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RAMELIUS RESOURCES LIMITED Interim / Quarterly Report 2005

Jan 27, 2005

65718_rns_2005-01-27_5600c3bc-df03-4f4d-8fa6-7c67aec72351.pdf

Interim / Quarterly Report

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Ramelius Resources Limited

ACN 001 717 540

140 Greenhill Road, Unley, SA 5061 GPO Box 1373, Adelaide SA 5001 DX 52003, Unley Telephone (08) 8373 6473 / (08) 8373 5588 Facsimile (08) 8373 5917

ASX RELEASE

For Immediate Release Friday, 28 January 2005

General Manager The Company Announcements Office Australian Stock Exchange Limited PO Box H224 Australia Square Sydney NSW 1215

Dear Sir/Madam.

RAMELIUS RESOURCES LIMITED OUARTERLY REPORT ENDING 31 DECEMBER 2004

QUARTERLY HIGHLIGHTS

EXPLORATION

HILDITCH (Nickel) - Massive sulphides grading 3.9% nickel and 0.5% copper were intersected over 1 metre at 74 to 75 metres in drill hole HRC025. The adjacent interval 73 to 74 meters returned 1.3% nickel and 0.2% copper for a total intersection of 73 to 75 metres at 2.4% nickel and 0.3% copper. This correlates with the western zone of the previous drilling.

A further zone of nickel bearing sulphides grading 1.3% nickel and 0.1% copper was intersected by HRC025 at 93 to 94 metres. This interval is within a sedimentary unit adjacent to ultramafic rocks that have returned several individual one metre intervals of 0.3% and 0.4% nickel with anomalous to enhanced copper and cobalt values that may indicate narrow zones of "Cloud Sulphides" within this ultramafic unit. This mineralisation is equated to the eastern zone of the previous drilling.

Shallow geochemical drilling intersected nickel mineralisation associated with the western zone both north and south of the original drill line. These intersections returned values to 0.8% nickel and 0.1% copper in the oxide zone.

Approximately 1.5 kms south and along strike, shallow RC drilling beneath Gossan HR 133 returned an 8 metre wide intercept of 0.4% nickel between 9 metres depth of which the more significant interval is 14 metres to 16 metres which returned 2 metres at 0.5% nickel 0.1% copper.

Outlook

A program of approximately 1300 metres RC drilling and approximately 300 metres diamond drilling is scheduled to commence within 2 weeks. This drilling is targeting

the massive nickel sulphides below and to the north and south of the intersection in hole HRC 025. A further 600 metres of RC drilling is proposed to target the source of the nickel mineralisation intersected in the shallow drilling 1.5 kilometres to the south.

WATTLE DAM (Gold)

Wattle Dam 7800N prospect

A program of 30 close spaced Aircore drill holes, infilling the shallow high grade intersections previously obtained along the eastern side of the mineralised area, was completed in December 2004. Improved confidence has been obtained from this drilling in respect of the continuity of the shallow high grade intersections.

Outlook

The Company is systematically progressing towards a decision to mine the 7800N resource which is expected to be made during the March 2005 quarter.

1. EXPLORATION

$1.1$ HILDITCH (Nickel) - (90% P15/4127 - 4130 & MLA 15/1448) : Gold, Nickel and Base Metals

RC Drilling North

Early in the quarter 974 metres in 24 reverse circulation holes, numbered HRC001 to 024, were drilled in the north eastern corner of the tenements below gossans that had been identified as being after nickel sulphides. This drilling, undertaken for geological and geochemical purposes, used a three hole scissor pattern to test below the gossans. Drill holes HRC001 to HRC003 returned two nickel and copper anomalous zones on the contact of ultramafic and mafic and sedimentary rocks. These zones have been termed the eastern and western zones. This mineralisation is considered to be of the Archaean. komatiite-associated nickel sulphide style.

