PROSPECT RESOURCES LIMITED — Governance Information 2016

Sep 29, 2016

Rules 4.7.3 and 4.10.31

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Introduced 01/07/14 Amended 02/11/15

Name of entity

PROSPECT RESOURCES LIMITED

30 124 354 329 30 June 2016

ABN / ARBN Financial year ended:

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: www.prospectresources.com.au/company/corporategovernance/

The Corporate Governance Statement is accurate and up to date as at 30 June 2016 and has been approved by the board.

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

Date: 30 September 2016

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 have followed the recommendation in full for the whole of theperiod above. We have disclosed …	We have NOT followed the recommendation in full for the wholeof the period above. We have disclosed …4
	PRINCIPLE 1 –LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1	A listed 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 OR… and information about the respective roles and responsibilities ofour board and management(including those matters expresslyreserved to the board and those delegatedto management):inthe Company's 2016 Annual Report
1.2	A listed 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
1.4Thecompany 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 have followed the recommendation in full for the whole of theperiod above. We have disclosed …	We have NOT followed the recommendation in full for the wholeof the period above. We have disclosed …4
1.5	A listed entity should:		an explanationwhy that is soin our Corporate Governance
	(a)have a diversity policy which includes requirements for theboard or a relevant committee of the board tosetmeasurable objectives for achieving gender diversity and toassess annually both the objectives and the entity's progressin achieving them;		Statement
	(b)disclose that policy or a summary of it; and
	(c)disclose as at the end of each reporting period themeasurable objectives for achieving gender diversity set bythe board or a relevant committee of the board in accordancewith the entity's diversity policy and its progress towardsachieving them and 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"seniorexecutive" 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 listed entity should:	… and the information referred to in paragraph (b):	an explanation why that is soin our Corporate Governance
	(a)have and disclose a process for periodically evaluating theperformance of the board, its committees and individualdirectors; and	in our Corporate Governance Statement	Statement
	(b)disclose, in relation to each reporting period, whether aperformance evaluation was undertaken in the reportingperiod in accordance with that process.
1.7	A listed entity should:	… and the information referred to in paragraph (b):	an explanationwhy that is soin our Corporate Governance
	(a)have and disclose a process for periodically evaluating theperformance of its senior executives; and	in our Corporate Governance Statement	Statement
	(b)disclose, in relation to each reporting period, whether aperformance evaluation was undertaken in the reportingperiod in accordance with that process.

Corporate Governance Council recommendation		We have followed the recommendation in full for the whole of theperiod above. We have disclosed …	We have NOT followed the recommendation in full for the wholeof the period above. We have disclosed …4
	PRINCIPLE 2 -STRUCTURE THE BOARD TO ADD VALUE
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.	[If the entity complies with paragraph (b):]… 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 Box2.3 but the boardis of the opinion that it doesnot compromise theindependence of the director, the nature 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.		an explanationwhy that is soin our Corporate GovernanceStatement

