RAMELIUS RESOURCES LIMITED — Interim / Quarterly Report 2005

Feb 24, 2005

Half Year Financial Report

31 December 2004

CORPORATE DIRECTORY

Ramelius Resources Limited

ACN 001 717 540 ABN 51 001 717 540 Incorporated in NSW

Registered Office

140 Greenhill Road UNLEY SA 5061 Telephone: (08) 8373 6473 / (08) 8373 5588 Facsimile: (08) 8373 5517

Email: info@rameliusresources.com.au

Share Registar

Computershare Investor Services Pty Ltd Level 5, 115 Grenfell Street ADELAIDE SA 5000 Telephone: (08) 8236 2300 Facsimile: (08) 8236 2305

Email: info@computershare.com.au

Auditor

Grant Thornton Chartered Accountants 67 Greenhill Road Wayville SA 5034

Directors' report

The directors present their report together with the half-year financial report of Ramelius Resources Limited for the period ended 31 December 2004 and the auditor's independent review report thereon.

Directors

The directors of the Company at any time during or since the end of the half-year are:

Robert Michael Kennedy ASAIT, Grad, Dip (Systems Analysis), FCA, ACIS, FAIM, FAICD Non-Executive Chairman

Reginald George Nelson BSc, Hon Life Member Society of Exploration Geophysicists, FAusIMM, FAICD Non-Executive Director

Joseph Fred Houldsworth Managing Director

Principal activities

The company's principal activity is gold and minerals exploration.

Review and results of operations

During the half-year, the Company carried out a total of 4,252 metres of resource definition drilling at the Wattle Dam 7800N prospect which resulted in an indicated and inferred gold resource of 155,000 tonnes at 3.3 g/t of gold being estimated. Pit Optimisation and Metallurgical Studies were subsequently initiated on the indicated and inferred gold resource as a precursor to a decision being made on mining. Initial results of the study have indicated that the 7800N prospect at Wattle Dam holds a robust resource that can be expected to provide an economic return to the Company.

A total of 1,682 metres of reverse circulation ("RC") drilling was carried out during the half-year at the Hilditch Project where nickel gossans had been identified. The drilling resulted in the intersection of massive sulphides grading 3.9% nickel and 0.5% copper over one metre at a depth of 74 to 75 metres. A further zone of nickel bearing sulphides was also intersected at a depth of 93 to 94 metres grading 1.3% nickel and 0.1% copper. As a consequence, Hilditch has developed into a priority project for 2005 where further RC drilling, including an initial program of diamond drilling, is expected to be carried out during the first quarter of 2005.

In October 2004, the Company issued 500,000 options in the share capital of Ramelius as a performance incentive to each of three non-related consultants to the Company. These options totalling 1,500,000 are non transferable, unquoted securities exercisable at \$0.18687 at any time until expiry on 31 December 2007.

The net loss after extraordinary items and income tax for the half-year was \$346,241.

Likely developments

A mining decision is expected to be made during the first quarter of 2005 in respect of Ramelius' Black Cat and/or Wattle Dam Gold Projects that has the potential to generate a quick cash flow for the Company.

Further information about likely developments in the operations of the company and the expected results of those operations in future years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Company.

Auditors Independence Declaration

Section 307C of the Corporations Act 2001 requires the Company's auditors, Grant Thornton, to provide the directors of Ramelius Resources Limited with an Independence Declaration in relation to the review of the half-year financial report. The Independence Declaration is set out on the following page and forms parts of this Director's Report.

Directors' report (continued)

Unles this Dated at .	day of Geracion 2005.
Signed in accordance with a resolution of the directors:
Robert Michael Kennedy
Director

Grant Thornton

AUDITOR'S INDEPENDENCE DECLARATION

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Ramelius Resources Limited for the half-year ended 31 December 2004, I declare that, to the best of my knowledge and belief, there have been:

• no contraventions of the auditor independence requirements of the Corporations Act $(a)$ 2001 in relation to the review; and
• no contraventions of any applicable code of professional conduct in relation to the $(b)$ review.

SJERAY

Partner Grant Thornton

Adelaide

25 February 2005

Level 1 67 Greenhill Road Wayville SA 5034 GPO Box 1270 Adelaide SA 5001 DX 275 Adelaide T (08) 8372 6666 F (08) 8372 6677 E info@gtsa.com.au W www.grantthornton.com.au

A South Australian Partnership -A Member of Grant Thornton Association Inc.

