Nova Minerals Ltd - Annual Report 2011

Quantum Resources Limited

ABN 84 006 690 348

ANNUAL REPORT 2011

Quantum Resources Limited Chairman’s Report

Dear Shareholder

Quantum Resources Limited (“Quantum” or “the Company”) is an Australian base metal, uranium and gold explorer with a suite of projects whose tenements cover approximately 1,000 square kilometres in the Northern Territory and Western Australia. During the year, several work programs for tenements in both the Northern Territory and Western Australia were completed with additional field programs currently underway.

Uranium Exploration, Gardner Range, WA. The Gardner Range project is prospective for uranium, base metals and gold. The Mt Mansbridge uranium deposit, which was explored by BHP in the 1980s, clearly demonstrates the uranium prospectivity of the area. BHP concluded the uranium mineralisation to be of the unconformity style associated with the contact between the Gardiner Sandstone and the Killi Killi Beds.
Uranium Exploration, Ware Range, NT. The Ware Range project contains the Gardner Sandstone, which unconformably overlies Archaean rocks and is considered prospective for unconformity-style uranium mineralisation. The tenement package was acquired as a result of geological similarities with the Gardner Range unconformity uranium concept. Potential also exists for calcrete-hosted uranium mineralisation in a drainage system that overlies the unconformity.

Regional Exploration

The Company holds tenements in the Gardner Range and Ware Range, approximately 100 to 200 kilometres to the southeast and east of Hall’s Creek with potential for base metals, uranium and gold. The Gardner Range project consists of 3 granted tenements, E80-3410, E80-3411 and E80-3412. Exploration for uranium by BHP Exploration in the 1980’s discovered uranium mineralisation at Mt Mansbridge. Uranium results of up to 980 parts per million (“ppm”) were found to be associated with the unconformity between the Gardner Sandstone and underlying Killi Killi Beds.

The Ware Range project consists of two granted exploration licences - EL25010, and EL27745. At Ware Range, the Gardner Sandstone unconformably overlies the Archaean Helena Creek Beds and is considered prospective for both unconformity style and calcrete style uranium mineralisation.

Gardner Range (Quantum 100%)

During September to November 2010, three periods of exploration activity were undertaken on the Gardner Range Project, south east of Halls Creek, Western Australia. This work represented the first phase of on-ground exploration conducted by the Company and comprised RadonX surveys, soil geochemical sampling, some rock chip sampling, and geological mapping. Sample results, plus a review of geophysical data and aerial photo-geological mapping work, has highlighted a number of areas warranting follow-up for uranium, rare earth mineralisation, with some potential for gold.

Exploration in 2011 has built on the 2010 results and includes a second phase of mobile metal ion and conventional soil geochemical sampling, rock chip sampling, hand held spectrometer surveying and a greater emphasis on geological mapping in order to define hosting stratigraphy and identify potential drilling targets

Work program meetings with the Kimberley Land Council and heritage clearance applications have been completed and field work commenced in August. Drill testing may take place in late 2011 or early 2012 subject to turnaround of results, relevant approvals, ground access and drill rig availability.

Ware Range (Quantum 100%)

The approvals process for obtaining an Aboriginal Areas Protection Authority (AAPA) certificate has been successfully completed with the certificate granted in June 2011.

Exploration in previous years mapped calcrete in a drainage system that overlies the unconformity between the Gardner Sandstone and the Helena Creek Beds. Calcrete represents an attractive uranium target with well known examples in Western Australia (eg Yeelirrie, Lake Maitland) and Namibia (Langer-Heindrich) highlighting the potential for this style of mineralisation.

The Company has now received all the approvals needed to begin drilling to investigate the potential of the calcrete channel to host uranium mineralisation. Field visits to plan the drill site location and drilling rig access have been delayed due to a late and intense wet season.

To simplify the logistics the current plan is to drill both Ware Range and Gardner at the same time given their proximity

Quantum Resources Limited Chairman’s Report

to each other. This work will be undertaken once ground access is confirmed and a suitable drill rig is found. The drilling will be undertaken in parallel with a program of mapping and soil geochemistry sampling targeting hard rock mineralisation.

Telfer Project (Quantum 100%)

The Company holds a single Exploration Licence Application E45/2401 located 6km to the northeast of the Newcrest Mining Ltd Telfer gold mine. The Telfer gold mine is host to one of Australia's largest gold deposits with a reported ore reserve of 18.0 million ounces of gold and 0.685 million tonnes of copper within a mineral resource of approximately 27 million ounces gold. The O’Callaghan’s ore body, 9km south west of Telfer mine, is also owned by Newcrest and hosts significant resources of tungsten, copper, lead and zinc.

Previous drilling within the tenement identified gold mineralisation at the Chicken Ranch Prospect, which include results of 6m @ 15.8g/t gold. Evaluation of the historical drilling data has highlighted the fact that the spacing and depth extent of the holes sampled only the shallow, possibly supergene enriched, saprolite.

A Heritage Agreement is required prior to the licence being granted and the Company has been advised by the Western Desert Lands Aboriginal Corporation (WDLAC) that the application is currently being assessed. The Company presented a proposed program of work to the WDLAC in early August 2011. Once the agreement is finalised the licence application can proceed to grant under the Mining Act.

Base Metal & Gold Exploration

Whiteheads Project (Quantum 80%)

The Company has reviewed all tenements within the Whiteheads Project and assessed that no further work is warranted in the anomalous areas; subsequently the Company withdrew from the Whiteheads project.

Farm-Out Joint Ventures

Officer Hill Joint Venture

Newmont Australia have joint ventured into Exploration Licence EL23150, which is located 34 kilometres southwest of The Callie gold mine, also owned by Newmont. Previous explorers located sporadic mineralization from drilling such as 4 metres @ 4.64g/t, numerous short intervals of 1-4g/t, and several wide intercepts of 0.1-1g/t. The prospect is considered to have excellent potential to host steeply plunging shoots such as those at the Tanami Gold Mine. An apparent fold closure to the east offers the possibility of discovery of Callie-style mineralization at depth. The licence is located on Aboriginal Land is currently under application.

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JI GUTNICK Chairman and Managing Director

The technical information in this report has been reviewed and approved by Dr D S Tyrwhitt who is a Fellow of the Australasian Institute of Mining and Metallurgy and has 50 years experience in the industry and has more than 5 years experience which is relevant to the style of mineralisation being reported upon to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr Tyrwhitt consents to the inclusion in the report of the matters based on the information in the form and context to which it appears.

Quantum Resources Limited Directors’ Report

The Directors of Quantum Resources Limited present their report for the year ended 30 June 2011.

1. Directors

The Directors of the Company in office since 1 July 2010 and up to the date of this Report are:

Mr Joseph Gutnick FAusIMM FAIM MAICD Chairman and Managing Director

Mr Gutnick is a leading mining industry entrepreneur. He has been a Director of the Company since 1987. He is currently President and Chief Executive Officer of numerous listed public companies in both Australia and North America including Legend International Holdings, Inc., Golden River Resources Corporation, Northern Capital Resources Corp and Great Central Resources Corp, Executive Chairman, Managing Director and Chief Executive Officer of North Australian Diamonds Limited and Top End Uranium Ltd, and Executive Chairman and President of Aurum, Inc. and Electrum International, Inc. Mr Gutnick has been responsible for overseeing the discovery of the Plutonic gold deposit, and the discovery, development and operation of the world class Bronzewing and Jundee gold mines in Australia. He was awarded the Diggers award at the 1997 Diggers and Dealers Industry Awards and is a former Director of the World Gold Council. He was a Director of Astro Diamond Mines N.L. from October 1988 to October 2007, Hawthorn Resources Limited from July 1987 to November 2007, Acadian Mining Corporation from October 2009 to February 2010 and Royal Roads Corporation from November 2009 to February 2010. Age 59

Dr David Tyrwhitt PhD(Geology) BSc(Hons) FSEG(USA) FAusIMM CPGeo Non-Executive Director

Dr Tyrwhitt has been a Director of the Company since 1999. He has more than 50 years experience in the mining industry. He is currently a Director of Legend International Holdings, Inc., Hawthorn Resources Limited, Golden River Resources Corporation, Northern Capital Resources Corp and Bassari Resources Ltd. He worked for over 20 years with Newmont Mining Corporation in Australia, South East Asia and the United States. During this time, he was responsible for the discovery of the Telfer Gold Mine in Western Australia. He was Chief Executive of Newmont Australia Limited between 1984 and 1988 and Chief Executive Officer of Ashton Mining Limited between 1988 and 1991 and a Director of Astro Diamond Mines N.L. from November 1996 to May 2008. He established his own consultancy in 1991 and worked with Normandy Mining Limited on a number of mining projects in South East Asia. Age 73

Craig Michael

Executive Director – appointed 5 October 2010

Mr Michael has over 10 years experience as a geology professional in the mining and resources industry. He is currently a Director of North Australian Diamonds Ltd and Top End Uranium Ltd, Director and Chief Executive Officer of Aurum, Inc. and Electrum International, Inc. and Executive General Manager of Legend International Holdings, Inc. His previous work was with Oxiana Ltd, an international mining company with operations in South East Asia and Australia. Mr Michael was based in Laos in senior management positions both as a Mine Geologist and Resource Geologist at the Sepon Copper Gold Project. Prior to his time with Oxiana, he was a Mine Geologist at Sons of Gwalia's Carosue Dam Gold Project in Western Australia where he also conducted his first class honours thesis on their flagship Karari gold deposit. Age 34

Directors who ceased to hold office

Mordechai Gutnick – resigned 5 October 2010

Mr Mordechai Gutnick is a businessman and long-term investor in the mining industry. He is also a Director of Golden River Resources Corporation. He was a Director of Astro Diamond Mines N.L. from May 2003 to October 2007 and of Hawthorn Resources Limited from May 2003 to November 2007.

2. Principal Activities and Review and Results of Activities

The principal activity of the Company during the financial year was mineral exploration. There has been no significant change in the nature of these activities during the financial year.

Quantum Resources Limited Directors’ Report

Objectives

The Company’s objective is to increase shareholder wealth through successful exploration activities whilst providing a safe workplace and ensuring best practice in relation to its environmental obligations.