	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of theperiod above. We have disclosed …	We have NOT followed the recommendation in full for the wholeof the period above. We have disclosed …4
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 shouldbe 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 should have a program for inducting new directorsand provide appropriate professional development opportunitiesfor directors to develop and maintain the skills and knowledgeneeded to perform their role as directors effectively.		an explanationwhy that is so in our Corporate GovernanceStatement
PRINCIPLE 3 –	ACT ETHICALLYAND 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 have followed the recommendation in full for the whole of theperiod above. We have disclosed …	We have NOT followed the recommendation in full for the wholeof the period above. We have disclosed …4
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 reportingperiod, 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.	[If the entity complieswith paragraph (b):]… 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 Statement	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 positionandperformance of the entity and 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 have followed the recommendation in full for the whole of theperiod above. We have disclosed …	We have NOT followed the recommendation in full for the wholeof the period above. We have disclosed …4
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 usand our governance on our website:at www.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.	… our policies and processes for facilitating and encouragingparticipation at meetings of security holders:in our Corporate Governance Statement
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 have followed the recommendation in full for the whole of theperiod above. We have disclosed …	We have NOT followed the recommendation in full for the wholeof the period above. We have disclosed …4
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:(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)asat 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 committees thatsatisfy (a) above, disclose that fact and the processes itemploys for overseeing the entity's risk managementframework.	[If the entity complies withparagraph (b):]… the fact that we do not have a risk committeeor committees thatsatisfy (a) and the processes we employ for overseeing our riskmanagement framework:in our Corporate Governance Statement	an explanationwhy that is soin our Corporate GovernanceStatement
7.2	The board or a committee of the board should:(a)review the entity's risk management framework at leastannually to satisfy itself that it continues to be sound; and(b)disclose, in relation to each reporting period, whether sucha review has taken place.	… the fact that board or a committee of the board reviews the entity'srisk management framework at least annually to satisfy itself that itcontinues to be sound:in our Corporate Governance Statement… and that such a review has taken place in the reporting periodcovered by this Appendix4G:in our Corporate Governance Statement
7.3	A listedentity should disclose:(a)if it has an internal audit function, how the function isstructured and what role it performs; or(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 andinternal control processes.		an explanationwhy that is soin our Corporate GovernanceStatement

Corporate Governance Council recommendation		We have followed the recommendation in full for the whole of theperiod above. We have disclosed …	We have NOT followed the recommendation in full for the wholeof the period above. We have disclosed …4
7.4	A listed entity should disclose whether it has any materialexposure to economic, environmental and social sustainabilityrisks and, if it does, how it manages or intends to manage thoserisks.	… whether we have any material exposure to economic,environmental and social sustainability risks and, if we do, how wemanage or intend to manage those risks:in our Corporate Governance Statement

Corporate Governance Council recommendation		We have followed the recommendation in full for the whole of theperiod above. We have disclosed …	We have NOT followed the recommendation in full for the wholeof the period above. We have disclosed …4
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.	[If the entity complies with paragraph (b):]… 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 the Company's 2016 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

Corporate Governance Statement

PROSPECT RESOURCES LIMITED ACN 124 354 329

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 30 June 2016 and has been approved by the board of the Company (Board).

ASXPrinciplesand	Comply	Explanation
Recommendations	(Yes/No)
1.Lay solid foundations for management and oversight
1.1 A listed entity should disclose:(a) therespectiverolesandresponsibilities of its board andmanagement; and(b) thosemattersexpresslyreserved to the board and thosedelegated to management.	Yes	The Board is responsible for the corporategovernance of the Company. The BoarddevelopsstrategiesfortheCompany,reviews strategic objectives and monitorsperformance against those objectives. Thegoals of the corporate governance processesare to:(a)maintainandincreaseshareholdervalue;(b)ensure a prudential and ethical basis forthe Company's conduct and activities;and(c)ensure compliance with the Company'slegal and regulatory objectives.Consistent with these goals, the Boardassumes the following responsibilities:(a)developing initiatives for profit and assetgrowth;(b)reviewing the corporate, commercialandfinancialperformanceoftheCompany on a regular basis;(c)actingonbehalfof,andbeingaccountable to, the shareholders; and(d)identifyingbusinessrisksandimplementing actions to manage thoserisks and corporate systems to assure
1.2 A listed entity should:(a) undertakeappropriatechecksbefore appointing a person orputtingforwardtosecurityholders a candidate for election	Yes	quality.The Company is committed to the circulationof relevant materials to directors in a timelymanner to facilitate directors' participation inBoard discussions on a fully informed basis.The Company intends to regularly review thebalance of responsibilities between the Boardand management to ensure that the divisionof functions remains appropriate to the needsof the Company.TheCompanyundertakesappropriatechecks before appointing a person as aDirector of the Company.When the election of Directors are put to
as a director; and		security holders at a meeting of members, all

