Resolute Mining Limited — Annual Report 2008

Oct 23, 2008

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ASX ANNOUNCEMENT

ANNUAL REPORT AND NOTICE OF MEETING

Resolute Mining Limited advises that the Company’s 2008 Annual Report and Notice of Annual General Meeting are being posted to shareholders today. Copies of these two documents are attached.

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GREG FITZGERALD Company Secretary

24 October 2008

RESOLUTE MINING LIMITED A.C.N. 097 088 689 A.B.N. 39 097 088 689 4[th] Floor, The BGC Centre, 28 The Esplanade, Perth, Western Australia 6000. PO Box 7232 Cloisters Square, Perth, Western Australia 6850. Telephone +61 8 9261 6100 Facsimile +61 8 9322 7541 Email : contact@resolute-ltd.com.au

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AnnuAl RepoRt 08

CoRpoRAte DiReCtoRy

Directors

Chairman – PE Huston Chief Executive Officer – PR Sullivan Non-Executive Director – TC Ford Non-Executive Director – HTS Price

Secretary GW Fitzgerald

Registered Office and Business Address 4th Floor, The BGC Centre 28 The Esplanade Perth, Western Australia 6000

Postal

PO Box 7232 Cloisters Square Perth, Western Australia 6850

Telephone: + 61 8 9261 6100 Facsimile: + 61 8 9322 7597 contact@rml.com.au

ABN 39 097 088 689

Website

Resolute maintains a website where all major announcements to the ASX are available. www.rml.com.au

Share Registry

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross, Western Australia 6153 Telephone: + 61 8 9315 2333 Facsimile: + 61 8 9315 2233 registrar@securitytransfer.com.au

Home Exchange Australian Securities Exchange Limited Exchange Plaza 2 The Esplanade Perth, Western Australia 6000 Quoted on the official lists of the Australian Securities Exchange ASX Ordinary Share Code: “RSG”

Securities on Issue (10/10/2008) Ordinary Shares 281,034,725 Unlisted Options 2,297,000

Legal Advisors Hardy Bowen Level 1, 28 Ord Street West Perth, Western Australia 6005

Auditors

Ernst & Young Ernst & Young Building 11 Mounts Bay Rd Perth, Western Australia 6000

Bankers

Barclays Bank Plc Level 24, 400 George Street Sydney, New South Wales 2000 Citibank Limited Level 23, Citigroup Centre 2 Park Street Sydney, New South Wales 2000

ContentS

2008 Highlights 2 Chief executive’s Review 4 Reserves and Resources 6 production and project Summary 7 operations overview 8 Development overview 12 exploration overview 18 Corporate Responsibility 28 Financial Report 36

Shareholders wishing to receive copies of Resolute Mining Limited ASX announcements by e-mail should register their interest by contacting the Company at contact@rml.com.au

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Resolute is building shareholder value through its strength as a successful developer and operator of quality gold projects. Its projects to date have yielded over 4.8 million ounces (149 tonnes) of gold. The Company is actively progressing its portfolio of projects to further enhance shareholder value.

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HigHligHtS
08
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Operations Yielded in excess of 293,000 ounces of gold at a cash cost of A$617/ounce Mt Wright underground deposit at Ravenswood delivering significant ore Syama Project in Mali nearing first gold production Financial Achieved an Operating Profit before unrealised treasury and tax of A$5.3m Finance facilities totalling US$60m negotiated with Barclays Bank Plc Corporate Rights Issue raises A$50m Hedge book significantly reduced and restructured Development

Mt Wright underground deposit at Ravenswood identifies additional ore compared to feasibility Feasibility study commenced on Syama free milling ore Exploration A ramp up of the exploration programme around Syama in Mali continues to deliver excellent results In Tanzania a new discovery at Kavsav, only 8km from Golden Pride, is now being systematically drilled out

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opeRAtionS oveRview CHieF exeCutive’S Review

The Syama gold mine is set to become the key production asset of the Company. The benefits from this project should start to emerge shortly as it establishes itself as a producing mine.

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Over the last year we have continued to enhance the very strong gold fundamentals of the Resolute Mining group and build a solid production platform for future growth.

The redevelopment of the Syama gold mine has been the key focus and the benefits from this project should start to emerge shortly as it establishes itself as a producing mine.

We have also worked hard to improve gold production from our two operating mines. Total gold production for the year was 293,057 ounces at a cash cost of A$617 per ounce and we are expecting a lift next year to around 400,000 ounces and more in following years.

A major milestone was reached in October at Syama with the first gold production coming from stockpiled oxide ore following commissioning of the non sulphide section of the plant. The construction of the balance of the project is nearly complete and commissioning is occurring on the remaining sections as they become available, with the whole plant expected to be operating early in the new year.

The Syama gold mine is set to become the key production asset of the Company. In addition to the open pit there is considerable potential for more ounces to be developed over the next few years from both the free milling and underground resources on the tenure. The Tabakoroni deposit, which is further to the south and part of the joint venture with Etruscan Resources may also be suitable for treatment at Syama.

During the year good progress has been made at the Ravenswood operation with production commencing from the Mt Wright underground deposit. This mine is now integrated into the overall operation with its ore being blended with the Sarsfield ore for treatment. Ravenswood is in a transition period with production from the Sarsfield open pit due to cease early next year. Low grade stockpiles will continue to be blended with Mt Wright underground ore until around the end of 2009, following which Mt Wright will be the sole ore feed.

We are undertaking deeper drilling at Mt Wright to test for extensions to the ore body. Infill drilling has shown the ore body to

be very consistent and its current depth is only limited by the extent of the drill data. Scope exists to add significantly to the resource and any depth extensions could lead to a revision of the mine plans.

At Golden Pride we are well advanced with the cutback for the new pit. There is limited access to ore until the cutback is further advanced and this is going to impact on production this coming year. Our exploration, in the vicinity of the mine, has successfully identified new targets and these will be key to extending the life of the mine.

The purchase of the balance of the Nyakafuru project gives us full control of this million ounce project and it offers further development options in Tanzania.

Overall exploration expenditure remains at reduced levels as we concentrate on completion of the development programme. However there has been some exciting results from our activities and we are continuing programmes in the areas around each of our key sites.

We entered into a new debt facility with Barclays Bank during the year to help fund our development programme. As part of this we restructured our hedge book to provide much higher participation in spot gold over the next few years and at the same time we added some downside protection with the purchase of put options.

It has been a difficult year in the gold sector with wide fluctuations, but an overall positive move, in the gold price tempered by continued increases in operating costs at both of our mines. Our development activities have also suffered from rising costs and delays due to high demand in the fabrication, construction and support service sectors.

The current rights issue, which we are undertaking in difficult financial times, is very important to seeing through our business plan. The next 12 months is a quite critical time, in particular as we ramp up production at Syama, but also for a number of the other value add initiatives we are undertaking.

We thank our very dedicated management team who have worked hard over the year to meet the various challenges we faced. With continued support from our shareholders and other groups we look forward to a rewarding year ahead.

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Peter Sullivan Chief Executive Officer

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RESERvES AND RESOURCES STATEMENT
as at 30 June 2008
GOLD RESERvES AND RESOuRcES PROjEct GOLD PROjEct RESOLutE RESOLutE
(INcLuDES StOckPILES) GRADE cONtAINED GROuP SHARE GROuP SHARE
tONNES (G/t) OuNcES GOLD % OuNcES
RESERvES
RESERvES ( PROvED)
Golden Pride (insitu) 2,600,000 2.2 184,000 100% 184,000
Golden Pride (stockpiled) 120,000 1.9 7,000 100% 7,000
Ravenswood (insitu) 3,600,000 1.3 150,000 100% 150,000
Syama (insitu) 11,100,000 3.2 1,142,000 80% 913,600
Syama (stockpiled) 90,000 1.2 3,000 80% 2,400
Total Proved 17,510,000 2.6 1,486,000 1,257,000
RESERvES ( PROBABLE)
Golden Pride (insitu) 4,100,000 1.7 224,000 100% 224,000
Golden Pride (stockpiled) 4,200,000 0.8 103,000 100% 103,000
Ravenswood (insitu) 2,000,000 2.6 167,000 100% 167,000
Ravenswood (stockpiled) 3,000,000 0.8 77,000 100% 77,000
Syama (insitu) 7,100,000 3.0 685,000 80% 548,000
Syama (stockpiled) 4,200,000 1.7 230,000 80% 184,000
Total Probable 24,600,000 1.9 1,486,000 1,303,000
Total Reserves 42,110,000 2.2 2,972,000 2,560,000
RESOuRcES
RESOuRcES (MEASuRED)
Golden Pride 4,500,000 1.9 275,000 100% 275,000
Ravenswood 10,800,000 1.2 417,000 100% 417,000
Syama + Satellite deposits 13,400,000 2.8 1,206,000 80% 964,800
Finkolo (Etruscan Jv) 3,100,000 2.5 249,000 60% 149,400
Total Measured 31,800,000 2.1 2,147,000 1,806,200
RESOuRcES (INDIcAtED)
Golden Pride (insitu) 12,300,000 1.7 672,000 100% 672,000
Golden Pride (stockpiled) 1,200,000 0.7 27,000 100% 27,000
Nyakafuru Jv 7,700,000 2.2 545,000 100% 545,000
Ravenswood (insitu) 10,600,000 1.8 613,000 100% 613,000
Ravenswood (stockpiled) 340,000 0.5 5,000 100% 5,000
Syama + Satellite deposits 23,900,000 2.5 1,921,000 80% 1,536,800
Syama (stockpiles) 250,000 1.3 10,000 80% 8,000
Finkolo (Etruscan Jv) 1,500,000 2.7 130,000 60% 78,000
Total Indicated 57,790,000 2.1 3,923,000 3,484,800
Total Measured and Indicated 89,590,000 2.1 6,070,000 5,291,000
RESOuRcES (INfERRED)
Golden Pride 7,400,000 1.7 404,000 100% 404,000
Nyakafuru Jv 11,700,000 1.4 527,000 66% 347,820
Ravenswood 9,800,000 1.8 567,000 100% 567,000
Syama + Satellite deposits 11,600,000 2.2 820,000 80% 656,000
Finkolo (Etruscan Jv) 4,500,000 2.5 362,000 60% 217,200
Akoase 13,300,000 1.2 513,000 90% 461,700
Total Inferred 58,300,000 1.7 3,193,000 2,653,720
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The information in this report that relates to Mineral Resources and Ore Reserves is based on information compiled by Mr TH Brown and Mr R Bray, full-time employees of the Company, who are members of the Australian Institute of Mining and Metallurgy. Mr TH Brown and Mr R Bray have more than five years experience which is relevant to the styles of mineralisation and type of deposits under consideration and to the activity which they are undertaking to qualify as Competent Persons as identified in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr TH Brown and Mr R Bray have consented to the inclusion of the matters in this report based on their information in the form and context in which it appears.

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GROUP PRODUCTION SUMMARY

	ORE MINED tONNES	ORE MILLED tONNES	HEAD GRADE G/t	REcOvERy %	MINE PRODuctION OuNcES	cASH cOSt A$/Oz	cASH cOSt uS$/Oz
Golden Pride	1,863,917	2,553,433	2.04	90	150,224	497	449
Ravenswood	4,697,579	5,018,506	1.07	83	142,833	743	663
Syama	98,965	-	-	-	-	-	-
TOTAL	6,660,461	7,571,939	1.39	86	293,057	617	553

GROUP PROJECT SUMMARY

GROUP PROJECT SUMMARY
cOuNtRy PROjEct	AREA kM2	cOMMODIty	LOcAtION
tANzANIA
Golden Pride	350	Gold	Africa
Nyakafuru Jv	540	Gold	Africa
Kahama Jv	350	Gold	Africa
Isaka	400	Gold	Africa
Bulanga	460	Gold	Africa
Igunga	570	Gold	Africa
Matinje	320	Gold	Africa
Other tenure	210	Gold	Africa
	3,200
GHANA Akoase	106	Gold	Africa
Weststar/Blue River	126	Gold	Africa
Nchiadi	209	Gold	Africa
	441
MALI Syama	200	Gold	Africa
Finkolo	160	Gold	Africa
N’Gokoli	260	Gold	Africa
	620
Sub Total Africa AuStRALIA	4,261
Ravenswood	1,691	Gold	Queensland
Karamindie	27	Gold	Western Australia
Sub Total Australia	1,718
Total Resolute Tenure	5,979

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opeRAtionS oveRview

Resolute’s established operations produced a total of 293,057 ounces at an average cash cost of A$617 per ounce.

In the coming financial year, Resolute’s mines at Golden Pride in Tanzania, Ravenswood in Queensland and the newly re-developed Syama in Mali are together forecast to produce approximately 400,000 ounces of gold at an average cash cost of around A$700 per ounce.

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golDen pRiDe

The Golden Pride mine is located in Tanzania, East Africa, 750km north-west of the port of Dar es Salaam and 200km south of Lake victoria.

Resolute has a 100% interest in the project through its Tanzanian subsidiary, Resolute (Tanzania) Limited.

OPERAtIONS

The 2008 financial year produced 150,224 (2007: 138,421) ounces of gold at a cost of US$449 (2007: US$403) per ounce.

Plant throughput remained steady at 2.5 million tonnes at an average head grade of 2.04g/t (2007: 1.94g/t) and a recovery rate of 90% (2007: 88%).

Gold production increased from the previous year with increased grade from the open pit together with a steady increase in recoveries on the harder sulphide ores. Blending of the low grade oxide ore assisted with the gold recovery. Cost per ounce has increased largely due higher mining costs with a change of contractor and mining ore at depth, greater wear on grinding and mill components and higher costs of labour and consumables.

The open pit mined 3.8 million cubic metres of material at a strip ratio of 4.8:1, with the majority of the waste mined from the central cutback. Mining delays through the year, due to adverse weather conditions, meant the mining of ore from this pit will now commence towards the beginning of 2009. All the ore for the year has been mined from the western (main) pit at depth. This section of the pit has a limited mining area and was subject to several flooding events through the year which affected ore production. Higher grades in line with expectations have been mined from the main pit during the year.

The Golden Pride mine has now produced in excess of 1.55 million ounces of gold since commissioning in 1998.

	GOLDEN PRIDE - ORE as at 30 June 2008 cAtEGORy tONNES	GOLDEN PRIDE - ORE as at 30 June 2008 cAtEGORy tONNES	RESERvES GRADE OuNcES	RESERvES GRADE OuNcES
	Proved(insitu)	2,600,000	2.2	184,000
	Proved(stockpiled) Probable(insitu) Probable(stockpiled) Total	120,000 4,100,000 4,200,000 11,020,000	1.9 1.7 0.8 1.5	7,000 224,000 103,000 518,000

OutLOOk

The coming year will see a decrease in gold production with the western (main) pit ore production completed during the 1st quarter and the central pit ore production commencing in the 3rd quarter. Low grade stockpiles will supplement mill feed during the hiatus in the 2nd quarter.

Waste stripping of the central pit will continue and later in the year the stripping of the next phase of mining on the western pit will commence.

The mining contractor has mobilised additional key equipment to site to maintain higher availabilities on mining equipment and achieve the scheduled production from the open pit.

Plant throughput and recoveries are expected to continue with controlled blending of low grade ore and higher grade ore from the pit. This also has the benefit of reduced wear on mill components and assists with the plant kinetics.

Additional ore feed from satellite pits within the project area and surrounds will be investigated to reduce the impact of reduced mined ore from the current open pit.

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Golden Pride
Ravenswood
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RAvenSwooD

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The Ravenswood gold mine is located approximately 95km south-west of Townsville and 65km east of Charters Towers in north-east Queensland. Resolute has a 100% interest in the mine through its subsidiary Carpentaria Gold Pty Ltd.

Ore for the Ravenswood Operations was sourced from the Sarsfield open pit, the low-grade screening plant and the Mt Wright underground mine. The ore is treated using conventional three stage crushing, ball-milling and carbon-in-pulp (CIP) processing at the rate of 5Mtpa.

OPERAtIONS

During the 2007-8 financial year the operation produced 142,833 (2007: 117521) ounces of gold at a cash cost of A$ 743 (2007: A$ 781).

Improvements were made in tonnes milled at 5.0 (2007: 4.6) million tonnes and recovery at 83% (2007: 79%). The improvement in tonnes can be attributed to a 7% improvement in the processing plant’s availability and elimination of sanding problems with the installation of the new agitators. The improvement in recovery can be attributed to a 7% improvement in head grade and improved agitation in the leach tanks.

Increased costs associated with major reagents and consumables had a negative impact on the cash cost per ounce.

The Mt Wright Project continues to progress to expectations and to-date diamond infill drilling is identifying additional ore tonnages compared to the feasibility study model.

MINING

Sarsfield open cut activities predominately focused on mining the Eastern cut-back section of the pit. Total material movement from the open pit was approximately 3.6 (2007: 4.2) million cubic metres. The lower mine production is in line with lower strip ratios and deepening of the pit.

Waste dumping into the adjacent Nolans void continued throughout the year, with in-pit tailings disposal into this void occurring at the same time. The waste dump now forms an engineered wall to prevent the ingress of tailings into the main Sarsfield pit.

The Mt Wright underground project developed 3,824 (2007: 3,126) metres and produced 474,282 (2007: 67,731) tonnes @ 2.24g/t (2007: 1.48g/t) Au. Ore tonnes were sourced from three stopes during the year with the completion of the L7 and O8 stopes.

Resource drilling has upgraded the resource at Mt Wright from indicated to measured to the 1040 RL and converted the resource from inferred to indicated to the 920 RL.

PROcESSING

RAvENSWOOD – SARSFIELD ORE RESERvES

as at 30 June 2008

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|---|---|---|---|
|cAtEGORy|tONNES|GRADE|OuNcES|
|Proved (insitu)|2,600,000|1.3|109,000|
|Proved (stockpiled)|700,000|0.8|19,000|
|Probable (insitu)|200,000|1.1|7,000|
|Probable (stockpiled)|3,000,000|0.8|77,000|
|Total|6,500,000|1.0|212,000|

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RAvENSWOOD - MT WRIGHT ORE RESERvES

as at 30 June 2008

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|---|---|---|---|
|cAtEGORy|tONNES|GRADE|OuNcES|
|Proved (insitu)|300,000|2.2|22,000|
|Probable (insitu)|1,800,000|2.8|160,000|
|Total|2,100,000|2.7|182,000|

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RAvENSWOOD - MT WRIGHT MINERAL RESOURCES at 1.8g/t cut-off

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|---|---|---|---|
|cAtEGORy|tONNES|GRADE|OuNcES|
|Indicated|2,600,000|4.0|327,000|
|Inferred|5,600,000|2.1|379,000|
|Total|8,200,000|2.7|706,000|

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OutLOOk

With the completion of the east cut-back in the Sarsfield pit and mining focusing on the higher grade final stage of the pit combined with increasing amounts of Mt Wright underground ore, it is expected that overall head grade will improve over the 2008-9 financial year.