The key opportunity for the Company during the year has been the advancement of its exploration projects; however this was hampered by the difficulty in sourcing consultants, drilling rigs, field supplies and field infrastructure allowing it to commence a field program.

Statement of Comprehensive Income

As an exploration company, Quantum does not have an ongoing source of revenue. Its revenue stream is normally from ad-hoc tenement disposals, sale of fixed assets and interest received on cash in bank.

In the current year, revenue has increased from $2,871 in 2010 to $10,000 in 2011. During 2011, the Company sold its interest in several exploration licences.

Costs and expenses have decreased from $271,473 in 2010 to $171,224 in 2011. Exploration expenditure provided for or written off amounted to $46,937 in 2011 compared to $168,697 in 2010 as a result of the write-down of non-prospective tenement interests and expenditure incurred. The majority of the 2010 writedown was due to the withdrawal of exploration and prospective tenements under a joint venture farm-in agreement. Administration expenses increased from $105,723 in 2010 compared to $125,291 in 2011. Net finance income was $2,947 in 2010 compared to $1,004 in 2011 as a result of a lower cash balance during the 2011 year. As a result, the Company made a net loss after tax of $268,602 in 2010 compared to a net loss after tax of $161,224 in 2011.

Statement of Financial Position

At 30 June 2011, the Company had cash at bank of $372,684 (2010: $1,012,350). During the year, the Company reduced its receivables and other current assets from $12,894 to $689 and capitalized exploration expenditure increased by $337,820 to $1,283,634. At 30 June 2011, the Company had total liabilities of $239,277.

As a result, the Company had, at 30 June 2011, working capital of $154,152 (2010: $638,392) and net assets of $1,432,313 (2010: $1,593,429).

Cash Flow

During the year, the Company paid $133,912 (2010: $125,132) for operating activities and $505,862 (2010: $806,441) for investing activities with the key components being payments for exploration expenditure of $515,824 (2010: $537,993), offset by proceeds from the sale of exploration tenement licences of $10,000 (2010: $nil). Net cash from financing activities of $108 (2010: payment of $101,078) was the result of funds received from the exercise of options.

3. Significant Change in State of Affairs

The Directors are of the opinion that other than that disclosed in the Principal Activities section of the Directors’ Report, there have not been any significant changes in the state of affairs of the Company during the year under review.

4. Dividends

The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of dividend since the end of the previous financial year and up to the date of this Annual Report.

Quantum Resources Limited Directors’ Report

5. Events After The End Of The Financial Year

There has not arisen in the interval between the end of the financial year and the date of this Report any item, transaction or event of a material and unusual nature which in the opinion of the Directors of the Company, has significantly affected or may significantly affect:

the operations of the Company
the results of those operations, or
the state of affairs of the Company

in financial years subsequent to this financial year.

6. Future Developments and Results

There are no likely developments of which the Directors are aware which could be expected to significantly affect the results of the Company’s operations in subsequent financial years not otherwise disclosed in this Annual Report.

7. Options

At the date of this Report, the Company had on issue the following options over fully paid ordinary shares.

(i) Listed Number Maturity Date Issue Price Exercise Price Exercise Period 32,875,597 30 April 2012 A$0.02 A$0.09275 Anytime after 1 January 2003

During the year and up to the date of this Report, no options have been issued and no options have been exercised. Optionholders have no rights to participate in an issue of shares unless they convert their options. The names of all the persons who currently hold options are entered on a register maintained for the Company, by Link Market Services Limited. In accordance with the Corporations Act 2001, this Register may be inspected free of charge.

Number Maturity Date Issue Price Exercise Price Exercise Period 68,378,151 30 November 2012 A$0.02 A$0.04275 Anytime after 1 July 2003

(ii) Unlisted Number Maturity Date Issue Price Exercise Price Exercise Period 7,250,000 19 October 2011 Nil A$0.06275 Under terms and conditions of the employee share option plan

During the year and up to the date of this Report, no options have lapsed, no options have been issued and no options have been exercised. Optionholders have no rights to participate in an issue of shares unless they convert their options. The names of all the persons who currently hold options are entered on a register maintained for the Company, by the Company. In accordance with the Corporations Act 2001, this Register may be inspected free of charge.

As a result of the rights issue in 2009, the exercise price of options was recast in accordance with ASX Listing Rules.

Quantum Resources Limited Directors’ Report

There were no options granted to Directors and Officers of the Company during the year and up to the date of this report.

(iii) Expired

Number

Number Maturity Date Issue Price Exercise Price Exercise Period - 31 October 2010 - - -

During the year and up to the date of this Report, no options have been issued, 1,162 options have been exercised and 43,747,511 options have expired.

8. Directors’ Interests in Shares and Options

The relevant interest of each Director in the number of fully paid ordinary shares and options over fully paid ordinary shares of the Company disclosed by that Director to the Australian Securities Exchange as at the date of this Report is:

Director		Relevant	Interest
	Ordinary Shares	Employee	Options	Options
		Options	30/04/2012	30/11/2012
J I Gutnick	-	-	-	-
D S Tyrwhitt	-	-	-	-
C A Michael	-	-	-	-

9. Meetings of Directors

The number of meetings of Directors held including meetings of Committees of the Board during the financial year including their attendance was as follows:

	BOARD	BOARD
	ELIGIBLE TO ATTEND	ATTENDED
J I Gutnick	2	2
D S Tyrwhitt	2	1
C A Michael	1	1
M Z Gutnick	1	1

All matters that would usually fall to a Remuneration and Audit Committee are to be handled by the full Board, due to the size and composition of the Board.

10. Company Secretary

Mr Peter Lee is the Company Secretary of the Company. Mr Lee is a Member of the Institute of Chartered Accountants in Australia, a Fellow of Chartered Secretaries Australia Ltd., a Member of the Australian Institute of Company Directors and holds a Bachelor of Business (Accounting) from Royal Melbourne Institute of Technology. He has over 30 years commercial experience and is currently Chief Financial Officer and Company Secretary of several listed public companies in Australia and a Director, Chief Financial Officer and Secretary of a US Corporation listed on the over the counter market in the USA, Chief Financial Officer and Secretary of a further several US Corporations listed on the over the counter market in the USA and a Director of a company listed on Toronto Stock Exchange. Age 54

11. Indemnification of Directors, Officers and Auditors

The Company has entered into an Indemnity Deed with each of the Directors and certain former Directors which will indemnify them against liability incurred to a third party (not being the Company or any related company) where the liability does not arise out of conduct including a breach of good faith. The Indemnity Deed will continue to apply for a period of 10 years after a Director ceases to hold office and a Director’s Access and Insurance Deed with each of the Directors pursuant to which a Director can request access to

Quantum Resources Limited Directors’ Report

copies of documents provided to the Director whilst serving the Company for a period of 10 years after the Director ceases to hold office. There will be certain restrictions on the Directors’ entitlement to access under the deed.

The Company has not, during or since the financial year, indemnified or agreed to indemnify an auditor of the Company or of any related body corporate against a liability incurred as an auditor.

12. Environment

The exploration activities of the Company are conducted in accordance with and controlled principally by Australian state and territory government legislation. The Company has exploration land holdings in Western Australia and Northern Territory. The Company employs a system for reporting environmental incidents, establishing and communicating accountability, and rating environmental performance. During the year data on environmental performance was reported as part of the monthly exploration reporting regime. In addition, as required under various state and territory legislation, procedures are in place to ensure that the relevant authorities are notified prior to the commencement of ground disturbing exploration activities.

The Company is committed to minimising the impact of its activities on the surrounding environment at the same time aiming to maximise the social, environmental and economic returns for the local community. To this end, the environment is a key consideration in our exploration activities and during the rehabilitation of disturbed areas. Generally rehabilitation occurs immediately following the completion of a particular phase of exploration. In addition, the Company continues to develop and maintain mutually beneficial relationships with the local communities affected by its activities.

13. Non- Audit Services

During the year, PKF, the Company’s auditor, has not performed any other services in addition to their statutory duties.

A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is attached to the Directors’ Report.

14. Remuneration Report - Audited

(i) Overview of Remuneration Policies

The Company is managed by AXIS Consultants Pty Ltd (“AXIS Consultants”) pursuant to a Service Deed dated 25 November 1988. In accordance with the arrangement with AXIS Consultants, it provides company secretarial, finance, geology, exploration, IT and other services to the Company. As a result, the Company has no employees.

Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company, including Directors of the Company and other Executives. Key management personnel includes the five most highly remunerated S300A Directors and Executives of the Company.

Remuneration levels for Directors of the Company are competitively set to attract and retain appropriately qualified and experienced Directors. The Remuneration Committee obtains independent advice on the appropriateness of remuneration packages given trends in comparative companies and the objectives of the Company’s remuneration strategy, when appropriate.

The remuneration structures explained below are designed to attract suitably qualified candidates, reward the achievement of strategic objectives, and achieve the broader outcome of creation of value for shareholders. The remuneration structures take into account:

the capability and experience of the Directors;
the Directors’ ability to control the Company’s performance;
the Company’s performance including:

Quantum Resources Limited Directors’ Report

the Company’s earnings
the growth in share price and returns on shareholder wealth

The Company’s performance during the current year and over the past four years has been as follows:

	2011	2010	2009	2008	2007
	$	$	$	$	$
Revenue	10,000	2,871	424,757	8,261	71,885
Net loss	(161,224)	(268,602)	(1,038,135)	(1,045,468)	(904,511)
Basic loss per share (cents)	(0.02)	(0.03)	(0.25)	(0.28)	(0.26)
Diluted loss per share (cents)	(0.02)	(0.03)	(0.25)	(0.28)	(0.26)
Net assets	1,432,313	1,593,429	1,862,340	954,757	771,507

The Directors do not believe the financial or share price performance of the Company is an accurate measure when considering remuneration structures as the Company is in the mineral exploration industry. Companies in this industry do not have an ongoing source of revenue, as revenue is normally from ad-hoc transactions.

The more appropriate measure is the identification of exploration targets, identification and/or increase of mineral resources and reserves and the ultimate conversion of the Company from explorer status to mining status.

