RAND MINING LIMITED — Interim / Quarterly Report 2006

Mar 15, 2006

Rand Mining NL ABN 41 004 669 658 and Controlled Entities Contents

Directors' Report
Auditor's Independence Declaration
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Notes to the Financial Statements
Note 1 - Basis of Preparation
Note 2 - First-time Adoption of Australian Equivalents to International Financial Reporting Standards
Directors' Declaration
Independent Review Report to the Members of Rand Mining NL

Rand Mining NL ABN 41 004 669 658 and Controlled Entities Director's Report

Your directors submit the financial report of the economic entity for the half-year ended 31 December 2005.

Directors

The names of directors who held office during or since the end of the half-year:

J Andrews	A Billis
F Bozic (resigned 7 October 2005) O Demis
W Jav	G Sklenka

Review of Operations

East Kundana Joint Venture (Rand's Interest 36.75%)

Construction of the Raleigh Underground Mine that commenced on 1 December 2004 continued through the half year period with completion expected by the March 06 Quarter. The total construction costs are now estimated at \$52.5 million compared to the estimated costs of \$49.5 million.

Raleigh Underground development advanced 368 metres for capital development, 675 metres for secondary development and 1,505 metres for operating development by the end of the half year period. By the close of the half year period development had been extended to a depth of approximately 50 metres below the previous period.

On 2 December 2005 Tribune and Rand Mining NL entered into an Ore Division Agreement with Placer Dome Australia Limited to enable Rand and Tribune to take its share of the Rateigh ore for processing at Higginsville Mining Pty Ltd Greenfield plant.

The first development ore was mined on 3 July 2005. At the close of the half year period 57,247 tonnes of ore at an estimated grade of 18.9g/t containing 34,848 ounces of gold had been mined and stockpiled.

At the close of the half year 5,476 tonnes grading 12.5 g/t containing an estimated 2,202 ounces of gold EKJV ore remained on the Raleigh stockpile. A total of 15,621 tonnes of ore grading 18.3 g/t of Rand (Interest 25%) and Tribune (Interest 75%) ore were hauled and stockpiled at Greenfield plant for processing in the March 06 Quarter. A further 10,318 tonnes grading 18.3 g/t containing 6,070 ounces of gold being Rand and Tribune share of ore remained on a transit stockpile to be hauled to the Greenfields plant in the March 06 Quarter.

Exploration was performed on the Wards, Golden Hind, Sir Walter and Big Chief during the period.

Seven Mile Hill (Rand's Interest 50%)

No work was performed.

Adoption of Australian Equivalents to IFRS

This interim financial report has been prepared under Australian equivalents to IFRS. A reconciliation of differences between previous GAAP and Australian equivalents to IFRS has been included in Note 2 of this report.

Auditor's Declaration

The lead auditor's independence declaration under section 307C of the Corporations Act 2001 is set out on page 3 for the half year ended 31 December 2005.

This report is signed in accordance with a resolution of the Board of Directors.

A Billis Dated this 16^th day of March 2006

CHARTERED
ACCOUNTANTS
& EUSINESS ADVISORS

A MEMBER OF
MOORES ROWLAND
INTERNATIONAL

Bentleys MRI Perth Partnership ABN 17 735 344 518

Eevel 1, 10 Kings Park Road West Perth WA 6005 Australia

PO Box 570 West Perth WA 6872

T 61 8 9480 2000 F 61 8 9322 7787

admin@bmsp.com.au www.bentleys.com

AUDITORS INDEPENDENCE DECLARATION

Auditors Independence Declaration under section 307C of the Corporation Act 2001 to the Directors of Rand Mining NL.

I declare that, to the best of my knowledge and belief, during the half-year ended 31 December 2005, there has been:

• $i)$ no contraventions of the auditor independence requirements as set out in the Corporation Act 2001 in relation to the review; and
• $\mathbf{ii}$ no contraventions of any applicable code of professional conduct in relation to the review.

