group – Business Combination including fair value attribution Total auditor remuneration Amounts received or due and receivable by related network practices of BDO (WA) Pty Ltd (i) An audit or review of the financial report of the entity. Total auditor remuneration Amounts received or due and receivable by non BDO (WA) Pty Ltd audit firms for: (i) Taxation services Total auditor remuneration	30-Jun-11 30-Jun-10
	$ $ 46,349 5,000 20,249 12,109 2,000 -
	68,598 17,109
	15,735 -
	15,735 -
	853 -
	853 -

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Directors’ Declaration

MINBOS RESOURCES LIMITED AND ITS CONTROLLED ENTITIES

The Directors of the company declare that:

• 1 The financial statements, comprising the consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001; and

• (a) comply with Accounting Standards, Corporations Regulations 2001 and other professional reporting requirements; and

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

• 2 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.

• 3 The consolidated entity has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards.

• 4 The Directors have been given the declarations by the chief executive officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the Board of Directors and is signed on behalf of the Directors by:

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Peter Richards Executive Chairman Perth Thursday, 29 September 2011

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Tel: +8 6382 4600 38 Station Street Fax: +8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MINBOS RESOURCES LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Minbos Resources Limited, which comprises the consolidated statement of financial position as at 30 June 2011, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, 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 about 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 Minbos Resources Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Opinion

In our opinion:

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

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

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

• (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 2(c) in the financial report which indicates that the consolidated entity incurred a net loss of $2,481,251 during the year ended 30 June 2011. This condition, along with other matters as set forth in Note 2(c), indicates the existence of a material uncertainty which may cast significant doubt about the consolidated entity’s ability to continue as a going concern and as such realise its assets and liabilities in the normal course of business and at the amounts stated in the financial report.

Report on the Remuneration Report

We have audited the Remuneration Report included in 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 Minbos Resources Limited for the year ended 30 June 2011 complies with section 300A of the Corporations Act 2001 .

BDO Audit (WA) Pty Ltd

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Phillip Murdoch Director

Perth, Western Australia Dated this 29[th] day of September 2011

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Shareholder Information

The following additional information was applicable as at 22 September 2011.

There are a total of 68,250,000 ordinary fully paid shares on issue, 48,743,000 of which are listed on the ASX (of which 2,185,000 shares are subject to voluntary escrow), with the balance of 19,507,000 being restricted securities.

The number of holders of fully paid ordinary shares is 514.

SUBSTANTIAL SHAREHOLDERS

As at report date, there are no shareholders recorded in the Register as Substantial Shareholders.

HSBC CUSTODY NOMINEES	7,763,373	11.39%
CHIKAPA COMERCIO AND INDUSTRIA	5,390,000	7.90%
WILGUS INVESTMENTS PTY LTD	4,000,000	5.86%
JCJ INVESTMENTS SA	3,655,000	5.36%

TOP 20 SHAREHOLDERS

The name of the Top 20 shareholders and the number to which they are entitled are:

HSBC CUSTODY NOMINEES	7,763,373	11.39%
CHIKAPA COMERCIO AND INDUSTRIA	5,390,000	7.90%
WILGUS INVESTMENTS PTY LTD	4,000,000	5.86%
JCJ INVESTMENTS SA	3,655,000	5.36%
ROMFAL SIFAT PTY LTD	2,100,000	3.08%
BRIJOHN NOMINEES PTY LTD	1,977,000	2.90%
MR ATHANASIOS LEKKAS	1,662,500	2.44%
MR GARY PADMORE	1,440,000	2.11%
MR ARIF ELBERT MATTHEE &	1,350,000	1.98%
MAGNUM CAPITAL PTY LTD	1,087,000	1.59%
JP MORGAN NOMINEES AUSTRALIA	1,043,106	1.53%
MR MICHAEL F & L R BLACK	1,000,000	1.47%
TT NICHOLLS PTY LTD	1,000,000	1.47%
MR ROSS WILLIAM ANDERSON	990,642	1.45%
ABN AMRO CLEARING SYDNEY	921,527	1.35%
CITICORP NOMINEES PTY LIMITED	826,206	1.21%
PHEAKES PTY LTD	815,860	1.20%
MR MARK WILLIAM TOPLEY	700,000	1.03%
WHOLESALERS(MORLEY)PTY LTD	550,000	0.81%
MR DAMIAN PETER & A J BLACK	500,000	0.73%
38,772,214 56.86%

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Minbos Resources Limited – Financial Report For the year ended 30 June 2011

Shareholder Information

DISTRIBUTION OF SHARE HOLDERS

Distribution of HoldersNumber of FullyPaid OrdinaryShareholders	Distribution of HoldersNumber of FullyPaid OrdinaryShareholders
1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and above	1,200 4 203,014 64 592,463 70 10,639,877 274 56,813,446 102
	68,250,000 514

HOLDERS OF NON-MARKETABLE PARCELS

There are 12 shareholders who hold less than a marketable parcel of shares.

The number of fully paid ordinary shareholdings held in less than marketable parcels is 8,392.

VOTING RIGHTS

Subject to any rights or restrictions for the time being attached to any class or classes (at present there are none) at general meetings of shareholders or classes of shareholders:

• (a) each shareholder entitled to vote, may vote in person or by proxy, attorney or representative;

• (b) on a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a shareholder has one vote; and

• (c) on a poll, every person present who is a shareholder or a proxy, attorney or representative of a shareholder shall, in respect of each fully paid share held, or in respect of which he/she has appointed a proxy, attorney or representative, have one vote for the share, but in respect of partly paid shares shall have a fraction of a vote equivalent to the proportion which the amount paid up bears to the total issue price for the share.

SHARE BUY-BACKS

There is no current on-market buy-back scheme.

OTHER INFORMATION

Minbos Resources Limited, incorporated and domiciled in Australia, is a public listed Company limited by Shares.

The Register of securities is held at the following address:

Security Transfers Registrar 770 Canning Highway Applecross WA 6153

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