2004 Annual Report

MONARCH RESOURCES LIMITED

ABN 69-100-038-266

Annual Report 2004

Corporate Directory	1
Chairman's Review	2
Review of Operations	3
Statutory Information and Financial Report
Directors' Report	8
Statement of Financial Performance	12
Statement of Financial Position	13
Statement of Cash Flows	14
Notes to the Financial Statements	15
Declaration by Directors	29
Independent Audit Report	30
Corporate Governance Statement	32
Additional Information	35
Tenement Directory	37

Corporate Directory

ROARD OF DIRECTORS
Colin L Smith	Dip. Mining, WASM, FAuslMM
Michael F Kiernan B.Bus.
	David M Macoboy B.Ec, B.Comm, CPA
	Phillip P Botsis FAICD, AAIBF (Senior)
COMPANY SECRETARY
Frank J Campagna B.Bus. (Acc), CPA
REGISTERED OFFICE 62 Colin Street West Perth WA 6005
Telephone: (61 8) 9481 6422 Facsimile: (618) 9481 6433 E-mail: [email protected] Web-site: www.mrl.net.au
SHARE REGISTRY Level 2, 45 St George's Terrace Perth WA 6000	Computershare Investor Services Pty Ltd
Telephone: (61 8) 9323 2000 Facsimile: (61 8) 9323 2033 fi-mail: Web-site:	[email protected] www.computershare.com.au

AUDITORS

Ernst & Young

SOLICITORS Steinepreis Paganin

BANKERS National Australia Bank Limited

STOCK EXCHANGE LISTING

Shares in Monarch Resources Limited are quoted on Australian Stock Exchange Limited. ASX code: MRS

Chairman's Review

MONARCH RESOURCES LIMITED AND CONTROLLED ENTITIES

Dear Shareholders

I am pleased to report that the 2004 financial year has been a period of solid progress for Monarch Resources Limited.

Monarch owns a portfolio of mineral tenements which are prospective for gold and nickel. The tenements are located within the Lake Johnston Greenstone Belt and the Eastern Goldfields of Western Australia.

The Lake Johnston region is the major focus of our exploration efforts. Our systematic approach to exploration at Lake Johnston is returning positive results, confirming the existence of greenstones associated with gold and nickel sulphide mineralisation within project areas. The region is relatively under-explored due to the occurrence of extensive soil and sand cover, the structural complexity of the greenstone belt and limited detailed follow-up exploration in the past.

Ground geophysical surveys undertaken at the Mt Day project better defined a previously known anomaly (T1) and identified a new anomaly to the north (T1 North). A programme of drilling to test the new anomaly and to follow up previous drilling at T1 was interrupted by heavy rainfall, forcing suspension of work after only one RC hole had been completed at T1 North. This hole did not yield any significant nickel values but it did intersect ultramatic rocks with minor disseminated sulphides, including traces of the nicket sulphide pentlandite. While the maximum nicket assay was only 0.17%, this drill hole was encouraging because it was the first time that ultramafic rocks (the usual host rocks for nicket sulphide deposits) had been located in the vicinity of the TEM anomalies. Resumption of the RC drilling programme has been delayed by poor weather and unavailability of suitable drill rigs, but work is expected to resume in late October.

At the Mt Gordon project, exploration is aimed at testing the source of an extensive semi-regional goldin-auger anomaly, identified by previous exploration. An initial programme of follow-up drilling was undertaken in two more strongly anomalous localities within the broader anomalous region. This work confirmed that gold mineralisation is present in the bedrock and further drilling is planned later in 2004. At Plover Rock, an exploration programme has been developed to investigate an identified gold in soil anomaly which overfies interesting geological structures and which has not been tested by previous exploration work.

. . . . . . . . . . . . . . . . . . .

Following acquisition of the Londonderry profect, an exploration programme was undertaken based on geological and structural interpretation of concealed bedrock. A drilling programme of 4,248 metres did not intersect zones of anomalous nickel, typical of massive nickel sulphide mineralisation, but anomalous gold values in weathered bedrock were obtained in one part of the area.

We have continued to evaluate other resources based opportunities in order to expand the Company's tenement portfolio. During the year Monarch entered into a joint option over the Republican project, which is located 90 kilometres south-east of Kalgoorlie, in the Eastern Goldfields of Western Australia. The rights for nickel exploration have since been farmed out.

The Company will continue to evaluate other prospective mining projects that would have the potential to contribute to the Company's future growth. Our aim in this regard is to identify advanced exploration projects, with primarily gold potential, that can be advanced to a development stage.

With the focus during the year being on the systematic exploration of our tenement portfolio, a decision was made to dispose of Monarch's strategic shareholding in the ASX listed oil and gas explorer, Anzoil NL, with proceeds from the sale being used to advance our exploration programmes.

After year end, Monarch raised additional working capital though a share purchase plan offer to all shareholders. Further funding initiatives are under consideration.

The Company's mission is to increase shareholder wealth by capital growth and dividend through the discovery of economic mineral deposits and the development of profitable mining operations. We are actively searching for other opportunities.

We are encouraged by the work completed to date and we look forward to further progress in the year ahead.

Colin L Smith CHAIRMAN

5 October 2004

to focus future efforts on high priority prospects. Relinquishment of selected tenements commenced subsequent to the end of the year.

As part of the comprehensive review of all geological, geochemical and geophysical data available on the tenements, detailed aeromagnetic data were acquired over the northern tenement areas. In addition, a reanalysis of the regolith was carried out to assess the validity of previous soil sampling. This work identified ten areas for geological follow-up within the Plover Rock, Round Top Hill, Mt Day and Mt Gordon tenements, where previous exploration was considered inadequate or ineffective. Much of the exploration completed this year was devoted to these areas, although some areas of significance still remain to be tested.

Mt Day prospect (80%)

The Mt Day tenements are located over a greenstone sequence along strike from the Emily Ann and Maggie Hayes Mines, with Emily Ann only 6 km to the south.

NARCH RESOURCES LIMITED

Figure 2

LAKE JOHNSTON PROJECT

Monarch Resources Limited controls interests in a portfolio of mining tenements over the Lake Johnston Greenstone Belt of Western Australia. The tenements, almost 1,000 km³ in area, are located approximately 540 km east of Perth and approximately 150 km south-west of Kalgoorlie.

The Lake Johnston belt hosts the Emily Ann and Maggie Hayes Nickel Mines, owned by Lion Ore (Australia) Limited. These deposits, containing significant mineral resources, are currently in production or being developed.

The geology of the belt closely resembles the neighbouring Forrestania, Southern Cross and Norseman Greenstone Belts, all of which contain major hard rock gold mines, such as Bounty, Yilgarn Star and Chalice. While no gold production has been recorded from Lake Johnston, the belt is considered to be under-explored due to its remoteness, difficult access and poor exposure.

Monarch's Lake Johnston project comprises five distinct geographical prospect areas of Mt Day, Mt Gordon, Plover Rock, Round Top Hill and Lake Hope (Figure 2).

A comprehensive review of Monarch's Lake Johnston tenement holdings was undertaken during the year. This concluded that some tenements considered to have low prospectivity should be relinquished in order

(Continued)

The sequence consists, predominantly of mafic rocks. and subordinate ultramafic rocks, which are metamorphosed to amphibolite grade. Previous drilling in the area intersected local sulphide mineralisation assaying up to 0.8% nickel. Anomalous gold also occurs locally in the sequence, with values up to 1.1 g/t reported from previous drifting.

Last year a complete re-evaluation of all exploration data was completed and a detailed aeromagnetic and radiometric survey was flown. The results of this work confirmed that TEM anomaly T-1 was a priority target and indicated the potential for rocks along strike from T-1 to host nicket mineralisation.

This year a grid was established to cover 5 km of strike length around T-1. Thirty-four line kms of pole-dipole induced polarisation (IP) were completed to explore for the presence of disseminated sulphides associated with nickel and gold mineralisation. A moving loop transient electromagnetic (TEM) ground survey was completed over 3 km of strike covering the previously identified T-1 anomaly and extending to the north. This survey located a new TEM anomaly (T-1 North) situated 700 metres northwest of T-1, which was interpreted to be a bedrock conductor at a depth of >100 metres (Figure 3). This anomaly was selected as a priority reverse circulation (RC) drilling target.

At anomaly T-1, variable responses caused by nearsurface perturbations made the interpretation of the

TEM equivocal, so a further TEM survey was needed to resolve the interpretation, assist in modelling conductors and establish additional drill targets. A rotary air blast (RAB) drifting programme consisting of six holes for 333 metres was completed to check for near-surface ultramafic rocks between the T-1 and T-1 North anomalies, but found none.

RC hole MDRC 012 was drilled to 227 metres to test the conductor at anomaly T-1 North. The hole intersected two narrow zones of ultramafic rocks containing minor sulphide mineralisation with traces of pentlandite (nickel iron sulphide). Assays of interest included:

From * To * Nickel Copper Sulphur the communication of the communication of the communication of the communication of the communication of the communication of the communication of the communication of the communication of the communication of the communic
170		374 - 0.326	- 0.080	ก กล่ว
ind. $173 \sim 174$ 0.165 0.252 9.630
184	186	- 0.167	-<0.01	- 0.303
$1.111186 \times 1188 = 0.160 \times 0.01 \times 0.265$
188	190	A 096	$\leq 0.01$	- 0. 199
* Metres down hole			and a state straight and

While this drilling was in progress, heavy rain in the area made access to the site impossible for heavy equipment and caused a temporary cessation of activities. Further drilling to test T-1 and T-1 North will commence after the current wet season, when access to the area is regained.