ASXPrinciplesand	Comply	Explanation
Recommendations(b) provide security holders with allmaterialinformationinitspossessionrelevanttoadecision on whether or not toelect or re-elect a director.	(Yes/No)	material information relevant to the vote areincorporated in the meeting documents,which includes their relevant professionalhistory and qualifications.
1.3 A listed entity should have a writtenagreement with each director andseniorexecutivesettingouttheterms of their appointment.	Yes	The Company has written agreements inplace with each of its Directors and seniorexecutives.
1.4 The company secretary of a listedentity should be accountable directlyto the board, through the chair, on allmatterstodowiththeproperfunctioning of the board.	Yes	The Company Secretary position is directlyaccountable to the Board on all matters to dowith the proper functioning of the Board.
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 annuallyboththeobjectivesandtheentity's progress in achievingthem;(b) disclosethatpolicyorasummary of it; and(c)disclose as at the end of eachreportingperiodthemeasureableobjectivesforachieving gender diversity set bytheboardorarelevantcommitteeoftheboardinaccordancewiththeentity'sdiversity policy and its progresstowardsachievingthemandeither:(1) the respective proportionsof men and women on theboard, in senior executivepositions and across thewholeorganisation(including how the entityhasdefined"seniorexecutive"forthesepurposes); or(2) if the entity is a "relevantemployer"undertheWorkplace Gender EqualityAct, the entity's most recent"GenderEqualityIndicators", as defined inand published under thatAct.	No	The Company has not found it necessary tocreate a diversity policy or to annually reporton measurable objectives with respect toachieving gender diversity. However, theBoard notes that during the reporting periodit had a female member, and all of itsmemberscamefromdiverseethnicbackgrounds.As the Company develops, the Board intendsto review its practices, and if deemednecessary in the future, the Board mayconsider adopting a formal diversity policywith a set of measurable objectives.
1.6 A listed entity should:(a) have and disclose a process forperiodicallyevaluatingtheperformance of the board, its	No	The Company has not found it necessary todisclosetheprocessforevaluatingperformance.However,performanceevaluationwillbeundertakenbytheChairman against agreed key performance

ASXPrinciplesandRecommendations	Comply(Yes/No)	Explanation
committeesandindividualdirectors; and(b)disclose, in relation to eachreportingperiod,whetheraperformanceevaluationwasundertakeninthereportingperiod in accordance with thatprocess.	Yes	indicators and reported to the Board. In thecaseoftheChairman,performanceevaluation will be undertaken by the Boardagainst agreed key performance indicators,with the Chairman excusing himself fromsuch discussion and not participating in anyvote or resolution on the issue.A performance evaluation was conducted in
		the reporting period.
1.7 A listed entity should:(a) have and disclose a process forperiodicallyevaluatingtheperformanceofitsseniorexecutives; and(b)disclose, in relation to eachreportingperiod,whetheraperformanceevaluationwasundertakeninthereportingperiod in accordance with thatprocess.	NoYes	The Board and senior management team willregularly review the performance of its seniorexecutives and address any issues that mayemerge. However, the Company has notfound it necessary to disclose the process forevaluating performance.A performance evaluation was conducted inthe reporting period.
2Structure 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,a majority of whom areindependent directors; and(2) ischairedbyanindependent director,and disclose:(3) thecharterofthecommittee;(4) themembersofthecommittee; and(5) as at the end of eachreportingperiod,thenumberoftimesthecommittee met throughouttheperiodandtheindividual attendances ofthemembersatthosemeeting; or(b) if it does not have a nominationcommittee, disclose that factand processes it employs toaddressboardsuccessionissues and to ensure that theboardhastheappropriatebalance of skills, knowledge,experience, independence anddiversity to enable it to dischargeits duties and responsibilities	NoYes	Noformalnominationcommitteeorprocedures have been adopted for theidentification, appointment and review of theBoardmembership,butaninformalassessmentprocess,facilitatedbytheChairman in consultation with the Company'sprofessional advisers (if required), has beencommitted to by the Board.