(ii) Service Agreements with AXIS Consultants Pty Ltd

Messrs JI Gutnick, C A Michael, M Z Gutnick and Dr DS Tyrwhitt do not have a contract for their services as Directors. Their remuneration and fees are paid to them by AXIS Consultants Pty Ltd (other than Dr Tyrwhitt), based on amounts agreed by the Company.

Mr PJ Lee, Company Secretary, does not have a contract of employment with the Company. His services are provided to the Company through the service arrangements with AXIS Consultants Pty Ltd. This service contract with AXIS Consultants Pty Ltd is for an unlimited term and is capable of termination on two months notice.

(iii) Non-Executive Directors

Total remuneration for all Non-Executive Directors, last voted upon by shareholders at the 1999 AGM, is not to exceed $200,000 per annum. Non-Executive Directors’ base fees are presently up to $20,000 per annum per Director. Non-Executive Directors do not receive performance related remuneration. Directors’ fees cover all main board activities and membership of board committees. Non-Executive Directors do not receive any benefits on retirement.

(iv) Performance-Linked Remuneration

Performance linked remuneration focuses on long-term incentives and was designed to reward key management personnel for meeting or exceeding their objectives.

Long-Term Incentive

2005 Employee Share Option Plan

At the Annual General Meeting of the Company held in November 2005, shareholders of the Company approved the introduction of the Quantum Resources Limited 2005 Share Option Plan (“the Plan”) and the issue of options under the Plan to the Directors at the time.

The Plan was introduced to assist in the reward, retention and motivation of eligible persons.

The key components of the Plan and conditions imposed by the Board for the initial issue of options were that the options will have no issue price; the exercise price of the options will be an amount as determined by the Board and will be not less than the market price for one share on the date the Board decides to invite a

Quantum Resources Limited Directors’ Report

participant to apply for options; the Board can determine the exercise conditions (if any) to apply prior to a participant being able to exercise the options; if the exercise condition is met, the participant (subject to continuing to be an eligible participant) is able to exercise the options at any time for a period of 3 years after the vesting period; the number of options that can be on issue under the Plan is 5% of the issued number of shares in the Company at the date of an invitation or grant of an option (for this purpose, the 5% is calculated as the number of shares the subject of options the Board proposes to issue an invitation or proposes to grant; the number of shares which would be issued if all offers or options to acquire unissued shares pursuant to this Plan or any other employee share option plan were accepted or exercised; the number of shares issued pursuant to the Plan in the last 5 years; and the number of shares issued during the last 5 years pursuant to any other employee share scheme of the Company); if the employment of a participant is terminated before the end of the vesting period, the options held by that participant will lapse, except where a participant has ceased to be employed due to death or mental incapacity (in such circumstances the Board has the ability to allow the legal personal representative of the participant to exercise the option on the terms set by the Board at the time). In the case of termination after the vesting period, the participant has one month to exercise the option otherwise it lapses; the Board will also have the discretion to have the options expire if it determines that a participant has acted fraudulently, dishonestly or in a manner which is in breach of his or her obligations to the Company or a subsidiary of the Company; participants will have their entitlements in respect of options held adjusted to take account of capital reconstructions and bonus issues as if the option has been exercised before the determination of entitlement in respect of these issues. If the Company makes a pro rata rights issue to shareholders, the exercise price of an option will be reduced according to the formula specified in the Australian Securities Exchange (“ASX”) Listing Rules; and in the case of a change of control, options are immediately exercisable notwithstanding exercise conditions or the vesting period.

For the initial grant of options, the Directors resolved that the exercise price will be the weighted average closing price of shares sold on ASX on the 5 trading days immediately preceding the offer of options to a Participant (but if no shares were sold on ASX during that 5 day period the exercise price of an option is to be determined by the Board to be equal to the closing price of shares sold on ASX on the last trading day on which the shares were traded) multiplied by up to 200 percent; the options cannot be exercised for 2 years from grant. The options were issued without a specific performance hurdle given the current conditions for attracting and retaining staff in the highly competitive resources market. However a share price hurdle has effectively been built into the options to align shareholders’ interests with participants’ interests.

The options were valued by an external consultant as at grant date using the binomial option pricing model and the following inputs:

Grant date	19 October 2006
Grant date share price	$0.04
Vesting date	19 October 2008
Expected life in years	3.5
Risk-free rate	5.91%
Volatility	60%
Exercise price	$0.07
Fair value of option	$0.013

The following tables disclose options that have been issued to key management personnel under the Plan during 2007.

Quantum Resources Limited Directors’ Report

MZ Gutnick – Non-Executive Director	2011	2010
Date of issue	-	19 October 2006
Number of options	-	2,000,000
Issue price	-	Nil
Exercise price	-	$0.06275
Value of options	-	$26,000
Expiry date	-	19 October 2011
Number of options vested during the year	-	-
% vested in year	-	0%
% forfeited in year	-	0%
Number of options on issue
- at 1 July	-	2,000,000
- at 30 June	-	2,000,000
PJ Lee – Chief Financial Officer & Company Secretary	2011	2010
Date of issue	19 October 2006	19 October 2006
Number of options	2,500,000	2,500,000
Issue price	Nil	Nil
Exercise price	$0.06275	$0.06275
Value of options	$32,500	$32,500
Expiry date	19 October 2011	19 October 2011
Number of options vested during the year	-	-
% vested in year	0%	0%
% forfeited in year	0%	0%
Number of options on issue
- at 1 July	2,500,000	2,500,000
- at 30 June	2,500,000	2,500,000

Details concerning the valuation methodology and key assumptions made in the option valuations are set out on the preceding pages.
Unless otherwise disclosed, no options were exercised and no options lapsed in the year.

(v) Details of Directors, Executives and Remuneration

As noted in section (i), management services are provided to the Company by AXIS Consultants Pty Ltd. AXIS Consultants Pty Ltd pays the Chairman and Managing Director’s remuneration and Non-Executive Directors’ fees on behalf of the Company, based on pre-agreed amounts. AXIS Consultants invoices the Company for remuneration paid to the Company’s Executives (not being Directors) based on the time the Executive spends in servicing the requirements of the Company. AXIS Consultants has provided the following information in regard to the amounts invoiced to the Company for the Directors and Executives in respect of all remuneration (as that term is defined in the Corporations Act 2001) received by the Directors and/or Executives in connection with the management of the affairs of the Company.

The names of the Directors and Executives in office during the year are as follows:-

(a) Directors

J I Gutnick – Chairman and Managing Director C A Michael – Executive Director (appointed 5 October 2010) D S Tyrwhitt – Non Executive Director M Z Gutnick – Non Executive Director (resigned 5 October 2010)

(b) Executives

P J Lee – Chief Financial Officer & Company Secretary C A Michael – Executive General Manager

Quantum Resources Limited Directors’ Report

Details of the nature and amount of each major element of remuneration of each Director of the Company and each Executive of the Company are:

	Primary	Post- employment	Equity compensation	Total $	s300A (1)(e)(i) Proportion of remuneration performance related %	s300A (1)(e)(vi) Value of options as proportion of remuneration %
	Salary & fees $ Non- monetary benefits $	Super- annuation benefits $	Value of options $
Directors J I Gutnick 2011 2010 D S Tyrwhitt 2011 2010 M Z Gutnick 2011 (resigned 5 October 2010) 2010 C A Michael 2011 (appointed 5 October 2010)(i) 2010	25,000 - 22,500 - 20,000 - 20,000 - 5,000 - 20,000 - 15,000 - - -	2,250 2,500 1,800 1,800 450 1,800 1,350 -	- - - - - - - -	27,250 25,000 21,800 21,800 5,450 21,800 16,350 -	0.00 0.00 0.00 0.00 0.00 0.00 0.00 -	0.00 0.00 0.00 0.00 0.00 0.00 0.00 -
Total all Directors 2011 2010	65,000 - 62,500 -	5,850 6,100	- -	70,850 68,600
*Executives* P J Lee 2011 2010 C A Michael(i) 2011 2010	20,000 - 10,000 - 5,000 - 10,000 -	1,800 900 450 900	- - - -	21,800 10,900 5,450 10,900	0.00 0.00 0.00 0.00	0.00 0.00 0.00 0.00
Total all 2011 Executives 2010	25,000 - 20,000 -	2,250 1,800	- -	27,250 21,800
Total all Directors 2011 & Executives 2010	90,000 - 82,500 -	8,100 7,900	- -	98,100 90,400

(i) Appointed as a Director on 5 October 2010. Remuneration split between Directors and Executives remuneration accordingly.

There were no STI cash bonuses, post-employment prescribed benefits, termination benefits or insurance premiums paid during 2011 or 2010.

Signed in accordance with a resolution of the Board of Directors at Melbourne this 28th day of September 2011.

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Director

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Lead auditor’s independence declaration under Section 307C of the Corporations Act 2001

To: the directors of Quantum Resources Limited.

I declare to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2011 there have been:

no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit, and
no contraventions of any applicable code of professional conduct in relation to the audit.

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J A Mooney Partner PKF

28 September 2011 Melbourne

The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

Quantum Resources Limited Statement of Comprehensive Income for the year ended 30 June 2011

*Note* Revenue 3 Exploration impaired 9 Administration expenses Loss from continuing operations Net finance income 4 Loss before income tax Income tax expense 5 Loss for the year Other comprehensive income for the year, net of income tax Net change in fair value of available-for-sale financial asset Total comprehensive loss for the year Loss attributable to members of Quantum Resources Limited Total comprehensive loss attributable to members of Quantum Resources Limited Basic loss per share (cents per share) 6 Diluted loss per share (cents per share) 6	2011 $ 2010 $
	10,000 2,871 (46,937) (168,697) (125,291) (105,723)
	(162,228) (271,549)
	1,004 2,947
	(161,224) (268,602)
	- -
	(161,224) (268,602)
	- (309)
	(161,224) (268,911)
	(161,224) (268,602)
	(161,224) (268,911)
	(0.02) (0.03)
	(0.02) (0.03)

The notes on pages 17 to 32 are an integral part of these financial statements.