MONARCH RESOURCES LIMITED AND.CONTROLLED.ENTITIES

Mt Gordon prospect (100%)

The Mt Gordon prospect is located 50 km southeast of Mt Day. The tenements cover a broad suite of mafic and ultramafic rocks that are intruded by narrow irregular granites along an anticlinal axis that trends northwest through the central part of the main tenement.

Previous shallow auger drilling, at the time believed to represent the entire auger programme, had defined six gold anomalies that were partially followed up by RAB drilling. The best RAB results were 14 metres @ 0.4g/t gold and 7 metres @ 0.22 g/t gold; the best end-ofhole result was 1 metre @ 1.7 g/t gold. Previous operators had not followed up these intersections.

Following a reassessment of all previous data, Monarch identified five target areas considered to have potential for economic gold mineralisation. Two of these areas - Anomalies C and D - were selected for further RAB drill testing. A RAB drilling programme consisting of 109 holes for 2,626 metres was undertaken during the first quarter of 2004. This programme was designed to more clearly define the trends of gold anomalism and produce targets for RC drilling. The best results obtained from the RAB drilling were 1 metre @ 0.42 g/t gold from Anomaly C and 1 metre @ 0.22 g/t gold at Anomaly D.

Subsequently, four RC holes were drilled at each anomaly. At Anomaly C the four holes (total 484 metres) intersected a best value of 2 metres @ 6.97 g/t gold from 70 metres, associated with an altered granitic intrusive. At Anomaly D the four holes (total 482 metres) intersected a best value of 2 metres @ 0.99 g/t gold from 74 metres, associated with an ultramafic intrusive crosscutting mafic rocks and granites. Interpretation of the drill data failed to indicate continuity between intersections in either area.

Recently, a substantial amount of additional (infill) auger geochemistry, also carried out by the earlier explorer, has been uncovered. A reinterpretation of all surface auger and drill hole geochemistry is in progress to better define targets for further exploration in the coming year.

Plover Rock prospect (80%-100%)

The Plover Rock tenements cover the north-eastern extremity of the Lake Johnston Greenstone Belt and are centred around 12 km east of Mt Day. Previous exploration outlined a number of gold anomalies, which occur around the margins of a granitic intrusive. These previously returned a best drill result of 4 metres @ 2.3 g/t gold from the Bilbo Prospect.

Two greenfields structural targets (PRA and PRB) were identified last year during a compilation of geochemistry and drilling. Field checking of these targets identified moderate amounts of quartz veining and epidote-silica alteration. In addition, compilation of soil geochemical data has recently identified a poorly tested gold soil anomaly with a strike length of up to 3 km. This anomaly strikes northwest and is situated near the western margin of a large granitic intrusive in a structural position similar to those of the other Plover Rock gold anomalies.

Work to test these three targets will commence next year. It will include a combination of soil sampling, geological mapping and RAB drilling.

(Continued)

Round Top Hill prospect (100%)

Tenements of the Round Top Hill prospect, located in the northwest corner of the Lake Johnston Greenstone Belt, are centred around 7 km west of Mt Day, Previous exploration on the tenements comprised soil and auger sampling, chiefly for nicket. Interpretation of aeromagnetics and reinterpretation of previous geochemistry had identified two targets with potential for hosting sulphide nickel deposits. These targets, named T-2 and T-3, are associated with ultramafic rocks and have previously yielded anomalous nickel responses from RAB holes.

During 2003-4, grids were established and moving loop TEM surveys were completed over each of them. The surveys detected no bedrock conductors and readings were dominated by strong surficial and overburden-type responses.

Lake Hope prospect (100%)

The Lake Hope tenements are located on the western margin of the Lake Johnston Greenstone Belt. around 20 km south-southeast of the Maggie Hayes nickel mine.

Salt lake sediments obscure most of the area, the least explored of the Lake Johnston titles. Granitic rocks underlie most of the western portion of the tenements but the northeastern portion appears to be underlain by greenstone lithologies including ultramatics, making this area prospective for nickel deposits.

Monarch has acquired detailed aeromagnetics and radiometrics over the greenstones, which will be assessed in the coming year. Fieldwork was not undertaken at Lake Hope during 2003-4 since exploration concentrated on higher priorities at Mt Daviand Mt Gordon.

LONDONDERRY PROJECT (100%)

During the year, Monarch exercised its option to purchase six prospecting licences covering an area of 10 km² near Coolgardie, Western Australia. The tenements are located 10 km south of Coolgardie and 12 km north of the old Nepean nickel mine. They cover 5 km of prospective ground along the eastern margin of the Coolgardie-Nepean Greenstone Belt. This belt hosts major gold mines at Bayleys, Three Mile Hill and Tindals, as well as numerous smaller deposits. It also hosts a major nickel deposit at Nepean and several smaller deposits such as Miriam.

The tenements are extensively covered by thick overburden that has been scout drilled for deep lead alluvial gold. The project is considered to have potential for hard rock gold deposits and sulphide nickel deposits hidden beneath the alluvial cover. After acquiring the tenements, Monarch purchased and reprocessed multi-client aeromagnetic data covering the area. These data, together with the old driffing information, were used to produce a new geological and structural interpretation.

From this work, three targets (two gold and one goldnicket) were identified as worthy of drill testing. The targets are of the order of 300 metres long and are all concealed beneath alluvial cover.

A RAB/aircore drilling programme consisting of 109 holes for 4,248 metres was completed over the targets. The drifting intersected a sequence of mafic (metamorphosed basalts and dolerites) and ultramafic rocks, intruded by granite along the northern margin of the drifting grid. Some RAB holes intersected sporadic anomalous gold at the base of the alluvial profile and just below it. Anomalous bottom-of-hole gold ( 0.1 ppm) was also intersected in a number of holes. In particular, three adjacent holes, LEB 043, LEB 044 and LEB 045, all contained anomalous gold, which in LEB 043 was associated with fine dusty sulphides and anomalous copper.

A follow-up programme of aircore driffing planned to assess this anomaly has been completed since the end of the year with negative results.

YERILLA PROJECT (Monarch option)

Monarch has an option to purchase eleven prospecting licences covering 18.5 km² just east of the old Yerilla Mining Centre, located 150 km north-northeast of Kalgoorlie in Western Australia. The western portion of the licences is extensively covered by transported overburden to a depth of approximately 20 metres. Previous drilling has shown that this cover obscures a sequence of highly schistose felsic, intermediate and mafic volcanics and metasediments cut by goldbearing quartz stockwork systems. To the east, the weathering profile is partially exposed, with bedrock consisting of sheared and unsheared mafic rocks and minor sediments. Minor granitic bodies also intrude the area.

Previous drilling along old tracks traversing the tenements has located three gold anomalous areas beneath alluvial cover. Although each of these anomalies has been drilled, the gold anomalies are all still open-ended. In addition, scout drilling has intersected anomalous gold away from the three main areas

Prior to any decision to purchase the tenements Monarch is entitled to undertake up to 800 metres of driffing, but up untif year end attempts to commence the programme had been frustrated by a combination of bad weather and unavailability of suitable drill rigs. Since the end of the year an extension of the option period to 31 October 2004 has been negotiated and a programme of around 500 metres of RC drifting has recently been conducted.

(Continued)

REPUBLICAN PROJECT (Monarch joint option)

In conjunction with Bullion Minerals Limited, Monarch has entered into an option to purchase exploration licence 15/661, 77km² in area, located approximately 90 km south of Kalgoorlie. The nickel rights to this title have been farmed out to Equinox Resources Limited (Equinox) such that Equinox can eam up to 60% equity in all nickel mineralisation found within it. Equinox manages the tenement and is responsible for maintaining it in good standing.

The tenement covers mixed greenstones. Within it, a felsic volcanic-metasedimentary sequence correlated with the Black Flag Beds is considered to have potential for both gold deposits and volcanogenic massive sulphide (VMS) base metal deposits similar to Nimbus (silver-gold) and Jaguar (lead-zinc-silver). Examination of previous drill hole data indicates that this relatively shallow drilling may not have adequately tested the bedrock sources of soil and supergene anomalism.

Thrust-faulted against the felsic volcanics and repeated by further thrust faulting is a sequence of mafic and ultramafic rocks, which are considered equivalent to those found at the nearby nickelmineralised Bluebush, Republican and Tramways areas. The ultramafic rocks are considered to have excellent potential for mechanically remobilised nickel-copper mineralisation along the Democrat Thrust and into structural traps.

Exploration is in the preliminary stages and to date consists of aeromagnetic interpretation, open file data compilation and limited field reconnaissance.

CORPORATE

During the year Monarch sold its strategic shareholding in the ASX listed oil and gas explorer, Anzoil NL, for net sale proceeds of \$488,114 in order to focus on our mineral exploration activities and to redirect funding to exploration programmes.

In August 2004, Monarch raised \$409,800 through a share purchase plan offer to shareholders and a shortfall placement. The share purchase plan offered shareholders the opportunity to subscribe for a maximum of \$5,000 worth of shares at a subscription price of 16 cents per share and a free attaching option for every two shares subscribed for. A total of 2,561,250 shares were issued as a result of the share purchase plan and the shortfall placement.

In September 2004, shareholders approved the issue of options pursuant to the share purchase plan. A total of 1,280,625 options will be issued upon lodgement of a prospectus for the options.

The Directors will continue to review new resources projects in which Monarch can participate.

So far as it relates to ore and mineralisation, this report is based on information compiled by Mr John Mill, who is a Member of the Australian Institute of Geoscientists and who has had more than five years relevant experience in the field of activity being reported on. This report accurately reflects the information compiled by Mr Mill. Mr Mill has consented to the inclusion of this information in the form and context in which it appears in this report.

Directors' Report

The Directors of Monarch Resources Limited (Monarch or parent entity) provide hereunder their report on the results and state of affairs of the parent entity and the consolidated entity for the financial year ended 30 June 2004.

