PROSPECT RESOURCES LIMITED — Governance Information 2019

Sep 26, 2019

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity:
Prospect Resources Limited
ABN / ARBN:Financial year ended:
30 124 354 329	30 June 2019

Our corporate governance statement2 for the above period above can be found at:3

☐ These pages of our annual report:

☒ This URL on our website: https://www.prospectresources.com.au/corporate-governance

The Corporate Governance Statement is accurate and up to date as at [insert effective date of statement] and has been approved by the board.

The annexure includes a key to where our corporate governance disclosures can be located.

Date: 27 September 2019 Name of Director or Secretary authorising lodgement: Andrew Whitten

1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX.

Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period.

Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.

2 "Corporate governance statement" is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period.

3 Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity's corporate governance statement can be found. You can, if you wish, delete the option which is not applicable.

Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes "OR" at the end of the selection and you delete the other options, you can also, if you wish, delete the "OR" at the end of the selection.

ANNEXURE – KEY TO CORPORATE GOVERNANCE DISCLOSURES

	Corporate Governance Council recommendation	We havefollowed the recommendation in full for the whole of theperiodabove. We have disclosed…	We have NOT followed the recommendationin full for the wholeperiod above. We have disclosed …4of the
	PRINCIPLE 1 –LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1	Alisted entity should disclose:(a)the respective roles and responsibilities of its board andmanagement; and(b)those matters expressly reserved to the board and thosedelegated to management.	… the fact that we follow this recommendation:☒in our Corporate Governance Statement… and information about the respective roles and responsibilities ofour board and management(including those matters expresslyreserved to the board and those delegatedto management):☒atour Corporate Governance Statement
1.2	Alisted entity should:(a)undertake appropriate checks before appointing a person, orputting forward to security holders a candidate for election,as a director; and(b)provide security holders with all material information in itspossession relevant to a decision on whether or not to elector re-elect a director.	… the factthat we follow this recommendation:☒in our Corporate Governance Statement
1.3	A listed entity should have a written agreement with each directorand senior executive setting out the terms of their appointment.	… the fact that we follow this recommendation:☒in our Corporate Governance Statement
1.4	The company secretary of a listed entity should be accountabledirectly to the board, through the chair, on all matters to do with theproper functioning of the board.	… the fact that we follow this recommendation:☒in our Corporate Governance Statement

4 If you have followed all of the Council's recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form and re-format it.

		Corporate Governance Council recommendation	We havefollowed the recommendation in full for the whole of theperiodabove. We have disclosed…	We have NOT followed the recommendationin full for the wholeperiod above. We have disclosed …4of the
1.5	(a)	A listed entity should:have a diversity policy which includes requirements for theboardor a relevant committee of the board tosetmeasurable objectives for achieving gender diversity andtoassess annually both the objectives and the entity's progressin achieving them;		☒an explanationwhy that is soin our Corporate GovernanceStatement
	(b)(c)	disclose that policy or a summary of it; anddisclose as at the end of each reporting periodthemeasurable objectives for achieving gender diversity set bythe board or a relevant committee of the board in accordancewith the entity's diversity policyand its progress towardsachieving themand either:(1)the respective proportions of men and women on theboard, in senior executive positions and across thewhole organisation (including how the entity has defined"senior executive" for these purposes); or(2)if the entity is a "relevant employer" under the WorkplaceGender Equality Act, the entity's most recent "GenderEquality Indicators", as defined in and published underthat Act.
1.6	(a)(b)	A listed entity should:have and disclose a process for periodically evaluating theperformance of the board, its committees and individualdirectors; anddisclose,in relation to each reporting period, whether aperformance evaluation was undertaken in the reportingperiod in accordance with that process.	… the evaluationprocess referred to in paragraph (a):☒in our Corporate Governance Statement… and the information referred to in paragraph (b):☒in our Corporate Governance Statement
1.7	(a)(b)	A listed entity should:have and disclose a process for periodically evaluating theperformance of its senior executives; anddisclose,in relation to each reporting period, whether aperformance evaluation was undertaken in the reportingperiod in accordance with that process.	… the evaluationprocess referred to in paragraph (a):☒in our Corporate Governance Statement… and the information referred to in paragraph (b):☒in our Corporate Governance Statement