The processing plant is expected to continue to run consistently with improved throughput and recoveries.

The Sarsfield Open Pit is expected to be completed by the 3rd quarter and ore will then be sourced from low-grade stockpiles to be blended with Mt Wright ore.

Gold production is expected to improve during the coming financial year due to improved head grade. This will also have a beneficial effect on the cash cost per ounce.

For the period the processing plant treated 5.0 (2007: 4.6) million tonnes at an average head grade of 1.07g/t (2007: 1.00g/t) Au. Recovery averaged 83.0% (2007: 79.0%).

A trial parcel of Mt Wright material (54Kt) was treated in April 08 to determine long term metallurgical treatment options and to give a reconciliation of grade control and assaying techniques. The trial parcel was a success with a reconciled grade of 2.26g/t compared to the grade control estimated grade of 2.06g/t. Total recovery of 81.8% for the grind size used was within expectations.

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Development oveRview

Resolute is well placed to pursue opportunities by using a common sense approach firmly based on adding value for shareholders. The broad approach is low risk, costeffective acquisition of ounces.

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SyAmA

PROjEct BAckGROuND

The Syama Gold Project is located in the south of Mali, West Africa approximately 30kms from the Côte d’Ivoire border and 300km southeast of the capital Bamako. Resolute has an 80% interest in the project through its equity in Sociêtê des Mines de Syama S.A. (SOMISY). The Malian Government holds a 20% interest in SOMISY, 15% of which is free carried.

The Syama gold mine was established by BHP Ltd in 1990 as an oxide operation and in 1994 the decision was made to build a primary ore processing facility to treat the hard, refractory ore based on “whole of ore” roasting. It was operated by BHP until 1996 and by Randgold Resources Ltd from 1996 to 2001. Both operators were unable to achieve a sustainable operation based on “whole of ore” roasting, coupled with a low prevailing gold price, and Randgold placed the operation on care and maintenance in 2001.

Excellency Diane Hamed Semega, the Minister of Mines, Energy and Water and SOMISY SA.

With Amendment (No3) signed, and the sale of Resolute’s non core uranium assets the Board took the decision to commit fully to the re-development of the project in early 2007.

Preliminary site works commenced in October 2006 with the commencement of demolition of areas of the plant not required for the future operation.

On 1 April 2007 the Malian President, Amadou Toumani Touré, officiated at a “ground breaking” ceremony for the redevelopment of Syama.

The Company has approved an investment of up to US$174million for the re-development of the Syama gold mine.

PROjEct ActIvItIES

Resolute acquired the project in April 2004 after completing a positive pre-feasibility study, and completed a Feasibility Study in April 2005. This study shows positive returns based on a modified flow sheet that processes a sulphide concentrate through the roasting circuit. The single pit operation currently has a six to seven year mine life with potential to increase reserves by development of an underground operation or by the discovery of new resources.

The re-development project was initiated in June 2006 when Resolute entered into an agreement with GRD Minproc to provide engineering, procurement and construction management services (EPCM) for the Syama Project. The initial phases of the detailed design were completed in Perth and procurement, final design etc were relocated to Johannesburg in September 2006. Outotec (Australasia) Pty Ltd, previously Outokumpu, was selected for the design, supply and commissioning of the roaster.

The start to the project was conditional, with a budget of US$32 million approved, while financing options for the project were evaluated. Negotiations with the State of Mali for an Amendment to the Establishment Convention were still in progress. On 12 December the Amendment (No3) was signed by his

Project activities have continued during 2007-2008, and at the end of June 2008, have culminated in the construction completion of the oxide processing plant, which is currently undergoing commissioning activities. The design of the remaining sulphide plant sections is completed, and most of the sulphide plant is at site or in transit to site. The various infrastructure elements required for processing of oxide ore; the tails dams, water supply, power station etc have been completed and are in operation. The buildings & camp facilities that required construction or refurbishment have been completed. Capital spares & consumables required for operation have been purchased and are onsite.

cAPItAL cOSt

Following completion of the detailed design the Company announced, in February 2007, the revised capital estimate for the Project of US$118 million. In early 2007 the company also committed to a owned & operated power station at a capital estimate of US$16 million. Thus providing an approved capital budget of US$134 million at 30 June 2007.

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Syama
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SyAmA

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Since that time the Company has approved various increases in the project budget to reflect the final project scope & schedule. The increase in project budget have largely been due to:

• Additional scrubbing equipment and stack extension to improve air emmisions

• Additional new roaster plant equipment as recommended by Outotec

• Additional equipment for the re-use of the existing 22km river pipeline

• Effects due to currency fluctuations over the duration of the project

• Increased freight and transportation costs, due to additional shipping volumes and increased pricing

• Costs of increased project duration

The current (July 2008) capital budget approved by the Company is US$174 million.

REvISED CAPITAL ESTIMATE COMPARISON

AREA DEScRIPtION	07 uS$ M	08 uS$ M
Treatment Plant	64.2	86.9
Services & Infrastructure	12.5	10.3
Pre-Production	11.4	10.0
EPCM	18.5	19.8
Owner Costs	11.8	24.3
Power Station	16.1	22.7
Total	134.4	174.0

cONStRuctION ActIvItIES

Construction has progressed as follows:

• The old BHP camp, village houses, kitchen and messes having been refurbished, re-equipped, and are now in use by construction & operations personnel

• An 84 man security camp, adjacent to the main gate, has been constructed and is in use

• A new national mess close to the plant area has been constructed and is being used by construction personnel

• A four stage crushing system utilising 2 refurbished jaw crushers & 3 new cone crushers has been constructed & commissioned

• The milling circuit has been completed and is being commissioned

• The CIL circuit has been completed and commissioning is underway

• The elution circuit, reagents and goldroom areas have been completed and are being commissioned

• The tails dam has been segmented into a flotation tails area and a calcine tails area. The embankments have been lifted and the tails distribution lines completed

• The pit dewatering system which provides water to the plant for the first 10 months of plant operation, has been completed and commissioned. Water is being pumped to the empty Syama Extension pit

• The power station has been refurbished and fitted with 14 caterpillar gensets, which have been commissioned, and is now providing all site power. A further 2 Rolls Royce Allen engines are being installed

• The various other plant buildings have been constructed or refurbished as required including laboratory, mine workshops, plant workshop, light vehicle workshops, training centre and clinic.

The completion of the above plant areas has allowed commissioning of these areas to commence with the aim of processing stockpiled oxide ore. At the end of July 2008 ore has already been crushed and stockpiled. Processing of ore is now dependant on the commissioning of the mills which commenced during August 2008.

The following areas relate to the remainder of the plant, which makes up the sulphide ore processing areas.

• The construction of the new sulphide flotation circuit is nearing completion with all equipment in place. Electrical and piping work is nearing completion.

• The roaster shell has been installed. The new top of the primary cyclone has been installed and is awaiting connection to the roaster shell. The cross-over duct to the spray cooler has been removed and the spray cooler is to be lowered to a new location. All the roaster equipment is onsite and is being installed.

• The electrostatic precipitator (ESP) has been stripped ready for the installation of new internals. The casing is currently being stiffened. All the new equipment for refurbishing the precipitator is onsite.

• The scrubber tanks and pumps are being installed. Scrubber vessels, ductwork and supporting steelwork is on site.

• The stack extension is onsite and the extension installation contractor and stack lining contractor are onsite. The insulation and cladding contractor for cladding the roaster and ESP components is on site and the refractory installation contractor is due onsite in September.

• The installation of the pumping stations for the Bagoë River pipeline is underway.

The roaster is scheduled for commissioning in early 2009.

fEASIBILIty StuDy ON SyAMA fREE MILLING ORE

A Feasibility Study into the treatment of free milling ore in parallel with the treatment of sulphide ore at the SOMISY operation at Syama, Mali was commenced in 2008. This study is based on the capacity of the existing but idle Morgardshammar mill located on site and the subsequent capacity of the refurbished leach circuit (CIL). The free milling ore would be sourced from satellite deposits close to the Syama operation.

As part of the study, infill drilling was carried out on the A21Quartz vein Hill deposit. The drilling provided samples for metallurgical test work (comminution, gravity and leach) and will be used to remodel the resource to improve the resource classification of the deposit. A majority of the deposit is now drilled on a 25m by 25m pattern. A new resource model for the A21-Quartz vein Hill deposit is expected in the second half of 2008.

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Samples for the metallurgical test work were sent to Ammtec laboratories in Australia. The laboratory will carry out the comminution, gravity and leach test work. The results will be used to determine the key design criteria for the addition of a free milling circuit to the current Syama treatment plant. The engineering studies for the free milling circuit with a capacity between 1 to 1.5Mtpa are expected to be completed towards the end of 2008.

Preliminary results from the test work show the oxides resources of the deposit, using a gravity and CIL circuit, should have recoveries greater than 90%.

On completion of the metallurgical test work, the reserves will be estimated using the metallurgical recoveries and the operating costs from the Syama deposit.

Current resources of the A21-Quartz vein Hill deposit at a 1g/t cut off are estimated at, measured and indicated resource 4.0 Mt @ 2.1g/t Au for 266,000ozs, plus an inferred resource of 5.8Mt @ 1.8g/t Au for 336,000ozs. Approximately 42% of this total resource is oxide.

Other sources of oxide mineralisation, that are being drilled in 2008, are located at Tellem, Drag Queen and Tabakoroni, south of the Syama infrastructure. Refer figures 1 and 2 (Exploration section).

RESOuRcE DEvELOPMENt At Mt WRIGHt

During 2007 and the early part of 2008 a decline was established to the upper mineralised areas of Mt Wright approximately 200m below surface. The decline was to provide bulk samples of the ore to test through the Ravenswood CIL plant and to provide drill platforms for infill diamond drilling for estimation of reserves.

The results of the bulk samples and diamond drill programme were compared against the 2005 feasibility study. The bulk sample mill

grade of 2.3g/t compared well with the feasibility grade of 2.4g/t, using the stope cutoff grade of 1.8g/t. Table 1 compares the resource estimation of the 2005 feasibility study and the detailed diamond drilling carried out over the past 18 months. The infill drilling has increased the tonnage by 10%, grade by 4% and ounces by 15% as compared to the feasibility study.

In addition to the infill drilling, a diamond hole was drilled from the 1040mRL to determine the continuation of the Mt Wright mineralisation at depth. The drill hole was targeting the zone at the 460mRL. Unfortunately the drill hole deviated from its planned position and ended paralleling the granite/rhyolite breccia contact. The hole was terminated at 819m depth with approximately 213m of rhyolite breccia with intense sulphidation (Marcasite and Sphalerite) being intersected in the drill hole. These sulphides are generally adjacent to and present within the gold mineralised zones of the rhyolite breccia. Fire assay results showed only two intercepts above 1g/t.

A drill rig with greater capacity is expected onsite in the later part of 2008 and will be used to carry out wedging from this hole to continue testing at depth the rhyolite mineralized zone (see Figure 1).

In the next 12 months the underground drilling programmes will;

• Continue to establish reserves from the 1040mRL level to 760mRL level. The 2005 feasibility study indicated a potential resource (inferred) for the area of 5,387,000t at 3.5g/t Au for 606,000 ounces

• Carry out 80m (vertical) by 40m spaced drilling from 760mRL level to 600mRL level to define further resources for medium term planning

• Continue testing target zones at depth to determine the continuity of the mineralisation which will assist in long term planning.

TABLE 1. COMPARISON OF MT WRIGHT RESOURCE ESTIMATIONS; 2005 FEASIBILITY STUDY vERSUS THE 2007-2008 DRILL PROGRAMME. 1.8 g/t cut off grade

TABLE 1. COMPARISON OF MT WRIGHT RESOURCE ESTIMATIONS; 2005 FEASIBILITY STUDY vERSUS THE 2007-2008 DRILL PROGRAMME. 1.8 g/t cut off grade	TABLE 1. COMPARISON OF MT WRIGHT RESOURCE ESTIMATIONS; 2005 FEASIBILITY STUDY vERSUS THE 2007-2008 DRILL PROGRAMME. 1.8 g/t cut off grade	TABLE 1. COMPARISON OF MT WRIGHT RESOURCE ESTIMATIONS; 2005 FEASIBILITY STUDY vERSUS THE 2007-2008 DRILL PROGRAMME. 1.8 g/t cut off grade
05 fEASIBILIty 07-08 INfILL DRILLING
	tONNES GRADE OuNcES	tONNES GRADE OuNcES
1120-1240 770,000 2.43 60,157 477,000 2.56 39,260
1040-1120 478,000 2.95 45,336 456,000 2.53 37,092
920-1040 1,706,000 2.43 133,283 2,330,000 2.63 197,016
Total 2,954,000 2.51 238,776 3,263,000 *2.61 273,368
Percentage change +10% +4% +14%

NOTE

• 63% of tonnage and 63% ounces are indicated resources, remainder inferred

• ** 89% of tonnage and 89% ounces are indicated resources, remainder measured

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FIGURE 1. MT WRIGHT UNDERGROUND SHOWING CURRENT AND PLANNED INFRASTRUCTURE AND PROPOSED WEDGE HOLES

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Resolute is committed to expanding its gold resources and production base through exploration. The main thrust of exploration activities has been on our tenure close to our existing operations or strategic joint ventures on ground that has been identified through our regional studies.

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mAli

Resolute’s exploration programme continued to focus on organic growth by expanding resources around the Company’s existing operations in mali, tanzania and Queensland.

A ramp up of the exploration programme around the Syama project in mali continues to deliver excellent results with new and expanded satellite resource discoveries now totalling over 1.3 moz with several additional targets currently undergoing resource drilling.

in tanzania a new discovery at Kavsav, only 8km from golden pride, is now being systematically drilled out whilst a series of regional targets undergo reconnaissance testing in the expanded district portfolio.

Exploration in the Syama belt continued at a high level during the year focused on advancing two main areas of new resource discoveries at A21, north of Syama, and Tabakoroni, south of Syama. New and expanded resources were established in both areas with some 1.3 Moz of new satellite resources (measured, indicated and inferred) now recognised outside the Syama Mine (see tables 1 and 2 below for resource classification and breakdown). The success of exploration means that good scope now exists to re-build a separate oxide circuit at Syama, and to this end a feasibility study is currently in progress.

With the new resources already established it has become clear that the district around Syama provides an excellent opportunity to make significant discoveries in a poorly explored but obviously fertile greenstone belt. The further economic impact of even modest near surface discoveries in the hinterland of Syama will be considerable.

Building on the detailed geology model established for Syama in 2007 a robust exploration model is now being used to explore the Syama belt utilising the enhanced knowledge of stratigraphy, alteration and structural controls on mineralisation. During the last 12 months this exploration model has been utilised to prioritise a series of geochemical and geological targets in the district. Using wide spaced aircore drilling it has been possible to obtain valuable information on bedrock lithology and alteration throughout the Syama tenure and parts of the Finkolo joint venture area. Combined with outstanding images from a recent airborne versatile time-domain electromagnetic (vTEM) survey careful targeting of follow up drilling is now possible.

Early results from the 10km of strike to the south of Syama demonstrate that the exploration model is working very successfully with a whole series of mineralised intercepts returned over nearly the whole strike length.

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Mali
Ghana
Tanzania
Australia
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A21 RESOuRcE

An old pit at ‘A21’, some 11km north of Syama, became a focus for exploration in the past year. Discovery of the A21 North mineralised trend over more than 1.6km of strike in 1997 progressed to a systematic drill out of the entire A21 area in the last 12 months. The first resource model was completed in January 2008 (table 1).

At a 1g/t cut off the measured and indicated resource is estimated at 4.0Mt @ 2.1g/t Au for 266,000ozs plus an inferred resource of 5.8Mt @ 1.8g/t Au for 336,000ozs. The total (measured, indicated and inferred) resource of 9.8Mt @ 1.9g/t Au for 601,000ozs in this area now provides a significant opportunity to develop future oxide reserves for Syama. Mining scoping and optimization studies have commenced to evaluate the economic potential of the resource.

Follow up aircore and reverse circulation drilling on three new areas has delineated significant mineralisation at Tellem, Drag Queen and Senufu.

At Tellem, some 10km south of Syama, drilling has now defined a north-south mineralised trend over more than 2km in strike. Some excellent intercepts including 18m @ 10.9g/t, 16m @ 2.6g/t and 19m @ 1.9g/t Au in shallow drilling suggest good potential for an oxide resource to be developed in this area. Limited drilling on the Drag Queen prospect just 4km south of Syama has also returned some encouraging intercepts including 20m @ 1.9g/t Au. Systematic reverse circulation drilling of these targets to develop new resources is currently in progress.

fINkOLO jv – EtRuScAN RESOuRcES (RESOLutE 60%)

SyAMA SOutH PROSPEctS

Following on from the successful discoveries north of Syama a programme of wide spaced aircore drilling was initiated over the 10km of prospective strike immediately south of the Syama Mine. Results of the programme were remarkable with widespread ‘ore grade’ intercepts on almost every line (figure 2).

Resolute completed it’s earn in phase in the Finkolo Joint venture south of Syama in 2007, taking its equity to 60%. Under the terms of the joint venture agreement Resolute will continue to fund all costs of the joint venture until production of a feasibility study and Etruscan will reimburse Resolute from 50% of its share of future project cash flow.

FIGURE 1. SYAMA – FINKOLO Jv TENEMENTS

FIGURE 2. SYAMA SOUTH PROSPECTS – 2008 SIGNIFICANT AIR CORE DRILL RESULTS

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Following the establishment of an initial resource on the Tabakoroni deposit in 2006 (see Figure 1 for location) extensive reverse circulation and diamond drilling was conducted during the last year. An upgraded resource was announced in January 2008. At a cut off grade of 1g/t the updated Tabakoroni gold resource amounts to 9.2Mt @ 2.53g/t Au for 745,000ozs representing an increase of 53% contained gold over the previous estimation in June 2006 (6.4Mt @ 2.33g/t Au for 485,000ozs). The updated resource includes 4.62Mt @ 2.57g/t Au for 382,000ozs in the measured and indicated categories. A detailed classification of the resource is included in Table 2.

A further reverse circulation and diamond drill core program designed to extend and test the depth potential of the Tabakoroni resource was completed between January and March 2008. A total of 35 new drill holes were completed to test the Tabakoroni Main Shear zone (TMSz) at vertical depths of 130 to 300m. Some excellent intercepts were reported from higher levels e.g. 44m @ 11.6g/t Au and 16m @ 16.2g/t Au. Both these results upgrade previous drilling in the area and would be likely to fall into an optimised open pit.