DIRECTORS

The names of the Directors of Monarch in office during the course of the financial year and up to the date of this report are as follows:

Colin Lindsay Smith
Michael Laurence Kiernan
David Michael Macoboy
Phillip Peter Botsis

Unless otherwise indicated, all Directors held their position as a Director throughout the entire financial year and up to the date of this report.

PRINCIPAL ACTIVITIES

The principal activity of Monarch and the consolidated entity (which includes the controlled entities of Monarch) during the financial year was mineral exploration and evaluation. There was no significant change in the nature of this activity during the year.

RESULTS OF OPERATIONS

The net loss of the consolidated entity after provision for income tax was \$1,038,200.

REVIEW OF OPERATIONS

During the year the consolidated entity continued its mineral exploration and evaluation activities on its portfolio of tenements located within Western Australia.

Exploration activities during the year included an aerial magnetic survey over the northern section of the Lake Johnston project, ground geophysical surveys at the Mt Day and Round Top Hill projects and drilling programmes at the Mt Day, Mt Gordon and Londonderry projects.

Monarch and Bullion Minerals Limited (Bullion) jointly entered into an option agreement over the Republican project located in Western Australia. The option may be exercised at any time up to 31 December 2005 for the sum of \$312,500 in cash and \$312,500 in shares in Monarch and/or Bullion.

Monarch sold its strategic shareholding in Anzoil NL in January 2004 for net sale proceeds of \$488,114.

The Directors of Monarch will continue to review other resources projects in which the consolidated entity may participate.

. . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . .

DIVIDENDS

No amounts were paid by way of dividend since the end of the previous financial year. The Directors do not recommend the payment of a dividend.

LIKELY DEVELOPMENTS

During the course of the next financial year, the consolidated entity intends to continue its mineral exploration and evaluation activities and to investigate additional resource projects in which the consolidated entity may participate.

In the opinion of the Directors there is no additional information available as at the date of this report on any likely developments which may materially affect the operations of the consolidated entity and the expected results of those operations in subsequent years.

OPTIONS GRANTED OVER UNISSUED SHARES

At the date of this report, 20,965,250 ordinary fully paid shares which are subject to options were unissued. The options are exercisable at 20 cents each on or before 31 3uly 2006.

Details of options issued and exercised during the financial year are contained in Note 13 to the financial report. Subsequent to the end of the financial year, shareholders approved the issue of 1,280,625 options pursuant to a share purchase plan offer to shareholders.

No person entitled to exercise the options has any right by virtue of the option to participate in any share issue of any other corporation.

SIGNIFICANT CHANGES

Significant changes in the state of affairs of the consolidated entity during the financial year were as follows:

(a) In January 2004, Monarch sold its strategic shareholding in Anzoil NL for net sale proceeds of \$488,114.
(b) During the year, Monarch exercised its option to acquire the Londonderry project and entered into an option agreement and joint venture agreement over the Republican project.
(c) Following a comprehensive technical review of the consolidated entity's Lake Johnston tenement holdings during the year, mineral tenements considered to have low prospectively were relinguished. Deferred exploration expenditure of \$776,123 was written-off to the statement of financial performance.

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Directors' Report

(Continued)

EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

Significant events which have occurred subsequent to the end of the financial year are contained in Note 29 to the financial report.

INFORMATION ON DIRECTORS

Directors

Qualifications, experience and special responsibilities

Colin L Smith Dip. Mining, WASM, FAuslMM, Chairman A Director since March 2002. Mr Smith is an independent minerals consultant with over 40 years experience, including extensive general management, corporate and directorial experience in the iron ore, gold, lead-zinc and uranium industries, primarily in Australia and Ghana. Mr Smith is also Chairman of Consolidated Minerals Limited.

1.162.500 shares 550,000 options

Michael L Kiernan B.Bus., Non-Executive Director

A Director since March 2002. Mr Kiernan has over 30 years experience in the transport, processing and mining contracting industries. His experience includes manganese, chromite, gold, iron ore, nickel, barytes and tin projects. He has held executive positions with Australia's major transport and mining contractors and is currently Managing Director of Consolidated Minerals Limited.

13,030,002 shares 6,515,001 options

David M Macoboy B.Ec, B.Comm, CPA, Non-Executive Director A Director since March 2002. Mr Macoboy is a certified practising accountant with degrees in both economics and commerce. He has extensive experience in banking, finance and general management in a range of industries having held senior positions in banking, investment banking, media and mining companies. Mr Macoboy is currently Finance Director for Consolidated Minerals Limited.

1,131,250 shares 550,000 options

Phillip P Botsis FAICD, AAIBF (Senior), Non-Executive Director A Director since February 2003. Mr Botsis has over 25 years experience in finance and investment. He is the Founder and Managing Director of Ledge Finance Limited, which provides business finance services. Ledge Finance has several high-profile mining clients and is a member of the Association of Mining and Exploration Companies.

1,531,250 shares 1,000,000 options

Directors' Report

MONARCH RESOURCES LIMITED AND CONTROLLED ENTITIES.

(Continued)

MEETINGS OF DIRECTORS

The number of meetings of the Board of Directors of Monarch held during the year ended 30 June 2004 and the number of meetings attended by each Director are as follows:

	Number held whilst in office	Number attended
CLSmith	-5	5
ML Kiernan	6	5
D M Macoboy	6	5
P P Botsis	5	4

Monarch does not have a separate audit committee. The Directors believe that Monarch is not currently of a size nor are its affairs of such complexity as to warrant the establishment of a separate audit committee. Accordingly, all matters capable of delegation to an audit committee are considered by the full Board of Directors.

DIRECTORS' AND EXECUTIVES' REMUNERATION

The Board of Directors considers remuneration policies and practices generally, and determines specific remuneration packages and other terms of employment for any executive directors, senior management and non-executive directors. Executive remuneration and other terms of employment are reviewed annually by the Board having regard to perform ance, relevant comparative information and independent expert advice. Executives may be provided with longer-term incentives through participation in option schemes, which serve to align the interests of the executives with those of shareholders.

Monarch's remuneration policy for any executive directors and senior management is designed to promote superior performance and long term commitment to Monarch. Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the consolidated entity's Australian operations.

Details of the nature and amount of each element of the emoluments of each Director of Monarch are as follows:

		Primary	Post-employment
Name	Cash salary and fees .	Other benefits (insurance premiums):	Superannuation	Total
Directors
C L Smith M L Kiernan D M Macoboy P P Botsis	55,573 22,500 30,000	5,197 5,196 5,196 5,196	2,700	60,770 5,196 27,696 37,896

Directors' Report

(Continued)

Other than Directors of Monarch, there were no other executive officers of the consolidated entity during the year.

Information on any benefits received by Directors of Monarch by reason of a contract made by the consolidated entity with a Director or a director-related entity are contained in Note 21 of the financial report.

The consolidated entity has entered into indemnity agreements with each of the Directors and officers of the consolidated entity. Under the agreements, the consolidated entity will indemnify those officers against any claim or for any expenses or costs which may arise as a result of work performed in their respective capacities as officers of the consolidated entity or any related entities.

During the financial year, Monarch paid premiums of \$20,785 to insure the Directors and other officers of the consolidated entity. The liabilities insured are for costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the consolidated entity.

ENVIRONMENTAL REGULATIONS

The consolidated entity is subject to significant environmental regulation in respect to its mineral exploration activities. These obligations are regulated under relevant government authorities within Australia. The consolidated entity is a party to exploration and development ficences. Generally, these licences specify the environmental regulations applicable to exploration and mining operations in the respective jurisdictions. The consolidated entity aims to ensure that it complies with the identified regulatory requirements in each jurisdiction in which it operates.

Compliance with environmental obligations is monitored by the Board of Directors. No environmental breaches have been notified to the consolidated entity by any government agency during the year ended 30 June 2004.

Signed in accordance with a resolution of the Directors.

M₁ Kiernan Director

Perth, Western Australia 27 September 2004

MONARCH RESOURCES LIMITED

Statement of Financial Performance

For the year ended 30 June 2004

			CONSOLIDATED		PARENT ENTITY
	Note	2004. \$	2003 \$	2004 \$.	2003 \$

Revenue from operating activities		18,671	45,016	18,671	45,016
Revenue from outside operating activities		578,112	32,175	578,112	32,175
Total revenue	2	596,783	77,191	596,783	77,191
Employee and directors' benefits expenses		58,700	40,288	58,700	40,288
Carrying value of investments sold		536,736	26,000	536,736	26,000
Consulting and corporate advisory fees		118,200	73,001	118,200	73,001
Deferred exploration expenditure written-off		776,123		213,918
Provision for diminution in investments			320,038	729,200	320,038
Regulatory expenses		58,023	26,832	58,023	26,832
Other expenses from ordinary activities		87,201	94,389	87,201	94,336
Loss from ordinary activities before income tax expense		$3(1,038,200)$ (503,357) (1,205,195)			(503, 304)
Income tax expense	4
Net loss attributable to members of Monarch Resources Limited		(1,038,200)		$(503,357)$ $(1,205,195)$	(503, 304)
Share and option issue expenses			(385, 142)		(385, 142)
Total changes in equity other than those resulting from transactions with owners as. owners attributable to members of
Monarch Resources Limited.		(1,038,200)		(888,499) (1,205,195)	(888, 446)
	Note	2004	2003
		Cents	Cents
Basic earnings/(loss) per share Diluted earnings/(loss) per share	$27 \cdot$ 27	(2.43) (2.43)	(1.36) (1.36)

The accompanying notes form part of these financial statements.