	Corporate Governance Council recommendation	We havefollowed the recommendation in full for the whole of theperiodabove. We have disclosed…	We have NOT followed the recommendationin full for the wholeperiod above. We have disclosed …4of the
PRINCIPLE 2 -STRUCTURE THE BOARD TO ADDVALUE
2.1	The board of a listed entity should:(a)have a nomination committee which:(1)has at least three members, a majority of whom areindependent directors; and(2)is chaired by an independent director,and disclose:(3)the charter of the committee;(4)the members of the committee; and(5)as at the end of each reporting period, the number oftimes the committee met throughout the period andthe individual attendances of the members at thosemeetings; or(b)if it does not have a nomination committee, disclose thatfact and the processes it employs to address boardsuccession issues and to ensure that the board has theappropriate balance of skills, knowledge, experience,independence and diversity to enable it to discharge itsduties and responsibilities effectively.	… the fact that we do not have a nomination committee and theprocesses we employ to address board succession issues and toensure that the board has the appropriate balance of skills,knowledge, experience, independence and diversity to enable it todischarge its duties and responsibilities effectively:☒in our Corporate Governance Statement	☒an explanationwhy that is soin our Corporate GovernanceStatement
2.2	A listed entity should have and disclose a board skills matrixsetting out the mix of skills and diversity that the board currentlyhas or is looking to achieve in its membership.		☒an explanation why that is soin our Corporate GovernanceStatement
2.3	A listed entity should disclose:(a)the names of the directors considered by the board to beindependent directors;(b)if a director has an interest, position, association orrelationship of the type described in Box2.3but the boardis of the opinion that it does not compromise theindependence of the director, thenature of the interest,position, association or relationship in question and anexplanation of why the board is of that opinion; and(c)the length of service of each director.	… the names of the directors considered by the board to beindependentdirectors:☒in our Corporate Governance Statement… and, where applicable, the information referred to in paragraph (b):☒in our Corporate Governance Statement… and the length of service of each director:☒in our 2019 Annual Report

Corporate Governance Council recommendation		We havefollowed the recommendation in full for the whole of theperiodabove. We have disclosed…	We have NOT followed the recommendationin full for the wholeperiod above. We have disclosed …4of the
2.4	A majority of the board of a listed entity should be independentdirectors.		☒an explanationwhy that is so in our Corporate GovernanceStatement
2.5	The chair of the board of a listed entity should be an independentdirector and, in particular, should not be the same person as theCEO of the entity.		☒an explanationwhy that is so in our Corporate GovernanceStatement
2.6	A listed entity shouldhave a program for inducting new directorsand provideappropriate professional development opportunitiesfor directors to develop and maintain the skills and knowledgeneeded to perform their role as directorseffectively.		☒an explanationwhy that is so in our Corporate GovernanceStatement
PRINCIPLE 3 –	ACTETHICALLYAND RESPONSIBLY
3.1	A listed entity should:(a)have a code of conduct for its directors, senior executivesand employees; and(b)disclose that code or a summary of it.		☒an explanationwhy that is soin our Corporate GovernanceStatement