Other new significant results at depth on the TMSz include 12m @ 3.6g/t Au, 8m @ 3.8g/t Au, 26m @ 2.4g/t Au, 14m @ 3.1g/t Au, and 14m @ 3.4g/t Au (figure 3 and figure 4).

Later in 2008 the Tabakoroni project will largely be handed over to the Resolute Development team to initiate a mining feasibility study. However, in parallel with the development drilling further exploratory work is justified to test the continuity of the high grade shoots at depth on a 100m spacing (within potential open pit depth) as well as cover off on some near surface extensions that have not been fully tested.

Whilst Tabakoroni moves into development the remainder of the Finkolo permit remains relatively unexplored with virtually no drilling. Following from the success of carefully targeted wide spaced air core drilling traverses in identifying mineralisation near Syama, a similar programme has been designed to test the 15km of strike north of Tabakoroni towards Syama. The programme of some 200 drill holes will test a number of highly prospective structural targets identified from the recent electromagnetic survey as well as priority geochemical targets.

N’GOkOLI PERMIt

A large aircore drilling program was completed in early 2008 to test a number of high priority targets located within the N’Gokoli permit some 40-50km south of Syama (see Figure 1 for location). Drilling was focussed along a NNE-SSW trending structure, locally referred to as the ‘Bandit Shear’.

A significant number of drill holes reported highly anomalous intercepts up to 19m @ 1.27g/t Au. These encouraging results confirm the potential of the Bandit Shear over a 9km strike length with almost every line of drilling intersecting anomalous mineralisation over the structure. This drilling was designed as a first pass and as such drill hole spacing does not constrain any of the zones intersected either along strike or laterally. Further drilling is required to follow up these anomalous gold results and to delineate further targets associated with the Bandit Shear zone.

TABLE 1. A21 RESOURCES

(January 2008)

TABLE 1. A21 RESOURCES (January 2008)	TABLE 1. A21 RESOURCES (January 2008)	TABLE 1. A21 RESOURCES (January 2008)	TABLE 1. A21 RESOURCES (January 2008)	TABLE 1. A21 RESOURCES (January 2008)	TABLE 1. A21 RESOURCES (January 2008)
CUT OFF MEASURED INDICATED MEASURED & INDICATED INFERRED TOTAL
G/T	TONNES (M) G/T Oz (K)	TONNES (M) G/T Oz (K)	TONNES (M) G/T Oz (K)	TONNES (M) G/T Oz (K)	TONNES (M) G/T Oz (K)
0.50 3.35 1.57 169 3.76 1.39 168 7.10 1.48 337 12.52 1.22 490 19.63 1.31 828
0.60 3.03 1.68 164 3.31 1.51 160 6.34 1.59 324 10.61 1.34 457 16.96 1.43 781
0.70 2.75 1.79 158 2.92 1.62 152 5.67 1.70 310 9.05 1.46 424 14.71 1.55 734
1.00 2.05 2.11 139 1.99 1.98 127 4.04 2.05 266 5.77 1.81 336 9.81 1.91 601
1.50 1.23 2.70 106 1.07 2.64 91 2.29 2.67 197 2.87 2.40 222 5.17 2.52 419

TABLE 2. TABAKORONI RESOURCES

(December 2007)

TABLE 2. TABAKORONI RESOURCES (December 2007)	TABLE 2. TABAKORONI RESOURCES (December 2007)	TABLE 2. TABAKORONI RESOURCES (December 2007)	TABLE 2. TABAKORONI RESOURCES (December 2007)	TABLE 2. TABAKORONI RESOURCES (December 2007)
CUT OFF MEASURED INDICATED INFERRED TOTAL
G/T	TONNES (M) G/T Oz (K)	TONNES (M) G/T Oz (K)	TONNES (M) G/T Oz (K)	TONNES (M) G/T Oz (K)
0.50 4.58 1.96 289 2.34 1.96 147 9.11 1.60 468 16.02 1.75 904
0.70 3.97 2.17 277 1.95 2.24 140 6.66 1.97 421 12.57 2.07 838
0.90 3.40 2.40 262 1.62 2.53 132 5.12 2.32 381 10.14 2.38 775
1.00 3.14 2.52 254 1.48 2.68 127 4.54 2.49 364 9.16 2.53 745
1.10 2.90 2.64 246 1.35 2.83 123 4.06 2.66 347 8.31 2.68 716
1.20 2.68 2.76 238 1.24 2.99 119 3.64 2.84 332 7.55 2.84 688
1.50 2.10 3.16 213 0.96 3.46 107 2.70 3.36 291 5.76 3.30 611

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FIGURE 3. TABAKORONI PROSPECT (FINKOLO Jv) NORTH SOUTH LONG SECTION

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FIGURE 4. TABAKORONI PROSPECT (FINKOLO Jv) SIGNIFICANT DRILL RESULTS
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tAnzAniA

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Following the establishment of a number of smaller near mine resources at Golden Pride, exploration has concentrated on the now consolidated tenement portfolio with a number of high resolution data sets being collected and amalgamated to generate high priority targets.

Re-evaluation of some areas lightly drilled by previous explorers using a new exploration model has led to the discovery of an exciting new prospect (‘Kavsav’) only 8km from the Golden Pride mine. Smart targeting techniques using multi-element ‘footprint’ geochemistry and an extensive airborne vTEM survey have provided a series of high priority targets for drill testing in the coming season.

GOLDEN PRIDE AREA

During the last year new joint ventures and license applications have been completed that provide Resolute for the first time with access to almost the entire Nzega Greenstone Belt surrounding the Golden Pride Mine. Coupled with this new ground position the Company has carried out some detailed studies on the geology, geophysics and geochemical ‘footprint’ of the Golden Pride gold mineralisation that will assist in the exploration and recognition of further deposits in the district that are likely to be concealed under shallow soil cover. Some detailed geochemistry, close to the mine, has highlighted immediate targets for follow up that might provide smaller satellite resources for the mine and these are to be drill tested later in 2008.

kAvSAv PROSPEct

Reinvestigation of previous exploration data collected by AngloAshanti over this prospect, some 8km northeast of Golden Pride, has highlighted a large silica-sericite alteration footprint coincident with a significant induced polarisation (IP) anomaly. Previous drilling and trenching had only been shallow in nature with several drill holes ending in mineralisation.

During the last 12 months Resolute committed to a more concerted testing of the prospect with reverse circulation/diamond drilling and a detailed 3 dimensional IP survey. After a series of aircore traverses returned encouraging results in early 2007 four reverse circulation drill holes, three with diamond tails, were completed in November 2007 on 400m spaced sections to a maximum depth of 394m. The drill holes intersected a sequence of sandstone and conglomerates variably sericite-sulphide altered with the occasional mafic intrusive. The western hole, MSR0012D, returned a very encouraging intercept of 29.7m @ 2.94g/t Au from 95m, including 21m @ 4.05g/t Au from 102m. The deeper drilling taken together with the previous aircore results confirm the prospectivity of the Kavsav target which now demonstrates potential as a large mineralising system with good grades and widths of mineralisation (figure 6). A systematic drilling programme has commenced to test the target with the view to establishing a resource later in the year.

NzEGA BELt REGIONAL

A significant new joint venture has been finalised with Barrick Exploration covering the area east of Golden Pride. The “Golden Pride East Joint venture” (GPEJv) includes a series of prospecting licences covering 350km2 in the Nzega Greenstone belt including the eastward continuation of the Golden Pride Shear zone and two other significant regional structures. Resolute may earn an initial 51% of Barrick’s equity in the GPEJv by spending US$3 million over 5 years. Work on the area is already well advanced with mapping, soil sampling, aircore drilling and ground geophysics in progress.

A major aircore programme testing the eastern extensions of the Golden Pride and Choma shear zones has been completed. This drilling is on a wide 1km by 100m spacing using the ‘Golden Pride Footprint’ model from which it is hoped to be able to identify major mineralising systems using multi-element geochemistry and PIMA spectrometry on end of hole samples. The programme has been

FIGURE 5. TANzANIA REGIONAL TENURE

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25

gHAnA

successful in locating the extension of the Golden Pride Shear zone (GPSz) under cover with several drill lines showing areas of disseminated pyrite and silica, sericite and chlorite alteration. In particular two areas of anomalous results have been reported, one on the interpreted extension of the GPSz and one on an east west trend between the GPSz and Choma shear. The targets are supported by regional scale surface geochemistry anomalies. Both areas require infill aircore drilling to define reverse circulation diamond drilling targets.

Field activities in Ghana were curtailed and project summary reports completed with a review completed on opportunities to divest or joint venture current projects.

Negotiations to divest a complete package of projects to an experienced exploration group are close to being finalised. The divestment will allow Resolute to retain significant equity should a potential development be realised.

Two new permits at Nchiadi and Nyame Dzikan were acquired to complement the exploration package near Weststar and Blue River.

NyAkAfuRu AREA

The Nyakafuru Project (see figure 6 for location) currently includes an indicated resource of 7.7 Mt @ 2.2g/t Au for 535,000ozs plus an inferred resource of 11.7Mt @ 1.42g/t Au for 534,600ozs (all at a 0.5g/t cut off grade) for a total resource of 19.4 Mt @ 1.72 g/t Au for 1.1 Mozs. The calculation includes the main resource at Nyakafuru Reefs as well as satellite resources at Leeuwin, Grange and Kanegele. Feasibility studies including metallurgical testing, engineering studies and preliminary environmental assessment has now been largely completed. Options for developing and further expanding the project are currently being considered.

A purchase agreement for Iamgold’s 34% equity the Nyakafuru Jv was finalised and announced to the ASX on 28th February 2008. Resolute now controls 100% of the main Nyakafuru Reefs resource. A renewal of the main Nyakafuru PL was received in May 2008.

Following the purchase of Iamgold’s equity in the project exploration re-commenced at Nyakafuru in July 2008 to test high priority targets. Further air core and reverse circulation drilling is in progress on the southern extension of the Nyakafuru Reefs resource area covering resistivity and chargeability features 600m along strike to the south of Reefs 2E and 2W. Extension drilling is also planned along strike of the Grange resource.

FIGURE 6. GOLDEN PRIDE / NzEGA DISTRICT TENURE

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AuStRAliA

26

RAvENSWOOD

Ravenswood is located approximately 90km south of Townsville and 65km east of Charters Towers in north-east Queensland. The Ravenswood exploration project encompasses a series of exploration permits and mining leases covering an area of 1,691km2 centred on the Sarsfield plant. Target generation studies have identified a number of high priority areas in the district, some of which lay outside existing tenure. New EPM applications covering 926km2 were lodged to cover these areas (figure 7).

A number of smaller targets, based largely on old prospector workings close to the Sarsfield plant, were drill tested during the year without particular success. Efforts have now moved to larger but more challenging exploration targets that utilise the geochemical

‘footprint’ models built up from detailed work at the Sarsfield and Mt Wright deposits. The new exploration model is particularly important given that the successful underground (c. 1Moz) Mt Wright mine is essentially ‘blind’ at surface in gold mineralisation but has a strong signature in alteration and pathfinder elements.

Systematic wide spaced regional multi element soil sampling over the entire tenement portfolio was carried out during the year, as well as more focused soil and rock chip sampling over a series of regional targets. The regional sampling appears to be effectively defining the major mineralising systems using very low detection gold and multi-element ‘pathfinder’ analysis. Based on an interpretation of the results to date some ten primary areas have been selected for infill follow up (figure 7).

FIGURE 7. RAvENSWOOD LOCATION MAP SHOWING TENURE AND CURRENT EXPLORATION TARGET AREAS

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CoRpoRAte ReSponSibility

Resolute is mindful its activities may potentially have an impact on the environment and a broad range of people. These people all, in one way or another, contribute to our ability to sustain our activities in a harmonious manner within the community and environment.

29

enviRonment

Resolute is committed to achieving the best balance between protection of the environment and economic development. Resolute’s Environmental Policy provides the objectives for the environmental management programmes to be achieved by its operations, as:

• comply with and, where appropriate, exceed the requirements of applicable legislation, regulations and other policies, codes and standards to which we subscribe

• progressively develop, implement and maintain environmental management systems that are consistent with internationally recognised standards

• integrate environmental processes throughout all aspects of our activities

• identify and assess the potential environmental effects of our activities and manage environmental risk

• continually improve and regularly monitor, audit and review our environmental performance, including the reduction and prevention of impacts and more efficient use of resources

• promote environmental awareness among our personnel and contractors to increase understanding of their roles and responsibilities in environmental management

• develop our people and provide resources to meet our environmental objectives

• promote our environmental progress and performance through liaison with and public reporting to the Government and community.

In February 2008 the Resolute Safety, Health and Environment Management System was audited by external consultants at the Golden Pride Mine and Ravenswood Mine. The system provides guidance to site management through detailed Standards, Guidelines and Audit Protocols. Key areas at both sites that require improvement are risk management, planning, measuring and monitoring performance, and management review. Action plans

at each site have been developed to implement opportunities for improvement highlighted during the audit.

Resolute holds licences and abides by Acts and Regulations issued by the relevant mining and environmental protection authorities of the various countries in which the group operates. These licences, Acts and Regulations specify limits and regulate the management of discharges to the air, ground and surface waters associated with the mining operations, as well as the storage and use of hazardous materials.

There have been no significant known breaches of Resolute’s licence conditions or of the relevant Acts and Regulations. The operations have had no prosecutions or fines from the regulatory authorities. No high or critical environmental incidents occurred that could have medium to long-term impacts.

GOLDEN PRIDE MINE – tANzANIA

Environmental performance at Golden Pride continues to improve. Highlights include the approval of the 2007 Environmental Management Plan, a milestone reached of over 500,000 seedlings planted on the Golden Pride lease since the project commenced in 1998, development of Environmental Geographic Information System to improve land management and monitoring, waste rock dump water management improvements, staging of the Resolute Group Environmental Conference, and continued development of environmental personnel.

Community environmental support and development continued with additional training of local community members in plant nursery and reforestation management and donation of 21,000 Golden Pride seedlings to local reforestation programmes. Since commencement of operations in excess of 350,000 seedlings have been donated to the community. An apiary project was also established in one local village with a view to establishing a commercially viable business. If successful, Resolute will expand the project to other villages in the future.

The Company is committed to building relationships through well-targeted social, safety and environmental programmes. Resolute aims to support the local communities by assisting with programmes and projects that deliver lasting benefits.

30

Rehabilitation

29,500 trees were planted in the mining area which included 10.5ha of newly available re-shaped waste rock dumps.

Water Management

Ground and surface water monitoring is carried out on a monthly basis. Additional monitoring bores were installed around site to improve the monitoring network and improve understanding of hydrogeology.

Emissions

Dust monitoring continued and showed that dust from the mine site is not affecting surrounding properties.

pre-date Resolute’s operations at Syama. It is planned that the seepage will be contained by the construction of a new engineered facility downstream of the Tailings Storage Facility.

Emissions

Monitoring of air quality was improved during the year with the installation of dust, sulphur dioxide and mono-nitrogen oxide monitoring equipment. It is planned to further improve this air quality monitoring network with the installation of a Continuous Emissions Monitoring System on the roaster stack.

Compliance

The Environmental and Social Impact Study was approved and an Environmental Permit issued in November 2007 by the Ministry of Environment and Sanitation.

Tailings

The annual Tailings Storage Facility audit indicated the facilities were being operated efficiently and there were no significant issues with structural stability or compliance with procedures.

Compliance

In accordance with the Tanzania Mining Act, 1998, the Environmental Management Plan was due for a five-year review and re-submission to the Ministry of Energy and Minerals. The 2007 Environmental Management Plan was approved by the Minister for Minerals and Energy in April 2008. The Environmental Management Plan has been aligned with the operation’s risk-based management and continual improvement approach to environmental management.

There are three non-compliance issues outstanding. The noncompliances are longer-term issues that are being progressively addressed, as follows:

• Potential for poor water quality off-site from the lack of stormwater drainage controls at the mine contractors yard. Hydrocarbon management and drainage have been improved, and a whole of site sediment and erosion management plan is being implemented

• Total suspended solids and total iron exceedance at the Ibole River surface water monitoring site located at the mine boundary. Improvements, as part of the sediment and erosion management plan implementation, include the construction of a sediment trap

• Environmental awareness training for site personnel not fully implemented. Training modules are being prepared and undertaken.

SyAMA MINE – MALI

Syama Mine is currently under construction and had no processing activities undertaken during the reporting period. The main highlight for the year was receiving approval of the Environmental and Social Impact Study. Monitoring of ground and surface water, air quality and river flows was increased in order to capture valuable baseline data.

Water Management

Monitoring of ground and surface water quality continues to show that it is generally within acceptable values. There are however high dissolved salt levels in seepage water from the Syama Tailings Storage Facility. These water quality issues

During the year there were no non-compliances reported.

RAvENSWOOD MINE – QuEENSLAND

The Ravenswood Mine continues to place importance on environmental management. The sites amended Environmental Authority was completed in July 2007. The focus this year has been on merging the Environmental Management System and Safety and Health Management System. Work continues on maintaining and improving this Management System.

Rehabilitation

Throughout the year the main focus of rehabilitation has been on the first batters of the Sarsfield Waste Rock Dump, associated topsoil stockpile footprint and the last lift of the Nolans Tailings Storage Facility. Approximately 12ha were rehabilitated. Ecosystem Functional Analysis monitoring of rehabilitated and analogue sites has continued with results that show developing ecosystems on the rehabilitation.

Water Management

Ground and surface water sulphate levels, due to the above ground tailings storage facility seepage, continue to be addressed. A detailed investigation into the seepage was completed during the year. The investigation covered potential long-term impacts of the seepage on the downstream environment. The report concluded, that based on the geochemical composition of the tailings the level of sulphate emanating from the tailings storage facility has stabilized, seepage water quality will not degrade, and that there is minimal impact on downstream vegetation communities or to the downstream users of the water. The report also concluded that the seepage interception strategy is adequate, and due to the life of the mine, will be adequate in managing seepage until such time that the tailings storage facility ceases to cause seepage.

Emissions

As part of the Greenhouse Challenge Plus Programme, changes in activities that have contributed to a reduction of greenhouse gas emissions are the connection of mains power to the Mt Wright operation and tailings seepage return water pumps.

The site National Pollution Inventory Report outlined no significant increases in emissions to land, water and air. A minor increase in emissions of metals to water were reported, this increase was due to a first flush event during the Wet Season. The increase was within regulatory limits.

31

Community RelAtionS

32

Tailings

The Nolans In-Pit Tailings Storage facility started receiving tailings in early August 2007.