BENTLEYS MRI PERTH PARTNERSHIP

$\lambda$ lul/

MAURICE ANGHIE PARTNER

Dated this 16^th day of March 2006.

Page 3

Chartered Accountants

Rand Mining NL ABN 41 004 669 658 and Controlled Entities Condensed Income Statement for the half year Ended 31 December 2005

	Consolidated
	31.12.2005 \$	31.12.2004 \$
Revenue	2,450,503	1,819,897
Change in value of inventories	(2,234,865)	(1,603,026)
Mining costs	(705, 136)	(326, 547)
Employee benefits expense	(114.923)	(76,090)
Exploration costs written off	(198, 034)	(260, 705)
Carrying value of investments sold	(2.000)	(81,360)
Depreciation and amortisation expense	(8,757)	(8,652)
Finance costs	(163, 473)	(19, 798)
Doubtful debts	(36,998)	(4,643)
Royalty expense	(57,021)	(16, 667)
Write back provision for investment write-down		51,074
Impairment loss on other financial assets	(172, 500)
Administration expenses	(242, 641)	(498, 560)
Loss before income tax	(1,485,845)	(1,025,077)
Income tax expense
Loss for the period	(1,485,845)	(1,025,077)
Loss attributable to members of the parent entity	(1,485,845)	(1,025,077)
Earnings per share:
Basic earnings per share (cents per share)	(3.60)	(2.68)
Diluted earnings per share (cents per share)	(3.60)	(2.60)

Rand Mining NL ABN 41 004 669 658 and Controlled Entities Condensed Balance Sheet as at 31 December 2005

	31.12.2005 S	30.06.05 S
ASSETS
CURRENT ASSETS
Cash and cash equivalents	1,438,224	1,057,984
Receivables	493,936	147,938
Inventories	114,613	2,277,418
TOTAL CURRENT ASSETS	2,046,773	3,483,340
NON-CURRENT ASSETS
Investments	8,330,566	6,712,492
Property, plant and equipment	2,532,375	2,034,577
Exploration, evaluation and development costs carried forward	2,703,536	608,157
TOTAL NON-CURRENT ASSETS	13,566,477	9,355,226
TOTAL ASSETS	15,613,250	12,838,566
CURRENT LIABILITIES
Payables	1,041,840	447.730
Short-term borrowings	1,796,658
Interest bearing liabilities	22,048	22,048
Provisions	27,360	18,135
TOTAL CURRENT LIABILITIES	2,887,906	487,913
NON-CURRENT LIABILITIES
Long-term borrowings	3,218,850	3,025,000
Provisions	273,094	273,094
TOTAL NON-CURRENT LIABILITIES	3,491,944	3,298,094
TOTAL LIABILITIES	6,379,850	3,786,007
NET ASSETS	9,233,400	9,052,559
EQUITY
Issued capital	11,453,559	11,453,559
Reserves	2,993 660	1,326,974
Accumulated losses	(5,213,819)	(3,727,974)
TOTAL EQUITY	9,233,400	9,052,559

Rand Mining NL ABN 41 004 669 658 and Controlled Entities Condensed Statement of Changes in Equity for the half year ended 31 December 2005

		Share Capital	Accum	Equity	Revaluation
	Note	Ordinary	Losses	Reserve	Reserve	Total
Balance at 1.7.2004		10.993.558	(1,762,581)	$\overline{\phantom{a}}$	1,326,974	10,557,951
Loss attributable to members of parent entity			(1,025,077)			(1,025,077)
Balance at 31.12.2004		10,993,558	(2,787,658)		1,326,974	9.532,874
Balance at 1.7.2005		11,453,559	(3,727,974)		1,326,974	9,052,559
Employee share options				1,400	$\rightarrow$	1.400
Available for sale financial assets					1,665,286	1,665,286
Loss attributable to members of
parent entity			(1,485,845)			(1,485,845)
Balance at 31.12.2005		11,453,559	(5,213,819)	1,400	2,992,260	9.233,400

Rand Mining NL ABN 41 004 669 658 and Controlled Entities Condensed Cash Flow Statement for the half year ended 31 December 2005