	Corporate Governance Council recommendation	We havefollowed the recommendation in full for the whole of theperiodabove. We have disclosed…	We have NOT followed the recommendationin full for the wholeperiod above. We have disclosed …4of the
PRINCIPLE 4 –SAFEGUARD INTEGRITY IN CORPORATE REPORTING
4.1	The board of a listed entity should:(a)have an audit committee which:(1)has at least three members, all of whom are nonexecutive directors and a majority of whom areindependent directors; and(2)is chaired by an independent director, who is not thechair of the board,and disclose:(3)the charter of the committee;(4)the relevant qualifications and experience of themembers of the committee; and(5)in relation to each reporting period, the number oftimes the committee met throughout the period andthe individual attendances of the members at thosemeetings;or(b)if it does not have an audit committee, disclose that factand the processes it employs that independently verify andsafeguard the integrity of its corporate reporting, includingthe processes for the appointment and removal of theexternal auditor and the rotation of the audit engagementpartner.	… the fact that we do not have an audit committeeand the processeswe employ that independently verify and safeguard the integrity of ourcorporate reporting, including the processes for the appointment andremoval of the external auditor and the rotation of the auditengagementpartner:☒in our Corporate Governance StatementO	☒an explanation why that is soin our Corporate GovernanceStatement
4.2	The board of a listed entity should, before it approves the entity'sfinancial statements for a financial period, receive from its CEOand CFO a declaration that, in their opinion,the financial recordsof the entity have been properly maintained and that the financialstatements comply with the appropriate accounting standardsand give a true and fair view of the financial position andperformance of the entityand that the opinion has been formedon the basis of a sound system of risk management and internalcontrol which is operating effectively.	… the fact that we follow this recommendation:☒in our Corporate Governance Statement
4.3	A listed entity that has an AGM should ensure that its externalauditor attends its AGM and is available to answer questionsfrom security holders relevant to the audit.	… the fact thatwe follow this recommendation:☒in our Corporate Governance Statement

	Corporate Governance Council recommendation	We havefollowed the recommendation in full for the whole of theperiodabove. We have disclosed…	We have NOT followed the recommendationin full for the wholeperiod above. We have disclosed …4of the
PRINCIPLE 5 –	MAKE TIMELY AND BALANCED DISCLOSURE
5.1	A listed entity should:(a)have a written policy for complying with its continuousdisclosure obligations under the Listing Rules; and(b)disclose that policy or a summary of it.		☒an explanationwhy that is soin our Corporate GovernanceStatement
PRINCIPLE 6 –	RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1	A listed entity should provide information about itself and itsgovernance to investors via its website.	… information about us and our governance on our website:☒atwww.prospectresources.com.au
6.2	A listed entity should design and implement an investor relationsprogram to facilitate effective two-way communication withinvestors.		☒an explanationwhy that is soin our Corporate GovernanceStatement
6.3	A listed entity should disclose the policies and processes it has inplace to facilitate and encourage participation at meetings ofsecurity holders.		☒an explanationwhy that is so in our Corporate GovernanceStatement
6.4	A listed entity should give security holders the option to receivecommunications from, and send communications to, the entityand its security registry electronically.	… the fact that we follow this recommendation:☒in our Corporate Governance Statement

	Corporate Governance Council recommendation	We havefollowed the recommendation in full for the whole of theperiodabove. We have disclosed…	We have NOT followed the recommendationin full for the wholeperiod above. We have disclosed …4of the
PRINCIPLE 7 –	RECOGNISE AND MANAGE RISK
7.1	The board of a listed entity should:(a)have a committee or committees to oversee risk, each ofwhich:	… the fact that we do not have a risk committeeor committees thatsatisfy (a) and the processes we employ for overseeing our riskmanagement framework:	☒an explanationwhy that is soin our Corporate GovernanceStatement
	(1)has at least three members, a majority of whom areindependent directors; and	☒in our Corporate Governance Statement
	(2)is chaired by an independent director,
	and disclose:
	(3)the charter of the committee;
	(4)the members of the committee; and
	(5)as at the end of each reporting period, the number oftimes the committee met throughout the period andthe individual attendances of the members at thosemeetings;or
	(b)if it does not have a risk committee or committeesthatsatisfy (a) above, disclose that fact and the processes itemploys for overseeing the entity's risk managementframework.
7.2	The board or a committee of the board should:	… the fact that board or a committee of the board reviewsthe entity's
	(a)review the entity's risk management framework at leastannually to satisfy itself that it continues to be sound; and	risk management framework at least annually to satisfy itself that itcontinues to be sound:
	☒(b)disclose,in relation to each reporting period, whether suchin our Corporate Governance Statement
	a review has taken place.	… and that such a review has taken place in the reporting periodcovered by this Appendix4G:
		☒in our Corporate Governance Statement
7.3	A listed entity should disclose:		☒
	(a)if it has an internal audit function, how the function isstructured and what role it performs;or		an explanationwhy that is soin our Corporate GovernanceStatement
	(b)if it does not have an internal audit function, that fact andthe processes it employs for evaluating and continuallyimproving the effectiveness of its risk management andinternalcontrol processes.