Statement of Financial Position

As at 30 June 2004

	Note	2004 -	CONSOLIDATED 2003		PARENT ENTITY 2003
		S	S	\$	\$
CURRENT ASSETS
Cash assets	5	149,843	781,167.	149,843	781,167
Receivables	6.	40,743	30,399	40,743	30,399
Other financial assets	7		482,005		482,005
TOTAL CURRENT ASSETS		190,586	1,293,571	190,586	1,293,571
NON-CURRENT ASSETS
Receivables	8			584,100	240,683
Other financial assets	9				729,200
Deferred exploration expenditure	10	1,914,797	1,763,126	1,121,455	750,996
TOTAL NON-CURRENT ASSETS		1,914,797	1,763,126	1,705,555	1,720,879
TOTAL ASSETS		2,105,383	3,056,697	1,896,141	3,014,450

CURRENT LIABILITIES
Payables	11	100,824	76,638	100,824	76,638
TOTAL CURRENT LIABILITIES		100,824	76,638	100,824	76,638
TOTAL LIABILITIES.		100,824	76,638	100,824	76,638
NET ASSETS		2,004,559	2,980,059	1,795,317	2,937,812
EQUITY
Contributed equity	$12$ .	3,415,306	3,352,606	$-3,415,306$	3,352,606
Reserves i	13.	$-103,148$	$-103,148$ .	$-103,148$ .	103,148
Accumulated losses		$14 \cdot (1,556,195)$		(517,995) (1,723,137)	(517, 942)
TOTAL PARENT ENTITY INTEREST		1,962,259		2,937,759 1,795,317 2,937,812
Outside equity interests	15	42,300	42,300
TOTAL EQUITY	16	2,004,559	2,980,059	1,795,317	2,937,812

The accompanying notes form part of these financial statements.

$\begin{bmatrix} 13 \end{bmatrix}$

MONARCH RESOURCES LIMITED

Statement of Cash Flows

For the year ended 30 June 2004

	CONSOLIDATED		PARENT ENTITY
Note .	2004 : s.	2003 \$	2004 S.	2003 \$

Cash flows from operating activities
Payments to suppliers and employees	(320, 376)	(227, 435)	(320, 376)	(227, 382)
Interest received	18,671	45,016	18,671	45,016
Net cash outflow from operating activities 25	(301, 705)	(182, 419)	(301, 705)	(182, 366)
Cash flows from investing activities
Payments for controlled entitles, net of
cash acquired		(29, 147)
Payments for mineral exploration expenditure	(836, 609)	(380, 215)	$(493, 192)$ .	(139, 532)
Payments for purchase of mining tenements	(69,091)	(521, 505)	(69,091)	(521, 505)
Payments for purchase of share investments	(54, 731)	$(828, 043)$ .	$(54,731)$ .	(857,243)
Proceeds on sale of share investments	578,112	32,175	578,112	32,175

Net cash outflow from investing activities.		$(382,319)$ $(1,726,735)$	(38,902)	(1,486,105)
Cash flows from financing activities
Proceeds from issues of shares and options	62,700	2,892,894	62,700	2,892,894
Payments for share and option issue expenses		(385, 142)		(385, 142)
Loans to controlled entities			(343, 417)	(240, 683)
Loans to other parties	(110,000)		(110,000)
Proceeds from borrowings -		10,000		10,000
Repayment of loans by other corporations	100,000		100,000
Net cash inflow/(outflow) from
financing activities	52,700	2,517,752	(290, 717)	2,277,069
Net increase/(decrease) in cash held	(631, 324)	608,598	(631, 324)	608,598
Cash at the beginning of the financial year.	781,167	172,569	781,167	172,569
Cash at the end of the financial year -5 -	149,843	781,167	149,843	781,167

Non-cash financing and investing activities $\sim$ 26

The accompanying notes form part of these financial statements.

Notes to the Financial Statements For the year ended 30 June 2004

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

$1.1$ BASIS OF PREPARATION OF THE FINANCIAL REPORT.

This financial report is a general purpose financial report which has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The financial report has been prepared on an accruals basis and is based on historical cost and does not take into account changing money values or, except where stated, current valuations of non-current assets.

Cost is based on the fair values of the consideration given in exchange for assets. Accounting policies adopted are consistent with those applied in the previous financial period, except as specifically noted.

GOING CONCERN

$1.2$

The statement of financial position of the parent entity and the consolidated entity as at 30 June 2004 both disclose a net working capital position of \$89,762. The net cash outflow for the year ended 30 June 2004 for both the parent entity and the consolidated entity was \$631,324. The financial statements have been prepared on the basis that the parent entity and the consolidated entity can continue to meet their commitments and can therefore continue normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. Given the stage of the parent entity's and the consolidated entity's development and their working capital position as at 30 June 2004, they remain reliant upon equity capital for ongoing funding requirements.

Subsequent to the end of the financial year, the parent entity raised \$409,800 through a share purchase plan offer to shareholders and shortfall placement. The directors of the parent entity are also investigating additional funding initiatives. The parent

entity and the consolidated entity may also undertake a rationalisation of their tenement portfolios, including the joint venture or outright sale of projects within the portfolio. The directors believe that at the date of signing of the financial report there are reasonable grounds to believe that the matters set out above will be achieved and thus believe that it is appropriate for the financial statements to be prepared on the basis of the parent entity and the consolidated entity continuing as a going concern.

The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts, or to the amounts or classification of liabilities, which may be necessary should the parent entity and the consolidated entity not be able to continue as a going concern.

PRINCIPLES OF CONSOLIDATION $1.3$

The consolidated financial report incorporates the assets and liabilities of all entities controlled by Monarch Resources Limited ("parent entity") as at 30 June 2004 and the results of all controlled entities for the year then ended. Monarch Resources Limited and its controlled entities together are referred to in this financial report as the consolidated entity. A list of controlled entities appears in Note 23. The effects of all transactions between entities in the consolidated entity are eliminated in full.

Where control of an entity is obtained during a financial year, its results are included only from the date upon which control commences. Where control of an entity ceases during a financial year, its results are included for that part of the year during which control existed.

$1.4$ INVESTMENTS

Investments classified as current assets represent securities in listed companies purchased for resale and are valued at the lower of cost and net realisable value as at. balance date.

Notes to the Financial Statements (Continued)

$1.5$ INCOME TAX

Tax effect accounting procedures are followed whereby the income tax expense in the statement of financial performance is matched with the accounting profit or loss (after allowing for permanent differences). The future income tax benefit relating to tax losses is not carried forward as an asset unless the benefit can be regarded as being virtually certain of realisation, Income tax on net cumulative timing differences is set aside to the deferred income tax and future income tax benefit accounts at the rates which are expected to apply when those timing differences reverse.

DEFERRED EXPLORATION EXPENDITURE $1.6$ Exploration and evaluation costs are accumulated in respect of each separate area of interest.

Exploration and evaluation costs for each area of interest are carried forward where rights of tenure of the area of interest are current and the costs are expected to be recouped through the successful development and exploitation of the area of interest, or by its sale, or where exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in relation to the area are continuing.

When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in respect of that area are written off in the financial year in which the decision is made. Each area of interest is reviewed at the end of each accounting period and accumulated expenditure is written off to the extent that it is considered that the costs will not be recoverable in the future.

RECOVERABLE AMOUNT $1.7$

Where the carrying value of an individual non-current asset, other than exploration expenditure, is greater than its recoverable amount, the asset is written down to its recoverable amount. The directors review the carrying values of non-current assets at each year end and in determining recoverable amount, the expected net cash flows are not discounted to their present values.

REVENUE RECOGNITION 1.8 Revenue is recognised to the extent that it is probable that the economic benefits will flow to the consolidated entity and the revenue can be reliably measured. Specific criteria for interest receipts to be recognised as revenue are when control of the right to receive the interest payment passes to the consolidated entity.

FINANCIAL INSTRUMENTS 1.9

Financial instruments included in equity -Ordinary share capital bears no special terms or conditions affecting income or capital entitlements of the shareholders. Dividend entitlements are recognised as an appropriation of profit in the period to which. they relate.

Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

Financial instruments included in liabilities Loans payable are recorded as liabilities and are recognised at the amount of the net proceeds received. Interest is recognised as an expense in the period to which it relates. Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received.

Financial instruments included in assets Trade and other debtors are initially recorded. at the amount of contracted proceeds.

Notes to the Financial Statements (Continued)

1.10 EARNINGS PER SHARE

Basic earnings per share is determined by dividing net operating results after income tax attributable to members of the parent entity, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year.

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

$-1.11$ $\degree$ GOODS AND SERVICES TAX $\degree$

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

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable or payable is included as a current asset or liability in the statement of financial position. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable or payable are classified as operating cash flows.

$1.12$ $CASH$

For the purposes of the statement of cash flows, cash includes deposits at call which are readily convertible to cash on hand and which are used in the cash management function on a day to day basis, net of outstanding bank overdrafts.

Notes to the Financial Statements (Continued)

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		2004 -	CONSOLIDATED 2003	2004.	PARENT ENTITY 2003
		\$		S
2.	OPERATING REVENUE
	(a) Revenue from operating activities.
	interest received	18,671	45,016	18,671	45,016
	(b) Revenue from outside operating activities
	proceeds on sale of investments.	578,112	32,175	578,112	32,175
		596,783	77,191	596,783	77,191
З.	LOSS FROM ORDINARY ACTIVITIES
	Loss from ordinary activities before income tax expense includes the following specific net gains and expenses.
	Net gains
	Profit on sale of investments	41,376	6,175	41,376
	Other expenses
	Insurance costs	30,895	20,042	30,895	20,042
	Legal fees	16,256	25,100	16,256	25,100
	Rental and outgoings	12,000	8,000	12,000	8,000
	Individually significant items
	Expenses
	Deferred exploration expenditure written-off. 3. 776,123 Provision for diminution in investments		320,038	213,918 729,200	320,038


	4 INCOME TAX
	The difference between income tax expense provided in the financial statements and the prima facie income tax expense is reconciled as follows:
	Loss from ordinary activities.	(1,038,200)		$(503,357)$ $(1,205,195)$	(503, 304)
	Prima facie tax expense/(benefit) at 30%	(311, 460)	(151,007)	(361, 558)	(150, 991)
	Tax effect of permanent differences:
	Provision for diminution in investments			218,760
	Other non-deductible expenses	7,029	15,871	7,029	15,871
		(304, 431)	(135, 136)	$(135,769)$ (135,120)
	Current year tax losses not brought to account
	as realisation is not virtually certain	304,431	135,136	135,769	135,120
	Income tax expense
	The directors estimate that the potential future
	income tax benefit in respect of tax losses not brought to account is:	816,943	137,067	524,847	137,051

Notes to the Financial Statements (Continued)

The potential benefit of tax losses has not been brought to account in this financial report as realisation of the benefit cannot be regarded as being virtually certain.