The Australian Member of Grant Thornton International

Statement of financial performance

For the half-year-ended 31 December 2004

	Note	Dec 2004	Dec 2003
		\$	S
Profit on sale of mineral tenements			39,699
Revenue from Option granted			10,000
Other Revenues from ordinary activities	2	44,895	27,300
Total revenue		44,895	76,999
Administrative expenses		86,900	68,028
Depreciation		1,706	1,048
Diminution in value of Investments		(600)	6,000
Employment expenses		163,279	112,770
Exploration costs written off		99,719	5,286
Occupancy expenses		17,357	8,778
Other expenses from ordinary activities		22,775	32,497
Profit/(loss) from ordinary activities before
related income tax expense		(346,241)	(157, 408)
Income tax (expense)/benefit relating to ordinary activities
Profit/(loss) from ordinary activities after
related income tax expense		(346,241)	(157, 408)
Profit/(loss) from extraordinary item after related
income tax expense
Total changes in equity other than those resulting from transactions with owners as
owners		(346, 241)	(157, 408)
Basic earnings per share		(S0.006)	(\$0.004)
Diluted earnings per share		(S0.006)	(\$0.004)

The statement of financial performance is to be read in conjunction with the notes to the financial statements set out on pages 8 - 11.

Statement of financial position

As at 31 December 2004

	Note	Dec 2004	June 2004
		\$	\$
Current Assets
Cash assets		1,190,730	2,033,506
Receivables		46,185	47,503
Other Financial assets		22,400	21,800
Other		19,884	21,292
Total current assets		1,279,199	2,124,101
Non-current assets
Property, Plant and Equipment		16,839	14,994
Exploration, evaluation & development
expenditure		3,851,263	3,393,227
Total non-current assets		3,868,102	3,408,221
Total assets		5,147,301	5,532,322
Current liabilities
Payables		106,847	148,301
Provisions		30,975	28,301
Total current liabilities		137,822	176,602
Non-current liabilities
Provisions		7,564	7,564
Total non-current liabilities		7,564	7,564
Total liabilities		145,386	184,166
Net assets		5,001,915	5,348,156
Equity
Contributed equity	3	5,937,938	5,937,938
Retained profits	4	(936, 023)	(589, 782)
Total Equity	5	5,001,915	5,348,156

The statement of financial position is to be read in conjunction with the notes to the financial statements set out on pages 8 - 11.

Statement of cash flows

For the half-year ended 31 December 2004

Note	Dec 2004 \$	Dec 2003 \$
Cash Flows from operating activities
Cash payments in the course of operations	(287,951)	(237, 167)
Cash receipts in the course of operations	2,076	33,602
Interest received	42,564	29,662
Net cash provided by/(used in) operating
activities	(243,311)	(173,903)
Cash Flows from investing activities
Payments for Property, Plant and Equipment	(2,022)	(1, 734)
Payments for Mining Tenements & Exploration	(597, 443)	(864, 656)
Net cash provided by/(used in) investing
activities	(599, 465)	(866, 390)
Cash Flows from Financing activities
Proceeds from disposal of mineral tenements		40,000
Proceeds from option granted		10,000
Proceeds from issue of shares to seed capitalists
Proceeds from Applicants for shares pursuant to
IPO prospectus
Payments associated with capital raising		(64, 193)
Proceeds from exercise of options		1,000
Net cash provided by/(used in) financing activities		(13, 193)
Net increase/(decrease) in cash held	(842,776)	(1,053,486)
Cash at the beginning of the half-year	2,033,506	1,557,837
Cash at the end of the half-year	1,190,730	504,351

The statement of cash flows is to be read in conjunction with the notes to the financial statements set out on pages 8 - 11.

Ramelius Resources Limited Notes to the financial statements For the half-vear ended 31 December 2004

$\boldsymbol{\mathit{I}}$ Statement of significant accounting policies

The significant policies that have been adopted in the preparation of this financial report are:

$(a)$ Basis of preparation

The half-year financial report is a general purpose financial report which has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standard AASB 1029 Interim Financial Reporting, the recognition and measurement requirements of applicable AASB standards, other authoritative pronouncements of the Australian Accounting Standards Board and Urgent Issues Group consensus views. This half-year financial report is to be read in conjunction with the 30 June 2004 Annual Financial Report and any public announcements made by Ramelius Resources Limited during the half year in accordance with the continuous disclosure requirements of the Corporations Act 2001. It has been prepared on the accruals basis and is based on historical costs and except where stated, does not take into account changing money values or fair values of non-current assets.

These accounting policies have been consistently applied and, except where there is a change in accounting policy, are consistent with those of the 2004 Annual Financial Report.

The half-year financial report does not include full note disclosures of the type normally included in an annual financial report.

$(b)$ Adoption of Australian Equivalents to International Financial Reporting Standards

For reporting periods beginning on or after 1 January 2005, the Company is required to comply with the Australian Equivalent of International Financial Reporting Standards (AIFRS) as issued by the Australian Accounting Standards Board.