Corporate Governance Council recommendation		We havefollowed the recommendation in full for the whole of theperiodabove. We have disclosed…	We have NOT followed the recommendationin full for the wholeperiod above. We have disclosed …4of the
7.4	A listed entity should disclose whetherit has any materialexposureto economic, environmental and social sustainabilityrisksand, if it does, how it manages or intends to manage thoserisks.	… whether we have any material exposure to economic,environmental and social sustainabilityrisks and, if we do, how wemanage or intend to manage those risks:☒in our Corporate Governance Statement

Corporate Governance Council recommendation		We havefollowed the recommendation in full for the whole of theperiodabove. We have disclosed…	We have NOT followed the recommendationin full for the wholeperiod above. We have disclosed …4of the
PRINCIPLE 8 –	REMUNERATE FAIRLY AND RESPONSIBLY
8.1	The board of a listed entity should:(a)have a remuneration committee which:(1)has at least three members, a majority of whom areindependent directors; and(2)is chaired by an independent director,and disclose:(3)the charter of the committee;(4)the members of the committee; and(5)as at the end of each reporting period, the number oftimes the committee met throughout the period andthe individual attendances of the members at thosemeetings;or(b)if it does not have a remuneration committee, disclose thatfact and the processes it employs for setting the level andcomposition of remuneration for directors and seniorexecutives and ensuring that such remuneration isappropriate and not excessive.	… the fact that we do not have a remuneration committee and theprocesses we employ for setting the level and composition ofremuneration for directors and senior executives and ensuring thatsuch remuneration is appropriate and not excessive:☒in our Corporate Governance Statement	☒an explanationwhy that is soin our Corporate GovernanceStatement
8.2	A listed entity should separately disclose its policies andpractices regarding the remuneration of non-executive directorsand the remuneration of executive directors and other seniorexecutives.	… separately our remuneration policies and practices regarding theremuneration of non-executive directors and the remuneration ofexecutive directors and other senior executives:☒in our 2019 Annual Report
8.3	A listed entity which has an equity-based remuneration schemeshould:(a)have a policy on whether participants are permitted toenter into transactions (whether through the use ofderivatives or otherwise) which limit the economic risk ofparticipating in the scheme; and(b)disclose that policy or a summary of it.		☒an explanationwhy that is so in our Corporate GovernanceStatement

2019 CORPORATE GOVERNANCE STATEMENT

This corporate governance statement sets out Prospect Resources Limited's (Company) current compliance with the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations (ASX Principles and Recommendations). The ASX Principles and Recommendations are not mandatory. However, the Company will be required to provide a statement in its future annual reports disclosing the extent to which the Company has followed the ASX Principles and Recommendations. This corporate governance statement is current as at 27 September 2019 and has been approved by the board of the Company (Board).

Comply(Yes/No)	Explanation
Yes	The Board is responsible for the corporate governance ofthe Company. The Board develops strategies for theCompany, reviews strategic objectives and monitorsperformance against those objectives. The goals of thecorporate governance processes are to:
	(a)maintain and increase Shareholder value;
	(b)ensure a prudential and ethical basis for theCompany's conduct and activities; and
	(c)ensure compliance with the Company's legal andregulatory objectives.
	Consistent with these goals, the Board assumes thefollowing responsibilities:
	(a)developing initiatives for profit and asset growth;
	(b)reviewing the corporate, commercial and financialperformance of the Company on a regular basis;
	(c)acting on behalf of, and being accountable to, theShareholders; and
	(d)identifying business risks and implementing actionsto manage those risks and corporate systems toassure quality.
	The Company is committed to the circulation of relevantmaterials to Directors in a timely manner to facilitateDirectors' participation in Board discussions on a fullyinformed basis.
	It is expected that the division of responsibility of the Boardand senior executives will vary with the evolution of theCompany. The Company intends to regularly review the
		balance of responsibilities to ensure that the division offunctions remains appropriate to the needs
	Lay solid foundations for management and oversight