Subsequently, further reverse circulation drilling of 378 metres in 5 holes was undertaken to follow up the anomalous nickel and copper identified in drill holes HRC001 to HRC003. It should be noted that some of the holes, particularly the shallow ones were drilled in the oxidized zone well above the depth at which sulphides are preserved.

Hole HRC025 intersected nickel sulphides between 73 and 75 metres grading 2.4% nickel and 0.3% copper including one metre of massive sulphides grading 3.9% nickel and 0.5 % copper on the contact of ultramafics and a mafic unit at a down hole depth of 74 metres. This correlates with the western zone, refer to the drill hole cross section above

A further zone of nickel bearing sulphides grading 1.3% nickel and 0.1% copper was intersected by HRC025 at 93 to 94 metres. This interval is within a sedimentary unit adiacent to ultramafic rocks that have returned several individual one metre intervals of 0.3% and 0.4% nickel with anomalous to enhanced copper and cobalt values that may indicate narrow zones of "Cloud Sulphides" within this ultramafic unit. This mineralisation is equated to the eastern zone of the previous drilling, refer to the drill hole cross section above.

Down hole EM was conducted on hole HRC025 from the surface to 93 metres at which depth the casing within the hole was constricted and the probe was unable to pass. A weak, single point, early time response was obtained at a 75 metres depth that is consistent with a narrow, weak conductor that has been intersected by the drill hole. The massive sulphide intersection at 74 to 75 metres is dominantly pyrite and violarite mineralisation, a mineralisation style that has a low intrinsic conductivity and the observed EM response was consistent with the observed geology. No geometric information could be derived from the EM survey.

HRC026 a shallow hole, drilled 20 metres south of the original line obtained geochemically anomalous nickel, copper and cobalt values within the oxidised zone on the same ultramafic and mafic contact as in HRC025 at 74 metres depth.

HRC027 drilled below HRC026 intersected 0.5% nickel and 0.14%copper on the same ultramatic and matic contact and still within the oxidised zone.

HRC028 drilled 40 metres north of the original line intersected three, one metre intervals between 19 and 28 metres depth with nickel values to 0.8% nickel and 0.4% copper. These intervals are within the oxidised zone and are individually associated with the same mafic unit, the sedimentary unit and the eastern ultramafic unit as the nickel mineralisation in HRC 025.

HRC029 drilled below HRC028 intersected a similar ultramafic sequence to that of the other drill holes however the mafic and sedimentary units were absent, however anomalous nickel with enhanced copper and cobalt values were obtained at a 45 metre depth, the inferred position of the mafic unit. Further down hole, two intercepts of 0.4% and 0.3% nickel were returned from within the eastern ultramafic. Disseminated pyrite was recorded at the lower interval. These intervals are correlated with "Cloud Sulphides" in the eastern zone.

200 metres to the South East hole HRC030 was drilled to 120 metres below the previous holes HRC004, 05 and 06 that targeted very anomalous nickel gossans but did not return any anomalous results. Hole HRC030 returned 2 metres at 0.4% nickel at 87 to 89 metres depth that may equate to the mineralised horizon that is represented by the gossans.

Down hole EM was conducted on HRC030. No obvious off hole responses were obtained.

A summary of the nickel intercepts from this more recent drilling is tabulated below

Hole No North East Az Di Depth From To Length Ni% Cu%
GDA GDA p
HRC025 6537110 355113 90 $-60$ 120 73 75 2 2.4 0.3
75 76 0.5 0.05
93 94 1.3 0.1
97 98 0.5 0.4
100 101 0.4
HRC026 6537090 355148 90 $-60$ 40
HRC027 6537090 355134 90 $-60$ 80 48 50 2 0.5 0.14
HRC028 6537150 355133 90 -60 60 19 20 0.8 0.12
24 25 0.5 0.4
27 28 0.8 0.1
HRC029 6537150 355118 90 $-60$ 78 63 64 0.4 0.03
68 69 0.3
HRC030 6536978 355253 60 $-60$ 120 87 89 2 0.4

All analyses were performed with a multi acid digestion and ICP analysis.