Quantum Resources Limited Statement of Financial Position

as at 30 June 2011

*Note* Assets Current Assets Cash and cash equivalents 12 Receivables 7 Total current assets Non-current Assets Receivables 7 Plant and equipment 8 Exploration and evaluation expenditure 9 Total non-current assets Total assets Liabilities Current Liabilities Trade and other payables 10 Total current liabilities Total liabilities Net assets Equity Issued capital 11 Reserves Accumulated losses Total equity	2011 $ 2010 $
	372,684 1,012,350 689 12,894
	373,373 1,025,244
	12,038 6,000 2,545 3,223 1,283,634 945,814
	1,298,217 955,037
	1,671,590 1,980,281
	239,277 386,852
	239,277 386,852
	239,277 386,852
	1,432,313 1,593,429
	56,604,226 56,604,118 713,940 713,940 (55,885,853) (55,724,629)
	1,432,313 1,593,429

The notes on pages 17 to 32 are an integral part of these financial statements.

Quantum Resources Limited Statement of Changes in Equity for the year ended 30 June 2011

Balance at 1 July 2009 Total comprehensive (loss) for the year, net of tax Balance at 30 June 2010 Balance at 1 July 2010 Total comprehensive loss for the year, net of tax Transactions with owners, recorded directly in equity Issue of shares, net of transaction costs Total transactions with owners Balance at 30 June 2011	Issued capital $ Option premium reserve $ Share based payment reserve $ Fair value reserve $ Accumulated loss $	Total equity $
	56,604,118 619,690 94,250 309 (55,456,027) - - - (309) (268,602)	1,862,340 (268,911)
	56,604,118 619,690 94,250 - (55,724,629)	1,593,429

	56,604,118 619,690 94,250 - (55,724,629)	1,593,429

	- - - - (161,224)	(161,224)



	108 - - - -	108

	108 - - - -	108
	56,604,226 619,690 94,250 - (55,885,853)	1,432,313

The notes on pages 17 to 32 are an integral part of these financial statements.

Quantum Resources Limited Statement of Cash Flows

for the year ended 30 June 2011

*Note* Cash flows from operating activities Payments to suppliers and employees (inclusive of GST) Interest received Net cash used in operating activities 12 Cash flows from investing activities Payments for exploration expenditure Payments for plant and equipment Proceeds from sale of exploration licences Proceeds from sale of investment Payments for security deposit Refund of security deposit Loans from other entity Repayment of loans from other entity Net cash used in investing activities Cash flows from financing activities Proceeds from issue of equity securities Equity securities issue transaction costs Net cash from/(used in) financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at 1 July Cash and cash equivalents at 30 June 12	2011 $ 2010 $
	(135,072) (128,435) 1,160 3,303
	(133,912) (125,132)
	(515,824) (537,993) - (3,390) 10,000 - - 2,440 (6,038) - 6,000 7,000 - 158,868 - (433,366)
	(505,862) (806,441)
	108 - - (101,078)
	108 (101,078)
	(639,666) (1,032,651) 1,012,350 2,045,001
	372,684 1,012,350

The notes on pages 17 to 32 are an integral part of these financial statements.

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

1. Summary of significant accounting policies

Quantum Resources Limited (the ‘Company’) is a company domiciled in Australia. The financial statements of the Company as at and for the year ended 30 June 2011 comprise the Company only and has not been consolidated with any other entity.

The financial statements were authorised for issue by the Board of Directors on 28 September 2011.

(a) Basis of preparation

Compliance with IFRS

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 Company complies with International Financial Reporting Standards (IFRSs) and interpretations adopted by the International Accounting Standards Board.

The principal standards and interpretations that have been adopted for the first time in these financial statements are:

AASB 2009-5 Further amendments to Australian Accounting Standards arising from the Annual Improvements Project

The adoption of these amendments has not resulted in any changes to the Company’s accounting policies and have no effect on the amounts reported for the current or prior periods. However, the only amendment that has had an impact and resulted in changes to the Company’s presentation of, or disclosure in, its financial statements is the presentation of exploration costs in the statement of cash flows. AASB 107 Statement of Cash Flows has been amended through AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project to require that only expenditures that result in a recognised asset in the statement of financial position can be classified as investing activities in the statement of cash flows.

Consequently, cash flows in respect of exploration costs that do not meet the criteria for capitalisation and, therefore, are recognised in profit or loss as incurred, have been reclassified from investing to operating activities in the statement of cash flows. Prior year amounts have been restated for consistent presentation.

The following standards and interpretations may have an impact on the Company in future reporting periods but are not yet effective. These standards and interpretations are available for early adoption in the 30 June 2011 financial year but have not been applied in the preparation of these financial statements.

AASB 9 Financial Instruments includes requirements for the classification and measurement of financial assets resulting from the first part of Phase 1 of the project to replace AASB 139 Financial Instruments: Recognition and Measurement . AASB 9 will become mandatory for the Company’s 30 June 2014 financial statements. Retrospective application is generally required, although there are exceptions, particularly if the entity adopts the standard for the year ended 30 June 2012 or earlier. The Company has not yet determined the potential effect of the standard.
AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Process emphasises the interaction between quantitative and qualitative AASB 7 disclosures and the nature and extent of risks associated with financial instruments. The amendments become mandatory for the Company’s 30 June 2012 financial statements. The Company has not yet determined the potential effect of the standard.

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

Basis of measurement

The financial statements have been prepared on the historical cost basis.

Going concern

The Company has incurred a loss of $161,224 in the year to 30 June 2011, had net cash operating outflow of $133,912 for the year ended 30 June 2011 and has working capital of $134,096 at 30 June 2011. These conditions indicate a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. The Financial Report has been prepared on the basis of going concern which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The Directors believe this basis to be appropriate. In order to continue as a going concern, the Company will be required to raise further capital to meet its commitments. The Directors are satisfied that adequate plans are in place and that the Company will be able to raise sufficient cash for a minimum of 12 months from the date of signature of the financial report to the date of signature of the financial report for the year ending 30 June 2012. The Directors are confident of doing so due to the success the Company has previously had raising capital and preliminary indications from brokers and investors. Should the Company be unable to continue as a going concern, it may be required to realise their assets and extinguish their liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary should the Company be unable to continue as a going concern.

Functional and presentation currency

These financial statements are presented in Australian dollars, which is the Company’s functional currency.

Critical accounting estimates

The preparation of financial statements in conformity with AASBs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Estimates and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below.

Exploration and evaluation

Note 1(i) contains information about the assumptions and risk factors relating to exploration, evaluation and development expenditure impairment.

Share based payment transactions

Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions.

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

(b) Revenue

Revenue is measured at the fair value of the consideration received or receivable.

Interest revenue

Interest is brought to account as income over the term of each financial instrument on an effective interest basis.

(c) Income tax

The income tax expense or revenue for the year is the tax payable on the current year’s taxable income based on the income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses.

Deferred income tax is provided for in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

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

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

(d) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included with other receivables or payables.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(e) Impairment of assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash generating units.

(f) Cash and cash equivalents

For statement of cash flow presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, and investments in money market instruments with

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

(g) Trade receivables

Trade receivables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days.

Collectability of trade receivables is reviewed on an ongoing basis. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

(h) Plant and equipment

Plant and equipment is carried at cost, less accumulated depreciation and impairment. Costs include all expenditure that is directly attributable to acquisitions of the asset.

Depreciation is provided on a straight line basis on all depreciable tangible assets at a rate calculated to allocate their cost based on their estimated useful lives. Profits and losses on disposal of plant and equipment are taken into account in determining the operating result for the year.

The assets’ residual values and useful lives (being 2 to 5 years) are reviewed and adjusted as appropriate at each balance sheet date. An asset carrying amount is written down immediately to its recoverable amount if the assets’ carrying amount is greater than its recoverable amount (see note 1(e)).

(i) Exploration, evaluation and development expenditure

Exploration, evaluation and development expenditure, including costs of acquisition in relation to separate areas of interest for which rights of tenure are current, are brought to account in the year in which they are incurred and are carried at cost.

The exploration expenditure will be carried forward as an asset where:

(i) it is expected that the expenditure will be recovered through the successful development and exploitation of an area of interest or by its sale; or
(ii) exploration activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of economically recoverable reserves.

Where a project or an area of interest has been abandoned, the expenditure incurred thereon is written off in the year in which the decision is made.

Where there has been a decision to proceed with development, accumulated expenditure is amortised over the life of the associated resource once mining operations commence.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

The key points that are considered in this review include:

planned drilling programs.
environmental issues that may impact the underlying tenements.
the estimated market value of assets at the review date.

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

Information used in the review process is rigorously tested to externally available information as appropriate.

(j) Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing operating loss attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the year.

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 financial costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(k) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year and which are unpaid. They are recognised initially at fair value and subsequently at amortised cost. The amounts are unsecured and are usually paid within 30 days of recognition.

(l) Issued capital

Ordinary shares are classified as equity.

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

(m) Transfer from reserves

The balance of the share option reserve is transferred to accumulated losses once the options have expired.

2. Segment Reporting

Operating segment information is disclosed on the same basis as information used for internal reporting purposes by the board of directors.

At regular intervals, the board is provided management information for the Company’s cash position, the carrying values of exploration permits and a Company cash forecast for the next twelve months of operation.

On this basis, no segment information is included in these financial statements.

3. Revenue

Gain from sale of exploration licences Gain from sale of investments Total revenue	2011 $ 2010 $
	10,000 - - 2,871
	10,000 2,871

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

4. Net finance income

Interest income Finance income Bank charges Finance expenses Net finance income	2011 $ 2010 $
	1,160 3,303
	1,160 3,303
	(156) (356)
	(156) (356)
	1,004 2,947

5. Income tax

Total tax expense comprises Current tax expense Deferred tax expense	2011 $ 2010 $
	- - - -
	- -

Reconciliation between tax expense and pre-tax accounting profit

Loss before tax Income tax benefit on loss at Australian tax rate of 30% (2010: 30%) Sundry items Capitalised exploration and evaluation expenditure Movement in other temporary differences Under provided in prior periods Current year losses for which no deferred tax asset was recognised Income tax expense	2011 $ 2010 $
	(161,224) (268,602)
	48,367 80,581 3,000 723 101,346 163,737 11,254 28,491
	163,967 273,532 (31,822) (21,069) (132,145) (252,463)
	- -

Deferred tax assets and liabilities

Capitalised exploration and evaluation expenditure Accruals Capital raising costs Tax losses Deferred tax assets/(liabilities) Set off of deferred tax liabilities Net deferred tax assets Net deferred tax assets not recognised Net deferred tax assets	Assets Liabilities 2011 $ 2010 $ 2011 $ 2010 $
	- - (385,090) (283,744) 5,700 600 - - 17,423 28,677 - - 6,370,289 6,238,144 - -
	6,393,412 6,267,421 (385,090) (283,744) (385,090) (283,744) 385,090 283,744
	6,008,322 5,983,677 - - 6,008,322 5,983,677 - -
	- - - -

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Company can utilise the benefits.