	ASX Principles and Recommendations	Comply(Yes/No)	Explanation
1.2.	A listed entity should:(a) undertake appropriate checksbefore appointing a person, orputting forward to security holdersa candidate for election as adirector; and(b) provide security holders with allmaterial information in itspossession relevant to a decisionon whether or not to elect or reelect a director.	Yes	The Company undertakes appropriate checks beforeappointing a person as a Director of the Company.When the election of Directors are put to security holdersat a meeting of members, all material information relevantto the vote are incorporated in the meeting documents,which includes their relevant professional history andqualifications.
1.3.	A listed entity should have a writtenagreement with each director andsenior executive setting out the termsof their appointment.	Yes	The Company has written agreements in place with each ofits Directors and senior executives.
1.4.	The company secretary of a listedentity should be accountable directly tothe board, through the chair, on allmatters to do with the properfunctioning of the board.	Yes	The Company Secretary is directly accountable to the Boardon all matters to do with the proper functioning of theBoard.
1.5.	A listed entity should:(a) have a diversity policy whichincludes requirements for theboard or a relevant committee ofthe board to set measurableobjectives for achieving genderdiversity and to assess annuallyboth the objectives and the entity'sprogress in achieving them;(b) disclose that policy or a summaryof it; and(c) disclose as at the end of eachreporting period the measurableobjectives for achieving genderdiversity set by the board or arelevant committee of the board inaccordance with the entity'sdiversity policy and its progresstowards achieving them, andeither:(1) the respective proportions ofmen and women on the board,in senior executive positionsand across the wholeorganisation (including howthe entity has defined "seniorexecutive" for thesepurposes); or(2) if the entity is a "relevantemployer" under theWorkplace Gender Equality	No	The Board recognises the importance and value of diversityand will develop and disclose an appropriate policy forimplementation, at such time as is practical.

ASX Principles and Recommendations	Comply(Yes/No)	Explanation
Act, the entity's most recent"Gender Equality Indicators",as defined in and publishedunder that Act.
A listed entity should:1.6.(a) have and disclose a process forperiodically evaluating theperformance of the board, itscommittees and individualdirectors; and(b) disclose, in relation to eachreporting period, whether aperformance evaluation wasundertaken in the reporting period	Yes	Performance evaluation is undertaken by the Chairmanagainst agreed key performance indicators and reported tothe Board. In the case of the Chairman, performanceevaluation is undertaken by the Board against agreed keyperformance indicators, with the Chairman excusing himselffrom such discussion and not participating in any vote orresolution on the issue. The Board will implement anddisclose a formal policy at such time as is practical.A performance evaluation was conducted in the reporting
in accordance with that process.1.7.A listed entity should:(a) have and disclose a process forperiodically evaluating theperformance of its seniorexecutives; and(b) disclose, in relation to eachreporting period, whether aperformance evaluation wasundertaken in the reporting periodin accordance with that process.	Yes	period.The Board and senior management team will regularlyreview the performance of its senior executives andmanage any issues that may emerge. However, theCompany has not found it necessary to disclose the processfor evaluating performance. The Board will implement anddisclose a formal policy at such time as is practical.A performance evaluation was conducted in the reportingperiod.
2.Structure the board to add value
2.1.The board of a listed entity should:(a)have a nomination committeewhich:(1) has at least three members, amajority of whom areindependent directors; and(2) is chaired by an independentdirector,and disclose:(3) the charter of the committee;(4) the members of thecommittee; and(5) as at the end of eachreporting period, the numberof times the committee metthroughout the period and theindividual attendances of themembers at those meetings;or	No	No formal nomination committee or procedures have beenadopted for the identification, appointment and review ofthe Board membership, but an informal assessmentprocess, facilitated by the Chairman in consultation with theCompany's professional advisers (if required), has beencommitted to by the Board.
(b)if it does not have a nominationcommittee, disclose that fact andthe processes it employs toaddress board succession issuesand to ensure that the board hasthe appropriate balance of skills,	Yes