As the sequence appears to be sub-vertical, the true widths are likely to be a factor of 0.5 of the intersected widths.

Gossan Sampling and Drilling South

During the quarter a gossan search continued, mainly in the central and southern portions of the tenements. Two areas of gossanous ironstone that exhibit the geochemistry of nickel sulphide gossans have been located. The northern most of these areas contains gossans in outcrop while in the southern area, the gossans are recorded as scree.

The following table shows the geochemistry of some of these gossans.

Sample GDA 94 Cu Ni Pd Pt Zn
No North East ppm ppm ppb ppb ppm
HR162 6535062 355404 1501 8169 107 82 217
HR145 6535585 355371 1592 12669 722 410 27
HR143 6535594 355368 1215 13082 156 241 50
HR144 6535599 355365 1035 6121 108 113 222
HR133 6535645 355354 1431 12261 2594 70 830
HR123 6535811 355301 1232 2490 421 225 834
HR117 6535863 355316 429 2031 35 40 107

An RC drilling programme of 210 metres in six holes was undertaken to provide an initial geological and geochemical test of the northern of these gossans. As in the previous drilling the holes were drilled on a scissor pattern due to uncertainties in the dip direction. The most significant results returned were from the following holes. It should be noted that all the holes were drilled within the oxidised zone well above the depth at which sulphides would be preserved.

HRC033 returned several intervals with elevated nickel values however the interval 32 to 34 metres depth returning 0.4% nickel and 0.04% copper is considered the more significant because of the elevated to anomalous copper values.

HRC035 drilled 50 metres to the south of HRC033 returned an 8 metre wide intercept of 0.4% nickel between 9 and 17 metres depth of which the more significant interval is 14 to 16 metres that returned anomalous copper values averaging 0.11% copper. This anomalous zone is located below the targeted gossan and indicates a steep easterly dip. There is currently no drilling to the south.

Hole No North East Az Dip Depth From To Length Ni% Cu%
GDA GDA
HRC031 6535810 355285 90 $-60$ 40
HRC032 6535810 355310 270 $-60$ 30
HRC033 6535695 355352 90 $-60$ 40 32 34 2 0.4 0.04
HRC034 6535695 355375 270 $-60$ 30
HRC035 6535645 355365 270 $-60$ 30 9 17 8 0.4
including 14 16 2 0.5 0.11
HRC036 6535645 355340 90 -60 40

All analyses were performed with a multi acid digestion and ICP analysis.

As the sequence appears to be sub-vertical the true widths are likely to be a factor of 0.5 of the intersected widths.

$1.2$ WATTLE DAM (100% PL's 15/3767; 3873; 4479; EL 15/718 ML's 15/1263; 1264; 1323; 1338; 1101.) : Gold

Wattle Dam 7800N prospect.

Drilling

A program of 30 close spaced Aircore drill holes was completed in December 2004, infilling the shallow high grade intersections previously obtained along the eastern side of the mineralised area. The results of this drilling have improved the confidence in respect of the continuity of the shallow high grade intersections.

WATTLE DAM 7800N PROJECT
Results of Shallow Air-Core Drilling Along High Grade Eastern Zone
Hole No GDA North GDA East From Тo length G/t Gold Comment
WAC003 6527878 356242 8 10 2 2.8
WAC004 6527878 356257 $\overline{2}$ 4 2 2
WAC005 6527898 356240 5 7 2 15
WAC005 including 6 7 1 25.1 uncut
WAC006 6527898 356250 0 7 7 4.4
WAC007 6527898 356255 0 4 4 $1.5\,$
WAC008 6527898 356261 0 6 6 2.8
WAC009 6527898 356265 0 2 2 2.8
WAC010 6527918 356251 5 10 5 10.1
WAC010 including 7 8 1 22.5 uncut
WAC011 6527918 356256 0 2 2 2.5
WAC013 6527938 356244 4 10 6 6.8
WAC017 6527958 356221 3 5 2 5
WAC019 6527958 356231 1 9 8 8.4
WAC019 including 4 5 1 23.11 uncut

Tabulated below are the significant intercepts with a 4 gram metre cut-off.