6.

Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit @ 30% Loss per share Basic loss per share (cents) Diluted loss per share (cents)	2011 $ 2010 $
	21,234,297 20,798,813
	6,370,289 6,238,144
	2011 2010
	(0.02) (0.03) (0.02) (0.03)

The loss used for the purposes of calculating basic and diluted loss per share are as follows:

Loss attributable to ordinary shareholders (basic) Loss attributable to ordinary shareholders (diluted)	2011 $ 2010 $
	(161,224) (268,602) (161,224) (268,602)

The weighted average number of shares used for the purposes of calculating diluted loss per share reconciles to the number used to calculate basic loss per share as follows:

Weighted average number of shares Basic loss per ordinary share denominator Effect of share options on issue Diluted loss per ordinary share denominator	2011 Shares 2010 Shares
	814,702,694 814,702,056 - -
	814,702,694 814,702,056

For the years ended 30 June 2010 and 30 June 2011, options were not considered to be dilutive as the conversion would result in a reduced loss per share. The options were therefore excluded from the weighted average number of shares in the calculation of loss per share.

7. Trade and other receivables

Trade and other receivables
Current Other receivables Total current receivables Non-current Security deposits Total current receivables	2011 $ 2010 $
	689 12,894
	689 12,894
	12,038 6,000
	12,038 6,000

The Company’s exposure to credit risk related to trade and other receivables are disclosed in note 15.

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

8. Plant and equipment

Cost Balance at 1 July 2009 Additions Disposals Balance at 30 June 2010 Balance at 1 July 2010 Additions Disposals Balance at 30 June 2011 Accumulated depreciation Balance at 1 July 2009 Depreciation for the year Disposals Balance at 30 June 2010 Balance at 1 July 2010 Depreciation for the year Balance at 30 June 2011 Carrying amounts At 1 July 2009 At 30 June 2010 At 1 July 2010 At 30 June 2011 Exploration and evaluation expenditure Balance at beginning of year Expenditure incurred Amount written off Carrying amount at end of year Trade and other payables Trade payables and accruals Payables due to other entity		Field and plant equipment $	Total $
		1,187 3,390 (1,187)	1,187 3,390 (1,187)
		3,390	3,390

		3,390	3,390
		-	-
		-	-
		3,390	3,390
		(1,187) (167) 1,187	(1,187) (167) 1,187
		(167)	(167)

		(167)	(167)
		(678)	(678)
		(845)	(845)
		-	-
		3,223	3,223

		3,223	3,223
		2,545	2,545
		2011 $	2010 $
		945,814	400,025 714,486 (168,697)
		384,757
		(46,937)
		1,283,634	945,814
		2011 $	2010 $
		58,688	385,897 955
		180,589
		239,277	386,852

9. Exploration and evaluation expenditure

10. Trade and other payables

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

11. Capital and reserves

Ordinary share capital

Balance at beginning of year Issue of shares arising from exercise of options ($0.09275 per share) Balance at end of year	2011 No. shares 2010 No. shares 2011 $ 2010 $
	814,702,056 814,702,056 56,604,118 56,604,118 1,162 - 108 -
	814,703,218 814,702,056 56,604,226 56,604,118

Holders of ordinary shares are entitled to one vote per share at shareholder meetings. In the event of winding up of the Company, ordinary shareholders are fully entitled to any proceeds of liquidation subject to prior entitlement. The Corporations Act 2001 abolished the concept of authorized capital and par value shares. Therefore, these are not presented.

Options

43,747,511 options expired during the year.

32,875,597 options are on issue at an exercise price of $0.09275 per option which, if exercised, will entitle the option holder to one ordinary fully paid share in the Company for each option. Options not exercised by 30 April 2012 will lapse.

68,378,151 options are on issue at an exercise price of $0.04275 per option which, if exercised, will entitle the option holder to one ordinary fully paid share in the Company for each option. Options not exercised by 30 November 2012 will lapse.

7,250,000 employee options are on issue at an exercise price of $0.06275 per option. Refer to note 17 for details.

Option premium reserve

The option premium reserve represents amounts contributed for the future right to acquire shares at a pre-determined price. The options have a price of $0.09275 and a latest expiry date of 30 April 2012.

Share-based payments reserve

The share-based payments reserve represents the accumulated amortization of the fair value of services provided with respect to employee options issued. Details of the share option plan are outlined in note 17.

Fair value reserve

The fair value reserve represents the cumulative net increase or decrease in the fair value of available-for-sale investments until the investment is derecognised.

12. Cash and cash equivalents

Cash at bank and on hand Cash and cash equivalents Cash and cash equivalents in the statement of cash flows	2011 $ 2010 $
	372,684 1,012,350
	372,684 1,012,350
	372,684 1,012,350

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

The Company’s exposure to interest rate risk is disclosed in note 15.

Reconciliation of cash flows from operating activities

Loss for the year Adjustments for Gain on sale of exploration tenement licences Gain on sale of investments Exploration impaired Depreciation Net cash used in operating activities before change in assets and liabilities Change in trade and other receivables Change in trade and other payables Net cash used in operating activities	2011 $ 2010 $
	(161,224) (268,602) (10,000) - - (2,440) 46,987 168,697 678 167
	(123,609) (102,178) 1,750 9,113 (12,053) (32,067)
	(133,912) (125,132)

13. Contingencies

Cash deposits of $12,038 (2010: 6,000) have been provided to the Department of Business, Industry and Resource Development of Northern Territory for the purposes of guaranteeing the Company’s performance in accordance with Northern Territory mining law. The performance relates to the requirement that the Company adheres to the terms and conditions of its Exploration Licences, which inter alia requires site requisition. However, the Directors do not anticipate the Department of Business, Industry and Resource Development of the Northern Territory will exercise these guarantees as the Company adheres to all conditions of its Licences.

14. Commitments

Exploration expenditure

The Company has to perform minimum exploration work and expend minimum amounts of money on its tenements. The overall expenditure requirement tends to be limited in the normal course of the Company’s tenement portfolio management through expenditure exemption approvals and expenditure reductions through relinquishment of parts or the whole of tenements deemed non prospective. Should the Company wish to preserve interest in its current tenements the amount which may be required to be expended is as follows:

Due within one year Due later than one year and not later than five years Due later than five years	2011 $ 2010 $
	243,711 456,959 2,640 37,040 - -
	246,351 493,999

15. Financial instruments

The Company’s activities expose it to a variety of financial risks, market risk, credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects of the financial performance of the entity.

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange risk, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Company does not operate internationally and therefore its exposure to foreign exchange risk arising from currency exposures is limited. The Company is not exposed to equity security price risk and holds no equity investments. The Company is not exposed to commodity price risk as the Company is still carrying out exploration.

Interest rate risk

Interest rate risk arises from investment of cash at variable rates. The Company’s income and operating cash flows are not materially exposed to changes in market interest rates.

At the reporting date, the interest rate profile of the Company’s interest bearing financial instruments was:

Variable rate instruments Cash and cash equivalents	Carrying amount 2011 $ 2010 $
	372,684 1,012,350
	372,684 1,012,350

An increase of 100 basis points (decrease of 100 basis points) in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2010. The following table summarises the sensitivity of the Company’s financial assets (cash) to interest rate risk:

30 June 2011 Variable rate instruments Cash and cash equivalents 30 June 2010 Variable rate instruments Cash and cash equivalents	Profit or loss Equity Carrying amount $ 100 bp increase $ 100 bp decrease $ 100 bp increase $ 100 bp decrease $	Profit or loss Equity Carrying amount $ 100 bp increase $ 100 bp decrease $ 100 bp increase $ 100 bp decrease $


	372,684 3,727 (3,727) 3,727	(3,727)
	372,684 3,727 (3,727) 3,727	(3,727)
	1,012,350 10,124 (10,124) 1,012,350	(10,124)
	1,012,350 10,124 (10,124) 1,012,350	(10,124)

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

The Company has no significant concentration of credit risk. Credit risk arises from cash and cash equivalents held with the bank and financial institutions and receivables due from other entities. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

The maximum exposure to credit risk is the carrying amount of the financial asset. The maximum exposure to credit risk at the reporting date was:

Cash and cash equivalents Receivables Security deposits	2011 $ 2010 $
	372,684 1,012,350 689 8,439 12,038 6,000
	385,411 1,026,789

Impairment loss

The aging of the Company’s current receivables at the reporting date was:

Current 31 – 60 days 61 – 90 days 91 days and over	At 30 June 2011 At 30 June 2010 Gross $ Impairment $ Gross $ Impairment $
	689 - 8,439 - - - - - - - - - - - - -
	689 - 8,439 -

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s liquidity risk arises from operational commitments. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities. Management aims at maintaining flexibility in funding by regularly reviewing cash requirements and monitoring forecast cash flows.

The following are the contractual maturities of financial liabilities:

30 June 2011 Financial liabilities Trade and other payables 30 June 2010 Financial liabilities Trade and other payables	Carrying amount $ Total contractual cash flows $ 6 months or less $	6 to 12 months $


	239,277 239,277 239,277	-
	239,277 239,277 239,277	-
	386,852 386,852 386,852	-
	386,852 386,852 386,852	-

Fair value

The carrying amount of financial assets and financial liabilities recorded in the financial statements represent their respective net fair value determined in accordance with the accounting policies referred to in note 1. Fair value approximates carrying value due to the short term nature of these instruments.

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

Capital management

The Company’s policy in relation to capital management is for management to regularly and consistently monitor future cash flows against expected expenditures for a rolling period of up to 12 months in advance. The Board determines the Company’s need for additional funding by way of either share placements or loan funds depending on market conditions at the time. Management defines working capital in such circumstances as its excess liquid funds over liabilities, and defines capital as being the ordinary share capital of the Company.