ASXPrinciplesandRecommendations	Comply(Yes/No)	Explanation
2.2 A listed entity should disclose aboard skills matrix setting out the mixof skills and diversity that the boardcurrently has or is looking to achieveits membership.	No	The Board strives to ensure that it iscomprised of Directors with a blend of skills,experience and attributes appropriate to theCompany and its business. The principalcriterion for the appointment of new Directorsis their ability to add value to the Companyand its business. In light of this, it has notbeen deemed necessary to create a formaldocument outlining the particular skills of theexisting Board.
2.3 A listed entity should disclose:(a) thenamesofthedirectorsconsidered by the board to beindependent directors;(b) if a director has an interest,position,associationorrelationshipofthetypedescribed in Box 2.3 but theboard is of the opinion that itdoesnotcompromisetheindependence of the director,thenatureoftheinterest,position,associationorrelationship in question and anexplanation of why the board isof that opinion; and(c)the length of service of eachdirector.	NoN/AYes	The Board ensures that each Director is notable to be significantly adversely influencedby the operations of the Company byensuring a diverse range of backgrounds andongoing involvement in other businesseswhich are not the Company. Information withrespect to potential issues of independencemay be disclosed to the market but no formalpolicy exists to ensure such disclosure. Thelength of service of each Director is publishedin the Company's Annual Report.
2.4 A majority of the board of a listedentityshouldbeindependentdirectors.2.5 The chair of the board of a listed	NoNo	For the reporting period, a majority of theBoard was not independent. However, theCompanyconsidersthattheBoardisappropriately structured given the extensiveknowledge of each of the directors regardingthe Company and its business and theirsubstantial experience and recognition in themining industry and other industries relevantto the Company's operations.For these reasons, and the stage of thedevelopment of the Company, the Companytakes the view that it is in the best interests ofmembers that the current Directors, with theirextensive background and experience, beDirectors of the Board.The Company does not have a CEO,
entity should be an independentdirector and, in particular, should notbe the same person as the CEO ofthe entity.		however, the equivalent function is shares byMessrs Hugh Warner and Harry Greaves.Mr Warner is also the Company's ExecutiveChairman. Despite this, the Board considersMr Warner's current role as essential to thesuccess of the Company at this stage of itsdevelopment.

ASXPrinciplesandRecommendations	Comply(Yes/No)	Explanation
2.6 A listed entity should have a programforinductingnewdirectorsandprovideappropriateprofessionaldevelopmentopportunitiesfordirectors to develop and maintain theskills and knowledge needed toperformtheirroleasdirectoreffectively.	No	The Companydoes not have a formalinductionprocessfornewDirectors.Nevertheless, the Company takes care inensuringthatdirectorswillbeabletoeffectively manage and govern the CompanybeforetheirnominationaspotentialDirectors.
3Act ethically and responsibly
3.1 A listed entity should:(a) have a code of conduct for itsdirectors, senior executives andemployees; and(b) disclose that code or a summaryof it.	No	The Board is committed to the establishmentandmaintenanceofappropriateethicalstandards. However, at this stage of theCompany's development, there is currentlyno official code of conduct in place.
		As the Company develops, the Board intendsto review its practices, and if deemednecessary, establish an appropriate code ofconduct.
4Safeguard 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,allofwhomarenon	No	The Company does not have a separatelyconstituted audit committee due to its currentstage of development.
executive directors and amajorityofwhomareindependent directors; and(2) ischairedbyanindependent director who isnot the chair of the board,and disclose:		The Company has an independent externalauditor that verifies and safeguards theintegrityoftheCompany'scorporatereporting. TheBoard, from time to time,reviews the scope, performance and fees ofthe external auditor.
(3) thecharterofthecommittee;(4) the relevant qualificationsandexperienceofthemembers of the committee;and		An external auditor can be removed and/orappointed at a meeting of shareholders,provided that the requisite notices under theCorporations Act have been provided to theCompany and other relevant parties.
(5) in relation to each reportingperiod, the number of timesthecommitteemetthroughout the period andthe individual attendancesof the members at thosemeetings; or		As the Company develops, the Board intendsto review its practices, and if deemednecessary, adopt a charter establish acommittee.
(b)if it does not have an auditcommittee, disclose that factand the processes it employsthat independently verify andsafeguard the integrity of itscorporatereporting,includingtheprocessesfortheappointment and removal of theexternal auditor and the rotationof the audit engagement partner.	Yes