These analyses were performed by Genalysis Laboratory Services Pty Ltd using their 200qram leach well method.

Metallurgical Test Work

Three composite samples were collected from the drill cuttings at the 7800N prospect so as to represent the eastern zone near surface, the eastern zone at depth and the western zone. These samples were submitted to Amdel Limited in Kalgoorlie for metallurgical test work.

The Company's metallurgical consultant has examined the results of the test work and has advised that the ores are free milling, low reagent consumers and offer significant gravity gold recovery potential. Potential recoveries of 83% to 96% are indicated at a coarse grind size.

Open Pit Optimisation

Initial Open Pit Optimisation Studies have been completed by the Company's Mine Planning Consultants on the 7800N resource at the Wattle Dam Project. This study used the metallurgical recoveries indicated by test work undertaken by the Company's metallurgical consultants, with toll treatment and operational costs estimated as industry standard by the mine planning consultants.

The favourable results indicate a return commensurate with what one might expect from a resource of this magnitude.

From the current resource of 155,000 tonnes at 3.3 g/t gold, the high grade Eastern Zone formed the bulk of the return from the Optimisation. It also identified certain sites where additional drilling would provide additional confidence in the resource and the optimisation. The additional drilling was subsequently carried out in December 2004 (refer drilling results above).

Flora Survey

As a precusor of a Notice of Intent to Mine, the Company's Environmental Management Consultants completed a Flora Survey of the Wattle Dam Project area including the proposed haul route. The results of the survey indicate that no "Declared Rare or Priority Flora" species are evident.

Wattle Dam 7000N

A program of 320 metres in 4 holes of RC drilling was completed in December 2004. This drilling was targeting previous RAB drilling intercepts of potential ore grade gold mineralisation with individual one metre intercepts up to12.1 g/t gold.

Tabulated below are intercepts greater than 1 gram metre gold. These are contained within an envelope of low grade gold approximately 70m wide containing values between 0.1 and 0.5 g/t gold. It is considered that this indicates the presence of a substantial gold mineralised system and that further evaluation of this system, probably to the south is warranted.

WATTLE DAM 7000N PROJECT
RC DRILLING TO FOLLOW UP PREVIOUS RAB DRILLING RESULTS
GDA GDA G/t
Hole ID North East Az Incl Depth From То length Gold
WDRC049 6527157 356415 090 $-60$ 80 4 8 4 2.2
WDRC050 6527157 356375 090 $-60$ 80 7 8 5.3
and 18 19 1.2
and 32 33 1.5
WDRC051 6527195 356415 090 $-60$ 80
WDRC052 6527195 356385 090 $-60$ 80 19 21 2 $2.2\,$
and 31 32 1.5

These analyses were performed by Genalysis Laboratory Services Pty Ltd using their 200gram leach well method.

$1.3$ INGEBONG HILLS: (80% EL 69/1549) : Copper/Lead/Zinc:

The Ingebong Hills Licence is the Company's key project in the Earaheedy Basin, located approximately 180 kilometres north east of Wiluna in Western Australia.

During October 2004 an infill soil sampling programme of 425 samples were collected so as to close up the soil sampling to 200 metres by 50 metre density. These samples

were sieved in the field to minus 80# (mesh) and submitted to Genalysis Laboratory Services Pty Ltd for base metal analysis.

Six discrete areas with co-incident, anomalous copper and zinc have been defined. The copper anomalous areas are lensoid in outline and in the order of 1.5 kilometres along strike while the accompanying zinc anomalies are somewhat more attenuated along strike. The background values for both copper and zinc are in the order of 10ppm and anomalous areas are defined by 20ppm values with centres of the anomalies being greater than 25ppm with values to 40ppm copper and 50ppm zinc. Some of the outlines and internal contouring within the anomalous areas resemble fold shapes suggesting that there may be a lithological control on the distribution of the copper and zinc.