The potential future income tax benefit will be obtainable by the consolidated entity only if:

(a) the consolidated entity derives future assessable income of a nature and of an amount sufficient to enable the benefit of the deductions for the loss to be realised; which we are seen the second teams
(b) the consolidated entity continues to comply with the conditions for deductibility imposed by income tax law; and
(c) no changes in income tax legislation adversely affects the consolidated entity in realising the benefit of the deduction for the loss,

Tax consolidation legislation

The parent entity and its wholly-owned Australian controlled entities have not formally elected to implement the tax consolidation legislation. Accordingly, the Australian Taxation Office has not been notified that the parent entity will form a tax consolidated group. A review of the impact of the tax consolidation legislation on the consolidated entity is being undertaken to determine whether the consolidated entity will elect to adopt the legislation for the income tax year ending 30 June 2004. The financial effect, should it occur, will be recognised in the financial statements for the year ending 30 June 2005. It is unlikely that there will be any financial impact on the consolidated entity,

		CONSOLIDATED 2004 2003	2004	PARENT ENTITY -2003

CURRENT ASSETS
CASH ASSETS 5.
Cash at bank			$133,276$ , $76,141$ , $33,276$ , $76,141$
Cash on deposit			$-116,565$ 705,024 116,565 705,024
Cash on hand
	149.843	781,167	149,843	781,167
RECEIVABLES
Sundry debtors - other corporations	30.743	30,399.	30,743	- 30,399.
Unsecured loan - other parties.	10,000		10,000
	40,743	30,399	40,743	30,399

Unsecured loan to other parties is interest free and has no fixed terms of repayment.

OTHER FINANCIAL ASSETS

ÌТ.

Quoted investments - at cost
Shares in other corporations	802,043	802,043
Less provision for diminution.	(320, 038)	(320, 038)
	482,005	482,005
Market value of investments quoted on prescribed stock exchange
shares in other corporations	476,600	476,600
options in other corporations	6.000	6,000
	482,600	482,600
NON-CURRENT ASSETS

$\mathbf{R}$ . RECEIVABLES

. . . . . . . . . . . . . . . . . .

Unsecured loans - controlled entities 584.100

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Unsecured loans to controlled entities are interest free and have no fixed terms of repayment.

Notes to the Financial Statements (Continued).

	2004 -	CONSOLIDATED -- 2003		PARENT ENTITY $2004 - 2003$
9. OTHER FINANCIAL ASSETS
Shares in controlled entities - at cost			$-729.200$ .	$-729,200$
Less provision for diminution			(729, 200)
				729,200
10. DEFERRED EXPLORATION EXPENDITURE
Opening balance		$1,763,126$ $-$ 50,000		$-750,996$ . $-50,000$ .
Acquisition costs			$-69,091 - 1,292,953$ 69,091 521,505
Exploration expenditure incurred in current year 858,703		$-420,173$	$-515,286$	179.491
Exploration expenditure written-off	(776, 123)		(213.918)
		1,914,797 1,763,126 1,121,455		750,996

The ultimate recoupment of deferred exploration expenditure carried forward is dependent upon the successful development and exploitation, or alternatively sale, of the respective areas of interest at an amount greater than or equal to the carrying value.

CURRENT LIABILITIES

11. PAYABLES

Sundry creditors and accruals		.90,824 66,638 90,824 66,638
C Unsecured loan - other parties.	10.000 -	$-10.000$ $10.000$ $10.000$
	100.824	$76.638$ $100.824$	76.638

Unsecured loan from other parties is interest free and has no fixed terms of repayment.

12. CONTRIBUTED EQUITY

(a) Share capital

42,871,002 (2003: 42,557,502) 3,415,306 3,352,606 3,415,306 3,352,606 ordinary fully paid shares.
(b) Movements in ordinary share capital	Shares	$\cdot$
Balance 1 July 2002.	25,000,002	$-223.002$
Initial public offering	13,932,500	$-.2,786,500$
Issue of share for purchase of mining tenements	$-3,500,000$	700,000
Issue of shares to consultant.	$-125,000$	$-25.000$
Less share issue expenses		(381, 896)
Balance 30 June 2003	42,557,502	3,352,606
Exercise of options	313,500	62,700
Balance 30 June 2004	42,871,002 3,415,306

Ordinary shares entitle the holder to participate in dividends in proportion to the number of and amounts paid on the shares held. On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Notes to the Financial Statements (Continued)

		2004 S	CONSOLIDATED 2003 \$	2004 £	PARENT ENTITY 2003 \$

13.	RESERVES Option premium reserve	103,148	103,148	103,148	103,148
	Movements in share options			Options	\$
	Balance 1 July 2002 Pro-rata rights issue to shareholders			21,278,750	106,394
	Less option issue expenses				(3,246)
	Balance 30 June 2003			21,278,750	103,148
	Exercise of options			(313,500)
	Balance 30 June 2004			20,965,250	103,148
	As at 30 June 2004, the following options over ordinary fully paid shares were outstanding.			Options
	exercisable at 20 cents each on or before 31 July 2006.			20,965,250
	14. ACCUMULATED LOSSES
	Accumulated losses at the beginning of the financial year sections	517,995	14,638	517,942	14,638
	Net loss attributable to members of the parent entity	1,038,200	503,357	1,205,195	503,304
	Accumulated losses at the end of the financial year	1,556,195	517,995	1,723,137	517,942
	15. OUTSIDE EQUITY INTERESTS Interest in:
	Share capital	42,300	42,300
	16. TOTAL EQUITY RECONCILIATION
	Total equity at the beginning of the financial year www.com.com	2,980,059		$208,364$ 2,937,812	$-208,364.7$
	Total changes in equity recognised in
	the statement of financial performance Transactions with owners as owners: Contributions of equity, net of	$(1,038,200)$		$(888,499)$ $(1,205,195)$	$(888, 446)$ .
	transaction costs Total changes in outside equity interests		$62,700 - 3,617,894$ 42,300		$-62,700 - 3,617,894$
	Total equity at the end of the financial year	2,004,559	2,980,059		1,795,317 2,937,812

Notes to the Financial Statements (Continued).

17. DIRECTOR AND EXECUTIVE DISCLOSURES

Directors

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

Non-executive directors

C.I. Smith
M I. Kiernan
D M Macoboy

P.P. Botsis

Executives (other than directors) with the greatest authority for strategic direction and management

The strategic direction and management of the consolidated entity is administered and managed by the board of directors. There are no individuals (other than the directors) who are responsible for the strategic direction and management of the consolidated entity and consequently no individuals meet the definition of specified executive for the purposes of AASB 1046 - Director and Executive Disclosures by Disclosing Entities.

The consolidated entity makes superannuation contributions at a rate of 9% of directors' cash remuneration to defined superannuation funds. The average number of casual employees of the consolidated entity during the financial year was NII (2003: 1).

Remuneration report

Principles used to determine the nature and amount of remuneration

Executive remuneration

The parent entity's remuneration policy for any executive directors and senior management is designed to promote superior performance and long term commitment to the consolidated entity. Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the consolidated entity's Australian operations. William Martin March 2011

Executive remuneration and other terms of employment are reviewed annually having regard to performance, relevant comparative information and expert advice. The parent entity's reward policy aims to align executive's remuneration with shareholders' interests and to retain appropriately qualified personnel.

Non-executive directors remuneration .

Shareholders approve the maximum aggregate remuneration for non-executive directors. The Board of Directors recommends the actual payments to directors. Non-executive directors are entitled to statutory superannuation benefits.

Non-executive directors may be entitled to participate in equity based remuneration schemes. All directors are entitled to have their indemnity insurance paid by the consolidated entity.

Details of remuneration

Directors of Monarch Resources Limited -

2004	$\therefore$ Primary $\therefore$ Post-	employment		Equity Other benefits
Name	∶Cash salary and fees it	Super- annuation	Options ∽ issued ∴	- Insurance premiums.	∴ Total
CLSmith M L Kiernan ∴D M Macoboy. P P Botsis	55,573 $-22,500$ -30,000-	2.700		5,197 5,196 5.196 $-5.196$	60,770 $-5,196$ $-27,696$ - 37,896
∵Total	108,073	$-2.700$		20,785	$-131,558$

Notes to the Financial Statements (Continued).

2003	$\sim$ Primary $\pm$	Second Post- Processing employment		Equity Other benefits
Name	Cash salary and fees in	— Super- — annuation ∷l	- Options $\sim$ issued $\sim$ 1	— Insurance premiums .	⊤ Total
ିCLSmith M L Kiernan D M Macoboy PP Botsis	28,648 25,000 $^{\circ}$ 12,096 $^{\circ}$	-1107		4,142 4.142 4.142 4,142	32,790 $-29,142$ $-4,142$ 17,345
∵Total	$-65,744$	$-1.107$		$\sim$ 16,568 $\sim$ 83,419

Share holdings

The numbers of shares in the parent entity held during the financial year by each director of the parent entity, including their personally-related entities, are set out below.