Compliance

Six non-compliance issues are outstanding. The non-compliances are longer-term water quality issues, as follows:

• Sulphate levels in the above ground tailings storage facility seepage water. The sulphate levels have been investigated and the final report with recommendations submitted to the Environmental Protection Agency (EPA) for review

• Sulphate levels in seepage at the Sandy Creek Tailings Storage Facility. Sulphate levels are decreasing due to the facility being capped and rehabilitated, and levels are expected to have a continued downwards trend. Levels will continue to be monitored

• Sulphate levels in seepage from the Sandy Creek site. Monitoring has commenced to determine the source of this seepage

• Cadmium levels at an old waste rock dump at Mt Wright. Identified waste rock with elevated cadmium was removed and the area rehabilitated. It is expected that with the removal of the waste rock, first flush water quality will meet the required standards

• Cadmium and sulphate levels in water emanating from a natural spring below the Buck Reef Waste Rock Dump. In liaison with the landholder the area was fenced to prevent any potential impacts on cattle. Water quality monitoring has shown that the impact on water is localized. Future work has been planned to investigate techniques to stop any future occurrence of this event

• Sulphate levels in pit discharge water. Pit water discharge from site commenced after receiving high rainfall during the Wet Season. The water discharge was conducted in close liaison with the EPA. Sulphate levels in the pit discharge water increased to the point where discharge was stopped and the remaining water was managed within on-site storage facilities. A Transitional Environmental Authority will be submitted to the EPA seeking approval for further discharge during the next Wet Season.

EAStERN GOLDfIELDS – WEStERN AuStRALIA

Rehabilitation obligations were significantly reduced during the year as a result of a sale agreement with Avoca Resources Limited. The sale agreement included the sale of the tenement located in the Higginsville region which contains the tailings dams used by the Higginsville Gold Project in the 1990’s. Avoca has taken responsibility for all uncompleted rehabilitation obligations and replacement of all environmental performance bonds at Higginsville.

Environmental and rehabilitation responsibilities at Resolute’s remaining Eastern Goldfields mine sites (Bullabulling and Hopes Hill) focused on:

• Commencement of all outstanding rehabilitation at Bullabulling. The work is expected to be completed by June 2009.

• Rehabilitation monitoring using Ecosystem Function Analysis. Results continue to indicate that rehabilitated areas are developing into functional ecosystems.

Resolute recognises the need to focus on and proactively manage community issues in the areas surrounding its operations. Resolute is committed to fostering long-term relationships and partnerships with these communities by developing a culture of mutual understanding, cooperation, consultation and respect.

Our social investment initiatives aim to deliver significant and lasting benefits to employees, the community and other key stakeholders through our community management programmes. Resolute’s Community Policy provides the objectives for the management programmes to be achieved by its operations, as:

• Recognise and respect the value of cultural heritage and cultural diversity

• Establish enduring relationships with communities based on honesty and mutual trust

• Support the development and implementation of sustainable social and economic initiatives within the communities through co-operation and participation

• Provide management systems to identify, assess, monitor and control existing and potential impacts on communities

• Maintain an ‘open door’ policy whereby the local traditional leaders and community leaders have access at reasonable times to the Company’s management

• Ensure that employees are aware of and understand the requirements of this policy.

GOLDEN PRIDE MINE – tANzANIA

Golden Pride mine continues its commitment to ensure the sustainable development of the area around Nzega, particularly the communities close to the mine site. This support includes contributions of resources to improve infrastructure, education, health and the environment. The overall aim is to help the communities to enhance their standard of living and increase their capabilities independently. Initiatives and active participation of the local community, over the past seven years that Resolute has maintained an active role in using Participatory Rural Appraisal (PRA) techniques, is exemplary and essential to the success of the programme.

Key projects undertaken this year include:

• Continued support of the government campaign to establish secondary schools in every ward in Tanzania. Key areas being addressed are the lack of teachers, classrooms, teacher and student accommodation, furniture and text books. Approximately US$150,000 was spent on education projects.

• Construction projects that Resolute have assisted in, through the PRA programme, include three classrooms at Nzega Ndogo Secondary School, girl’s dormitory at Mambali Secondary School, administration block at Mwangoye Secondary School, library at Nata Secondary School, two houses at the Mwakabasa and Mwasala primary schools and two classrooms and one teacher’s office at Idala Primary School.

Resolute also recruited a volunteer teacher trainer from Australia to assist the science and mathematics teachers at six schools.

• Resolute’s involvement and contributions in community health programmes during the year have included the completion of the Undomo village dispensary and doctor’s house, renovation of the maternity block at Mbogwe dispensary, renovation of the Lusu dispensary and assisted in the establishment of the volunteer Counseling and Testing Centre at Lusu dispensary.

33

34

Resolute continued to build on the African Medical and Research Foundation (AMREF) research on HIv/AIDs undertaken within the local community in 2006. The main activity undertaken during the year within the mine and six villages was education training sessions held separately for 60 women from 6 villages, traditional healers and for people with HIv/AIDs.

In response to an increase in traffic accidents, on the recently sealed road to Shinyanga, Resolute sponsored a first aid and road safety training course to six villages and 24 health personnel from the Nzega District Hospital.

• Stakeholder engagement:

• To improve the relationship with the neighbouring villages and increase the transparency of the mining operations, 30 village leaders were invited on a tour through the mine site. The major aim of this exercise was to expose them to the mining activities and to discuss issues such as security and the life of mine.

• An annual Ward environmental meeting was held in Nata, with 107 community members participating. The emphasis was on educating community on the importance of native vegetation preservation to ensure its resource sustainability.

SyAMA MINE – MALI

The Syama Mine Community Consultative Committee (SMCCC) held several meetings during the year. The main goals of these meetings were to keep the community abreast of the progress of the Syama Project and to monitor and address community feedback.

Projects undertaken during the year included improvements to the Fourou village water supply and installation of a power generator at Fourou Medical Clinic. Support was also provided for a range of community events including sporting events, financial support for cultural activities including Mali Independence Day celebrations, school events and the Annual Association of Hunters celebrations.

Planned community projects for the coming year include a community baseline health survey and further improvements to the Fourou water supply. Recruitment of mine employees will continue, where possible, to focus on the local community.

Syama Mine will also commence development of a Participatory Rural Appraisal programme to assist the local communities to determine their own development needs and solutions. This programme will allow communities to learn the skills necessary to continually improve their quality of life and opportunities for growth without direct material support from Syama Mine.

RAvENSWOOD MINE – QuEENSLAND

The Ravenswood Mine is located in close proximity to the historic gold mining town of Ravenswood, therefore a strong emphasis is placed on maintaining a positive relationship with the community and keeping them informed about proposed changes to the operations. Specific initiatives during the year included:

• Communicating activities of the Ravenswood Mine to the community via community meetings, flyers, posters and newsletters. This year the main focus was updating the community in regard to the Mt Wright project and the newly commissioned in-pit tailings storage facility.

• Providing community access to the onsite clinic, occupational health nurses and 24 hour emergency medical support service. Site nurses made a total of 288 community related consultations. Site nurses also organised monthly visits from the Royal Flying Doctor Service.

• Site personnel providing labour and expertise for the installation of computers and a data network at the Ravenswood Primary School. There is now a computer for every student that attends the Ravenswood Primary School.

• Providing support to the Ravenswood Restoration and Preservation Association. The management of heritage listed buildings and tourism within the town is undertaken by this Association.

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35

HeAltH AnD SAFety

Resolute is committed to achieving the highest performance in Occupational Health and Safety to create and maintain a safe and healthy workplace.

Resolute’s Occupational Health, Safety and Security Policy provides the objectives for the management programmes to be achieved by its operations, as:

• Seek continuous improvement in its Occupational Health, Safety and Security performance taking into account evolving scientific knowledge and technology, management practices and community expectations

• Comply with the applicable laws, regulations and standards of the countries in which it has workplaces

• Train and ensure individual employees and contractors understand their obligations and are held accountable for their area of responsibility

• Involve all employees and contractors in the improvement of Occupational Health, Safety and Security performance

• Communicate and consult openly with staff, contractors, government and the community on Occupational Health, Safety and Security issues

• Implement risk management systems to identify, assess, monitor and control hazards in the workplace.

At every site, the health and safety of personnel and local communities are of fundamental concern to Resolute. The Company seeks to conduct operations in an efficient and effective manner whilst providing:

• a safe and healthy workplace

• information on the hazards of the workplace and training on how to work safely while caring for the environment, and

• consultation, at all staff levels, on safety, health and environmental matters.

No employee is expected to carry out work they reasonably consider to be unsafe.

Implementation of the Company’s Safety, Health and Environment Management System is ensuring that Resolute and industry standards are consistently met at each site.

Site audits on the Safety, Health and Environment Management Systems were undertaken by independent consultants at Ravenswood Mine and Golden Pride Mine in February 2008. Internal audits are regularly undertaken to ensure progress in implementation of these systems.

At year end the 12 month moving average Lost Time Injury Frequency Rate (LTIFR) was 1.17, a 40% reduction from the previous year of 1.96 (Western Australia surface metalliferous mining 2006-07 average LTI Frequency rate was 3.5). There were a total of three LTI’s recorded, as compared to five in the previous year. Two of the LTI’s were attributable to the mining contractor.

Unfortunately there was one fatality in May 2008 when a casual contract employee drowned in a process raw water dam, after accidently falling into the dam while cutting grass around its embankments. The employee unfortunately could not swim and attempts to resuscitate were unsuccessful.

SyAMA MINE – MALI

Since the start of construction in September 2006 the focus has been on raising safety awareness and improving the safety culture on site. A monthly Safety, Health and Environment newsletter has been issued covering the major issues on site. During the year a legal register for occupational health and safety was developed.

At year end the 12 month moving average Lost Time Injury Frequency Rate was 5.18 for operations and 14.11 for construction (Western Australia surface metalliferous mining 2006-07 average LTI Frequency rates were 3.5 for operations and 17.2 for construction).

RAvENSWOOD MINE – AuStRALIA

The emphasis has been maintained for the site to continually focus on its site safety culture theme; this has been promoted via the induction processes and site safety meetings.

An initiative for the year was the site health monitoring programme conducted by the clinic nurses. This programme dealt with dust, noise, ergonomics and manual handling awareness, as well as general site health awareness in the form of flu and hepatitis vaccinations.

The focus towards the safety key performance indicators continued with a marked increase in the quality and quantity of Safety Observations, Hazard Reports, and SLAM (Stop-LookAssess-Manage) observations being produced across site.

At year end the 12 month moving average Lost Time Injury Frequency Rate increased from 5.3 in the previous year to 6.5 (Queensland metalliferous mining 2006-07 average LTI Frequency rate was 3.1). Five LTI’s occurred during the year.

GOLDEN PRIDE MINE – tANzANIA

The Golden Pride Project continued to build on the high level of safety awareness it has established in its work culture and continues to be one of the industry leaders in the safety and accident prevention fields within the Tanzanian mining industry.

Training of the Golden Pride staff continues to be a major site focus. The competency based training programme is now well advanced within both the Junior and Senior Staff employees. The success of the programme is clearly evident in the number of Tanzanian employees who are being promoted to senior supervisory and management positions.

36

opeRAtionS oveRview FinAnCiAl RepoRt

ContentS

	Directors’ Report	37
	Corporate governance Statement	47
	Auditors’ independence Declaration	51
	income Statements	52
	balance Sheets	53
	Statements of Recognised
	income & expense	54
	Cash Flow Statements	55
	notes to the Financial Statements	56
	Directors’ Declaration	105
	independent Audit Report	106
	Shareholder information	108

37

Directors’ report

FOR THE YEAR ENDED 30 JUNE 2008

Your directors present their report on the consolidated entity (referred to hereafter as the “Group” or “Resolute”) consisting of Resolute Mining Limited and the entities it controlled at the end of or during the year ended 30 June 2008.

Corporate InformatIon

Resolute Mining Limited (“RML” or “the Company”) is a company limited by shares that is incorporated and domiciled in Australia.

DIreCtors

The names and details of the directors of Resolute Mining Limited in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

names, qualIfICatIons, experIenCe anD speCIal responsIbIlItIes

Peter Ernest Huston

Non-Executive Chairman

b. Juris, llb (Hons), b.Com., llm

Mr Peter Huston was appointed Chairman in 2000. After gaining admission in Western Australia as a Barrister and Solicitor, Mr Huston initially practised in the area of corporate and revenue law. Subsequently, he moved into the area of public listings, reconstructions, equity raisings, mergers and acquisitions and advised on a number of major public company floats, takeovers and reconstructions. Mr Huston is admitted to appear before the Supreme Court, Federal Court and High Court of Australia. Mr Huston was a partner of the international law firm now known as “Deacons” until 1993 when he retired to establish the boutique investment bank and corporate advisory firm known as “Troika Securities Limited”. In the past 3 years he has also been a director of Valhalla Uranium Limited (appointed September 2005 and resigned September 2006).

Mr Huston is a member of the Audit Committee and the Remuneration and Nomination Committee.

Peter Ross Sullivan Chief Executive Officer

b.e., mba

Mr Peter Sullivan was appointed Chief Executive Officer of the Company in 2001 and has been involved with the Group since 1999. Mr Sullivan is an engineer and has been involved in the management and strategic development of resource companies and projects for approximately 20 years. Mr Sullivan is also a director of GME Resources Limited (appointed 1996) and has previously been a director of Valhalla Uranium Limited (appointed September 2005 and resigned September 2006).

Mr Sullivan is a member of the Environment and Community Development Committee, the Safety, Security and Occupational Health Committee, and the Financial Risk Management Committee.

Thomas Cummings Ford Non-Executive Director

faICD

Mr Tom Ford is a non-executive director and was appointed to the board in 2001. Mr Ford is an investment banker and financial consultant with over 30 years experience in the finance industry. He retired as an executive director of a successful and well regarded Australian investment bank in 1991 and now fulfils a number of non-executive director roles. He is also Chairman of RESIMAC Limited (appointed 1985) and a non-executive director of Amalgamated Holdings Limited (appointed 1993).

Mr Ford is a member of the Audit Committee and the Remuneration and Nomination Committee.

Henry Thomas Stuart (Bill) Price Non-Executive Director

b.Com., fCa, faICD

Mr Bill Price is a non-executive director and was appointed to the board in 2003. Mr Price is a Chartered Accountant with over 35 years experience in the accounting profession. Mr Price has extensive taxation and accounting experience in the corporate and mining sector. In addition to his professional qualifications, Mr Price is a member of the Australian Institute of Company Directors, a registered tax agent and registered company auditor. He is a director and treasurer of Tennis West, a previous director of Valhalla Uranium Limited (appointed September 2005 and resigned September 2006), and a consultant to the Finance Committee at the Real Estate Institute of Western Australia.

Mr Price is the Chairman of the Audit Committee and a member of the Remuneration and Nomination Committee.

Company seCretary

Greg William Fitzgerald

b.bus., C.a.

Mr Fitzgerald is a Chartered Accountant with over 20 years of resources related financial experience and has extensive commercial experience in managing finance and administrative matters for listed companies. Mr Fitzgerald is also the General Manager – Finance & Administration and has been Company Secretary since 1996. Prior to his involvement with the Group, Mr Fitzgerald worked with an international accounting firm in Australia.

Mr Fitzgerald is a member of the Financial Risk Management Committee.

Interests In tHe sHares anD optIons of resolute mInIng lImIteD anD relateD boDIes Corporate

As at the date of this report, the interests of the directors in shares and options of Resolute Mining Limited and related bodies corporate were:

		orDInary sHares optIons over orDInary sHares	orDInary sHares optIons over orDInary sHares
P.	Huston	361,279	–
P.	Sullivan	3,146,400	–
T.	Ford	3,600	–
H.	Price	12,000	–
		3,523,279	–

Directors’ report FOR THE YEAR ENDED 30 JUNE 2008

38

nature of operatIons anD prInCIpal aCtIvItIes

The principal activities of entities within the consolidated entity during the year were:

• Gold mining; and,

• prospecting and exploration for minerals.

There has been no significant change in the nature of those activities during the year.

results

Resolute Mining Limited announced a net loss after tax attributable to its members for the year ended 30 June 2008 of $44.8m (year ended 30 June 2007: $170.2m profit). The 2007 profit result was directly impacted by the one off sale of the Group’s uranium assets.

DIvIDenDs

No dividend has been declared or paid during, or subsequent to, the financial year.

Corporate

During the year ended 30 June 2008, the Company invited its shareholders to subscribe to a rights issue of up to 46.4 million ordinary shares at an issue price of $1.10 per share on the basis of 1 share for every 5 fully paid ordinary shares held, with such shares issued on 5 November 2007. The rights issue was strongly supported by the Company’s shareholders with just over 98% of them participating in the A$50m capital raising.

The Company also negotiated a US$55m senior debt facility and a US$7.6m gold put option purchase facility with Barclays Bank Plc.

The hedge book was significantly reduced over the year with the delivery of 155,612 ounces of gold into forward sales contracts. At 30 June 2008 approximately 10 to 15% of Resolute’s gold reserves remain committed to hedging contracts. Furthermore, in the last quarter Resolute restructured its hedge book to allow greater spot price participation. In conjunction with the new Barclays debt facility, 110,000 ounces of AUD gold put options with a A$1,000 per ounce strike price were purchased at an average cost of A$72/oz.

revIew of operatIons

Production

The Group’s gold production for the year was 293,057 ounces (2007: 255,942 ounces) at an average cash cost of $617/oz (2007: $634/oz).

The Golden Pride gold mine in Tanzania, Africa, produced 150,224 ounces (2007: 138,421 ounces) of gold at a cash cost of $497/oz (or US$449/oz) (2007: $510/oz or US$403/oz) and the Ravenswood gold mine in Queensland, Australia, produced 142,833 ounces (2007: 117,521 ounces) of gold at a cash cost of $743/oz (or US$663/oz) (2007: $781/oz or US$617/oz).

Exploration

Exploration programs undertaken during the year ended 30 June 2008 concentrated on advancing the Group’s range of exploration properties located in Australia, Tanzania and Mali.

Project Development

Refer to comments made under the Outlook section.

Directors’ report

FOR THE YEAR ENDED 30 JUNE 2008

39

outlook

Operations

Forecast gold production for the Group for the year ending 30 June 2009 is 400,000 ounces. This improved outlook is being driven by the start up of the Syama project. The forecast cash cost per ounce is approximately $700.

golDen prIDe

Due to the proposed blending of existing ore stockpiles with run of mine ore, the average head grade of ore to be processed is expected to reduce by approximately 20% over the coming year. This is in line with current mine plan ore body models.

ravenswooD

Mt Wright’s contribution to the Ravenswood project continues to increase with underground ore expected to account for approximately 30% of gold production in the 2008/09 year. This should lead to a small increase in the head grade of the ore to be processed at Ravenswood in 2008/09.