Further work consisting of geological inspection and mapping of the anomalous zones and rock chip sampling has been recommended.

$1.4$ RHODES (EL 69/1653 - 80%) : Gold. Copper/Lead/Zinc:

Stream Sediment Sampling

During October 2004 a stream sediment sampling programme of 22 samples was undertaken in the western portion of the licence. These samples were sieved in the field to minus 80# and submitted to Genalysis Laboratory Services Pty Ltd for base metal and low level gold analysis.

There are no anomalous or enhanced values in the results in respect of base metals while seven sites returned gold values of 1ppb or greater with one site returning 1.6ppb gold that on repeat analysis returned 2.6ppb gold. The background values for gold are $0.6 - 0.7$ ppb gold.

Further stream sediment sampling has been recommended for this area.

Lag and Soil Sampling

Also during October 2004 a +1.5mm -6mm lag sampling programme of 40 samples along with back up minus 80# soils were collected at 500 metre intervals along 6 north south lines spaced 1 kilometre apart in the eastern portion of the licence. The lag samples were submitted to Genalysis Laboratory Services Pty Ltd for base metal and low level gold analysis. The soil samples are being held in reserve to be analysed as and if appropriate.

There were no anomalous or enhanced values returned from this sampling.

$2.0$ ROYALTY INTERESTS

The Current status of the Company's Royalty Interests is as follows.

PROJECT NAME CURRENT
HOLDER
NATURE OF
ROYALTY
COMMENTS
SANDSTONE
– Gold
Troy Resources
NL
Production based
Royalty Capped at
\$300,000
Purchased by Troy
from Herald Resources
Ltd
BULONG
- Gold
Yilgarn Gold Ltd Production based
Royalty Capped at
\$300,000
No Current Activity
SPARGOS
REWARD
– Gold
Breakaway
Resources Ltd
3% Gross Gold
Royalty
No Current Activity
SIBERIA
- Gold/Nickel
Siberia Mining
Corp Ltd
Nickel and Gold
Royalty Collectively
capped at \$100,000
Siberia Mining is
currently mining the
adjacent Missouri Pit
and exploring the
royalty tenement.
EDJUDINA
– Gold
Sons Of Gwalia
Ltd
Production based
Royalty Capped at
\$500,000
Sons of Gwalia now in
Administration. Future
indeterminable at this
stage.
EUCALYPTUS
– Nickel
GME Resources
Ltd
Option to purchase on
commencement of
mining Nickel Laterites
at \$0.10/tonne of
Proven Ore
GME is currently
drilling the laterite
resource to upgrade its
status.

Joe Houldsworth Managing Director

The Information in this report that relates to Exploration Results is based on information compiled by Gordon Dunbar who is a Fellow of the Institute of Mining and Metallurgy. Gordon Dunbar is employed by Rangewest Pty Ltd, trading as Dunbar Resource Management. Gordon Dunbar has a sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting on Exploration Results. Gordon Dunbar consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Appendix 5B

$Rule 5.3$

Year to date

$(12$ months)

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

Ramelius Resources Limited

ABN

51 001 717 540

Quarter ended ("current quarter")

31 December 2004

\$A'000

Current quarter

Consolidated statement of cash flows

Cash flows related to operating activities

YA UU
1.1 Receipts from product sales and related debtors
1.2 Payments for
(a) exploration and evaluation (230) (597)
(b) development
(c) production
(d) administration (142) (252)
1.3 Dividends received
1.4 Interest and other items of a similar nature 23 42
received
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (provide details if material))
GST 6 I
Prepaid insurance etc (4) (16)
Listing fee (8)
Other (5) (11)
Net Operating Cash Flows (352) (841)
Cash flows related to investing activities
1.8 Payment for purchases of:
(a) prospects
(b) equity investments
(c) other fixed assets (1) (3)
1.9 Proceeds from sale of:
(a) prospects
(b) equity investments
1.10 (c) other fixed assets
Loans to other entities
1.11
1.12
Loans repaid by other entities
Other (provide details if material)
Net investing cash flows (1) (3)
1.13 Total operating and investing cash flows
(carried forward) (353) (844)

+ See chapter 19 for defined terms.