	Consolidated
	31.12.2005 \$	31.12.2004 \$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers	2,415,421	1,564,102
Payments to suppliers and employees	(1,053,999)	(579, 397)
Interest received	29,391	15,141
Sundry income	3,301
Finance costs	(163, 473)	(19,798)
Tax instalments paid	(78, 269)
Withholding tax paid		(443)
Net cash provided by operating activities	1,152,372	979,605
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments	2.390	201,730
Purchase of investments	(132, 046)	(1,005,108)
Loans to other entities	(309, 025)	(22, 733)
Loans repaid to other entities		(339, 848)
Payment for plant & equipment	(1,955,453)	(9, 445)
Mining tenement expenditure	(368, 506)	(417, 672)
Net cash used in investing activities	(2,762,640)	(1,593,076)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	1,990,508	875,000
Net cash provided by financing activities	1,990,508	875,000
Net increase in cash held	380,240	261,529
Cash at the beginning of the financial period	1,057,984	927,301
Cash at the end of the financial period	1,438,224	1,188,830

NOTE 1: BASIS OF PREPARATION

The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standard AASB 134: Interim Financial Reporting, Urgent Issues Group Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2005 and any public announcements made by Rand Mining NL and its controlled entities during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001.

As this is the first interim financial report prepared under Australian equivalents to IFRS, the accounting policies applied are inconsistent with those applied in the 2005 annual report as this report was presented under previous Australian GAAP. Accordingly, a summary of the significant accounting policies under Australian equivalents to IFRS has been included below. A reconciliation of equity and orofit and loss between previous GAAP and Australian equivalents to IFRS has been prepared per Note 2.

The half-year report does not include full disclosures of the type normally included in an annual financial report and has been treated as a discrete reporting period.

(a) Principles of Consolidation

A controlled entity is any entity controlled by Rand Mining NL whereby Rand Mining NL has the power to control the financial and operating policies of an entity so as to obtain benefits from its activities

All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Where controlled entities have entered or left the economic entity during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

(b) Statement of Compliance

The half-year financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards ('AIFRS'). Compliance with AIFRS ensures that the half-year financial report, comprising of the financial statements and notes thereto, complies with International Financial Reporting Standards ('IFRS').

This is the first half-year financial report based on AIFRS and comparatives for the half-year ended 31 December 2004 and full-year ended 30 June 2005 have been restated accordingly. A summary of the significant accounting policies of the Group under AIFRS are disclosed in Note 2 below.

Reconciliations of:

• AIFRS equity as at 1 July 2004, 31 December 2004 and 30 June 2005; and

• AIFRS profit for the half-year 31 December 2004 and full year 30 June 2005,

to the balances reported in the 31 December 2004 half-year report and 30 June 2005 full-year financial report prepared under GAAP are detailed in Note 2 below.

(c) income Tax

The economic entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on the profit from ordinary activities adjusted for any non-assessable or disallowed items.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

NOTE 1: BASIS OF PREPARATION

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(d) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.

The cost of mining stocks includes direct materials, direct labour, transportation costs and variable and fixed overhead costs relating to mining activities.

Gold bullion held at year end is measured at spot price at balance date.

(e) Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Property

Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction), based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the re-valued amount of the asset.

Plant and equipment

Plant and equipment are measured on the cost basis less depreciation and impairment losses.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

The cost of fixed assets constructed within the economic entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in shareholders' equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset's original cost is transferred from the revaluation reserve to retained earnings.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding

NOTE 1: BASIS OF PREPARATION

freehold land, is depreciated on either a diminishing value basis or a straight line basis over their useful lives to the economic entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset	Depreciation Rate
Buildinas	2.5%
Plant and equipment	$15 - 37.50\%$

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

Mining plant & equipment and capital work in progress is carried at cost which includes acquisition, transportation, installation, and commissioning costs. Costs are not depreciated until such time as the plant has been completed ready for use. The rate of depreciation is determined having regard to the expected useful life of the plant at its current location.