ASXPrinciplesand	Comply	Explanation
Recommendations	(Yes/No)
4.2 The board of a listed entity should,beforeitapprovestheentity'sfinancial statements for a financialperiod, receive from its CEO andCFO a declaration that, in theiropinion, the financial records of theentity have been properly maintained	Yes	The Company does have a CFO and adeclaration in this form has been prepared.The Company does not have a CEO.
and that the financial statementscomplywiththeappropriateaccounting standards and give a trueand fair view of the financial positionand performance of the entity andthat the opinion has been formed onthe basis of a sound system of riskmanagement and internal controlwhich is operating effectively.
4.3 A listed entity that has an AGMshouldensurethatitsexternalauditor attends its AGM and isavailable to answer questions fromsecurity holders relevant to the audit.	Yes	An external auditor will be present at theAGM and be available to answer questionsfrom security holders relevant to the audit.
5Make timely and balanced disclosure
5.1 A listed entity should:(a) haveawrittenpolicyforcomplying with its continuousdisclosure requirements underthe Listing Rules; and(b) disclosethatpolicyorasummary of it.	No	Due to the current stage of development ofthe Company, there are no written policies inplace. The Company is however committedto providing relevant up-to-date informationtoitsshareholdersandthebroaderinvestment community in accordance withthecontinuousdisclosurerequirementsundertheASXListingRulesandtheCorporations Act.The Board has designated the CompanySecretary as the person responsible foroverseeing and coordinating disclosure ofinformation to the ASX and shareholders aswell as providing guidance to Directors andemployees on disclosure requirements andprocedures.As the Company develops, the Board intendsto review its practices, and if deemednecessary,adoptaformalcontinuousdisclosure policy.
6Respect the rights of security holders
6.1 Alistedentityshouldprovideinformationaboutitselfanditsgovernancetoinvestorsviaits website.	Yes	The Company's information is provided on itswebsite www.prospectresources.com.au.
6.2 A listed entity should design andimplementaninvestorrelationsprogram to facilitate effective twoway communication with investors.	No	TheCompanyhasnoformalinvestorrelations program in place, but ensures thatall material information is conveyed to itsinvestors so as to facilitate communication.
6.3 A listed entity should disclose thepolicies and processes it has in placetofacilitateandencourageparticipation at meetings of securityholders.	Yes	Although the Company does not have aformal communications policy in place, allmaterial matters will be disclosed to themarket in accordance with the ASX ListingRules.