Financial information in this report has been prepared in accordance with Australian Accounting Standards and other financial reporting requirements (Australian GAAP). The differences between Australian GAAP and AIFRS identified by management to date as potentially having a significant effect on the financial position of the company are summarised below. The summary should not be taken as an exhaustive list of all the differences between Australian GAAP and AIFRS.

No attempt has been made to identify all disclosure, presentation or classification differences that would affect the manner in which transactions or events are presented.

Impairment of Assets

Under AASB 136: Impairment of Assets, the Company's assets will be required to be tested for impairment on a discounted cash flow basis for each cash-generating unit. This may lead to write downs in the carrying value of the Company's assets more often than would be required under the existing policy.

Financial Instruments

Under AASB 139: Financial Instruments: Recognition and Measurement, financial instruments that are classified as available for sale instruments must be carried at fair value. Unrealised gains or losses may be recognised either in income or directly to equity. Current accounting policy is to measure investments at cost, with annual review by directors to ensure that the carrying amounts are not in excess of the recoverable value of the instruments.

Income Tax

Under AASB 112: Income Taxes, the Company will be required to adopt a balance sheet approach under which temporary differences are identified for each asset and liability rather than the effects of the timing and permanent differences between taxable and accounting profit. Currently, the Company adopts the liability method of tax effect accounting whereby the income tax expense is based on the accounting profit adjusted for any permanent differences. Timing differences are currently brought to account as either a provision for deferred income tax or future income tax benefit.

Exploration for and Evaluation of Mineral Resources ٠

AASB6: Exploration for and Evaluation of Mineral Resources, differs to the current accounting standard by applying only to exploration and evaluation expenditure rather than all aspects of extractive industries and requiring performance of impairment tests on those assets when the facts and circumstances suggest the carrying amount of the assets exceed the recoverable amount.

			Dec 2004 S	Dec 2003 S
2	Other Revenues from ordinary activities
	Included in other revenues from ordinary activities: Interest: other parties		42,269	26,295
		Note	Dec 2004 \$	June 2004 \$
3	Contributed equity
	Issued and paid-up share capital
	59,016,275 ordinary shares, fully paid	3(a)	5,937,938	5,937,938
	(a) Ordinary shares
	Balance at the beginning of half-year Shares issued during the half year		5,937,938	3,467,165
	1,500,000 to Vendors in consideration for tenements 22,727,273 to applicants pursuant to a 1			200,902
	for 1 Rights Issue at \$0.11			2,500,000
	Less transaction costs arising from issue for eash pursuant to IPO prospectus 5,000 to Option-holders on exercise of			(231, 129)
	options at \$0.20 in cash			1,000
	Balance at end of half year		5,937,938	5,937,938

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders' meetings. In the event of winding up of the Company ordinary shareholders rank after all creditors and are fully entitled to any proceeds of liquidation.

		Note	Dec 2004 June 2004 \$
4	Retained profits/(losses)
	Retained losses at beginning of the period		(127, 530) (589, 782)
	Net loss attributable to members of the company		(346,241) (462, 252)
	Retained profits at the end of the period		(936,023) (589, 782)

Notes to the financial statements

For the half-year ended 31 December 2004

	Note	Dec 2004 \$	Jime 2004 S
Total equity reconciliation
Total equity at beginning of the period		5,348,156	3,339,635
Total changes in parent entity interest in equity
recognised in statement of financial performance		(346,241)	(462, 252)
Transactions with owners as owners:
Contributions of equity			2,701,902
Less transaction costs arising from
transactions with owners as owners			(231, 129)
Total equity at end of the period		(5,001.915)	5,348,156

6 Commitments & Contingent liabilities

Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Company is required to perform minimum exploration work to meet the minimum expenditure requirements specified by the State Government of Western Australia. These obligations are subject to renegotiation when application for a mining lease is made and at other times. These obligations are not provided for in the financial report and are payable as follows.

Within one year	426.698	385,580
One year or later and no later than five years	1,250.472	1,010.537
Later than five years	1,299,577	844.219
	2,976,748	2,240,336

Non-cancellable operating lease expense commitments

The Company leases office accommodation under a non-cancellable operating lease expiring in March 2005. The lease generally provides the Company with a right of renewal for a further year after which time all terms are renegotiated. Lease payments comprise a base amount plus an incremental contingent rental. Contingent rentals are based on movements in the Consumer Price Index and operating criteria.

Future operating lease commitments not provided for in
the financial statements and payable:
Within one year	16.936	16.936
One year or later and no later than five years	4.234	12.702
Later than five years
	21.170.	29.638.