There were no changes in the Company’s approach to capital management during the year.

The Company is not subject to externally imposed capital requirements.

16. Key management personnel

The names of the key management personnel in office during the year are as follows:

J I Gutnick – Chairman and Managing Director
D S Tyrwhitt – Non-Executive Director
C A Michael – Executive General Manager and Executive Director, appointed Executive Director 5 October 2010
M Z Gutnick – Non-Executive Director, resigned 5 October 2010
P J Lee – General Manager Corporate and Company Secretary

Key management personnel compensation comprises:

Short-term employee benefits Post-employment benefits Share-based payments	2011 $ 2010 $
	90,000 82,500 8,100 7,900 - -
	98,100 90,400

Equity instrument disclosures relating to key management personnel

Options over equity instruments

No options were provided as remuneration and no shares were issued on exercise of any options.

The number of options over ordinary shares in the Company held during the financial year by each director of Quantum Resources Limited and other key management personnel of the Company, including their personally related parties are set out below:

30 June 2011 J I Gutnick Expiring 31 Oct 2010 Expiring 19 Oct 2011 Expiring 30 Apr 2012 Expiring 30 Nov 2012 D S Tyrwhitt M Z Gutnick Expiring 31 Oct 2010 Expiring 19 Oct 2011 P J Lee Expiring 19 Oct 2011	Held at beginning ofyear Granted Other changes Exercised Held at end ofyear*


	42,864,483 - (42,864,483) - -
	2,000,000 - - - 2,000,000
	31,176,678 - - - 31,176,678
	65,281,557 - - - 65,281,557
	- - - - -

	532 - (532) - **
	2,000,000 - (2,000,000) - **

	2,500,000 - - - 2,500,000

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

C A Michael 30 June 2010 J I Gutnick Expiring 24 Mar 2010 Expiring 31 Oct 2010 Expiring 19 Oct 2011 Expiring 30 Apr 2012 Expiring 30 Nov 2012 D S Tyrwhitt M Z Gutnick Expiring 31 Oct 2010 Expiring 19 Oct 2011 P J Lee Expiring 24 Mar 2010 Expiring 19 Oct 2011 C A Michael	Held at beginning ofyear Granted Other changes*	Exercised Held at end ofyear
	- - -	- -
	145,823,250 - (44,865,015)	- 100,958,235
	1,000,000 - (1,000,000) 42,864,483 - - 2,000,000 - - 31,176,678 - - 65,281,557 - - - - - 532 - - 2,000,000 - - 350,000 - (350,000) 2,500,000 - - - - -	- - - 42,864,483 - 2,000,000 - 31,176,678 - 65,281,557 - - - 532 - 2,000,000 - - - 2,500,000 - -
	147,173,250 - (1,350,000)	- 145,823,250

Other changes represent options that expired or were forfeited during the year.

** M Z Gutnick resigned as Non-Executive Director on 5 October 2010 and is not considered a Key Management Personnel after that date.

Equity holdings and transactions

The number of ordinary shares in the Company held during the financial year by each director of Quantum Resources Limited and other key management personnel of the Company, including their personally related parties are set out below:

30 June 2011 J I Gutnick D S Tyrwhitt M Z Gutnick P J Lee C A Michael 30 June 2010 J I Gutnick D S Tyrwhitt M Z Gutnick P J Lee C A Michael	Held at beginning of year Received on exercise of options Other changes	Held at end of year

	287,963,905 - (5,720,230)	282,243,675
	- - -	-
	9,672,022 - (9,672,022)	*
	511 - -	511
	- - -	-
	297,636,438 - (15,392,252)	282,244,186
	287,963,905 - - - - - 9,672,022 - - 511 - - - - -	287,963,905 - 9,672,022 511 -
	297,636,438 - -	297,636,438

M Z Gutnick resigned as Non-Executive Director on 5 October 2010 and is not considered a Key Management Personnel after that date.

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

Other transactions

Loans to key management personnel

There were no loans made to directors or other key management personnel of the Company during the year.

17. Employee benefits

Share based payments

At the 2005 annual general meeting, the Company established the Quantum Resources Limited 2005 Share Option Plan which allows employees, Directors, officers or consultants of the Company or an associated body corporate and other such persons nominated by the Directors to participate in the plan.

Grants of events of options made under this plan are as follows:

On 19 October 2006, 10,100,000 options were issued at an exercise price of $0.06275. Optionholders must remain eligible (which would usually mean remaining an eligible person although the Board has some discretion to allow continued participation in the event of an eligible person’s death, mental incapacity, ill health, accident or redundancy) to participate in the plan throughout the two (2) year vesting period and can be exercised at any time following vesting up to 19 October 2011. All options, if exercised, will be settled by physical delivery of the shares.

The number and weighted average exercise price of share options is as follows:

Outstanding at 1 July Forfeited during the year Outstanding at 30 June	2011 2010 Weighted average exercise price $ Number of Options Weighted average exercise price $ Number of Options
	0.06275 7,250,000 0.06275 7,250,000 0.06275 - 0.06275 -
	0.06275 7,250,000 0.06275 7,250,000

The options outstanding at 30 June 2011 have an exercise price of $0.06275 and a remaining contractual life of 0.25 years.

18. Related party transactions

Key management personnel

Disclosures relating to key management personnel are set out in note 16 to the financial statements.

Transactions with other entities

AXIS Consultants Pty Ltd (‘AXIS’), a company of which Mr J I Gutnick and Dr D S Tyrwhitt are Directors, provided management and geological services to the Company for the year.

Quantum Resources Limited Notes to and forming part of the Financial Statements for the year ended 30 June 2011

Payable to other entity Management and geological services	Transaction value for the year ended 30 June Balance outstanding at 30 June 2011 $ 2010 $ 2011 $ 2010 $
	226,688 422,859 180,589 955*
	226,688 422,859 180,589 955

* Excludes $302,936 payable to AXIS at 30 June 2010 included in Trade Payables

19. Auditors remuneration

Auditors remuneration
Audit services PKF Audit and review of financial reports	2011 $ 2010 $
	31,285 31,170
	31,285 31,170

20. Subsequent events

Other than the matters outlined elsewhere in these financial statements, no matters or circumstances have arisen since the end of the financial year that have a significant effect on the Company.

Directors’ Declaration

The Directors of Quantum Resources Ltd (the ‘Company’) declare that:

(a) In the Directors’ opinion the financial statements and notes set out on pages 13 to 32 and the Remuneration report in the Directors Report set out on pages 7 to 11, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s financial position as at 30 June 2011 and of its performance, for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations Regulations 2001.
(b) the financial report also complies with International Financial Reporting Standards adopted by the International Accounting Standards Board (IASB) as disclosed in note 1; and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations required by Section 295A of the Corporations Act 2001 by the chief executive officer and chief financial officer for the financial year ended 30 June 2011.

Signed in accordance with a resolution of the directors.

Dated at Melbourne this 28th day of September 2011

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J I Gutnick Chairman and Managing Director

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

Report on the Financial Report

We have audited the accompanying financial report of Quantum Resources Limited (the company), which comprises the statement of financial position as at 30 June 2011, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies, other explanatory information, and the directors’ declaration.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1(a), 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 and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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 .

Opinion

In our opinion:

(a) the financial report of Quantum Resources Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the company’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 1(a).

Tel: 61 3 9603 1700 | Fax: 61 3 9602 3870 | www.pkf.com.au

PKF | ABN 83 236 985 726

INDEPENDENT AUDITOR’S REPORT (CONT'D) TO THE MEMBERS OF QUANTUM RESOURCES LIMITED

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Emphasis of Matter - Material Uncertainty Regarding Continuation as a Going Concern

Without qualifying our opinion, we draw attention to Note 1(a) "Going Concern" in the financial report, which indicates that the company incurred a loss of $161,224 for the year and as of that date the company reflected a net cash operating outflow of $133,912. These conditions give rise to a material uncertainty which may cast significant doubt about the ability of the company to continue as a going concern, and therefore the company may be unable to realise its assets and discharge its liabilities in the normal course of business.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 7 to 11 of the directors’ report for the year ended 30 June 2011. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

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

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PKF

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J A Mooney Partner

28 September 2011 Melbourne

Quantum Resources Limited Corporate Governance

The main corporate governance practices that the Board of Quantum Resources Limited had in place during the year were:

1. Board of Directors

i. Board Responsibilities

The Board’s role is to maximize wealth creation and shareholder value in the Company. It assumes responsibility for overseeing the affairs of the Company by ensuring that they are carried out in a professional and ethical manner and that business risks are effectively managed. The primary responsibilities of the Board include the following:

To oversee the Company, including its control and accountability systems
To appoint and remove the Chief Executive Officer (or equivalent)
To ratifying the appointment and, where appropriate, the removal of the Chief Financial Officer (or equivalent) and the Company Secretary
To have input into and final approval of management’s development of corporate strategy and performance objectives
To review and ratify systems of risk management and internal compliance and control, codes of conduct, legal compliance and any other regulatory compliance
To monitoring senior management’s performance and implementation of strategy, and ensuring appropriate resources are available
To approve and monitor the progress of major capital expenditure, capital management, and acquisitions and divestitures
To approve and monitor financial and other reporting to shareholders and the market
To monitor the Board composition, Director selection, Board processes and performance and ensure Directors have an understanding of the Company’s business
To monitor and influence the key standards of the Company including ethical standards, reputation and culture
To review and approve executive remuneration
To approve annual budgets

ii. Board Composition

While the Company’s Constitution fixes the maximum number of Directors at twelve, the Board currently comprises two Executive Directors and one Non-Executive Director. The Company does not have a majority of independent Directors. The Chairman of the Company is a Director and Shareholder of Edensor Nominees Pty Ltd, which is a substantial shareholder of the Company, and is not independent in accordance with the ASX Corporate Governance Council definitions and recommendations. In considering the best interests of the Company and its shareholders, the Board believes that the background and experience of the Chairman should not preclude him from the office of Chairman of the Board on the grounds of him being a Director and Shareholder of a substantial shareholder. The Chairman is also the Managing Director. The Board believes the experience in the industry that the Company operates in that Mr. JI Gutnick brings to the Company is invaluable and is in the best interests of all shareholders. The Board considers Dr D S Tyrwhitt to be independent.