Name	Balance at the start of the year	Received during ≒ the year on $^{\circ}$ the exercise $^{\circ}$ of options	Other changes during the vear	Balance at the end of the year
⊕C L Smith MLKlernan DM Macoboy - P P Botsis	1,100,000 13,030,002 1,100,000 1,500,000.			$-1,100,000$ $-13,030,002$ $-1,100,000$ 1,500,000

Option holdings

The numbers of options over fully paid shares in the parent entity held during the financial year by each. director of the parent entity, including their personally-related entities, are set out below.

Name	Balance at $\cdot$ the start $\cdot$ of the year	Granted -during the vear as remuneration	Exercised during the $\Box$ vear	Other changes : during the $\cdots$ vear $\cdots$	Balance at ∵ the end of ∼the vear –	Vested and exercisable at the end of the year
CLSmith ~ M L Kiernan D M Macoboy P.P. Botsis	$-550,000$ . 6,515,001 550,000 $-750,000.$			$-250.000$	550,000 6,515,001 $-550,000$ 1,000,000	$-550,000$ 6,515,001 550,000 1,000,000

a territoria da cada da da de territoria partitició para territoria de partido de territoria e toda a algado territoria a Other changes during the year include on-market purchases. Options held by directors were acquired for cash and do not represent any form of remuneration. Accordingly, no options vested during the year.

Other transactions with directors

Transactions during the year between the consolidated entity and directors or their director-related entities are set out in Note 21.

Notes to the Financial Statements (Continued)

		CONSOLIDATED 2004 2003		PARENT ENTITY $2004$ 2003

REMUNERATION OF AUDITORS Amounts paid or due and payable to the auditors for:
Auditing the financial report -	17.550	$17,024$ 17,550		17.024
Taxation services	6,800	$-700$ .	$-6.800.$	- 700 -
Independent accountants' report		13,840		13,840
	24.350	31.564	24,350	31.564

19. EXPENDITURE COMMITMENTS

(a) Under the terms of mineral tenement licences held by the consolidated entity, minimum annual expenditure obligations of \$724,000 (2003, \$590,000) may be required to be expended during the forthcoming financial year in order for the tenements to maintain a status of good standing. This expenditure may be incurred by the consolidated entity or its joint venture partners and may be subject to variation from time to time in accordance with Department of Industry and Resources regulations.
(b) The parent entity has entered into an option agreement for the right to acquire a 50% interest in the Republican project for a consideration of \$312,500 in cash and \$312,500 in shares in the parent entity and/or its joint venture partner. The option may be exercised at any time prior to 31 December 2005.

20. SEGMENT INFORMATION

The consolidated entity operates predominantly in one business and geographical segment, being mineral exploration in Western Australia, and all of the assets of the consolidated entity are deployed for these purposes. The consolidated entity's primary segmentation is its business segmentation.

21. RELATED PARTIES

Transactions with related parties

During the financial year, fees of \$20,000 (2003: \$75,000) were paid in the normal course of business to Athena Capital Pty Ltd (Laurence James Kiernan) for the provision of corporate advisory services to the consolidated entity.

During the financial year, the consolidated entity paid a total of \$12,000 (2003: \$8,000) to a public company, of which Messrs C L Smith, M L Kiernan and D M Macoboy are directors and shareholders, for the rental of office facilities on normal commercial terms.

Transactions with related parties in the wholly owned group

During the financial year, unsecured loan advances were made between the parent entity and its controlled entities. All such loans were interest free. Loan balances between the parent entity and its controlled entities are disclosed in the financial report of the parent entity, Intra-entity loan balances have been eliminated in the financial report of the consolidated entity.

Other transactions with directors and specified executives are set out in Note 17.

Notes to the Financial Statements (Continued)

22. FINANCIAL INSTRUMENTS

(a) Credit risk exposure

Credit risk relates to the risk that a counter party will default on its contractual obligations resulting in -financial loss to the consolidated entity. The exposure of the consolidated entity to credit risk at balance date in relation to each class of recognised financial asset is the carrying amount of the assets as indicated in the statement of financial position.

(b) Net fair values

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

. . . . . . . . .

(c) Interest rate risk exposure

Interest rate risk represents the risk that the value of a financial instrument will fluctuate as a result of changes in market interest rates. The exposure of the consolidated entity to interest rate risk and the effective weighted average interest rate for classes of financial assets and liabilities is set out below.

	Note	Floating interest rate -	Non-interest bearing	Total \$

30 June 2004
Financial assets
Cash assets		149,841	- 2	149,843
Receivables	6		40,743	40,743
		149,841	40,745	190,586
Weighted average interest rate		3.1%

Financial liabilities
Payables			100,824	100,824
Weighted average interest rate			100,824	100,824

30 June 2003
Financial assets
Cash assets		781,165	$\cdot 2$	781,167
Receivables			30,399	30,399
Other financial assets			482,005	482,005
		781,165	512,406	1,293,571
Weighted average interest rate		3.7%

Financial liabilities
Payables	11		76,638	76,638
			76,638	76,638
Weighted average interest rate

Notes to the Financial Statements (Continued).

23. INVESTMENTS IN CONTROLLED ENTITIES

		Country of incorporation of shares	Class
Name of entity

	Monarch Nickel Pty Ltd	Australia	Ordinary
	Monarch Gold Pty Ltd	Australia	– Ordinarv

Acquisition of controlled entities

During the previous financial year, the parent entity acquired all the issued capital of Monarch Nickel Pty Ltd (formerly Rainbush Investments Pty Ltd) for a consideration of \$560,000 and 80% of the issued capital of Monarch Gold Pty Ltd (formerly Delvale Investments Pty Ltd) for a consideration of \$169,200. Details of the acquisitions are as follows:

2004	2003
Consideration
shares issued cash paid	700,000 29,200
	729,200
Fair value of identifiable net assets of controlled entities acquired.
Cash assets	53
Deferred exploration expenditure	771,447
Less outside equity interests.	771,500 (42, 300)
Consideration	729,200
Outflow of cash to acquire controlled entity, net of cash acquired
Cash consideration Less cash acquired	(29, 200) 53
Outflow of cash	(29, 147)

24. INTERESTS IN JOINT VENTURES

The parent entity holds an 80% interest and is manager of a joint venture arrangement, known as the Lake Johnston Joint Venture, for the exploration for minerals. Under the terms of the joint venture, the remaining 20% interest held by a third party is free carried. Accordingly, the consolidated entity contributes 100% of the funding for the joint venture activities.

The net contribution of the Lake Johnston Joint Venture to the consolidated operating loss before income tax of the consolidated entity was Nil. Included in the statement of financial position as at 30 June 2004 is an amount of \$534,712 (2003: \$189,986) in deferred exploration expenditure relating to this joint venture.

Notes to the Financial Statements (Continued)

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		2004.	CONSOLIDATED 2003 \$	2004. S	PARENT ENTITY 2003
	25. RECONCILIATION OF NET CASH OUTFLOW FROM OPERATING ACTIVITIES TO OPERATING LOSS AFTER INCOME TAX
	Net cash outflow from operating activities		$(301, 705)$ $(182, 419)$		$(301,705)$ (182,366).
	Deferred exploration expenditure written-off	(776, 123)		(213,918)
	Profit on sale of investments	41,376		-41,376
	Provision for diminution in investments.		(320, 038)	(729,200).	(320, 038)
	Changes in operating assets and liabilities
	Increase/(decrease) in receivables	(1,527)	28,910	(1,527)	28,910
	Increase/(decrease) other operating assets		(22, 373)		(22, 373)
	(Increase)/decrease in payables	(221)	(7, 437)	(221)	(7, 437)
	Operating loss after income tax.	(1,038,200)		$(503,357)$ $(1,205,195)$	(503, 304)
	26. NON CASH FINANCING AND INVESTING ACTIVITIES
	Issue of shares as part consideration for. the purchase of mining tenements		700,000		700,000
	Issue of shares for corporate advisory services		25,000		25,000
			725,000		725,000
	EARNINGS PER SHARE
27.	Weighted average number of ordinary shares
	on issue used in the calculation of basic
	earnings per share.		42,725,732 37,090,728
	Weighted average number of ordinary shares
	on issue used in the calculation of diluted
	earnings per share		42,725,732 37,090,728
	Loss used in the calculation of basic and
	diluted earnings per share.	$(1,038,200)$ (503,357)
	No dilutive potential ordinary shares existed as at balance date, therefore diluted loss per share is the same as basic loss per share.
	The following movements in ordinary shares and options occurred subsequent to balance date: 2,561,250 shares were issued pursuant to a share purchase plan and shortfall placement.

Notes to the Financial Statements (Continued)

28. INTERNATIONAL FINANCIAL REPORTING STANDARDS

The Australian Accounting Standards Board (AASB) is adopting International Financial Reporting Standards (IFRS) for application to reporting periods beginning on or after 1 January 2005. The AASB has issued Australian equivalents to IFRS and the Urgent Issues Group will issue abstracts corresponding to IASB interpretations originated by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee. The adoption of Australian equivalents to IFRS will be first reflected in the consolidated entity's financial statements for the half-year ending 31 December 2005 and the year ending 30 June 2006. Information about how the transition to Australian equivalents to IFRS is being managed and the key differences in accounting policies that are expected to arise, is set out below.

Entities complying with Australian equivalents to IFRS for the first time will be required to restate their comparative financial statements to amounts reflecting the application of IFRS to that comparative period. Most adjustments required on transition to IFRS will be made, retrospectively, against opening retained earnings as at 1 July 2004.