Impairment

The carrying values of plant and equipment are reviewed for impairment when events or changes in the circumstances indicate the carrying value may not be recoverable.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount.

The recoverable amount of plant and equipment is the greater of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(f) Exploration and Development Expenditure

Exploration and evaluation expenditure

Costs incurred during the exploration and evaluation stages on specific areas of interest are accumulated where the Directors consider that the costs are expected to be fully recouped through the successful development of the area, sale of the area, or where activities to date have not reached a stage to allow adequate assessment regarding existence of economically recoverable reserves and active and significant operations are continuing in respect of areas of interest in the development phase in which production has not yet commenced. Costs are written off as soon as an area has been abandoned or is considered to be non-commercial. Each area of interest is reviewed annually to determine whether costs should continue to be carried forward in respect of that area of interest. Amortisation of Deferred Exploration and Evaluation Costs is on a unit of production basis over remaining reserves.

Development expenditure

Projects are advanced to development status when a decision to mine is made and therefore it is expected that accumulated and future expenditure can be recouped through project development. Such expenditure is carried forward up to the commencement of operations at which time it is transferred to Mine Development. Amortisation of Mine Development is on a unit of production basis over remaining reserves.

Site restoration

Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs

NOTE 1: BASIS OF PREPARATION

of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site.

(g) Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the economic entity are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the economic entity will obtain ownership of the asset or over the term of the lease.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

(h) Financial Instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Financial assets at fair value through profit and loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. Derivatives are also categorised as held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Held-to-maturity investments

These investments have fixed maturities, and it is the group's intention to hold these investments to maturity. Any held-to-maturity investments held by the group are stated at amortised cost using the effective interest rate method.

Available-for-sale financial assets

Available for sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Derivative instruments

Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are taken to the income statement unless they are designated as hedges.

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm's length transactions,

NOTE 1: BASIS OF PREPARATION

reference to similar instruments and option pricing models.

Impairment

At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-for sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognized in the income statement.

(i) AASB 1 Transitional Exemptions

The Group has made its election in relation to the transitional exemptions allowed by AASB 1 'First-time Adoption of Australian Equivalents to International Reporting Standards' as follows:

Business combinations

AASB 3 'Business Combinations' was not applied retrospectively to past business combinations (i.e. business combinations that occurred before the date of transition to AIFRS).

Designation of previously recognised financial instruments

Financial instruments were designated as financial assets or liabilities at fair value through profit or loss as available-for-sale at the date of transition to AIFRS.

Share-based payment transactions

AASB 2 'Share-Based Payments' is applied only to equity instruments granted after 7 November 2002 that had not vested on or before 1 January 205.

Exemption from the requirement to restate comparative information for AASB 132 and AASB 139

The Group has not elected to adopt this exemption and has applied AASB 132 'Financial Instruments: Presentation and Disclosure' and AASB 139 'Financial Instruments: Recognition and Measurement' to its comparative information.

(i) Interests in Joint Ventures

The economic entity's share of the assets, liabilities, revenue and expenses of joint venture operations are included in the appropriate items of the consolidated statements of financial performance and financial position.

The economic entity's interests in joint venture entities are brought to account using the equity method of accounting in the consolidated financial statements. The parent entity's interests in joint venture entities are brought to account using the cost method.

(j) Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency of each of the group's entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional and presentation currency.

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange difference arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.

Group companies

NOTE 1: BASIS OF PREPARATION

The financial results and position of foreign operations whose functional currency is different from the group's presentation currency are translated as follows:

• Assets and liabilities are translated at vear-end exchange rates prevailing at that reporting date.
• Income and expenses are translated at average exchange rates for the period. $\bullet$
• Retained profits are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the group's foreign currency translation reserve in the balance sheet. These differences are recognised in the income statement in the period in which the operation is disposed.

(k) Employee Benefits

Provision is made for the company's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(I) Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will results and that outflow can be reliably measured.

(m) Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-borrowings in current liabilities on the balance sheet.