ASXPrinciplesandRecommendations	Comply(Yes/No)	Explanation
6.4 A listed entity should give securityholderstheoptiontoreceivecommunicationsfrom,andsendcommunications to, the entity and itssecurity registry electronically.	Yes	The Company encourages shareholders toregister for receipt of announcements andupdates electronically.
7Recognise and manage risk
7.1 The board of a listed entity should:(a) have a committee or committeesto oversee risk, each of which:(1) has at least three members,a majority of whom areindependent directors and;(2) ischairedbyanindependent director,and disclose:(3) thecharterofthecommittee;(4) themembersofthecommittee; and(5) as at the end of eachreportingperiod,thenumberoftimesthecommittee met throughouttheperiodandthe	No	The Company does not have a separatelyconstituted risk committee due to its currentstage of development.The Board is responsible for the oversightand management of all material businessrisks. The Board's collective experience willenable accurate identification of the principalrisksthatmayaffecttheCompany'sbusiness. Key operational risks and theirmanagement will be recurring items fordeliberation as Board meetings.The risk profile can be expected to changeand procedures adapted as the Companydevelops and it grows in size and complexity.The Board intends to continue to regularly
individual attendances ofthemembersatthosemeetings; or(b) ifitdoesnothaveariskcommittee or committees thatsatisfy (a) above, disclose thatfactandtheprocessesitemploysforoverseeingtheentity'sriskmanagementframework.	Yes	review and approve the risk managementand oversight policies of the Company.As the Company develops, the Board intendsto review its practices, and if deemednecessary, adopt a charter establish acommittee.
7.2 The board or a committee of theboard should:(a) reviewtheentity'sriskmanagement 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 theCompany'sriskmanagementsystems,practices and procedures to ensure effectiveriskidentificationandmanagementandcompliancewithinternalguidelinesandexternal requirements.As of the end of this reporting period, theBoard has completed its review.
7.3 A listed entity should disclose:(a) if it has an internal audit function,how the function is structuredand what role it performs; or(b) if it does not have an internalaudit function, that fact and theprocessesitemploysforevaluatingandcontinuallyimproving the effectiveness of itsrisk management and internalcontrol processes.	No	The Company does not have an internal auditfunction,anddoesnotdisclosetheprocessesitusestoimproveriskmanagement.Nonetheless,itremainscommitted to effective management andcontrol of these factors.
7.4 Alistedentityshoulddisclosewhether it has any material exposuretoeconomic,environmentalandsocial sustainability risks and, if it	Yes	All material risk are announced to the market,in accordance with the requirements of theASX Listing Rules and otherwise.

ASXPrinciplesandRecommendations	Comply(Yes/No)	Explanation
does, how it manages or intends to
manage those risks.
8Remunerate fairly and responsibly
8.1 The board of a listed entity should:(a) have a remuneration committee	No	The Companydoes not have in place aseparatelyconstitutedremuneration
which:		committeeduetoitscurrentstageof
(1) has at least three members,		development.
a majority of whom are
independent directors; and		The remuneration of an executive director will
(2) ischairedbyan		be decided by the Board, without the affected
independent director		executivedirectorparticipatinginthat
(3) thecharterofthe		decision-making process.
committee;
(4) themembersofthe		The total maximum remuneration is currently
committee; and		set at $500,000. Any increases will be the
(5) as at the end of each		subjectofashareholderresolutionin
reportingperiod,thenumberoftimesthe		accordance with the Company's constitution,the Corporations Act and the ASX Listing
committee met throughout		Rules, as applicable. The determination of
theperiodandthe		non-executive directors' remuneration within
individual attendance of the		that maximum amount will be made by the
membersatthose		Board, having regard to the inputs and value
meetings, or		totheCompanyoftherespective
(b) ifitdoesnothavea	Yes	contributions by each non-executive director.
remunerationcommittee,
disclosethatfactandthe		TheBoardmayawardadditional
processes it employs for setting		remunerationtonon-executivedirectors
the level and composition ofremuneration for directors and		called upon to perform extra services or makespecial exertions on behalf of the Company.
senior executives and ensuring
thatsuchremunerationis		As the Company develops, the Board intends
appropriate and not excessive.		to review its practices, and if deemed
		necessary, adopt a charter establish a
		committee.
8.2 A listed entity should separately	Yes	TheCompany'spoliciesandpractices
disclose its policies and practices		regarding the remuneration of all Directors
regarding the remuneration of non		and other senior executives is set out in the
executivedirectorsandthe		Company's Annual Report for each financial
remuneration of executive directorsand other senior executives.		year.
8.3 A listed entity which has an equity	No	Although the company did not have a formal
based remuneration scheme should:		policyduringthereportingperiod,the
(a) haveapolicyonwhether		Company had a Securities Trading Policy
participantsarepermittedto		that restricted the trading of the Company's
enter into transactions (whether		securities by those who have equity interests
through the use of derivatives or		in the Company.
otherwise)whichlimitthe
economic risk of participating in
the scheme; and(b) disclosethatpolicyora
summary of it.