The consolidated entity has commenced an internal analysis of key financial reporting differences as well as planning for the conversion to IFRS in relation to accounting policies and procedures, reporting systems, business processes and business structures. Expert external consultants will also be engaged to perform diagnostics and conduct impact assessments to identify key areas that will be impacted by the transition to IFRS, where considered necessary. The manufacturer

Major changes identified to date that will be required to the consolidated entity's existing accounting policies include the following.

Exploration and evaluation expenditure on mineral resources

Uncertainty remains in relation to accounting for extractive industries within the IFRS regime with no specific standard finalised. If the stated "grandfathering" approach embodied in Exposure Draft 6 "Exploration for and Evaluation of Mineral Resources^® is implemented, then the consolidated entity's existing policy of accounting for exploration and evaluation activity will comply with IFRS requirements and therefore no difference is expected to result either from the recognition of exploration and evaluation assets or from impairment testing. Income tax

Under AASB 112 Income Taxes, deferred tax balances are determined using the balance sheet method which calculates temporary differences based on the carrying amounts of an entity's assets and liabilities in the statement of financial position and their associated tax bases. In addition, current and deferred taxes attributable to amounts recognised directly in equity are also recognised directly in equity. This will result in a change to the current accounting policy, under which deferred tax balances are determined using the income statement method, items are only tax-effected if they are included in the determination of pre-tax accounting profit or loss and/or taxable income or loss and current and deferred taxes cannot be recognised directly in equity.

The impact on the consolidated entity has not yet been determined.

Equity-based compensation benefits

Under AASB 2 Share-based Payment, equity-based compensation to employees will be recognised as an expense in respect of the services received. This will result in a change to the current accounting policy, under which no expense is recognised for equity-based compensation.

The above should not be regarded as a complete list of changes in accounting policies that will result from the transition to Australian equivalents to IFRS, as not all standards have been analysed as yet, and some decisions have not yet been made where choices of accounting policies are available. For those reasons it is not yet possible to quantify the impact of the transitions to Australian equivalents to IFRS on the consolidated entity's financial position and reported results.

29. SUBSEQUENT EVENTS

In August 2004, the parent entity raised equity funds of \$409,800 through a share purchase plan offer to shareholders and a shortfall placement. The share purchase plan offered for subscription a maximum of \$5,000 worth of shares in the parent entity at a subscription price of 16 cents per share and a free attaching option for every two shares subscribed for. A total of 2,561,250 shares were issued as a result of the share purchase plan and shortfall placement.

Shareholder approval was received on 10 September 2004 for the issue of options pursuant to the share purchase plan. A total of 1,280,625 options will be issued upon lodgement by the parent entity of a prospectus for the options.

Declaration by Directors

The Board of Directors of Monarch Resources Limited declares that:

the financial statements and associated notes comply with Accounting Standards, the Corporations $(a)$ Regulations 2001 and other mandatory professional reporting requirements;
the financial statements and associated notes give a true and fair view of the financial position as at $(b)$ 30 June 2004 and performance of the parent entity and the consolidated entity for the financial year ended on that date:
$(c)$ at the date of this declaration, there are reasonable grounds to believe that the parent entity will be able to pay its debts as and when they fall due.

The consolidated financial report has been made out in accordance with Australian Accounting Standards and the Corporations Act 2001.

Signed in accordance with a resolution of the Directors.

M L Kiernan Director

Perth, Western Australia 27 September 2004

Independent Audit Report

To the members of Monarch Resources Limited

Scope

The financial report and directors' responsibility The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors declaration for Monarch Resources Limited (the company) and the consolidated entity, for the year ended 30 June 2004. The consolidated entity comprises both the company and the entities it controlled during that year.

The directors of the company are responsible for preparing a financial report that gives a true and fair view of the financial position and performance of the company and the consolidated entity, and that complies with Accounting Standards in Australia, in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach

We conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected,

We performed procedures to assess whether in all material respects the financial report presents fairly, In accordance with the Corporations Act 2001, including compliance with Accounting Standards in Australia, and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report; and

assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

We performed procedures to assess whether the substance of business transactions was accurately reflected in the financial report. These and our other procedures did not include consideration or judgment of the appropriateness or reasonableness of the business plans or strategies adopted by the directors and management of the company.

Independence

We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001. In addition to our audit of the financial report, we were engaged to undertake the services disclosed in the notes to the financial statements. The provision of these services has not impaired our independence.

Independent Audit Report

(Continued)

Audit opinion

In our opinion, the financial report of Monarch Resources Limited is in accordance with:

(a) the Corporations Act 2001, including:

(i) giving a true and fair view of the financial position of Monarch Resources Limited and the consolidated entity at 30 June 2004 and of their performance for the year ended on that date; and
(ii) complying with Accounting Standards in Australia and the Corporations Regulations $2001$ ; and
(b) other mandatory financial reporting requirements in Australia.

Inherent uncertainty regarding going concern Without qualification to the opinion expressed above, attention is drawn to the following matter.

As a result of the matters described in Note 1 of the financial report relating to going concern, there is significant uncertainty whether the company and consolidated entity will be able to continue as going concerns without obtaining further funds to continue its exploration and development activities, and therefore whether they will be able to pay their debts as and when they fall due and realise their assets and extinguish their liabilities in the normal course of business at the amounts stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be. necessary should the company and consolidated entity not be able to continue as going concerns.

Ernst & Young

Gavin A Buckingham Partner Perth 27 September 2004

Corporate Governance Statement

A review of the Company's corporate governance framework was completed during the year, in response to the best practice recommendations released by the ASX Corporate Governance Council.

Good corporate governance will evolve with the changing circumstances of a company and must be tailored to meet these circumstances. Monarch Resources Limited is a junior exploration company. The Company currently operates with limited permanent staff, relying on specialist consultants and casual field staff to assist in the implementation of exploration programmes. At this stage of the Company's corporate development, implementation of all ASX corporate governance recommendations is not practical in every instance given the modest size and simplicity of the operations.

The main corporate governance practices as set out below were, unless otherwise stated, in place for the entire financial year. Copies of relevant corporate governance policies were made available in the corporate governance section of the Company's website at www.mrl.net.au in September 2004.

BOARD OF DIRECTORS

The Board is responsible for guiding and monitoring the Company on behalf of shareholders by whom they are elected and to whom they are accountable. The Board's primary responsibility is to oversee the Company's business activities and management for the benefit of shareholders.

Due to the level and nature of the Company's present activities, there is presently no designated chief executive position within the Company. Geological and corporate management is outsourced to external consultants, with overall management of the Company monitored by the Board. A chief executive officer will be appointed for the Company when the level of activities and circumstances warrant.

Upon the appointment of a managing director, day to day management of the Company's affairs and the implementation of corporate strategies and policy initiatives will be formally delegated by the Board as set out in the Company's Board charter, which was formally adopted in September 2004.

Board composition

The Board charter states that:

the Board is to comprise an appropriate mix of both executive and non-executive directors.

in recognition of the importance of independent views and the Board's role in supervising the activities of management, the roles of Chairman and managing director will not be combined.

the Chairman is elected by the full Board and will be required to meet regularly with the managing director.

Board members should possess complementary business disciplines and experience aligned with the Company's objectives. Details of the members of the Board, their experience, expertise, qualifications and term of office are set out in the Directors' Report. The Board comprises four non-executive directors, three of which, Mr Colin Smith (Chairman), Mr David Macoboy and Mr Phillip Botsis, are considered independent under the principles set out below.

The Board has adopted ASX recommended principles in relation to the assessment of directors' independence. Financial materiality thresholds used in the assessment of independence are set at 10% of the annual gross expenditure of the Company and/or 25% of the annual income of the director or his associated entities.

The Board does not consider that a director's independence is or may be perceived to be impaired by length of service on the Board. Accordingly, directors are not appointed for specific terms, as their periods in office are regularly reviewed as part of annual performance evaluation processes and they are subject to re-election by shareholders every three years.

Directors have the right, in connection with their duties and responsibilities, to seek independent professional advice at the Company's expense, subject to the prior written approval of the Chairman, which shall not be unreasonably withheld.

Performance assessment

Commencing from September 2004, the Board has endorsed a formal process for an annual self assessment of its collective performance and the performance of individual directors. The Board will be required to meet annually with the purpose of reviewing the role of the Board, assessing its performance over the previous 12 months and examining ways in which the Board can better perform its duties. No formal assessment was undertaken during the year ended 30 June 2004.

Corporate Governance Statement

(Continued)

Corporate reporting

A director and chief financial officer have certified to the Board that the Company's financial report presents a true and fair view, in all material respects, of the financial position and operational results of the Company and are in accordance with relevant accounting standards. The Company adopted this reporting structure for the financial year ended 30 June 2004.

The Board does not specifically require an additional certification that the statement on the integrity of the financial statements is founded on a sound system of risk management and that the compliance and control systems are operating efficiently and effectively. The Board considers that risk management and internal compliance and control systems are sufficiently robust for the Board to place reliance on the integrity of the financial statements without the need for an additional certification by management.

Board committees

The directors consider that the current size of the operations and the stage of development of the Company, as well as the size of the Board, do not warrant the establishment of separate audit, remuneration or nomination committees. The directors as a whole consider the functions normally undertaken by these committees.

In circumstances where the size of the Board is expanded as a result of the growth or complexity of the Company, the establishment of separate Board committees will be reconsidered.

The Board oversees accounting and reporting practices and is also responsible for:

co-ordination and appraisal of the quality of the audits conducted by the Company's external auditors;

determination of the independence and effectiveness of the external auditors;

review the adequacy of the reporting and accounting controls of the Company.

The Board reviews all remuneration policies and practices for the Company, including overall strategies in relation to executive remuneration policies and compensation arrangements for nonexecutive directors and all equity based remuneration plans.

The Company's remuneration policy for any executive directors and senior management is designed to promote superior performance and longterm commitment to the Company. Executives will receive a base remuneration which is market related. There is presently no remuneration component which is performance-linked or based on the achievement of milestones and targets.