Mining in the Sarsfield pit is forecast to be completed in March 2009, however, Sarsfield ore stockpiles will continue to be treated until the end of calendar 2009.

syama

First gold production in the commissioning phase is expected in September 2008 with commissioning of the oxide circuit almost fully complete. A temporary delay of approximately 2 to 4 weeks has been encountered as a result of a ball mill engine bearing failure.

Mining levels are now increasing to planned rates, with the east wall cutback progressing to catch up with the rest of the pit floor. As the cut back progresses, sulphide ore production from the main zone of the ore body will increase allowing a meaningful reconciliation against the ore body to be made.

Roaster commissioning remains on track for the December quarter.

The speed of the ramp up phase will have a direct impact on projected gold production and cash costs per ounce in the coming year.

Project Development

syama

Completion is scheduled for the December quarter with the Roaster commissioning to commence in October 2008.

Forecast total capital costs are expected to be US$174m.

The Tabakoroni project (which is within the Finkolo Joint Venture) will be handed over to the Resolute development group to initiate a mining feasibility study.

mt wrIgHt

Mt Wright decline development will continue at the rate of approximately 100 metres per month.

Further drilling to test the depth extension of the Mt Wright orebody is planned for the coming year.

Exploration and Project Evaluation

Exploration of the prospective tenure around Syama, Golden Pride and Ravenswood will continue in the 2008/09 year.

Funding of Future Exploration and Development Expenditure

The Company is continuing to review its funding requirements for the period covering the completion of the Syama project and its production ramp-up. The working capital requirements are sensitive to the gold price, cost volatilities, as well as the commissioning timetable. In addition, the Company has a number of important other development activities it wants to proceed with on a timely and efficient basis.

sIgnIfICant CHanges In tHe state of affaIrs

There have been no significant changes in the state of affairs of the Company other than those listed above.

sIgnIfICant events after balanCe Date

• (i) Subsequent to year end, the Group has entered into an unconditional unsecured credit facility with a financier for $20 million. A first tranche of $10 million dollars was drawn down on this facility on 24 September 2008, with settlement to occur on 1 October 2008 and it is currently expected the second tranche of $10 million will be drawn down in late October 2008.

• (ii) Subsequent to year end, the Group has entered into a mandate with Patersons Securities Limited for a placement of ordinary shares in Resolute Mining Limited to raise approximately $10 million. The Group expects the placement to be completed during the course of October 2008 and thus the funds to be available prior to the end of October 2008.

lIkely Developments anD expeCteD results

The likely developments in the operations of the consolidated entity and the expected results of those operations in the coming financial year are as follows:

• (i) The continued production of gold from the Golden Pride and Ravenswood mines;

• (ii) completion of the redevelopment and commencement of full production at the Syama Project in Mali;

• (iii) continued development of the Mt Wright Project in Ravenswood;

• (iv) mineral exploration will continue; and,

• (v) the Group will seek to expand its gold production activities by advancing its existing projects or where appropriate, by direct acquisition of projects or investments in other resource based companies.

envIronmental regulatIon performanCe

The consolidated entity holds licences and abides by Acts and Regulations issued by the relevant mining and environmental protection authorities of the various countries in which the Group operates. These licences, Acts and Regulations specify limits and regulate the management of discharges to the air, surface waters and groundwater associated with the mining operations as well as the storage and use of hazardous materials.

There have been no significant known breaches of the consolidated entity’s licence conditions or of the relevant Acts and Regulations.

Directors’ report FOR THE YEAR ENDED 30 JUNE 2008

40

remuneratIon report

The following information has been audited.

This remuneration report outlines the director and executive remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, key management personnel (“KMP”) of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, including any director (whether executive or otherwise) of the parent company, and includes the executives in the parent and the Group receiving the highest remuneration.

a) Key management personnel

(i) Directors P. Huston Non-Executive Chairman P. Sullivan Director and Chief Executive Officer T. Ford Non-Executive Director H. Price Non-Executive Director (ii) Executives M. Turner General Manager – Operations (Resigned 12 September 2008) D. Cairns General Manager – Project Development (Resigned 21 December 2007) G. Fitzgerald General Manager – Finance & Administration and Company Secretary M. Christie General Manager – Exploration (Resigned 18 July 2008)

• b) Compensation of key management personnel

• This report outlines the remuneration arrangements in place for directors and executives of RML.

RML Remuneration Policy

The board recognises that the performance of the Company depends upon the quality of its directors and executives. To achieve its financial and operating objectives, the Company must attract, motivate and retain highly skilled directors and executives.

The Company embodies the following principles in its remuneration framework:

• Provides competitive rewards to attract high calibre executives;

• • structures remuneration at a level that reflects the executive’s duties and accountabilities and is competitive within Australia;

• benchmarks remuneration against appropriate groups at approximately the third quartile; and,

• aligns executive incentive rewards with the creation of value for shareholders.

Remuneration and Nomination Committee

The Remuneration and Nomination Committee is responsible for determining and reviewing the compensation arrangements for the directors themselves, the Chief Executive Officer and the executive team.

Executive remuneration is reviewed annually having regard to individual and business performance, relevant comparative information and internal and independent external information.

Remuneration Structure

In accordance with best practice governance, the structure of non-executive director and senior executive remuneration is separate and distinct. Note that the remuneration structure for the Chief Executive Officer is the same as the executive team.

Non-Executive Director Remuneration

obJeCtIve

The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.

struCture

The Company’s constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the directors as agreed. The latest determination was at the Annual General Meeting held on 26 November 2003 when the shareholders approved an aggregate remuneration of $300,000 per year.

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The board considers fees paid to non-executive directors of comparable companies when undertaking the annual review process.

Each non-executive director receives a fee for being a director of the Company. An additional fee is payable for each board committee on which a director sits and an additional fee is also payable to a Chairman of any of these board committees due to the extra workload and responsibilities.

Chief Executive Officer and Senior Executive Remuneration

obJeCtIve

The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and so as to ensure total remuneration is competitive by market standards.

Directors’ report

FOR THE YEAR ENDED 30 JUNE 2008

41

struCture

In determining the level and make up of executive remuneration, the Remuneration and Nomination Committee uses an external consultant’s Remuneration Report to determine market levels of remuneration for comparable executive roles in the mining industry.

It is the Remuneration and Nomination Committee’s policy that employment contracts are engaged for the Chief Executive Officer and the executive employees. Details of these contracts are outlined later in this report.

Remuneration consists of the following key elements:

• Fixed remuneration

• Variable remuneration

• Short term incentives (STI); and,

• Long term incentives (LTI).

The proportion of fixed remuneration and variable remuneration (potential short term and long term incentives) is established for each executive by the Remuneration and Nomination Committee.

Fixed Remuneration

obJeCtIve

The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position and is competitive in the market.

Fixed remuneration is reviewed annually by the Remuneration and Nomination Committee. The process consists of a review of business unit, individual performance and relevant comparable remuneration in the mining industry.

• Performance of a business unit;

• contribution to earnings;

• operational performance of a business unit;

• risk management;

• health and safety; and,

• leadership/team contribution.

The executive has to demonstrate outstanding performance in order to trigger payments under the short-term incentive scheme.

On an annual basis, after consideration of performance against KPIs, the overall performance of the Company and each individual business unit is assessed by the Remuneration and Nomination Committee.

The individual performance of each executive is also assessed and all these measures are taken into account when determining the amount, if any, to be paid to the executive as a short-term incentive.

The aggregate of annual STI payments available for executives across the Company is subject to the approval of the Remuneration and Nomination Committee. Payments are usually delivered as a cash bonus and/or in the form of superannuation.

Variable Remuneration

– Long Term Incentive (LTI)

obJeCtIve

The objective of the LTI plan is to reward executives in a manner, which aligns this element of remuneration with the creation of shareholder wealth.

struCture

Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost to the Company.

Variable Remuneration

– Short Term Incentive (STI)

obJeCtIve

The objective of the STI is to reward performance that is over and above expectation levels and is linked to the achievement of the Company’s performance measures (as set out below) by the executives charged with meeting those targets. The total potential STI available is set at a level so as to provide sufficient incentive to the executives to achieve the targets and such that the cost to the Company is reasonable in the circumstances.

struCture

Actual STI payments granted to each executive depend on their performance over the preceding year and are determined during the annual performance appraisal process. The performance appraisal outcomes are at the discretion of the remuneration committee and takes into account the following factors:

As such LTI’s are made to executives who are able to influence the generation of shareholder wealth and thus have an impact on the Company’s performance against the relevant long-term performance hurdles.

struCture

LTI grants to executives are delivered in the form of employee share options. These options are issued with an exercise price at a 10% premium to the average of the RML ordinary share price over the preceding 5 business days. These employee share options will also generally vest over a 30 month period.

At each vesting date, the Company assesses the performance of the executive, and if a satisfactory performance level is achieved, the relevant portion of the options vests to the executive. This performance criterion was chosen to enhance accountability of the executives and allow accurate measurement of performance.

The Company prohibits directors or executives from entering into arrangements to protect the value of unvested Resolute Mining Limited shares or options that the director or executive may become entitled to as part of his/her remuneration package. This includes entering into contracts to hedge their exposure to RML options or shares that may vest to him/her in the future.

Directors’ report FOR THE YEAR ENDED 30 JUNE 2008

42

Details of remuneration provided to key management personnel are as follows:

08 sHort term benefIts post employment benefIts sHare baseD payments base remuneration $ non monetary benefts (i) $ superannuation $ options $	08 sHort term benefIts post employment benefIts sHare baseD payments base remuneration $ non monetary benefts (i) $ superannuation $ options $	08 sHort term benefIts post employment benefIts sHare baseD payments base remuneration $ non monetary benefts (i) $ superannuation $ options $	08 sHort term benefIts post employment benefIts sHare baseD payments base remuneration $ non monetary benefts (i) $ superannuation $ options $
	base remuneration $ non monetary benefts (i) $	superannuation $	options $
Directors
P.Huston 150,000 – – –
P.Sullivan 519,000 61,337 62,280 –
T.Ford 25,229 – 29,771 –
H.Price 1,200 – 53,800 –
Offcers
M.Turner(ii) 334,740 38,209 30,159 6,961
D.Cairns 195,364 – – –
G.Fitzgerald(iii) 271,655 12,584 49,519 6,961
M.Christie(iv) 258,755 – 23,288 6,961

07 sHort term benefIts post employment benefIts sHare baseD payments base remuneration resolute (v) $ Cash bonus $ base remuneration valhalla (v) $ non monetary benefts (i) $ superannuation resolute (v) $ superannuation valhalla (v) $ options $	07 sHort term benefIts post employment benefIts sHare baseD payments base remuneration resolute (v) $ Cash bonus $ base remuneration valhalla (v) $ non monetary benefts (i) $ superannuation resolute (v) $ superannuation valhalla (v) $ options $	07 sHort term benefIts post employment benefIts sHare baseD payments base remuneration resolute (v) $ Cash bonus $ base remuneration valhalla (v) $ non monetary benefts (i) $ superannuation resolute (v) $ superannuation valhalla (v) $ options $	07 sHort term benefIts post employment benefIts sHare baseD payments base remuneration resolute (v) $ Cash bonus $ base remuneration valhalla (v) $ non monetary benefts (i) $ superannuation resolute (v) $ superannuation valhalla (v) $ options $
	base remuneration resolute (v) $ Cash bonus $ base remuneration valhalla (v) $ non monetary benefts (i) $	superannuation resolute (v) $ superannuation valhalla (v) $	options $
Directors
P.Huston 150,000 – 7,500 – – – –
P.Sullivan(vi) 480,000 53,248 7,500 56,436 63,990 – –
T.Ford 48,165 – – – 4,335 – –
H.Price 2,550 – 750 – 49,950 6,744 –
Offcers
M.Turner 302,100 – – 32,890 27,189 – –
D.Cairns(vii) 326,765 20,000 – – – – –
G.Fitzgerald(viii) 245,725 20,000 – 12,543 48,275 – –
M.Christie(ix) 231,575 – – – 20,842 – 26,092

(i) Non monetary benefits include, where applicable, the cost to the Company of providing fringe benefits, the fringe benefits tax on those benefits and all other benefits received by the executive.

(ii) 75,000 options were granted to M. Turner on 23 May 2008. These options have an exercise price of $2.13 and an expiry date of 22 May 2013. Information on these options is set out in Note 34.

(iii) 75,000 options were granted to G. Fitzgerald on 23 May 2008. These options have an exercise price of $2.13 and an expiry date of 22 May 2013. Information on these options is set out in Note 34.

(iv) 75,000 options were granted to M. Christie on 23 May 2008. These options have an exercise price of $2.13 and an expiry date of 22 May 2013. Information on these options is set out in Note 34.

(v) “Resolute” in this instance means the Group excluding any amounts received or receivable in remuneration from Valhalla Uranium Ltd (“Valhalla”), an 83.3% owned listed subsidiary of Resolute Mining Limited incorporated on 23 September 2005 and subsequently disposed of on 11 September 2006.

(vi) This cash bonus was granted on 11 December 2006 and in conjunction with the superannuation thereon represents 9% of P. Sullivan’s total remuneration. The Remuneration and Nomination Committee approved the amount based upon the successful outcome of a number of key business decisions.

(vii) This cash bonus was granted on 11 December 2006 and represents 6% of D. Cairns total remuneration. The Remuneration and Nomination Committee approved the amount based upon the successful execution of a temporary increase in responsibilities and volume of work in excess of what would reasonably be expected of the individual’s employment terms.

(viii) This cash bonus was granted on 11 December 2006 and represents 6% of G. Fitzgerald’s total remuneration. The Remuneration and Nomination Committee approved the amount based upon the successful execution of a temporary increase in responsibilities and volume of work in excess of what would reasonably be expected of the individual’s employment terms.

(ix) There were no options granted to directors or the officers of the company in the 2007 financial year. The amount in share based payments represents the portion of options granted in the prior year which have vested in the current year. This represents 9% of M. Christie’s total remuneration.

Directors’ report

43

FOR THE YEAR ENDED 30 JUNE 2008

Details of option holdings of key management personnel are as follows:

08	balanCe at tHe start of tHe year	exerCIseD DurIng tHe year	granteD DurIng tHe year as CompensatIon (i)	balanCe at tHe enD of tHe year	vesteD anD exerCIsable at tHe enD of tHe year	faIr value of optIons at exerCIse Date $
Directors
P.Huston	–	–	–	–	–	–
P.Sullivan	–	–	–	–	–	–
T.Ford	–	–	–	–	–	–
H.Price	–	–	–	–	–	–
Offcers
M.Turner	–	–	75,000	75,000	–	–
D.Cairns(ii)	300,000	(300,000)	–	–	–	181,800
G.Fitzgerald(iii)	250,000	(250,000)	75,000	75,000	–	139,750
M.Christie(iv)	300,000	(150,000)	75,000	225,000	150,000	72,000
07	balanCe at tHe start of tHe year	exerCIseD DurIng tHe year	granteD DurIng tHe year as CompensatIon	balanCe at tHe enD of tHe year	vesteD anD exerCIsable at tHe enD of tHe year	faIr value of optIons at exerCIse Date $
Directors
P.Huston	–	–	–	–	–	–
P.Sullivan(v)	2,000,000	(2,000,000)	–	–	–	2,470,000
T.Ford	–	–	–	–	–	–
H.Price	–	–	–	–	–	–
Offcers
M.Turner	–	–	–	–	–	–
D.Cairns	300,000	–	–	300,000	300,000	–
G.Fitzgerald(vi)	270,000	(20,000)	–	250,000	250,000	25,000
M.Christie	300,000	–	–	300,000	300,000	–

(i) These options were granted on 23 May 2008. The fair value of the options at grant date was $0.88 per option. The total fair value of the options granted was $65,805 per employee. The exercise price of these options is $2.13.

(ii) On 9 August 2007, 300,000 options were exercised at a price of $0.81 per option. These options were due to expire on 19 September 2007. The total fair value of the options granted and exercised was $98,190.

(iii) On 17 September 2007, 250,000 options were exercised at a price of $0.81 per option. These options were due to expire on 19 September 2007. The total fair value of the options granted and exercised was $81,825.

(iv) On 30 June 2008, 150,000 options were exercised at a price of $1.42. These options were due to expire on 21 December 2009. The total fair value of the options granted and exercised was $102,165. On 29 August 2008, 150,000 options were exercised at a price of $1.42. These options were due to expire on 21 December 2009. The total fair value of options granted and exercised was $19,500. All remaining options lapsed.

(v) The options were granted on 11 December 2001. The fair value of the options at grant date was $0.04 per option. The total fair value of the options granted and exercised was $84,000. The exercise price of the options was $0.42 per option.

(vi) The options were granted on 20 September 2002. The fair value of the options at grant date was $0.11 per option. The total fair value of the options granted and exercised was $29,700. The exercise price of the options was $0.81 per option.

(vii) No key management personnel options lapsed during the year.

Directors’ report FOR THE YEAR ENDED 30 JUNE 2008

44

Details of share holdings of key management personnel are as follows:

08	balanCe at tHe start of tHe year	reCeIveD DurIng tHe year on tHe exerCIse of optIons	otHer CHanges DurIng tHe year	balanCe at tHe enD of tHe year
Directors
P.Huston(i)	301,066	–	60,213	361,279
P.Sullivan(i)	2,622,000	–	524,400	3,146,400
T.Ford(i)	3,000	–	600	3,600
H.Price(i)	10,000	–	2,000	12,000
Offcers
M.Turner	–	–	–	–
D.Cairns(ii), (iii)	42,000	300,000	(291,600)	50,400
G.Fitzgerald(ii)	–	250,000	(250,000)	–
M.Christie(i)	30,000	150,000	6,000	186,000
07	balanCe at tHe start of tHe year	reCeIveD DurIng tHe year on tHe exerCIse of optIons	otHer CHanges DurIng tHe year (ii)	balanCe at tHe enD of tHe year
Directors
P.Huston	301,066	–	–	301,066
P.Sullivan	822,000	2,000,000	(200,000)	2,622,000
T.Ford	3,000	–	–	3,000
H.Price	10,000	–	–	10,000
Offcers
M.Turner	–	–	–	–
D.Cairns	42,000	–	–	42,000
G.Fitzgerald	–	20,000	(20,000)	–
M.Christie	30,000	–	–	30,000

(i) These shares were acquired through participation in the rights issue.

(ii) These shares were acquired or sold at the prevailing market price; no amounts remain unpaid as at 30 June 2008.

(iii) Balance at the end of the year refers to the date of resignation being 21 December 2007.