(n) Revenue

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting.

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

All revenue is stated net of the amount of goods and services tax (GST).

(o) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(p) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(q) Share Based Payment

Share-based compensation benefits are provided to employees.

No expense is recognised in respect of options granted before 7 November 2002 and/or vested before 1 January 2005. The shares are recognized when the options are exercised and the proceeds received allocated to share capital.

NOTE 1: BASIS OF PREPARATION

The fair value of options granted after 7 November 2002 and vested after 1 January 2005 is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employee become unconditionally entitled to the options.

The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate.

Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital.

The market value of shares issued to employees for no cash consideration under the employee share scheme is recognised as an employee benefits expense with a corresponding increase in equity when the employees become entitled to the shares.

(r) Earnings per Share

Basic earnings per share

Basic earnings per share is determined by dividing the profit from ordinary activities after income tax by the weighted average number of ordinary shares outstanding during the financial year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking the amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from the exercise of options outstanding during the financial year.

(s) Impairment of Assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changed in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

(t) Borrowings

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrowing using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

(u) Borrowing Costs

Borrowing costs incurred for the construction of any qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.

		Consolidated
NOTE 2: FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS	Previous GAAP at 1.7.2004	Adjustments on introduction equivalents to IFRS	Australian of Australian equivalents to IFRS at 1.7.2004
Reconciliation of Equity at 1 July 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents	4,744,755	(3,817,453)	927,302
Investments	5,238,267		5,238,267
Inventories		3,817,453	3,817,453
Receivables	67,439		67,439
TOTAL CURRENT ASSETS	10,050,461		10,050,461
NON-CURRENT ASSETS
Exploration, evaluation and development costs carried forward	604,459		604,459
Investments	162,512		162,512
Property, plant and equipment	299,379		299,379
TOTAL NON-CURRENT ASSETS	1,066,350		1,066,350
TOTAL ASSETS	11,116,811		11,116,811
CURRENT LIABILITIES
Payables	112,438		112,438
Interest-bearing liabilities	12,638		12,638
TOTAL CURRENT LIABILITIES	125,076		125,076
NON-CURRENT LIABILITIES
Payables	339,848		339,848
Interest-bearing liabilities	20,842		20,842
Provisions	73,094		73,094
TOTAL NON-CURRENT LIABILITIES	433,784		433,784
TOTAL LIABILITIES	558,860		558,860
NET ASSETS	10,557,951		10,557,951
EQUITY
Issued capital	10,993,558		10,993,558
Reserves	1,326,974		1,326,974
Accumulated losses	(1,762,581)		(1,762,581)
TOTAL EQUITY	10,557,951		10,557,951

				Consolidated
NOTE 2: FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS	Note	Previous GAAP at 31.12.2004	Adjustments on introduction equivalents to IFRS	Australian of Australian equivalents to IFRS at 31.12.2004
Reconciliation of Equity at 31 December 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents	3	3,403,257	(2,214,427)	1,188,830
Inventories	3		2,214,427	2,214,427
Investments		6,117,823		6,117,823
Receivables		71,080		71,080
TOTAL CURRENT ASSETS		9,592,160	$\overline{\phantom{0}}$	9,592,160
NON-CURRENT ASSETS
Exploration, evaluation and development costs carried forward		717,391		717,391
Investments		202,512		202,512
Property, plant and equipment		299,428		299,428
TOTAL NON-CURRENT ASSETS		1,219,331		1,219,331
TOTAL ASSETS		10,811,491	$\frac{1}{2}$	10,811,491
CURRENT LIABILITIES
Payables		301,298		301,298
Interest-bearing liabilities		12,580		12,580
TOTAL CURRENT LIABILITIES		313,878		313,878
NON-CURRENT LIABILITIES
Interest-bearing liabilities		16,645		16,645
Long-term borrowings		875,000		875,000
Provisions		73,094		73,094
TOTAL NON-CURRENT LIABILITIES		964,739		964,739
TOTAL LIABILITIES		1,278,617		1,278,617
NET ASSETS		9,532,874		9,532,874
EQUITY
Issued capital		10,993,558		10,993,558
Reserves		1,326,974		1,326,974
Accumulate losses		(2,787,658)		(2,787,658)
TOTAL EQUITY		9,532,874		9,532,874