To ensure that it has the right mix of management skills and technical expertise to meet the challenges of its business, the Board regularly reviews its composition. The Board believes that at the current stage of the Company’s development, the composition is adequate. However, it continues to assess the need to enhance the membership of the Board and is cognisant of the ASX Corporate Governance Council definitions and recommendations.

Quantum Resources Limited Corporate Governance

iii.

Appointment/retirement of Directors

The Company's Constitution requires that all Directors other than the Managing Director submit themselves for re-election every three years with not less than one third of the Board retiring by rotation. Directors appointed during the period since the last Annual General Meeting of the Company must submit themselves for election at the next Annual General Meeting. Accordingly, Mr C A Michael is required to retire at the 2011 Annual General Meeting and Dr D S Tyrwhitt is required to retire at the 2011 Annual General Meeting by rotation and may seek re-election.

iv.

Board Meetings

The full Board meets formally to conduct appropriate business. The Board uses resolutions in writing signed by all Directors to deal with matters requiring decisions between meetings.

v.

Directors' Remuneration

Total remuneration for the Executive Director includes an annual salary and other entitlements. Attendance at and participation in Board and Committee meetings are considered among the duties of the Executive Director. Non-Executive Directors receive fees for attending Board and Committee meetings. Pro-rata fees are paid to Non-Executive Directors who serve for less than a full year. None of the Directors or the Chief Financial Officer & Company Secretary has letters of appointment.

vi.

External Advice to Directors

The Company recognises that in the exercise of their responsibilities there may be occasions when Directors may wish to seek independent professional advice. With the prior consent of the Chairman, advice can be obtained at the Company’s expense and is to be made available to the whole Board.

vii. Performance Evaluation of Board and its Members

During the year, the Board completed a performance evaluation of the Board, its members and executives.

2. Board Committees

The Board has Committees to address the areas of remuneration and audit.

i. Remuneration Committee

The Company does not have a Remuneration Committee. All matters that would usually fall to a Remuneration Committee are handled by the full Board. The Board considers that it is appropriate for the Company at this time not to have a Remuneration Committee and for remuneration issues to be handled by the full Board, given the size of the Board. As the Remuneration Committee functions are carried out by the Board, the Company does not comply with the Remuneration Committee membership criteria set out in the CGC Principles and Recommendations. The Company uses short-term and long-term incentives as part of an executive’s remuneration package. The Board meets to review remuneration policies and practices of the Company, to ensure that they meet current market conditions. The Board draws on the experience of Senior Management and where appropriate, seeks the advice of external consultants. The Remuneration Committee has a formal charter and this is followed by the Board in its deliberations.

Quantum Resources Limited Corporate Governance

ii. Audit Committee

The Company does not have an Audit Committee. All matters that would usually fall to an Audit Committee are handled by the full Board. The Board considers that it is appropriate for the Company at this time not to have an Audit Committee and for audit issues to be handled by the full Board. The Company has adopted a formal Audit Committee Charter and this is followed by the Board in its deliberations. The Board monitors internal control policies and procedures designed to safeguard the Company’s assets and to maintain the integrity of financial reporting. As the Audit Committee functions are carried out by the Board, the Company does not comply with the Audit Committee membership criteria set out in the CGC Principles and Recommendations.

iii.

Nomination Committee

The Company does not have a Nomination Committee. The Board believes that with only three Directors on the Board, the Board itself is the appropriate forum to deal with this function. In considering the nomination of new board members, the Board consider the skill set and experience of existing board members and the skills required for a balanced board.

3. Diversity

The Company has yet to establish a formal written policy on diversity. Diversity includes, but is not limited to, gender, age, ethnicity and cultural background. Over the 2011-2012 financial year, the Company is to review the announced Corporate Governance Committee recommendations on diversity and prepare a policy, including measurable objectives for achieving gender diversity for the board to assess annually. From a board perspective, the Company, with its current board membership, already meets a number of the diversity guidelines. As noted elsewhere in the Remuneration Report and this Corporate Governance section, the Company is managed by AXIS Consultants Pty Ltd pursuant to a Service Agreement and thus does not have any employees. Accordingly, other than the membership of the board, and senior management (who are employed by AXIS and supplied through the Service Agreement), diversity is not relevant to the Company.

4. Role of Management

Day to day management of the Company’s activities and the implementation of Board strategy, policy and decisions is delegated to management. This includes the following:

To develop and recommend internal control and accountability systems for the Company and if approved, ensure compliance with such systems.
To prepare mission systems, corporate strategy and performance objectives for approval by the Board of Directors.
To prepare systems of risk management and internal compliance and controls, codes of conduct, legal compliance and any other regulatory compliance and if approved, ensure compliance with such systems.
To monitor employees’ performance, recommend appropriate resources and review and approve remuneration.
To prepare all required financial reports, tax returns, budgets and any other appropriate financial reports, meet all statutory deadlines, monitor performance against budgets.
Prepare recommendations on acquisitions and divestments of assets.
To implement decisions of the Board of Directors on key standards of the Company covering such areas as ethical standards, reputation and culture of the Company and influence and provide guidance for employees on these areas.
To protect the assets of the Company.

5. Risk Management

The Company continues to monitor its operations to identify the greatest areas of potential risk to minimise any adverse effects on the Company’s strategic, operational and financial activities.

Quantum Resources Limited Corporate Governance

i. Environment

Details of the environmental policy and other related matters are provided in the Environment section of the Directors’ Report.

ii. Occupational Health and Safety

The Company is committed to providing a safe and healthy working environment for all staff. It considers that safety is a collective responsibility and ensures that regular training in safe working methods is undertaken and encourages participation and involvement in the development of workplace safety programs. Individual employees and employees of contractors are required to practice safe working habits, to take all reasonable care to prevent injury to themselves and their colleagues and to report all hazards and accidents.

New staff and contractors (where appropriate) are required to undergo an induction program to familiarise themselves with policies, procedures and work practices prior to commencing work. All staff are covered against injury under the various Workers’ Compensation Acts.

iii. Financial Reporting

The Managing Director and Chief Financial Officer and Company Secretary sign off to the Board of Directors in respect to the annual financial statements and risk management policies as required by law and the ASX Corporate Governance Council “Principles of Good Corporate Governance and Best Practice Recommendations”.

6. Code of Conduct

i. Ethical Standards

The Company operates under a code of conduct that sets out the ethical standards under which the Company operates when dealing with internal and external parties. This code requires parties (including Directors and executives) to act with integrity, fairness and honesty in all dealings and to treat other parties with dignity at all times. They are required to:

not discriminate against any staff member or potential employee;
carry out their duties in respect to the law at all times;
to use the Company’s assets responsibly;
to respect the confidentiality of the Company's business dealings; and
take responsibility for their own actions and for the consequences surrounding their own actions.

ii.

Share Trading

In July 2010, the Company amended its policy following the release of changes to the ASX Corporate Governance Guidelines. It is the Company’s policy to encourage Directors, employees and related parties to own Shares in the Company. The trading in shares policy strongly reinforces the obligations of Directors and employees, both of the Company and AXIS Consultants Pty Ltd, under the Corporations Act 2001 and the Australian Securities Exchange Listing Rules in relation to trading in Company shares. The acquisition and sale of Company shares by Directors and employees is prohibited in periods of fourteen (14) days prior to the announcement of the Company’s quarterly reports, and thirty (30) days prior to the announcement of the Company’s half yearly and full year reports to the Australian Securities Exchange. Directors, employees and related parties can seek permission from the Chairman to purchase or sell shares outside these periods. Directors and Executives can only seek permission to trade in shares in the blackout period in cases of extreme financial hardship. In the case of the Chairman, he must seek permission from a Director or the

Quantum Resources Limited Corporate Governance

Company Secretary. The policy also sets out that there should be no speculative trading. Directors and employees are required to report share trading to the Company Secretary.

7. Continuous Disclosure Compliance

The Company’s continuous disclosure compliance procedure enables it to meet its obligations and to ensure that all matters, which may require announcement to the Australian Securities Exchange, are brought to the attention of Directors immediately.

8. Communicating with Shareholders

The Board ensures that shareholders are kept informed of all major developments that affect their shareholding or the Company's state of affairs through quarterly, half-yearly, annual and ad hoc reports. All shareholders are encouraged to attend the Annual General Meeting to meet the Chairman and Directors and to receive the most updated report on Company activities. The auditors of the Company attend the annual general meeting for the purpose of answering any questions on the annual financial statements and audit thereof, properly brought before the meeting.

The Company maintains a website at http://www.qur.com.au to provide shareholders with up to date information on the Company’s activities. Shareholders may also communicate with the Company through its e-mail address [email protected].

The Company does not web-cast shareholder meetings and does not believe that at this stage the cost-benefit of web casting is worthwhile to a Company of its size.

Quantum Resources Limited Tenement List

TENEMENTS WHOLLY OWNED

GARDNER RANGE

E 80/3410

E 80/3411 E 80/3412

WARE RANGE

EL 25010

EL 27745

TELFER

E 45/2401

TENEMENTS SUBJECT TO JOINT VENTURES

TANAMI (OFFICER HILL)

EL 23150

Quantum Resources Limited Australian Securities Exchange Information

As at 20 September 2011, the following information applied:

1. Substantial Shareholders

Substantial shareholders disclosed in substantial shareholder notices to the Company:

Name	Number of Fully Paid
	Ordinary Shares held
Wilzed Pty Ltd(*)	200,659,182
AXIS Consultants Pty Ltd	84,880,000
Edensor Nominees Pty Limited(**)	72,592,482

(*) Mr J I Gutnick is a Director and Shareholder of Wilzed Pty Ltd
(**) Mr J I Gutnick is a Director and Shareholder of Edensor Nominees Pty Limited.

2. Fully Paid Ordinary Shares

The number of holders of fully paid ordinary shares in the Company is 2,363. On a show of hands every holder of fully paid ordinary shares present or by proxy, shall have one vote. Upon a poll, each share shall have one vote. The distribution of holders of fully paid ordinary shares is as follows:

Category	Number of Shareholders
Holdingbetween 1-1,000 Shares	793
Holdingbetween 1,001 - 5,000 Shares	476
Holdingbetween 5,001 – 10,000 Shares	145
Holdingbetween 10,001-100,000 Shares	527
Holdingmore than 100,001 Shares	422

The number of holders with less than a marketable parcel of fully paid ordinary shares is 1,820. The Company’s fully paid ordinary shares are quoted on the Australian Securities Exchange using the code QUR.