Directors’ report

FOR THE YEAR ENDED 30 JUNE 2008

45

Employment Contracts

The CEO, Mr Sullivan, is employed under contract. His current employment contract commenced on 14 February 2004 and there is no termination date. Under the terms of the contract:

• Mr Sullivan may resign from his position and thus terminate this contract by giving 6 months written notice.

• The Company may terminate this employment agreement by providing 12 months written notice or provide payment in lieu of the notice period (based on the fixed component of Mr Sullivan’s remuneration).

Mr Fitzgerald (General Manager – Finance and Administration) is also employed under contract. This contract has no termination date and under the terms of the contract:

• Mr Fitzgerald may resign from his respective position and thus terminate his contract by giving 3 months written notice.

• The Company may terminate his employment agreement by providing 6 months written notice or provide payment in lieu of the notice period (based on the fixed component of remuneration).

Mr Turner (General Manager - Operations) was also employed under contract until the date of his resignation on 12 September 2008. This contract had no termination date and under the terms of the contract:

• Mr Turner may have resigned from his respective position and thus terminated his contract by giving 1 month written notice.

• The Company may have terminated his employment agreement by providing 1 month written notice or providing payment in lieu of the notice period (based on the fixed component of remuneration).

Mr Christie (General Manager - Exploration) was also employed under contract until the date of his resignation on 18 July 2008. This contract had no termination date and under the terms of the contract:

• Mr Christie may have resigned from his position and thus terminated this contract by giving 1 month written notice.

• The Company may have terminated this employment agreement by providing 1 month written notice or providing payment in lieu of the notice period (based on the fixed component of Mr Christie’s remuneration). On termination, the Company would have been required to pay 2 weeks of salary for each of the first three years of completed service, 1 week of salary for each complete year of service after 3 years and pro-rata long service leave in respect of any employment with the Company exceeding 3 complete years.

This is the end of the audited information.

sHares unDer optIons

Unissued ordinary shares of Resolute Mining Limited under option at the date of this report are as follows:

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Date optIons granteD expIry Date Issue prICe of sHares $ number unDer optIon
----- End of picture text -----

21 December 2004	21 December 2009	1.42	265,000
24 March 2006	23 March 2011	1.13	175,000
25 October 2006	24 October 2011	1.33	335,000
23 May2008	22 May2013	2.13	471,000

Shares issued as a result of the exercise of options:

During the financial year, employees and executives have exercised options to acquire 1,357,500 fully paid ordinary shares in Resolute Mining Limited at a weighted average exercise price of $1.02 per share.

InDemnIfICatIon anD InsuranCe of DIreCtors anD offICers

During or since the financial year, the Company paid an insurance premium of $68,999 (2007: $57,499) in respect of a contract insuring the Company’s directors and officers against certain liabilities arising as a result of work performed in the capacity as directors and officers. This insurance premium is not allocated over individuals.

DIreCtors’ meetIngs

The number of meetings and resolutions of directors (including meetings of committees of directors) held during the year and the number of meetings (or resolutions) attended by each director were as follows:

	full boarD	auDIt	envIronment anD CommunIty Development	remuneratIon anD nomInatIon	safety, seCurIty & oCCupatIonal HealtH	fInanCIal rIsk management
P. Huston	13	2	n/a	2	n/a	n/a
P. Sullivan	13	n/a	4	n/a	4	23
T. Ford	13	2	n/a	2	n/a	n/a
H. Price	13	2	n/a	2	n/a	n/a
Number of meetings held	13	2	4	2	4	23

The details of the functions of the other committees of the Board are presented in the Corporate Governance Statement.

Directors’ report

FOR THE YEAR ENDED 30 JUNE 2008

46

rounDIng

RML is a Company of the kind specified in Australian Securities and Investments Commission Class Order 98/0100. In accordance with that class order, amounts in the financial report and the Directors’ Report have been rounded to the nearest thousand dollars unless specifically stated to be otherwise.

auDItor InDepenDenCe

Refer to page 51 for a copy of Auditor’s Independence Declaration to the Directors of Resolute Mining Limited.

non-auDIt servICes

The following non-audit services were provided by the entity’s auditor, Ernst & Young. The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.

Ernst & Young received or are due to receive $53,050 for the provision of taxation planning and review services.

Signed in accordance with a resolution of the directors.

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P.R. Sullivan Director Perth, Western Australia 30 September 2008

47

corporate Governance statement

FOR THE YEAR ENDED 30 JUNE 2008

The Board of Directors of Resolute Mining Limited (“RML” or “the Company”) is responsible for the corporate governance of the consolidated entity. The Board guides and monitors the business and affairs of RML on behalf of the shareholders by whom they are elected and to whom they are accountable.

The Board has adopted the “Principles of Good Corporate Governance and Best Practice Recommendations” established by the ASX Corporate Governance Council and published by the ASX in March 2003. There is a corporate governance section on the Company’s website which sets out the various policies, charters and codes of conduct which have been adopted to ensure compliance with the “best practice recommendations” referred to above.

A description of the Company’s main corporate governance practices is set out below. All practices, unless otherwise stated, were in place for the entire year.

1. tHe boarD of DIreCtors

In accordance with ASX Principle 1, the Board have established a “Statement of Matters Reserved to the Board” which is available on the Company website. This outlines the functions reserved to the Board and those delegated to management and demonstrates that the responsibilities and functions of the Board are distinct from management.

The key responsibilities of the Board include:

• Appointing, evaluating, rewarding and if necessary the removal of the Chief Executive Officer (“CEO”) and senior management;

• Monitoring actual performance against defined performance expectations and reviewing operating information to understand at all times the state of the health of the Company;

• Overseeing the management of business risks, safety and occupational health, environmental issues and community development;

• Satisfying itself that the financial statements of the Company fairly and accurately set out the financial position and financial performance of the Company for the period under review;

• Satisfying itself that there are appropriate reporting systems and controls in place to assure the Board that proper operational, financial, compliance, risk management and internal control processes are in place and functioning appropriately. Further, approving and monitoring financial and other reporting;

• Assuring itself that appropriate audit arrangements are in place;

• Ensuring that the Company acts legally and responsibly on all matters and assuring itself that the Company has adopted a Code of Business Ethics and that the Company practice is consistent with that Code; and

• Reporting to and advising shareholders.

The Board is comprised of 3 non-executive Directors including the Chairman and one executive director being the CEO.

The table below sets out the detail of the tenure of each director at the date of this report.

• Development of corporate objectives and strategy with management and approving plans, new investments, major capital and operating expenditures and major funding activities proposed by management;

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DIreCtor role of DIreCtor fIrst appoInteD (a) non-exeCutIve InDepenDent
----- End of picture text -----

Peter Ernest Huston	Non-executive chairman	June 2001	Yes	Yes
Peter Ross Sullivan	CEO	June 2001	No	No
Thomas Cummings Ford	Non-executive director	June 2001	Yes	Yes
HenryThomas Stuart Price	Non-executive director	November 2003	Yes	Yes

(a) RML was incorporated on 8 June 2001.

Details of the members of the Board including their experience, expertise and qualifications are set out in the Directors’ Report under the heading “Directors”.

corporate Governance statement

FOR THE YEAR ENDED 30 JUNE 2008

48

2. DIreCtor InDepenDenCe

As outlined in ASX Principle 2, Directors are expected to contribute independent views to the Board.

The Board has adopted specific principles in relation to the Directors’ independence. These state that to be deemed independent, a director must be a non-executive and:

• Not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company.

• Within the last three years has not been employed in an executive capacity by the Company or another group member, or been a director after ceasing to hold any such employment.

• Within the last three years has not been a principal of a material professional advisor or a material consultant to the Company or another group member, or an employee materially associated with the service provided.

• Not a material supplier or customer of the Company or other group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer.

• Must have no material contractual relationship with the Company or another group member other than as a director of the Company.

• Not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company.

• Is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company.

Materiality for these purposes is based on both quantitative and qualitative bases. An amount of over 5% of annual turnover of the Company or Group or 5% of the individual Director’s net worth is considered material for these purposes. In addition, a transaction of any amount or a relationship is deemed to be material if knowledge of it impacts the shareholders’ understanding of the director’s performance.

The Board has reviewed and considered the positions and associations of each of the 4 Directors in office at the date of this report and considers that 3 of the directors are independent. Mr Peter Sullivan (CEO) is not considered to be independent. As such it is clear that the majority of the Board are independent and the Chairman is an independent director.

The roles of the Chairman and the CEO are not exercised by the same individual. The Chairman is responsible for leading the Board, ensuring that Board activities are organised and efficiently conducted and for ensuring Directors are properly briefed for meetings. The Board has delegated responsibility for the day-today activities to the CEO and the Executive Committee. The Remuneration and Nomination Committee ensure that the Board members are appropriately qualified and experienced to discharge their responsibilities and has in place procedures to assess the performance of the CEO and the Executive Committee. The CEO is accountable to the Board for all authority delegated to that position and the Executive Committee.

Directors and Board Committees have the right, in connection with their duties and responsibilities, to seek independent professional advice at the Company’s expense.

In relation to the term of office, the Company’s constitution specifies that one third of all Directors (with the exception of the CEO) must retire from office annually and are eligible for reelection.

3. remuneratIon anD nomInatIon CommIttee

The Remuneration and Nomination Committee consists of the following non-executive Directors, Mr P.Huston (Chairman), Mr T. Ford and Mr H.Price. The attendance record in 2008 of members at the Committee meetings is noted in the Directors’ Report under the heading “Directors’ Meetings”.

The Remuneration and Nomination Committee is responsible for determining and reviewing the compensation arrangements for the Directors themselves, the CEO, the executive team and employees. In addition, they are responsible for reviewing the appropriateness of the size of the Board relative to its various responsibilities. Recommendations are made to the Board on these matters. Further roles and responsibilities of this Committee can be found in the Committee’s charter which is posted on the Company website.

4. etHICal stanDarDs anD CoDe of ConDuCt

The Board acknowledges the need for the highest standards of corporate governance and ethical conduct by all Directors and employees of the consolidated entity. As such, the Company has developed a Code of Conduct which has been fully endorsed by the Board and applies to all Directors and employees. This Code of Conduct is regularly reviewed and updated as necessary to ensure that it reflects the highest standards of behaviour and professionalism and the practices necessary to maintain confidence in the Group’s integrity.

A fundamental theme is that all business affairs are conducted legally, ethically and with strict observance of the highest standards of integrity and propriety. The Directors and management have the responsibility to carry out their functions with a view to maximising financial performance of the consolidated entity. This concerns the propriety of decision making in conflict of interest situations and quality decision making for the benefit of shareholders.

Refer to the Company website for specific codes of conduct.

5. seCurItIes traDIng

The Board has adopted the “Dealings in Resolute Mining Limited Shares and Options” policy (refer website) (which is driven by Corporations Act 2001 requirements) that applies to all Directors, officers and employees of the Company. Under this policy and the Corporations Act 2001, it is illegal for Directors, officers or employees who have price sensitive information relating to the Group which has not been published or which is not otherwise ‘generally available’ to:

• Buy, sell or otherwise deal in Company shares or options;

• Advise, procure or encourage another person (for example, a family member, a friend, a family Company or Trust) to buy or sell Company shares or options; or

corporate Governance statement

FOR THE YEAR ENDED 30 JUNE 2008

49

• Pass on information to any other person, if one knows or ought to reasonably know that the person may use the information to buy or sell (or procure another person to buy or sell) Company shares or options.

6. Corporate reportIng

In accordance with ASX Principle 4, the CEO and General Manager – Finance & Administration have made the following certifications to the Board:

• That the Company’s financial reports are complete and present a true and fair view as required by Accounting Standards, in all material respects, of the financial condition and operational results of the Company and Group; and

• That the above statement is founded on a sound system of internal control and risk management which implements the policies adopted by the Board and that the Company’s risk management and internal control is operating efficiently in all material respects.

7. auDIt CommIttee

The Audit Committee consists of the following non-executive Directors; Mr H.Price (Chairman), Mr P.Huston and Mr T.Ford. The attendance record in 2008 of members at the Committee meetings is noted in the Directors’ Report under the heading “Directors’ Meetings”.

Details of the members of the Board including their experience, expertise and qualifications are set out in the Directors’ Report under the heading “Directors”.

The Committee operates under a charter approved by the Board which is posted to the corporate governance section of the website. It is the Board’s responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes. This includes the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non-financial considerations. The Committee also provides the Board with additional assurance regarding the reliability of the financial information for inclusion in the financial reports.

The Audit Committee is also responsible for:

• Ensuring compliance with statutory responsibilities relating to accounting policy and disclosure;

• Liaising with, discussing and resolving relevant issues with the auditors;

• Assessing the adequacy of accounting, financial and operating controls; and

• Reviewing half-year and annual financial statements before submission to the Board.

8. external auDItors

The Company’s current external auditors are Ernst & Young. As noted in the Audit Committee charter, the performance and independence of the auditors is reviewed by the Audit Committee.

Ernst & Young’s existing policy requires that its audit team provide a statement as to their independence. This statement was received by the Audit Committee for the financial year ended 30 June 2008.

Ernst & Young and the Corporations Act 2001 has a policy for the rotation of the lead audit partner. As a result of this policy, the head audit partner was rotated at the conclusion of the audit for the year ended 30 June 2006.

9. ContInuous DIsClosure

In accordance with ASX Principle 5, the Board has an established disclosure policy which is available on the Company website.

The Company is committed to:

• Ensuring that stakeholders have the opportunity to access externally available information issued by the Company;

• Providing full and timely information to the market about the Company’s activities; and

• Complying with the obligations contained in the ASX Listing Rules and the Corporations Act 2001 relating to continuous disclosure.

The CEO and the Company Secretary have been nominated as the people responsible for communication with the ASX. This involves complying with the continuous disclosure requirements outlined in the ASX Listing Rules, ensuring that disclosure with the ASX is co-ordinated and being responsible for administering and implementing the policy.

10. sHareHolDer CommunICatIon

In accordance with ASX Principle 6, the Board has established a communications strategy which is available on the Company website.

The Board aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary and kept informed of all major developments affecting the Company in a timely and effective manner. Information is communicated to the market and shareholders through:

• The annual report which is distributed to all shareholders.

• Half yearly, quarterly reports and all ASX announcements which are posted on the entity’s website.

• The annual general meeting and other meetings so called to obtain approval for Board action as appropriate.

• Continuous disclosure announcements made to the Australian Securities Exchange.

Further, it is a CLERP 9 requirement that the auditor of the Company attends the annual general meeting. This provides shareholders the opportunity to question the auditor concerning the conduct of the audit and the preparation and content of the Auditor’s Report.

corporate Governance statement

FOR THE YEAR ENDED 30 JUNE 2008

50

11. rIsk management

The Board recognises the importance of identifying and controlling risks to ensure that they do not have a negative impact on the Company.

In accordance with the ASX Principle 7, the Board has an established Risk Management policy which is available on the Company website which is designed to safeguard the assets and interests of the Company and to ensure the integrity of reporting.

12. remuneratIon polICIes

This policy governs the operations of the Remuneration and Nomination Committee. The Committee reviews and reassesses the policy at least annually and obtains the approval of the Board.

The details of the Directors’ and Officers’ remuneration policies are provided in the Directors’ Report under the heading “Remuneration Report”.

The CEO and General Manager – Finance & Administration will inform the Board annually in writing that:

• The sign off given on the financial statements is founded on a sound system of risk management and internal control compliance which implements the policies adopted by the Board.

• The Company’s risk management and internal compliance and control systems is operating effectively and efficiently in all material respects.

The Board has established the following Sub Committees to assist in internal control and business risk management:

• Audit Committee

• Remuneration and Nomination Committee

• Environment and Community Development Committee

• Safety, Security and Occupational Health Committee

• Financial Risk Management Committee

The function of the Audit Committee and the Remuneration and Nomination Committee are outlined above. The function of the other Committees noted above are as follows:

Environment and Community Development Committee

The main responsibility of this Committee is to monitor and review RML’s environmental performance and compliance with relevant legislation and oversee Community Relations.

Information on compliance with significant environmental regulations is set out in the Directors’ Report.

Safety, Security and Occupational Health Committee

The main functions of this Committee are to oversee an employee education program designed to increase employee awareness of safety, security and health issues in the workplace and monitor safety statistics and report to the Board on the results of incident investigations.

Financial Risk Management Committee

The main responsibility of this Committee is to oversee risk management strategies in relation to gold hedging, currency hedging, debt management, capital management, cash management and insurance.

The Board members and their attendance at meetings is outlined in the Directors’ Report. Senior members of management who specialise in each area also form part of the respective Committees.

aUDitors’ inDepenDence DecLaration FOR THE YEAR ENDED 30 JUNE 2008

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51

FOR THE YEAR ENDED 30 JUNE 2008

income statements

52

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note ConsolIDateD resolute mInIng lImIteD
08 07 08 07
$'000 $'000 $'000 $’000
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Continuing Operations Revenue from gold sales 2a Other revenue 2b Cost of sales 2c Gross proft Other income 2d Other expenses 2e Proft/(loss) from continuing operations before unrealised treasury, tax and fnance costs Borrowing costs 2f Proft/(loss) before unrealised treasury and tax Treasury – unrealised (losses)/gains 2g (Loss)/proft before tax Income tax (expense)/beneft 3 (Loss)/proft from continuing operations after income tax Attributable to: Minority interests Members of the parent Earnings per share for (loss)/proft from continuing operations attributable to the ordinary equity shareholders of the Company: Basic earnings per share for (loss)/proft for the year (cents per share) 37 Diluted earnings per share for (loss)/proft for the year (cents per share) 37	231,501 185,297 3,933 6,851 (204,963) (187,903)	– – 579 130 – – 579 130 – 163,412 (62,949) (4,771) (62,370) 158,771 (428) (249) (62,798) 158,522 927 – (61,871) 158,522 (323) 65 (62,194) 158,587 – – (62,194) 158,587
	30,471 4,245
	1,390 184,388 (26,560) (15,924)
	5,301 172,709
	(1,835) (1,318)
	3,466 171,391
	(38,448) 7,945
	(34,982) 179,336
	(9,881) (9,340)
	(44,863) 169,996
	(26) (174) (44,837) 170,170 (17.08) 73.91 (17.08) 73.55

The above income statements should be read in conjunction with the accompanying notes.