ASX Principles and Recommendations	Comply(Yes/No)	Explanation
knowledge, experience,independence and diversity toenable it to discharge its dutiesand responsibilities effectively.
A listed entity should have and disclose2.2.a board skills matrix setting out themix of skills and diversity that theBoard currently has or is looking toachieve in its membership.	No	The Board strives to ensure that it is comprised of Directorswith a blend of skills, experience and attributes appropriateto the Company and its business. The principal criterion forthe appointment of new Directors is their ability to addvalue to the Company and its business. In light of this, ithas not been deemed necessary to create a formaldocument outlining the particular skills of the existingBoard.
A listed entity should disclose:2.3.(a) the names of the directorsconsidered by the board to beindependent directors;(b) if a director has an interest,position, association or relationshipof the type described in Box 2.3but the board is of the opinion thatit does not compromise theindependence of the director, thenature of the interest, position,association or relationship inquestion and an explanation ofwhy the board is of that opinion;and(c) the length of service of eachdirector.	YesN/AYes	The Company recognises that independent directors areimportant in assuring shareholders that the Board isfulfilling its role and is diligent in holding seniormanagement accountable for its performance. The Boardassesses each of the directors against specific criteria todecide whether they are in a position to exerciseindependent judgment.Directors of Prospect are considered to be independentwhen they are independent of management and free fromany business or other relationship that could materiallyinterfere with, the exercise of unfettered and independentjudgement.In making this assessment, the Board considers all relevantfacts and circumstances. Relationships that the Board willtake into consideration when assessing independence arewhether a Director:•Is a substantial shareholder of the Company or anofficer of, or otherwise associated directly with, asubstantial shareholder of the Company;•Is employed, or has previously been employed in an
		executive capacity by the Company or anotherCompany member, and there has not been a period ofat least three years between ceasing such employmentand serving on the Board;•Has within the last three years been a principal of amaterial professional advisor or a material consultant tothe Company or another Company member, or anemployee materially associated with the serviceprovided;•Is a material supplier or customer of the Company orother Company member, or an officer of or otherwiseassociated directly or indirectly with a material supplieror customer; or•Has a material contractual relationship with theCompany or another Company member other than as aDirector.

ASX Principles and Recommendations	Comply(Yes/No)	Explanation
		The Board of Prospect consider has reviewed theindependence of each Director and considers that Mr Faheyand Mr Chen are independent directors.
		Information with respect to potential issues ofindependence may be disclosed to the market but noformal policy exists to ensure such disclosure.
		The length of service of each Director is published in theCompany's Annual Report.
A majority of the board of a listed2.4.entity should be independent directors.	No	For the reporting period, a majority of the Board was notindependent. However, the Company considers that theBoard is appropriately structured given scale of operation,the extensive knowledge of each of the directors regardingthe Company and its business and their substantialexperience and recognition in the mining industry and otherindustries relevant to the Company's operations.For these reasons, the Company takes the view that it is in
		the best interests of shareholders that the currentDirectors, with their extensive background and experience,be Directors of the Board.
The chair of the board of a listed entity2.5.should be an independent director and,	No	The Company's Chairman is Mr Hugh Warner and itsManaging Director (equivalent to CEO) is Mr Sam Hosack.
in particular, should not be the sameperson as the CEO of the entity.		Mr Warner is an executive director of the Company andtherefore not an independent director.
A listed entity should have a program2.6.for inducting new directors and provideappropriate professional developmentopportunities for directors to developand maintain the skills and knowledgeneeded to perform their role asdirectors effectively.	No	The Company does not have a formal program forinducting new Directors, however the Company takes carein inducting new Directors to ensure they are able toeffectively manage and govern the Company before theirnomination as potential Directors.
3.Promote ethical and responsible decision-making
3.1.A listed entity should:(a) have a code of conduct for itsdirectors, senior executives and	No	The Board is committed to the establishment andmaintenance of appropriate ethical standards. However,there is currently no official code of conduct in place.
employees; and(b) disclose that code or a summary ofit.		The Board will implement and disclose a policy at such timeas is practical.
4.Safeguard integrity in financial reporting
The board of a listed entity should:4.1.(a) have an audit committee which:(1) has at least three members, allof whom are non-executivedirectors and a majority of	No	The Company does not have a separately constituted auditcommittee. As the Company develops its operations theBoard intends to review its practices, and if deemednecessary, establish an audit committee.
whom are independentdirectors; and		The Company has an independent external auditor thatverifies and safeguards the integrity of the Company's