			Consolidated
NOTE 2: FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS	Note	Previous GAAP at 30.6.2005	Adjustments on introduction equivalents to IFRS	Australian of Australian equivalents to IFRS at 30.6.2005
Reconciliation of Equity at 30 June 2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents	3	3,335,402	(2,277,418)	1,057,984
Receivables	3	147.938		147,938
Inventories			2,277,418	2,277,418
TOTAL CURRENT ASSETS		3,483,340		3,483,340
NON-CURRENT ASSETS
Investments		6,712,492		6,712,492
Property, plant and equipment		2,034,577		2,034,577
Exploration, evaluation and development costs carried forward		608,157		608,157
TOTAL NON-CURRENT ASSETS		9,355,226		9,355,226
TOTAL ASSETS		12,838,566	$\qquad \qquad -$	12,838,566
CURRENT LIABILITIES
Payables		447,730		447,730
Interest-bearing liabilities		22,048		22,048
Provisions		18,135		18,135
TOTAL CURRENT LIABILITIES		487,913	$\overline{a}$	487,913
NON-CURRENT LIABILITIES
Interest-bearing liabilities		3,025,000		3,025,000
Provisions		273,094		273,094
TOTAL NON-CURRENT LIABILITIES		3,298,094		3,298,094
TOTAL LIABILITIES		3,786,007	÷,	3,786,007
NET ASSETS		9,052,559	$\blacksquare$	9,052,559
EQUITY
Issued capital		11,453,559		11,453,559
Reserves		1,326,974		1,326,974
Accumulated losses		(3,727,974)		(3,727,974)
TOTAL EQUITY		9.052.559		9.052.559

NOTE 2: FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS	Note	Previous GAAP	Effect of transition to Australian IFRS	Australian equivalents to equivalents to IFRS
Reconciliation of Profit or Loss for the half-year 31 December 2004
Revenue	3	216,871	1,603,026	1,819,897
Change in value of inventories	3		(1,603,026)	(1,603,026)
Mining costs		(326, 547)		(326, 547)
Employee benefits expense		(76,090)		(76,090)
Exploration costs written off		(260, 705)	$\overline{\phantom{0}}$	(260, 705)
Carrying value of investments sold		(81,360)		(81,360)
Depreciation and amortisation expense		(8,652)		(8,652)
Finance costs		(19,798)		(19,798)
Doubtful debts		(4,643)		(4,643)
Royalty expense		(16, 667)		(16, 667)
Provision for investment write-down		51,074		51,074
Administration expenses		(498, 560)		(498, 560)
Loss before income tax		(1,025,077)		(1,025,077)
Income tax expense
Loss for the year		(1,025,077)	$\frac{1}{2}$	(1,025,077)
Loss attributable to members of the parent entity		(1,025,077)		(1,025,077)
Reconciliation of Profit or Loss for the full year 30 June 2005
Revenue	3	319,915	1,540,035	1,859,950
Change in value of inventories	3	$\overline{a}$	(1,540,035)	(1,540,035)
Mining costs		(173, 649)		(173, 649)
Exploration costs written off		(462, 694)		(462, 694)
Carrying value of investments sold		(106,996)		(106, 996)
Investment expense		(167, 077)		(167, 077)
Depreciation and amortisation expense		(21,098)		(21,098)
Finance costs		(370,073)		(370,073)
Doubtful debts		(53, 197)		(53, 197)
Royalty expense		(23,018)		(23,018)
Write-down of development costs		45,916		45,916
Administration expenses		(953, 422)		(953, 422)
Loss before income tax		(1,965,393)		(1,965,393)
Income tax expense
Loss for the year		(1,965,393)		(1,965,393)
Loss attributable to members of the parent entity		(1,965,393)		(1,965,393)

NOTE 3: TRANSITION TO AIFRS

Note 3(a) - Gold on hand

This adjustment is to reflect the change in gold on hand at the end of the period. Previously under gold sales were recognised on receipt of bullion from the Joint Venture and gold bullion on hand was recorded as a cash asset valued at spot rate. Under AIFRS, gold sales are recognised on the sale of gold to a third party and gold on hand is recognised as inventory and valued at spot rate.