53

BaLance sHeets

AS AT 30 JUNE 2008

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note ConsolIDateD resolute mInIng lImIteD
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Current Assets Cash and cash equivalents 5 Receivables 6 Inventories 7 Available for sale fnancial assets 8 Financial derivative assets 9 Other 10 Total Current Assets Non Current Assets Receivables 6 Financial derivative assets 9 Exploration and evaluation 11 Development expenditure 12 Property, plant and equipment 13 Deferred expenditure 14 Deferred tax assets 3 Other 10 Total Non Current Assets Total Assets Current Liabilities Payables 15 Interest bearing liabilities 16 Tax liabilities 17 Financial derivative liabilities 18 Provisions 19 Total Current Liabilities Non Current Liabilities Interest bearing liabilities 16 Provisions 19 Financial derivative liabilities 18 Other liabilities 20 Deferred tax liabilities 3 Total Non Current Liabilities Total Liabilities Net Assets Equity Contributed equity 21 Reserves 22 Retained profts 23 Parent entity interest in equity Minority interest 24 Total Equity

29,731 67,661 1,026 1,460 14,922 16,358 387,550 21 43,209 31,834 – – 4,708 13,480 436 886 9 205 – – 3,629 23,674 149 65 96,208 153,212 389,161 2,432 – – – 274,329 8,951 300 – – 62,109 45,380 – – 257,433 72,566 426 – 95,438 100,365 – – 15,073 26,238 – – – 7,439 – – 2,733 6,310 16,643 76,803 441,737 258,598 17,069 351,132 537,945 411,810 406,230 353,564 39,514 34,908 84,253 209 12,562 3,367 10,459 – 2,160 5,069 – – 31,602 32,702 – – 5,289 4,414 – – 91,127 80,460 94,712 209 55,194 4,330 45,377 – 26,298 21,021 – – 93,032 39,690 – – 324 – 404 83,456 1,330 1,673 – – 176,178 66,714 45,781 83,456 267,305 147,174 140,493 83,665 270,640 264,636 265,737 269,899 171,867 113,917 171,867 113,917 (9,333) (1,936) 836 754 105,402 150,239 93,034 155,228 267,936 262,220 265,737 269,899 2,704 2,416 – – 270,640 264,636 265,737 269,899

The above balance sheets should be read in conjunction with the accompanying notes.

statements oF recoGniseD income & eXpense

FOR THE YEAR ENDED 30 JUNE 2008

54

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Total equity at the beginning of the year Exchange differences on translation of foreign operations 22 Changes in the fair value of gold put options, net of tax 22 Changes in the fair value of gold forward sales contracts, net of tax 22 Amortisation of the gold put options hedge reserve, net of tax 22 Amortisation of the gold forward sales contracts reserve, net of tax 22 Changes in the fair value of available for sale fnancial assets, net of tax 22 Changes in hedge reserve unearned income, net of tax 22 Net (expense)/income recognised directly in equity (Loss)/proft for the year Total recognised income and expense for the year Transactions with equity holders in their capacity as equity holders: Contributions of equity, net of transaction costs 21 Share based payments 22 Minority interests 24 Total equity at the end of the year Total recognised income and expense for the year is attributable to: Equity holders of Resolute Mining Limited Minority interest

264,636 83,655 269,899 110,199 1,149 (16,318) – – – 1,233 – – – 36,156 – – 675 – – – (4,161) – – – (5,536) (6,069) (394) (110) – (5,398) – – (7,873) 9,604 (394) (110) (44,863) 169,996 (62,194) 158,587 (52,736) 179,600 (62,588) 158,477 57,950 962 57,950 962 476 261 476 261 314 158 – – 58,740 1,381 58,426 1,223 270,640 264,636 265,737 269,899 (53,024) 178,470 (62,588) 158,477 288 1,130 – – (52,736) 179,600 (62,588) 158,477

The above statement of changes of recognised income and expense should be read in conjunction with the accompanying notes.

55

casH FLoW statements

FOR THE YEAR ENDED 30 JUNE 2008

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Cash Flows from Operating Activities Receipts from customers Payments to suppliers and employees Payments for purchases of put options Interest received Interest and other costs of fnance paid Net operating cash fows 27 Cash Flows from Investing Activities Expenditure on exploration and development areas Payment for property, plant and equipment Proceeds from sale of property, plant and equipment Royalties received Proceeds from sale of available for sale fnancial assets Proceeds from the reimbursement for the Syama mining feet Cash outfow on disposal of subsidiary 28 Payments for available for sale fnancial assets Loan to controlled entities Loans repaid by controlled entities Net investing cash fows Cash Flows from Financing Activities Proceeds from issues of securities Cost of issuing securities Proceeds from borrowings Repayment of borrowings Repayment of lease liability Net fnancing cash fows Net (decrease)/increase in cash held Cash assets held at the beginning of the year Exchange rate adjustment Cash assets held at the end of the year 5

224,275 179,370 – – (193,732) (166,385) (4,384) (2,264) (7,923) – – – 1,895 4,470 487 67 (2,416) (907) (428) (682) 22,099 16,548 (4,325) (2,879) (181,497) (110,442) (460) – (31,265) (22,366) – – 7,823 143 – – 2,164 2,162 – – 1,529 199,499 – 170,525 28,137 – – – – (4,096) – – – (4,655) – – – – (125,031) (176,545) – – 19,449 24,397 (173,109) 60,245 (106,042) 18,377 51,591 968 51,591 968 (104) (6) (104) (6) 66,598 12,580 58,446 – (3,138) (26,569) – (15,000) (1,568) (1,554) – – 113,379 (14,581) 109,933 (14,038) (37,631) 62,212 (434) 1,460 67,661 13,992 1,460 – (299) (8,543) – – 29,731 67,661 1,026 1,460

The above statement of cash flows should be read in conjunction with the accompanying notes.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

56

Corporate InformatIon

The financial report of Resolute Mining Limited (“consolidated entity” or the “Group”) for the year ended 30 June 2008 was authorised for issue in accordance with a resolution of the Directors on 30 September 2008.

Resolute Mining Limited (the parent) is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.

The nature of operations and principal activities of the Group are described in the Directors’ Report.

note 1: summary of sIgnIfICant aCCountIng polICIes

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial report includes separate financial statements for Resolute Mining Limited (“RML”) as an individual entity and the consolidated entity consisting of RML and its subsidiaries. Where appropriate comparative information has been reclassified.

(a) Basis of Preparation

This general purpose financial report has been prepared in accordance with Australian Accounting Standards (AASB), other authoritative pronouncements of the AASB, Urgent Issues Group Interpretations and the Corporations Act 2001.

ComplIanCe wItH Ifrs

The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

HIstorICal Cost ConventIon

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities (including derivative instruments) at fair value through profit and loss.

goIng ConCern

As at 30 June 2008 the Group’s payables of $39 million and estimated future committed capital expenditure requirements in connection with the Syama Gold Mine in Mali of US$11 million are in excess of the Group’s available cash and bullion on hand at 30 June 2008 of $30 million.

In addition, the Group has entered into further commitments for capital expenditure in connection with the Syama Gold Mine subsequent to year end and has incurred ongoing capital development expenditure in connection with its Mt Wright Gold Project.

The directors’ best estimate, at the date of signing these financial statements, is that the Group will require $50 million to $60 million of additional cash in various tranches prior to the end of December 2008 to enable the Group to complete these developments.

Notwithstanding the above matters the directors are satisfied the Group will be able to continue to meet its debts as and when they fall due and thus it is appropriate for the financial statements to be prepared on a going concern basis. Pertinent matters supporting this position are as follows:

1. Subsequent to year end, the Group has entered into an unconditional unsecured credit facility with a financier for $20 million. A first tranche of $10 million dollars was drawn down on this facility on 24 September 2008, with settlement to occur on 1 October 2008 and it is currently expected the second tranche of $10 million will be drawn down in late October 2008.

2. Subsequent to year end, the Group has entered into a mandate with Patersons Securities Limited for a placement of ordinary shares in Resolute Mining Limited to raise approximately $10 million. The Group expects the placement to be completed during the course of October 2008 and thus the funds to be available prior to the end of October 2008. The combination of these proceeds and the proceeds available under the facility discussed in 1 above will provide the Group with sufficient funds to meet its commitments up to the end of October 2008.

3. The Group has commenced the process of raising a further approximately US$33 million via a convertible note issue and/or an additional equity raising. To date US$10 million of the convertible note issue has been underwritten, discussions are being progressed with potential investors and a Merchant Banker has been mandated to assist with the issue. A portion of these proceeds will be required on or around late November 2008.

4. The directors are satisfied that the quantum of the funds to be raised via the means outlined above will be sufficient to enable the Group to complete the development and commissioning of the Syama Gold Mine and the ongoing underground decline development of the Mt Wright Gold Project.

Should the Group be unable to materially achieve the matters set out above or complete any other alternative forms of fund raisings there is significant uncertainty as to whether Resolute Mining Limited and the Group will be able to meet their debts as and when they fall due and thus continue as going concerns.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

57

note 1: summary of sIgnIfICant aCCountIng polICIes continued

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts or classification of liabilities that might be necessary should Resolute Mining Limited and the Group not be able to continue as going concerns.

(b) Principles of consolidation

(i) subsIDIarIes

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of RML (“Company” or “parent entity”) as at 30 June 2008 and the results of all subsidiaries for the year then ended. RML and its subsidiaries together are referred to in this financial report as the “Group” or the “consolidated entity”.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group.

The Group applies a policy of treating transactions with minority interests as transactions with parties external to the Group. Disposals to minority interests result in gains and losses for the Group that are recorded in the income statement.

Minority interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and balance sheet respectively.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.

Accounting policies of subsidiaries have been changed were necessary to ensure consistency with the policies adopted by the Group.

Investments in subsidiaries are accounted for at cost in the individual financial statements of RML.

(ii) JoInt ventures

Jointly controlled assets

The proportionate interests in the assets, liabilities and expenses of a joint venture activity have been incorporated in the financial statements under the appropriate headings.

(c) Segment reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is engaged in providing products and services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments.

(d) Foreign currency translation

(i) funCtIonal anD presentatIon CurrenCy

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). The consolidated financial statements are presented in Australian dollars, which is Resolute Mining Limited’s functional and presentation currency.

(ii) transaCtIons anD balanCes

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are included in the fair value reserve in equity.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

58

note 1: summary of sIgnIfICant aCCountIng polICIes continued

(iii) group CompanIes

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

• income and expenses for each income statement are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and,

• all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity. When a foreign operation is sold or borrowings repaid, a proportionate share of such exchange differences are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(e) Revenue recognition

(i) golD sales

Revenue is recognised when the risk has passed from the Group to an external party and the selling price can be determined with reasonable accuracy. Sales revenue represents gross proceeds receivable from the customer. Certain sales are initially recognised at estimated sales value when the gold is dispatched.

Revenue from the sale of by-products such as silver is included in sales revenue.

(ii) Interest

Interest revenue is recognised when control of the right to receive the interest payment is received.

(f) Borrowing costs

Borrowing costs incurred for the construction of any qualifying asset are capitalised 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 and are included in profit or loss as part of borrowing costs.

The capitalisation rate used to determine the amount of borrowing costs to be capitalised is the weighted average interest rate applicable to the entity’s outstanding borrowings during the period.

(g) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and by unused tax losses (if appropriate).

Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences:

• except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting nor taxable profit or loss; and,

• in respect of taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses, to the extent it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:

• except where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting nor taxable profit or loss; and,

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

59

note 1: summary of sIgnIfICant aCCountIng polICIes continued

• in respect of deductible temporary differences associated with investments in subsidiaries and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

tax ConsolIDatIon legIslatIon

RML and its wholly-owned Australian controlled entities implemented the tax consolidation legislation as of 1 July 2002.

gooDs anD servICes tax

Revenues, expenses and assets are recognised net of the amount of GST except:

• where the GST incurred on the purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and,

• receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Balance Sheets.

Cash flows are included in the Cash Flow Statements on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

(h) Earnings per share (“EPS”)

Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted EPS is calculated as the net profit attributable to members, adjusted for:

• costs of servicing equity (other than dividends) and preference share dividends;

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and,

• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(i) Cash and cash equivalents

Cash and cash equivalents includes cash on hand and deposits held at financial institutions at call. Any bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

(j) Receivables

Trade receivables are recognised at fair value less a provision for any uncollectible debts. Trade receivables are due for settlement no more than 30 days from the date of recognition. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the transaction. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the income statement.

Receivables from related parties are recognised and carried at the nominal amount due. Where interest is charged it is taken up as income in profit and loss and included in other income.

(k) Inventories

Finished goods, gold in circuit and stockpiles of unprocessed ore are stated at the lower of cost and estimated net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to ore stockpiles and gold in circuit items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business (excluding derivatives) less the estimated costs of completion and the estimated costs necessary to make the sale.

Consumables have been valued at cost less an appropriate provision for obsolescence. Cost is determined on a first-in-first-out basis.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

60

note 1: summary of sIgnIfICant aCCountIng polICIes continued

(l) Investments and other financial assets

The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at each reporting date.

(i) fInanCIal assets at faIr value tHrougH profIt or loss

This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. The policy of management is to designate a financial asset if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the balance sheet date.

(ii) loans anD reCeIvables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are included in receivables in the balance sheet.

(iii) HelD-to-maturIty Investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity.

(iv) avaIlable-for-sale fInanCIal assets

Available-for-sale financial assets, comprising principally marketable equity securities, are non derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.

Purchases and sales of investments are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are included in the income statement in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available-for-sale are recognised in equity in the available-for-sale investments revaluation reserve. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include reference to the fair values of recent arm’s length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific circumstances.

The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss – is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

61

note 1: summary of sIgnIfICant aCCountIng polICIes continued

(m) Derivatives

The Group uses derivative financial instruments such as gold options, gold forward contracts and interest rate swaps to manage the risks associated with commodity price and interest rate fluctuations.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either; (1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedges).

The fair value of derivative financial instruments that are traded on an active market is based on quoted market prices at the balance sheet date. The fair value of financial instruments not traded on an active market is determined using appropriate valuation techniques.

At the inception of the transaction, the Group documents the relationship between hedge instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. Refer to Note 39 for treatment of the Group’s gold contracts.

(i) faIr value HeDge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

(ii) CasH flow HeDge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.

Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non financial asset (for example, inventory) or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.

(iii) DerIvatIves tHat Do not qualIfy for HeDge aCCountIng

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the income statement.

Interest rate swaps utilised to manage interest rate exposure are fair valued by reference to the market value of similar financial instruments with movements reported in the income statement where fair value hedge accounting criteria is not met.

(n) Deferred mining costs

In mining operations, it is necessary to remove overburden and other barren waste materials to access ore from which minerals can economically be extracted. The process of mining overburden and waste materials is referred to as stripping. Stripping costs incurred before production commences are included within capitalised mine development expenditure and subsequently amortised. The Group defers stripping costs incurred subsequently during the production stage of operation.

Stripping ratios are a function of the quantity of ore mined compared with the quantity of overburden, or waste required to be removed to mine the ore. Deferral of the post production costs to the balance sheet is made, where appropriate, when actual stripping ratios vary from average life of mine ratios. Deferral of costs to the balance sheet is not made when the waste to ore ratio is expected to be consistent throughout the life of the mine.

Costs which have previously been deferred to the balance sheet are recognised in the income statement on a unit of production basis utilising average stripping ratios. Changes in estimates of average stripping ratios are accounted for prospectively from the date of the change.

As it is not possible to separately identify cash inflows relating to deferred overburden removal costs, such assets are grouped with other assets or a cash generating unit for the purposes of undertaking impairment assessments, where necessary, based on future cash flows for the operation as a whole.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

62

note 1: summary of sIgnIfICant aCCountIng polICIes continued

(o) Mineral exploration and evaluation interests

(i) areas In exploratIon anD evaluatIon

Exploration and evaluation costs related to an area of interest are carried forward only when rights of tenure to the area of interest are current and provided that one of the following conditions is met:

• such costs are expected to be recouped through successful development and exploitation of the area of interest, or alternatively by its sale; or

• exploration and/or evaluation activities in the area of interest have not yet reached a state which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area are continuing.

Costs carried forward in respect of an area of interest that is abandoned are written off in the year in which the decision to abandon is made.

(p) Development expenditure

(i) areas In Development

Areas in development represent the costs incurred in preparing mines for production. The costs are carried forward to the extent that these costs are expected to be recouped through the successful exploitation of the Company’s mining leases.

(ii) areas In proDuCtIon

Areas in production represent the accumulation of all exploration, evaluation and development expenditure incurred by or on behalf of the entity in relation to areas of interest in which mining of a mineral reserve has commenced. Amortisation of costs is provided on the unit-of-production method, with separate calculations being made for each mineral resource. The unit-of-production basis results in an amortisation charge proportional to the depletion of the economically recoverable mineral reserves.

The net carrying value of each mine property is reviewed regularly and, to the extent to which this value exceeds its recoverable amount, that excess is fully provided against in the financial year in which this is determined.

(q) Property, plant and equipment

(i) Cost anD valuatIon

Property, plant and equipment are stated at cost less any accumulated depreciation and any impairment in value.

The cost of an item of property, plant and equipment comprises:

• Its purchase price, including import duties and non refundable purchase taxes, after deducting trade discounts and rebates;

• • any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and,

• the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

(ii) DepreCIatIon

Depreciation is provided on a straight-line basis on all property, plant and equipment other than land. Major depreciation periods are:

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lIfe metHoD
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Motor vehicles	3years	straight line
Offce equipment	3years	straight line
Plant and equipment	6years	straight line

• (iii) ImpaIrment

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in 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.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

63

note 1: summary of sIgnIfICant aCCountIng polICIes continued

(r) Leases

Finance leases, which effectively transfer to the consolidated entity all of the risks and benefits incidental to ownership of the leased item, are capitalised at the present value of the minimum lease payments, disclosed as leased property, plant and equipment, and amortised over the period the consolidated entity is expected to benefit from the use of the leased assets. Lease payments are allocated between interest expense and reduction in the lease liability.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charges directly against income.

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiation of an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as the lease income.

Operating lease payments are recognised as an expense in the income statement over the lease term.

(s) Business combinations

The purchase method of accounting is used to account for all business combinations regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the combination. Where equity instruments are issued in a business combination, the fair value of the instruments is their published market price as at the date of exchange. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Except for non current assets or disposal groups classified as held for sale (which are measured at fair value less costs to sell), all identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the cost of the business combination over the net fair value of the Group’s share of the identifiable net assets acquired is recognised as goodwill. If the cost of the acquisition is less then the Group’s share of the net fair value of the identifiable net assets of the subsidiary, the difference is recognised as a gain in the income statement, but only after a reassessment of the identification and measurement of the net assets acquired.

Where settlement of any part of the transaction is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which similar borrowing could be obtained from an independent financier under comparable terms.

In applying the exemption available under AASB 1, the Group has elected not to restate its business combinations that occurred prior to transition date on 1 July 2004 for the impact of AASB 3 Business Combinations.

(t) Recoverable amount of assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired.

Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to is recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which it belongs.

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 that asset.

(u) Payables

Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity.

Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense on an accruals basis.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

64

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(v) Interest bearing liabilities

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing.