ASX Principles and Recommendations	Comply(Yes/No)	Explanation
(2) is chaired by an independentdirector, who is not the chairof the board,and disclose:(3) the charter of the committee;(4) the relevant qualifications andexperience of the members ofthe committee; and(5) in relation to each reportingperiod, the number of timesthe committee met throughoutthe period and the individualattendances of the membersat those meetings; or(b) if it does not have an auditcommittee, disclose that fact andthe processes it employs thatindependently verify and safeguardthe integrity of its corporatereporting, including the processesfor the appointment and removalof the external auditor and therotation of the audit engagementpartner.	Yes	corporate reporting. The Board, from time to time, reviewsthe scope, performance and fees of the external auditor.An external auditor can be removed and/or appointed at ameeting of shareholders, provided that the requisite noticesunder the Corporations Act have been provided to theCompany and other relevant parties.As the Company develops, the Board intends to review itspractices, and if deemed necessary, adopt a charterestablishing a committee.
The board of a listed entity should,4.2.before it approves the entity's financialstatements for a financial period,receive from its CEO and CFO adeclaration that, in their opinion, thefinancial records of the entity havebeen properly maintained and that thefinancial statements comply with theappropriate accounting standards andgive a true and fair view of thefinancial position and performance ofthe entity and that the opinion hasbeen formed on the basis of a soundsystem of risk management andinternal control which is operatingeffectively.	Yes	The CEO (or equivalent) and CFO prepared a declaration inthis form before the finalisation of its financial statements.
4.3.A listed entity that has an AGM shouldensure that its external auditor attendsits AGM and is available to answerquestions from security holdersrelevant to the audit.	Yes	An external auditor will be present at the AGM and beavailable to answer questions from security holdersrelevant to the audit.
5.Make timely and balanced disclosure
5.1.A listed entity should:(a) have a written policy for complyingwith its continuous disclosureobligations under the Listing Rules;and(b) disclose that policy or a summaryof it.	No	Whilst there are no written policies in place, the Companyis however committed to providing relevant up-to-dateinformation to its shareholders and the broader investmentcommunity in accordance with the continuous disclosurerequirements under the ASX Listing Rules and theCorporations Act.

	ASX Principles and Recommendations	Comply(Yes/No)	Explanation
			The Board has designated the Company Secretary as theperson responsible for overseeing and coordinatingdisclosure of information to the ASX and shareholders aswell as providing guidance to Directors and employees ondisclosure requirements and procedures.
			The Board will implement and disclose a policy at such timeas is practical.
6.	Respect the rights of shareholders
6.1.	A listed entity should provideinformation about itself and itsgovernance to investors via its website.	Yes	The Company's information is provided on its websitewww.prospectresources.com.au.
6.2.	A listed entity should design andimplement an investor relationsprogram to facilitate effective two-waycommunication with investors.	No	The Company has no formal investor relations program inplace, but ensures that all material information is conveyedto its investors so as to facilitate communication.
			The Board will implement and disclose a policy at such timeas is practical.
6.3.	A listed entity should disclose thepolicies and processes it has in place tofacilitate and encourage participationat meetings of security holders.	No	Although the Company does not have a formalcommunications policy in place, all material matters will bedisclosed to the market in accordance with the ASX ListingRules.
			Material communications are dispatched to investors eithervia email, surface mail and/or via market announcement.
6.4.	A listed entity should give securityholders the option to receivecommunications from, and sendcommunications to, the entity and itssecurity registry electronically.	Yes	The Company encourages shareholders to register forreceipt of announcements and updates electronically.
7.	Recognise and manage risk
7.1.	The Board of a listed entity should:(a) have a committee or committees	No	The Company does not have a separately constituted riskcommittee.
	to oversee risk, each of which:(1) has at least three members, amajority of whom areindependent directors; and(2) is chaired by an independentdirector,and disclose:		The Board is responsible for the oversight andmanagement of all material business risks. The Board'scollective experience will enable accurate identification ofthe principal risks that may affect the Company's business.Key operational risks and their management will berecurring items for deliberation as Board meetings.
	(3) the charter of the committee;(4) the members of thecommittee; and(5) as at the end of each		The Company's risk profile can be expected to change, andits risk management procedures adapted, as the Companydevelops significant operations and complexity.
	reporting period, the numberof times the committee metthroughout the period and theindividual attendances of the		The Board intends to continue to regularly review andapprove the risk management and oversight policies of theCompany.
	members at those meetings;or(b) if it does not have a riskcommittee or committees thatsatisfy (a) above, disclose that fact	Yes	As the Company develops, the Board intends to review itspractices, and if deemed necessary, adopt a charterestablish a committee.