Executive directors may participate in share option schemes with the prior approval of shareholders. Executives may also participate in employee share option schemes, with any option issues generally being made in accordance with thresholds set in plans approved by shareholders. The Board however, considers it appropriate to retain the flexibility to issue options to executives outside of approved employee option plans in appropriate circumstances.

Executive remuneration and other terms of employment are reviewed annually by the Board having regard to performance, relevant comparative information and expert advice. Non-executive directors are entitled to statutory superannuation benefits. At this stage of the Company's development, non-executive directors may be entitled to participate in equity based remuneration schemes.

The responsibility for the selection of potential directors and to review membership lies with the full Board of the Company and consequently no separate nomination committee has been established.

EXTERNAL AUDITORS

The performance of the external auditor is reviewed annually. Ernst & Young were appointed as the external auditors in 2002. It is both the Company's and Ernst & Young's policy to rotate audit engagement partners at least every five years and the review partner every five years.

It is the policy of the external auditors to provide an annual declaration of their independence to the audit committee. The external auditor is requested to attend annual general meetings and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report.

Corporate Governance Statement

(Continued)

CODE OF CONDUCT

A formal code of conduct for the Company was endorsed by the Board in September 2004 and applies to all directors and employees. The code aims to encourage the appropriate standards of conduct and behaviour of the directors, officers, employees and contractors (collectively called the employees) of the Company. Employees are expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.

Trading in the Company's securities by directors and employees is not permitted when they are in possession of unpublished price sensitive information. Any transactions undertaken must be notified to the Chairman or Company Secretary in advance.

CONTINUOUS DISCLOSURE AND SHAREHOLDER COMMUNICATIONS

The Company adopted a formal written policy in September 2004 relating to continuous disclosure of any information concerning the Company that a reasonable person would expect to have a material effect on the price of the Company's securities. The Board also adopted a formal written policy in September 2004 covering arrangements to promote communications with shareholders and to encourage effective participation at general meetings.

The Company Secretary has been nominated as the Company's primary disclosure officer. All information disclosed to the ASX is posted on the Company's web-site immediately after it is disclosed to the ASX. When analysts are briefed on aspects of the Company's operations, the material used in the presentation is released to the ASX and posted on the Company's web-site.

All shareholders receive a copy of the Company's annual report. In addition, the Company makes all market announcements, media briefings, details of shareholders meetings, press releases and financial reports available on the Company's web-site.

Additional Information

The following information was reflected in the records of the Company as at 27 September 2004.

Distribution of share and option holders

	Number of holders
	Fully paid shares	Options
$1 - 1,000$ $1,001 - 5,000$	17	$\sim$
$5,001$ $\cdot$ 10,000	27	77
10,001 - 100,000 100,001 and over	235 47	57 28
	327	166
including holdings of less than a marketable parcel

Classes of shares and voting rights

At meetings of members or classes of members, each member entitled to vote may vote in person or by proxy or attorney. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and on a poll, every person present in person or by proxy has one vote for each ordinary share held.

Substantial shareholders

The following shareholders have lodged a notice of substantial shareholding in the Company.

	Number of shares	%
l aurence James Kiernan and associated entities $\mathcal V$ Crawley Investments Pty Ltd and associated entities	18,325,002 13.045.002.

1 Includes 13,015,002 shares held by Crawley Investments Pty Ltd.

Twenty largest holders of fully paid shares

Shareholder		Shares	%
1.	Crawley Investments Pty Ltd	13,015,002	28.65
2.	Laurence James Kiernan	5,000,000	11.01
3.	Consolidated Minerals Limited	2,168,750	4.77
4.	ANZ Nominees Limited	2,000,000	4.40
5.	Methuen Nominees Pty Ltd	1,531,250	3.37
6.	Wintrue Pty Ltd (Taylors Foods Exec Super Fund)	1,331,250	2.93
7. Lisa Duperouzel		1,223,750	2.69
8. Gordon Anthony		1,185,000	2.61
Gimont Pty Ltd 9.		1,131,250	2.49
10. Adrienne Smith		1,031,250	2.27
11.	Social Investments Pty Ltd	805,500	1.77
12.	Anna Grech and Claudio Grech	500,000	1.10
13.	Mark Stanley Consulting Pty Ltd	500,000	1.10
14.	Cleo Holdings Pty Ltd	445,000	0.98
Driff Pty Ltd 15.		365,000	0.80
John Warren Booth 16.		331,250	0.73
17.	LGD Investments (WA) Pty Ltd	331,250	0.73
18.	Adamson-McKellar Pty Ltd	300,000	0.66
19.	Beverley McKellar Watts	300,000	0.66
20. Wintrue Pty Ltd		281,250	0.62
		33,776,752	74.34

Additional Information

(Continued)

Twenty largest holders of of listed options

Options	%
6,507,501	31.04
2,500,000	11.92
1,000,000	4.77
802,000	3.83
750,000	3.58
700,000	3.34
568,000	2.71
550,000	2.62
550,000	2.62
508,614	2.43
500,000	2.38
	2.38
	1.91
	1.32
	1.30
	1.19
	1.19
	1.05
	0.96
	0.96
17,506,115	83.50
	500,000 400,000 277,500 272,500 250,000 250,000 220,000 200,000 200,000

Restricted securities

The following securities in the Company are classified as restricted securities:

Number	∵iass
20 NGO ODN	Ordinary fully paid shares

Use of funds

. . . . . . . . . . . . . . . . . . . .

The Company confirms pursuant to ASX Listing Rule 4.10.19 that it has used its cash assets raised upon admission to the Australian Stock Exchange in a way consistent with its business objectives.

Tenement Directory
As at 27 September 2004

Project	Tenement number	Beneficial interest or joint venture details
Western Australia
Lake Johnston project Mt Dav	M63/299-301. MLA63/552, ELA63/882	80% 100%
Mt Gordon	E63/704, E63/705	100%
Plover Rock	E63/567, ELA63/629, E63/743, PLA63/1052, MLA63/553, E63/744-745, P63/1126-1129	100% 100% 80%
Round Top Hill	E63/703, E63/769	100%
Lake Hope	E63/780, ELA63/806, P63/1146-1147	100%
Londonderry project	P15/4389-4390, P15/4399, P15/4404, P15/4406-4407	100% 100%
Yerilla project	P31/1642-1651, P31/1654	Option to acquire 100% interest
Republican project	E15/661	Option to acquire 50% interest

Abbreviations

$\mathsf{P}$ Prospecting Licence

PLA Prospecting Licence Application
E Exploration Licence

E Exploration Licence
ELA Exploration Licence Application

Mining Lease M

MLA Mining Lease Application

AI assistant

ORA BANDA MINING LTD — Annual Report 2004

65475_rns_2004-10-21_11eed0f2-5cb7-4cc9-b661-bf3115407e1b.pdf

MONARCH RESOURCES LIMITED

Annual Report 2004

Table of Contents

Corporate Directory

STOCK EXCHANGE LISTING

Chairman's Review

Mt Day prospect (80%)

LAKE JOHNSTON PROJECT

Mt Gordon prospect (100%)

Plover Rock prospect (80%-100%)

Round Top Hill prospect (100%)

Lake Hope prospect (100%)

LONDONDERRY PROJECT (100%)

YERILLA PROJECT (Monarch option)

REPUBLICAN PROJECT (Monarch joint option)

CORPORATE

Directors' Report

DIRECTORS

PRINCIPAL ACTIVITIES

RESULTS OF OPERATIONS

REVIEW OF OPERATIONS

DIVIDENDS

LIKELY DEVELOPMENTS

OPTIONS GRANTED OVER UNISSUED SHARES

SIGNIFICANT CHANGES

Directors' Report

EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

INFORMATION ON DIRECTORS

Directors

Qualifications, experience and special responsibilities

Michael L Kiernan B.Bus., Non-Executive Director

Directors' Report

MEETINGS OF DIRECTORS

DIRECTORS' AND EXECUTIVES' REMUNERATION

Directors' Report

ENVIRONMENTAL REGULATIONS

MONARCH RESOURCES LIMITED

Statement of Financial Performance

Statement of Financial Position

MONARCH RESOURCES LIMITED

Notes to the Financial Statements For the year ended 30 June 2004

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

$1.1$ BASIS OF PREPARATION OF THE FINANCIAL REPORT.

GOING CONCERN

PRINCIPLES OF CONSOLIDATION $1.3$

$1.4$ INVESTMENTS

Notes to the Financial Statements (Continued)

$1.5$ INCOME TAX

RECOVERABLE AMOUNT $1.7$

FINANCIAL INSTRUMENTS 1.9

Notes to the Financial Statements (Continued)

1.10 EARNINGS PER SHARE

$-1.11$ $\degree$ GOODS AND SERVICES TAX $\degree$

$1.12$ $CASH$

Notes to the Financial Statements (Continued)

Notes to the Financial Statements (Continued)

Tax consolidation legislation

OTHER FINANCIAL ASSETS

$\mathbf{R}$ . RECEIVABLES

Notes to the Financial Statements (Continued).

CURRENT LIABILITIES

11. PAYABLES

12. CONTRIBUTED EQUITY

Notes to the Financial Statements (Continued)

17. DIRECTOR AND EXECUTIVE DISCLOSURES

Directors

Non-executive directors

Executives (other than directors) with the greatest authority for strategic direction and management

Remuneration report

Principles used to determine the nature and amount of remuneration

Executive remuneration

Non-executive directors remuneration .

Details of remuneration

Notes to the Financial Statements (Continued).

Share holdings

Option holdings

Other transactions with directors

ORA BANDA MINING LTD Annual Report 2004

Tenement Directory
As at 27 September 2004