Ramelius Resources Limited Notes to the financial statements

For the half-year ended 31 December 2004

Note	Dec 2004	June 2004
	- 12

Contingent Liabilities

The details and estimated maximum amounts of contingent liabilities (excluding unquantifiable royalties) that may become payable are set out below. The contingent liabilities arise from various agreements for the acquisition of or earning interests in mining tenements that are subject to certain precedent conditions being satisfied. At the date of this report there is no certainty that these liabilities will crystallise and therefore no provisions are included in the financial statements in respect of these matters. In addition to the contingent liabilities detailed below the Company is also required under the various agreements to maintain tenements in good standing and pay all rates, rents and taxes and do all things necessary to renew tenements during the conditions precedent period.

Total estimated contingent liabilities		564.319	720.481
interests in tenements	60 o	524.419	680,581
Exploration/Farm-in expenditure to earn
Mining Tenements/Performance Bond	6(a)	39.900	39.900

(a) Mining Tenements/Performance Bond

A production based royalty up to a maximum of \$1 million on certain mining tenements may become payable but cannot be presently quantified as well as a replacement performance bond of \$39,900. The Company has placed \$39,900 cash on deposit with its bankers as security against an unconditional performance bond for \$39,900 having been issued in favour of the Minister for State Development in Western Australia.

(b) Exploration/Farm-in expenditure

Exploration/Farm-in expenditure is to be made over periods between 1 and 4 years in accordance with terms set out in the relevant agreements. The Company may elect not to proceed to acquire or earn an interest in the relevant tenements provided it has first carried out the minimum exploration expenditure required. Total minimum exploration expenditure specified in the relevant agreements over this period is \$180,000 with a minimum of \$50,000 per year.

(c) Director Related Entities

A contractual agreement with a director related entity of the Managing Director provides for a production based royalty that may become payable. However at the date of the report, the maximum amount of royalties that may be payable cannot be quantified.

7 Events subsequent to balance date

There has not arisen in the interval between 31 December 2004 and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future years.

8 Segment Reporting

The Company operates in the gold exploration and mining business segment located in Australia.

Directors' declaration

In the opinion of the directors of Ramelius Resources Limited:

• (a) the half-year financial statements and notes, set out on pages 5 to 11, are in accordance with the Corporations Act 2001, including:
• giving a true and fair view of the financial position of the Company as at 31 December 2004 and of its $(i)$ performance, as represented by the results of its operations and its cash flows, for the six months ended on that date; and
• (ii) complying with Accounting Standards and the Corporations Regulations 2001; and
• there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become $(b)$ due and payable.

$\ldots$ 2005. ........ $day$ of . b. Dated at .. .............. this .. Signed in accordance with a resolution of the directors:

Robert Michael Kennedy Director

Grant Thornton &

INDEPENDENT REVIEW REPORT TO THE MEMBERS OF RAMELIUS RESOURCES LIMITED

Scope

We have reviewed the financial report of Ramelius Resources Limited for the half-year ended 31 December 2004, comprising Statement of Financial Position, Statement of Financial Performance. Statement of Cashflows. Notes to the Financial Statements and Directors Declaration. The company's directors are responsible for the financial report. We have performed an independent review of the financial report in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report is not presented fairly in accordance with Australian Accounting Standard AASB 1029: Interim Financial Reporting and other mandatory professional reporting requirements in Australia and statutory requirements so as to present a view which is consistent with our understanding of the company's financial position and performance as represented by the results of its operations and its cash flows, and in order for the company to lodge the financial report with the Australian Stock Exchange Limited/Australian Securities & Investments Commission.

Our review has been conducted in accordance with Australian Auditing Standards applicable to review engagements. A review is limited primarily to inquiries of company personnel and analytical procedures applied to the financial data. These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Statement

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the half-year financial report of Ramelius Resources Limited is not in accordance with:

• the Corporations Act 2001, including: $(a)$
• giving a true and fair view of the company's financial position as at 31 $(i)$ December 2004 and of its performance for the half-year ended on that date: and
• complying with Australian Accounting Standard AASB 1029: Interim $(ii)$ Financial Reporting and the Corporations Regulations 2001; and
• other mandatory professional reporting requirements in Australia. $(b)$

GRANT THORNTON Chartered Accountants

S J'GBAY

Pertner

GPO Box 1270 Adelaide SA 5001 DX 275 Adelaide T (08) 8372 6666 F (08) 8372 6677 E info@gtsa.com.au W www.grantthornton.com.au

Wayville SA 5034

Level 1 67 Greenhill Road

A South Australian Partnership -A Member of Grant Thornton Association Inc.