1.13 Total operating and investing cash flows
(brought forward)
(353) (844
1.14
1.15
1.16
1.17
1.18
1.19
Cash flows related to financing activities
Proceeds from issues of shares, options, etc.
Proceeds from sale of forfeited shares
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Other (provide details if material)
Net financing cash flows 0
1.20
1.21
1.22
Net increase (decrease) in cash held
Cash at beginning of quarter/year to date
Exchange rate adjustments to item 1.20
Cash at end of quarter
(353)
1,543
1,190
(844)
2,034
1,190

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

Current quarter
\$A'000
1.23 Aggregate amount of payments to the parties included in item 1.2 86
1.24 Aggregate amount of loans to the parties included in item 1.10

$1.25$ Explanation necessary for an understanding of the transactions

The amount at 1.23 above represents non executive directors' fees and executive director's salary (including SGC superannuation) and casual labour & vehicle/trailer hire paid to an entity of which a director is a director.

Non-cash financing and investing activities

Details of financing and investing transactions which have had a material effect on consolidated $2.1$ assets and liabilities but did not involve cash flows

Nil

$2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Nil

Financing facilities available

Add notes as necessary for an understanding of the position.

Amount available Amount used
\$A'000 \$A'000
3.1 Loan facilities Nil Nil
3.2 Credit standby arrangements Nil Nil

+ See chapter 19 for defined terms.

Estimated cash outflows for next quarter

4.1 Exploration and evaluation \$A'000
200
$4.2^{\circ}$ Development
Total 200

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as
shown in the consolidated statement of cash flows) to
the related items in the accounts is as follows.
Current quarter
\$A'000
Previous quarter
SA'000
5.1 Cash on hand and at bank 114 224
5.2 Deposits at call
5.3 Bank overdraft
5.4 Other (provide details) – Term Deposits 1,076 1,319
Total: cash at end of quarter (item 1.22) 1,190 1.543

Changes in interests in mining tenements

Tenement
reference
Nature of interest
(note (2))
Interest at
beginning
of quarter
Interest
at end of
quarter
-6.1 Interests in mining
tenements
relinquished, reduced
or lapsed
6.2 Interests in mining
tenements acquired
or increased

$+$ See chapter 19 for defined terms.

Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.

Total number
Number quoted Issue price per Amount paid up per
security (see note security (see note 3)
$3)$ (cents) (cents)
7.1 Preference
*securities
(description)
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buy-
backs,
redemptions
7.3 + Ordinary
securities 59,016,275 44,739,123
7.4 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buy-
backs
7.5 + Convertible
debt securities
(description)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
7.7 Options Exercise price Expiry date
(description and
conversion
factor) 24,685,750 12,897,175 \$0.18687 31/12/2007
7.8 Issued during 1,500,000 \$0.18687 31/12/2007
7.9 quarter
Exercised during
quarter
7.10 Expired during
quarter
7.11 Debentures
(totals only)
7.12 Unsecured
notes (totals
only)

+ See chapter 19 for defined terms.

Compliance statement

  • $\mathbf{I}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
  • $\overline{2}$ This statement does /does not* (delete one) give a true and fair view of the matters disclosed.
Print name: Dom Francese Date: 28/1/2005
( Director /Company Secretary)

Notes

  • $\mathbf{1}$ The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
  • $\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
  • 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
  • $\overline{4}$ The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
  • 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

= === === === ==

+ See chapter 19 for defined terms.