NOTE 4: CONTINGENT LIABILITIES

There has been no change in contingent liabilities since the last annual reporting date.

NOTE 5: EVENTS SUBSEQUENT TO REPORTING DATE

There are no events subsequent to reporting date that have or may significantly affect the operations results, or state of affairs of he economic entity other than that listed below:

In February 2006, Rand signed a loan agreement with Tribune Resources NL. Tribune will provide up to 5000 oz of gold bullion to Rand to ensure Rand can meet its Joint Venture obligations.

NOTE 6: EARNINGS PER SHARE

The weighted number of ordinary shares outstanding during the half-year used in the calculation of basic eamings per share is 40,560,813.

NOTE 7: SEGMENT INFORMATION

Primary Reporting - Business Segments

The consolidated entity operates in the mineral exploration industries in Australia and Angola.

Primary Reporting - Geographical Segments

	Segment Revenues from External Customers			Segment Result		Carrying Amount of Segment Assets		Acquisition of Non-Current Segment Assets
	31 Dec05	31 Dec04	31 Dec 05	31 Dec 04	31 Dec 05	31 Dec 04	31 Dec 05	31 Dec 04
	\$	\$	\$	\$	\$	\$	\$	\$
Geographical location:
Australia	2,450,503	1,819,897	(1,485,845)	(1,025,077)	15,594,565	10,811,491	4,211,251	152,981
Angola					18.685	۰
Total	2,450,503	1,819,897	(1,485,845)	(1.025.077)	15,613,250	10,811,491	4,211,251	152,981

Rand Mining NL ABN 41 004 669 658 and Controlled Entities Directors' Declaration

DIRECTORS' DECLARATION

The directors of the company declare that:

• The financial statements and notes, as set out on 4-20: $\mathbf{1}$ .
• a. comply with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations; and

This declaration is signed in accordance with a resolution of the Board of Directors.

$\sqrt{\frac{2}{3}}$

A Billis

Dated this 16th day of March 2006

• b. give a true and fair view of the economic entity's financial position as at 31 December 2005 and of its performance for the half year ended on that date.
• $\overline{2}$ In the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

A MEMBER OF
MOORES ROWLAND
INTERNATIONAL

Bentleys MRI Perth Partnership ABN 17 735 344 518

Level 1, 10 Kings Park Road West Perth WA 6005 Arretratio

PO Box 570 West Perth WA 6872

INDEPENDENT REVIEW REPORT

TO THE MEMBERS OF RAND MINING NL

Scope

We have reviewed the financial report of Rand Mining NL (the company) for the half-year ended 31 December 2005 as set out on pages 4 to 19. The company's directors are responsible for the financial report. The financial report includes the consolidated financial statements of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year. 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 Accounting Standard AASB 134: 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 consolidated entity'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 Securities and Investments Commission/Australian Stock Exchange Limited.

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.

Independence

In conducting our review, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Statement

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of the consolidated entity, comprising Rand Mining NL and the entities it controlled during the half-year is not in accordance with:

• the Corporations Act 2001, including: ä.
• giving a true and fair view of the financial position of the consolidated entity as at $\mathbf{i}$ 31 December 2005 and of its performance for the half-year ended on that date; and
• complying with Accounting Standard AASB 134: Interim Financial Reporting and the ii. Corporations Regulations 2001; and
• b. other mandatory professional reporting requirements in Australia.

BENTLEYS MRI PERTH PARTNERSHIP

Mul/

MAURICE ANGHIE PARTNER DATED at PERTH this 16^th day of March 2006