The top 20 shareholders are as follows:

Name	Number of Fully Paid Ordinary Shares held	Percentage interest
Wilzed PtyLtd	200,659,182	24.63%
Axis Consultants PtyLtd	84,880,000	10.42%
Newmont MiningFinance PtyLtd	64,253,609	7.89%
National Nominees Limited	24,651,063	3.03%
Mr Ralph Erwin Tonkin	19,700,000	2.42%
Pt Arafua MiningLimited	15,500,000	1.90%
Mr Trevor Steele	15,200,000	1.87%
Edensor Nominees PtyLimited	8,338,873	1.02%
Rocket Science Enterprises Pty Ltd A/C>	7,130,000	0.88%
Central West Electrical PtyLtd	7,117,647	0.87%
CityCorpPtyLtd	7,108,039	0.87%
Mr Joseph Issa & Mr Phillippe Issa	7,100,000	0.87%
Mr Raul Used	6,800,000	0.83%
Ms Mooi Fah Lee	6,557,162	0.80%
Ms Nada Saade	6,297,398	0.77%
HolmbergNominees PtyLtd	6,000,000	0.74%
Central West Electrical PtyLtd	6,000,000	0.74%

Quantum Resources Limited Australian Securities Exchange Information

Name	Number of Fully Paid Ordinary Shares held	Percentage interest
Global House Limited	6,000,000	0.74%
H Nominees PtyLtd	5,915,351	0.73%
SnowyPlains PtyLtd	5,500,000	0.68%

(b) LISTED OPTIONS MATURING 30 APRIL 2012 OVER FULLY PAID ORDINARY SHARES.

The number of holders of options maturing on 30 April 2012 over fully paid ordinary shares issued by the Company is 259. Optionholders may attend and speak at general meetings of the Company. However, they have not entitlement to vote upon the business before the meeting either by show of hands or by poll. The distribution of holders of options is as follows:

Category	Number of Optionholders
Holdingbetween 1-1,000 Options	177
Holdingbetween 1,001 – 5,000 Options	51
Holdingbetween 5,001 - 10,000 Options	6
Holdingbetween 10,001-100,000 Options	20
Holdingmore than 100,001 Options	5

The Company’s options maturing on 30 April 2012 over fully paid ordinary shares are quoted on the Australian Securities Exchange using the code QUROA.

The top 20 optionholders are as follows:

Name	Number of Options held	Percentage interest
Chabad House of Caulfield PtyLtd	24,741,562	75.26%
Wilzed PtyLtd	6,400,000	19.47%
Mr John G Kellas	371,490	1.13%
Bonos PtyLtd	240,050	0.73%
Miss Sanaz Ghasimzadeh	200,000	0.61%
Jandamint PtyLtd	100,000	0.30%
Mr TengHee Chee & Mr TengWah Chee	87,500	0.27%
Mr TengHee Chee	87,500	0.27%
Mr Lubomir Staffa	58,621	0.18%
Mr Kayne Mitchell	50,000	0.15%
Mr. Yehuda Hoch	35,116	0.11%
Mr Peter William King	35,000	0.11%
Blossom Hotels PtyLtd	25,000	0.08%
Mrs Judith Ann Valentino	22,000	0.07%
Mr Kenneth Reginald Savins	21,400	0.07%
Mr Peter Gasparini	20,000	0.06%
Mr Mark Raymond Luzi & Mrs Janine Marie Luzi	20,000	0.06%
Mrs Lorraine Maree Purdy& Mr Stephen Hall Purdy	20,000	0.06%
Jayvee Investments PtyLtd	20,000	0.06%
Hazlaha Investments PtyLtd	20,000	0.06%

(c) LISTED OPTIONS MATURING 30 NOVEMBER 2012 OVER FULLY PAID ORDINARY SHARES.

The number of holders of options maturing on 30 November 2012 over fully paid ordinary shares issued by the Company is 276. Optionholders may attend and speak at general meetings of the

Quantum Resources Limited Australian Securities Exchange Information

Company. However, they have not entitlement to vote upon the business before the meeting either by show of hands or by poll. The distribution of holders of options is as follows:

Category	Number of Optionholders
Holdingbetween 1-1,000 Options	162
Holdingbetween 1,001 – 5,000 Options	74
Holdingbetween 5,001 - 10,000 Options	12
Holdingbetween 10,001-100,000 Options	20
Holdingmore than 100,001 Options	8

The Company’s options maturing on 30 November 2012 over fully paid ordinary shares are quoted on the Australian Securities Exchange using the code QUROB.

The top 20 optionholders are as follows:

Name	Number of Options held	Percentage interest
Chabad House Of Caulfield PtyLtd	64,936,241	94.97%
Mr John G Kellas	742,980	1.09%
Miss Sanaz Ghasimzadeh	400,000	0.58%
JP Morgan Nominees Australia Limited A/C>	390,200	0.57%
Bonos PtyLtd	302,000	0.44%
Jandamint PtyLtd	200,000	0.29%
Mr Zalman Gutnick	200,000	0.29%
Mr Yehuda Hoch	145,316	0.21%
Est Frank Rodi	100,000	0.15%
Mr RoyPeter Wiseman	90,534	0.13%
M/S Judith Edna Brandt	62,500	0.09%
Mrs Susan Margaret West	53,500	0.08%
Mr Zdenek Havlicek	50,000	0.07%
Conrad Joseph Lawrence Goodger	46,150	0.07%
Mr Peter Gasparini	40,000	0.06%
Mr Douglas James Brown	35,000	0.05%
Graham J Bench PtyLimited	34,912	0.05%
Dr Lakshika Swarnapalee Bogoda & Mr Kapila Raja Bogoda	34,500	0.05%
Mr Russell James Barker	20,000	0.03%
Mr AnthonyWarwick Whatmore	20,000	0.03%

Quantum Resources Limited Corporate Information

Directors

Joseph Gutnick David Tyrwhitt Craig Michael

Company Secretary Peter Lee

Registered Office and Domicile

Level 8, 580 St. Kilda Road Melbourne Victoria 3004 Australia Telephone: +61 3 8532 2840 Facsimile: +61 3 8532 2805 E-mail: [email protected] Internet: http://www.qur.com.au

Legal Form A public company limited by shares

Country of Incorporation Australia

Share Registry

Link Market Services Limited Level 9, 333 Collins Street Melbourne Victoria 3000 Australia Telephone: 1300 554 474 or + 61 3 9615 9999 Facsimile: +61 3 8614 2903

Shareholder Information

Manager Investor Relations Telephone: +61 3 8532 2840 Facsimile: +61 3 8532 2805 E-mail: [email protected] Internet: http://www.qur.com.au Auditors PKF Level 14, 140 William Street Melbourne Victoria 3000 Australia

Australian Securities Exchange Listing Code QUR QUROA QUROB

Bankers Westpac Level 6, 360 Collins Street Melbourne Victoria 3000 Australia

Solicitor Cornwall Stodart Level 10, 114 William Street Melbourne Victoria 3000

AI assistant

Nova Minerals Ltd — Annual Report 2011

34115_rns_2011-09-28_c7292f09-4539-4647-afa0-594fe2b28fa0.pdf

Quantum Resources Limited

ANNUAL REPORT 2011

Quantum Resources Limited Chairman’s Report

Dear Shareholder

Regional Exploration

Gardner Range (Quantum 100%)

Ware Range (Quantum 100%)

Quantum Resources Limited Chairman’s Report

Telfer Project (Quantum 100%)

Base Metal & Gold Exploration

Whiteheads Project (Quantum 80%)

Farm-Out Joint Ventures

Officer Hill Joint Venture

1. Directors

Mr Joseph Gutnick FAusIMM FAIM MAICD Chairman and Managing Director

Dr David Tyrwhitt PhD(Geology) BSc(Hons) FSEG(USA) FAusIMM CPGeo Non-Executive Director

Craig Michael

Executive Director – appointed 5 October 2010

Directors who ceased to hold office

Mordechai Gutnick – resigned 5 October 2010

2. Principal Activities and Review and Results of Activities

Objectives

Statement of Comprehensive Income

Statement of Financial Position

Cash Flow

3. Significant Change in State of Affairs

4. Dividends

5. Events After The End Of The Financial Year

6. Future Developments and Results

7. Options

(iii) Expired

8. Directors’ Interests in Shares and Options

9. Meetings of Directors

10. Company Secretary

11. Indemnification of Directors, Officers and Auditors

Quantum Resources Limited Directors’ Report

12. Environment

13. Non- Audit Services

14. Remuneration Report - Audited

Quantum Resources Limited Directors’ Report

(ii) Service Agreements with AXIS Consultants Pty Ltd

(iii) Non-Executive Directors

(iv) Performance-Linked Remuneration

2005 Employee Share Option Plan

Quantum Resources Limited Directors’ Report

Quantum Resources Limited Directors’ Report

(v) Details of Directors, Executives and Remuneration

(a) Directors

(b) Executives

Quantum Resources Limited Directors’ Report

Lead auditor’s independence declaration under Section 307C of the Corporations Act 2001

Quantum Resources Limited Statement of Comprehensive Income for the year ended 30 June 2011

Quantum Resources Limited Statement of Financial Position

as at 30 June 2011

Quantum Resources Limited Statement of Changes in Equity for the year ended 30 June 2011

Quantum Resources Limited Statement of Cash Flows

1. Summary of significant accounting policies

(a) Basis of preparation

Compliance with IFRS

Basis of measurement

Going concern

Functional and presentation currency

Critical accounting estimates

Exploration and evaluation

Share based payment transactions

(b) Revenue

Interest revenue

(c) Income tax

(d) Goods and services tax (GST)

(f) Cash and cash equivalents

(g) Trade receivables

(h) Plant and equipment

(i) Exploration, evaluation and development expenditure

(j) Earnings per share

Basic earnings per share

Diluted earnings per share

(k) Trade and other payables

Nova Minerals Ltd Annual Report 2011