PROSPECT RESOURCES LIMITED (ASX:PSC) | CORPORATE GOVERNANCE STATEMENT | 2019 7

	ASX Principles and Recommendations	Comply(Yes/No)	Explanation
	and the processes it employs foroverseeing the entity's riskmanagement framework.
7.2.	The board or a committee of the boardshould:(a) review the entity's riskmanagement framework at leastannually to satisfy itself that itcontinues to be sound; and(b) disclose in relation to eachreporting period, whether such areview has taken place.	Yes	The Board is responsible for overseeing the Company's riskmanagement systems, practices and procedures to ensureeffective risk identification and management andcompliance with internal guidelines and externalrequirements.As of the end of this reporting period, the Board hascompleted its review.
7.3.	A listed entity should disclose:(a) if it has an internal audit function,how the function is structured andwhat role it performs; or(b) if it does not have an internal auditfunction, that fact and theprocesses it employs for evaluatingand continually improving theeffectiveness of its riskmanagement and internal controlprocesses.	No	The Company does not have an internal audit function anddoes not disclose the processes it uses to improve riskmanagement. Nonetheless, it remains committed toeffective management and control of these factors.
7.4.	A listed entity should disclose whetherit has any material exposure toeconomic, environmental and socialsustainability risks and, if it does, howit manages or intends to manage thoserisks.	Yes	All material risks are announced to the market, inaccordance with the requirements of the ASX listing rulesand otherwise.
8.	Remunerate fairly and responsibly
8.1.	The Board of a listed entity should:(a)have a remuneration committeewhich:	No	The Company does not have in place a separatelyconstituted remuneration committee.
	(1) has at least three members,a majority of whom areindependent directors; and(2) is chaired by an independentdirector,and disclose:(3) the charter of thecommittee;(4) the members of thecommittee; and(5) as at the end of eachreporting period, the numberof times the committee metthroughout the period andthe individual attendances ofthe members at those		by the Board, with the executive director in absentia.The total maximum remuneration is currently set at$500,000. Any increases will be the subject of ashareholder resolution in accordance with the Company'sconstitution, the Corporations Act and the ASX ListingRules, as applicable. The determination of non-executivedirectors' remuneration within that maximum amount willbe made by the Board, having regard to the inputs andvalue to the Company of the respective contributions byeach non-executive director.The Board may award additional remuneration to nonexecutive directors called upon to perform extra services ormake special exertions on behalf of the Company.
	meetings; or

ASX Principles and Recommendations	Comply(Yes/No)	Explanation
(b)if it does not have aremuneration committee,disclose that fact and theprocesses it employs for settingthe level and composition ofremuneration for directors andsenior executives and ensuringthat such remuneration isappropriate and not excessive.	Yes	As the Company develops, the Board intends to review itspractices, and if deemed necessary, adopt a charter andestablish a committee.
A listed entity should separately8.2.disclose its policies and practicesregarding the remuneration of nonexecutive directors and theremuneration of executive directorsand other senior executives.	Yes	The Company's policies and practices regarding theremuneration of all Directors and other senior executives isset out in the Company's Annual Report for each financialyear.
8.3.A listed entity which has an equitybased remuneration scheme should:(a) have a policy on whetherparticipants are permitted to enterinto transactions (whether throughthe use of derivatives orotherwise) which limit theeconomic risk of participating inthe scheme; and(b) disclose that policy or a summaryof it.	No	Although the company did not have a formal policy duringthe reporting period, the Company had a Securities TradingPolicy that restricted the trading of the Company'ssecurities by those who have equity interests in theCompany.