After initial recognition, interest bearing liabilities are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.

Gains and losses are recognised in the income statement when the liabilities are derecognised and as well as through the amortisation process. Treatment of borrowing costs is outlined in note 1(f).

(w) Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

The consolidated entity records the present value of the estimated cost of legal and constructive obligations (such as those under the consolidated entity’s Environmental Policy) to restore operating locations in the period in which the obligation is incurred. The nature of restoration activities includes dismantling and removing structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation and revegetation of affected areas.

Typically the obligation arises when the asset is installed at the production location. When the liability is initially recorded, the estimated cost is capitalised by increasing the carrying amount of the related mining assets. Over time, the liability is increased for the change in the present value based on the discount rates that reflect the current market assessments and the risks specific to the liability. Additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability when incurred.

The unwinding of the effect of discounting on the provision is recorded as a borrowing cost in the income statement. The carrying amount capitalised is depreciated over the life of the related asset.

(x) Employee benefits

(i) wages, salarIes anD annual leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave are recognised in other creditors in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

(ii) long servICe leave

The liability for long service leave expected to be settled within 12 months of the reporting date is recognised in the provision for employee benefits and is measured in accordance with (i) above. The liability for long service leave expected to be settled more than 12 months from the reporting date is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) termInatIon gratuIty anD reloCatIon

Liabilities for Termination Gratuity and Relocation payments are recognised and are measured as the present value of expected future payments to be made in respect of employees up to the reporting date.

(iv) sHare baseD payments

Equity-based compensation benefits are provided to employees via the Group’s share option plan. Under AASB 2 Share Based Payments, the Group determines the fair value of options issued to directors, executives and members of staff as remuneration and recognises that amount as an expense in the income statement over the vesting period with a corresponding increase in equity.

The fair value at grant date is independently determined using a Black Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

65

note 1: summary of sIgnIfICant aCCountIng polICIes continued

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.

(v) superannuatIon

Contributions made by the Group to employee superannuation funds are charged to the income statement in the period employees’ services are provided.

(y) Contributed equity

Issued and paid up capital is recognised at the fair value of the consideration received by the Company.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.

(z) Financial guarantees

Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially measured at fair value and subsequently at the higher of the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation, where appropriate.

Where guarantees in relation to loans or other payables of subsidiaries are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of the investment.

(aa) Significant accounting judgements

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

(i) DetermInatIon of mIneral resourCes anD ore reserves

The determination of reserves impacts the accounting for asset carrying values, depreciation and amortisation rates, deferred stripping costs and provisions for decommissioning and restoration. The information in this report as it relates to ore reserves, mineral resources or mineralisation is reported in accordance with the Aus.IMM “Australian Code for reporting of Identified Mineral Resources and Ore Reserves”. The information has been prepared by or under supervision of competent persons as identified by the Code.

There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of estimation may change significantly when new information becomes available.

Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated.

(ab) Significant accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

(i) ImpaIrment of CapItalIseD exploratIon anD evaluatIon expenDIture

The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

Factors which could impact the future recoverability include the level of reserves and resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent that it is determined in the future that this capitalised expenditure should be written off, this will reduce profits and net assets in the period in which this determination is made.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

66

note 1: summary of sIgnIfICant aCCountIng polICIes continued

(ii) ImpaIrment of CapItalIseD mIne Development expenDIture

The future recoverability of capitalised mine development expenditure is dependent on a number of factors, including the level of proved and probable reserves and measured, indicated and inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

To the extent that capitalised mine development expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

(iii) lIfe-of-mIne strIppIng ratIo

The Group has adopted a policy of deferring production stage stripping costs and amortising them in accordance with the life-of-mine strip ratio. Significant judgement is required in determining this ratio for each mine. Factors that are considered include:

• Any proposed changes in the design of the mine;

• estimates of the quantities of ore reserves and mineral resources for which there is a high degree of confidence of economic extraction;

• future production levels;

• future commodity prices; and,

• future cash costs of production and capital expenditure.

(iv) provIsIons for DeCommIssIonIng anD restoratIon Costs

Decommissioning and restoration costs are a normal consequence of mining, and the majority of this expenditure is incurred at the end of a mine’s life. In determining an appropriate level of provision consideration is given to the expected future costs to be incurred, the timing of these expected future costs (largely dependent on the life of the mine), and the estimated future level of inflation.

The ultimate cost of decommissioning and restoration is uncertain and costs can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other mine-sites. The expected timing of expenditure can also change, for example in response to changes in reserves or to production rates.

Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results.

(v) reCoverabIlIty of potentIal DeferreD InCome tax assets

The Group recognises deferred income tax assets in respect of tax losses and temporary differences to the extent that it is probable that the future utilisation of these losses and temporary differences is considered probable. Assessing the future utilisation of these losses and temporary differences requires the Group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws. To the extent that future cash flows and taxable income differ significantly from estimates, this could result in significant changes to the deferred income tax assets recognised, which would in turn impact future financial results.

(vi) sHare baseD payments

The Group measures the cost of cash settled transactions with employees by reference to the fair value at the grant date using the Black Scholes formula taking into account the terms and conditions upon which the instruments were granted, as discussed in Note 34(b).

(vii) faIr value of DerIvatIve fInanCIal Instruments

The Group assesses the fair value of its financial derivatives in accordance with the accounting policy stated in Note 1(m). Fair values have been determined based on well established valuation models and market conditions existing at the balance date. These calculations require the use of estimates and assumptions. Changes in assumptions concerning interest rates, gold prices and volatilities could have significant impact on the fair valuation attributed to the Group’s financial derivatives. When these assumptions change or become known in the future, such differences will impact asset and liability carrying values in the period in which they change or become known.

notes to tHe FinanciaL statements

67

FOR THE YEAR ENDED 30 JUNE 2008

note 1: summary of sIgnIfICant aCCountIng polICIes continued

(ac) New accounting standards and UIG interpretations

The following new accounting standards have been issued or amended but are not yet effective. These standards have not been adopted by the Group for the period ended 30 June 2008, and no change to the Group’s accounting policy is required:

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applICatIon ImpaCt on applICatIon
Date of group Date for
referenCe tItle summary stanDarD fInanCIal report group
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AASB 8 and	AASB 8 Operating Segments	AASB 8 will result in a signifcant	1 January	AASB 8 is a disclosure	1 July 2009
AASB 2007-3	and AASB 2007-3	change in the approach to segment	2009	standard so will have no
	Amendments to Australian	reporting, as it requires adoption of a		direct impact on the amounts
	Accounting Standards arising from AASB 8	‘management approach’ to reporting on fnancial performance.		included in the Group’s fnancial statements.
Revised AASB	Revised AASB 123 Borrowing	The revised AASB 123 has removed	1 January	There will be no impact on the	1 July 2009
123	Costs and AASB 2007-6	the option to expense all borrowing	2009	Group, as the Group already
	Amendments to Australian	costs and when adopted will require		capitalises material borrowing
	Accounting Standards arising	the capitalisation of all borrowing costs		costs in relation to qualifying
	from AASB 123 [AASB 1,	directly attributable to the acquisition,		assets.
	AASB 101, AASB 107, AASB	construction or production of a
	111, AASB 116 & AASB 138	qualifying asset.
	and Interpretations 1 & 12]
AASB 101	Revised AASB 101	It requires the presentation of a	1 January	AASB 101 is a disclosure	1 July 2009
	Presentation of Financial	statement of comprehensive income	2009	standard so will have no
	Statements and AASB 2007-8	and makes changes to the statement		direct impact on the amounts
	Amendments to Australian Accounting Standards arising from AASB 101	of changes in equity, but will not affect any of the amounts recognised in the fnancial statements. If an entity has		included in the Group’s fnancial statements.
		made a prior period adjustment or has reclassifed items in the fnancial
		statements, it will need to disclose a
		third balance sheet, this one being as at
		the beginning of the comparative period.
AASB	Amendments to Australian	The amendments clarify the defnition	1 January	The Group has share-based	1 July 2009
2008-1	Accounting Standard – Share-	of ‘vesting conditions’, introducing	2009	payment arrangements that
	based Payments: Vesting	the term ‘non-vesting conditions’ for		may be affected by these
	Conditions and Cancellations	conditions other than vesting conditions as specifcally defned and prescribe the		amendments. However, the Group has not yet determined
		accounting treatment of an award that		the extent of the impact, if
		is effectively cancelled because a non- vesting condition is not satisfed.		any.
AASB 2008-2	Amendments to Australian Accounting Standards – Puttable Financial Instruments and Obligations arising on Liquidation	The amendments provide a limited exception to the defnition of a liability so as to allow an entity that issues puttable fnancial instruments with certain specifed features, to classify those instruments as equity rather than fnancial liabilities.	1 January 2009	These amendments are not expected to have any impact on the Group’s fnancial report as the Group does not have on issue or expect to issue any puttable fnancial instruments as defned by the	1 July 2009
				amendments.
AASB 127	Consolidated and Separate	Under the revised standard, a change	1 July 2009	If the Group changes its	1 July 2009
(Revised)	Financial Statements	in the ownership interest of a subsidiary		ownership interest in existing
		(that does not result in loss of control)		subsidiaries in the future, the
		will be accounted for as an equity		change will be accounted
		transaction.		for as an equity transaction.
				This will have no impact on
				goodwill, nor will it give rise to
				a gain or a loss in the Group’s
				income statement.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

68

note 1: summary of sIgnIfICant aCCountIng polICIes continued

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applICatIon ImpaCt on applICatIon
Date of group Date for
referenCe tItle summary stanDarD fInanCIal report group
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AASB 3	Business Combinations	The revised standard introduces a	1 July 2009	If the Group were to enter	1 July 2009
(Revised)		number of changes to the accounting for business combinations, the most signifcant of which allows entities a		into a business combination(s) during the next fnancial year it may consider early adopting
		choice for each business combination		the revised standard. The
		entered into – to measure a non-		Group has not yet assessed
		controlling interest (formerly a minority		the impact of early adoption,
		interest) in the acquiree either at		including which accounting
		its fair value or at its proportionate		policy to adopt.
		interest in the acquiree’s net assets.
		This choice will effectively result in
		recognising goodwill relating to 100%
		of the business (applying the fair value
		option) or recognising goodwill relating
		to the percentage interest acquired. The
		changes apply prospectively.
AASB	Amendments to Australian	Amending standard issued as a	1 July 2009	Refer to AASB 3 (Revised)	1 July 2009
2008-3	Accounting Standards arising	consequence of revisions to AASB 3		and AASB 127 (Revised)
	from AASB 3 and AASB 127	and AASB 127.		above.
Amendments	Improvements to IFRSs	The improvements project is an annual	1 January	The Group has not yet	1 July 2009
to International		project that provides a mechanism for	2009	determined the extent of the
Financial		making non-urgent, but necessary,	except for	impact of the amendments,
Reporting		amendments to IFRSs. The IASB has	amendments	if any.
Standards		separated the amendments into two	to IFRS 5,
		parts: Part 1 deals with changes the IASB identifed resulting in accounting	which are effective from
		changes; Part 2 deals with either	1 July 2009.
		terminology or editorial amendments
		that the IASB believes will have minimal
		impact.
Amendments	Cost of an Investment in a	The main amendments of relevance to	1 January	Recognising all dividends	1 July 2009
to International	Subsidiary, Jointly Controlled	Australian entities are those made to	2009	received from subsidiaries,
Financial	Entity or Associate	IAS 27 deleting the ‘cost method’ and		jointly controlled entities and
Reporting		requiring all dividends from a subsidiary,		associates as income will
Standards		jointly controlled entity or associate to be recognised in proft or loss in an entity’s separate fnancial statements		likely give rise to greater income being recognised by the parent entity
		(i.e., parent company accounts). The		after adoption of these
		distinction between pre and post- acquisition profts is no longer required. However, the payment of such dividends requires the entity to consider whether there is an indicator of impairment.		amendments. In addition, if the Group enters into any group reorganisation establishing new parent entities, an assessment will
		AASB 127 has also been amended		need to be made to determine
		to effectively allow the cost of an		if the reorganisation meets
		investment in a subsidiary, in limited		the conditions imposed to be
		reorganisations, to be based on the		effectively accounted for on a
		previous carrying amount of the		‘carry-over basis’ rather than
		subsidiary (that is, share of equity)		at fair value.
		rather than its fair value.
IFRIC 16	Hedges of a Net Investment in	This interpretation proposes that	1 January	The Interpretation will not	1 July 2009
	a Foreign Operation	the hedged risk in a hedge of a net	2009	have any impact on the
		investment in a foreign operation is the		Group since it does not have
		foreign currency risk arising between		a net investment in a foreign
		the functional currency of the net		operation or subsidiary.
		investment and the functional currency
		of any parent entity. This also applies
		to foreign operations in the form of joint
		ventures, associates or branches.

• The following new accounting standards have been issued or amended but are deemed not applicable to the Group and therefore have no impact:

• AASB-I 12 – Service Concession Arrangements: Disclosures, AASB 2007-1 Amendments to Australian Accounting Standards arising from AASB Interpretation 12;

• Revised UIG 4 Determining whether an Arrangement contains a Lease;

• Revised UIG 129 Service Concession Arrangements: Disclosures;

• AASB-I 13 – Customer Loyalty Programmes;

• AASB-I 14 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction; and,

• • IFRIC 15 – Agreements for the Construction of Real Estate.

notes to tHe FinanciaL statements

69

FOR THE YEAR ENDED 30 JUNE 2008

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ConsolIDateD resolute mInIng lImIteD
08 07 08 07
$'000 $'000 $'000 $'000
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note 2: (loss)/profIt from ContInuIng operatIons (a) Revenues from gold sales Gold sales at spot price Realised loss on gold forward contracts Amortisation of the gold forward contract hedge reserve (b) Other revenue Royalty income Interest income – other persons/corporations Other (c) Cost of sales Cost of production Amortisation of exploration, development & rehabilitation costs Depreciation of mine site properties, plant & equipment Royalty expense Operational support costs (d) Other income Rehabilitation adjustment for non operating mine sites Proft on sale of available for sale fnancial assets Proft on sale of subsidiary Net write off of loans to/from controlled entities Realised gain on gold options Other (e) Other expenses Management and administration expenses Foreign exchange loss Rehabilitation provision adjustment from non operating mine sites Insurance costs Loss on sale of plant and equipment Loss on sale of available for sale fnancial assets Operating lease expense Write down of mineral exploration and development costs Depreciation of non mine site assets Realised loss on net settlement of gold forward sales contracts Realised loss on gold loan Realised loss on expired gold put options Share based payments Provision for doubtful debts Write down of investment in subsidiary (i)

265,980 218,321 – – (41,820) (33,024) – – 224,160 185,297 – – 7,341 – – – 231,501 185,297 – – 2,107 2,243 – – 1,826 4,608 478 69 – – 101 61 3,933 6,851 579 130 177,140 165,388 – – 9,292 3,511 – – 9,509 11,129 – – 7,453 6,406 – – 1,569 1,469 – – 204,963 187,903 – – 931 – – – 204 25,679 – – – 154,414 – 132,225 – – – 31,187 – 4,052 – – 255 243 – – 1,390 184,388 – 163,412 3,446 4,294 2,156 2,504 6,154 7,710 – 1,700 – 121 – – 475 465 57 53 204 19 – – – – 333 – 533 514 – – 163 968 34 144 140 153 – – – 722 – – 1,377 588 – – 8,313 – – – 209 370 209 370 5,546 – – – – – 60,160 – 26,560 15,924 62,949 4,771

(i) The parent entity has reduced its investment in Carpentaria Gold Pty Ltd (“CGPL”) to nil in order to reflect the effect of CGPL’s realised treasury losses that occurred on the novation of gold forward sales contracts to a related Resolute Mining Limited wholly owned subsidiary.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

70

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ConsolIDateD resolute mInIng lImIteD
08 07 08 07
$'000 $'000 $'000 $'000
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note 2: (loss)/profIt from ContInuIng
operatIons continued
(f) Borrowing costs
Interest and fees paid/payable to other entities	1,049	907	428	249
Rehabilitation provision discount adjustment	786	411	–	–
	1,835	1,318	428	249
(g) Treasury – unrealised (losses)/gains
Unrealised (loss)/gain on gold forward contracts	(54,190)	6,980	–	–
Unrealised gain/(loss) on gold put options	7,990	(1,634)	–	–
Unrealised gain on gold loan	621	767	–	–
Unrealised gain on gold call options	–	2,694	–	–
Unrealised loss on lease rate swaps	–	(29)	–	–
Unrealised foreign exchange gain/(loss)	7,131	(833)	927	–
	(38,448)	7,945	927	–
(h) Employee beneft expense
Salaries	30,736	23,009	–	–
Superannuation	544	438	–	–
Share based payment expense	209	370	209	370
	31,489	23,817	209	370
note 3: InCome tax
(a) Income tax expense/(beneft) attributable
to continuing operations
Current tax (beneft)/expense	(2,908)	5,060	–	–
Deferred tax expense/(beneft)	12,789	4,280	323	(65)
Income tax expense/(beneft) attributable to (loss)/proft from
continuing operations	9,881	9,340	323	(65)
(b) Numerical reconciliation of income tax expense/
(beneft) to prima facie tax expense/(beneft)
(Loss)/proft from continuing operations before income tax expense/ (beneft)	(34,982)	179,336	(61,871)	158,522
Prima facie income tax (beneft)/expense at 30% (2007: 30%)	(10,495)	53,801	(18,561)	47,557
Tax effect of permanent differences:
– (recognition)/derecognition of tax losses used to offset deferred tax
liabilities	(8,608)	2,811	(65)	28
– derecognition of deferred tax assets attributable to temporary
differences	32,174	–	18,147	–
– recognition of tax losses to offset current year tax expense	(4,379)	(51,267)	–	(38,405)
– tax beneft of investment allowance	–	(4,332)	–	–
– current year losses incurred for which no deferred tax asset has
been recognised	4,981	7,256	739	–
– effect of different rates of tax on overseas income	–	944	–	–
– foreign exchange loss on investment in subsidiaries	(700)	–	–	–
– intra Australian tax consolidated group diminution of investments
and loans to subsidiaries	–	–	–	(9,356)
– effect of share based payments expense not deductible	63	111	63	–
– prior year over provision	(3,070)	(53)	–	–
– other	(85)	69	–	111
Income tax expense/(beneft) attributable to (loss)/proft from
continuing operations	9,881	9,340	323	(65)

notes to tHe FinanciaL statements

71

FOR THE YEAR ENDED 30 JUNE 2008

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note 3: InCome tax continued
(c) Amounts recognised directly in equity
Amounts (credited)/debited directly to equity	(5,513)	5,398	(323)	65
(d) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised (potential tax beneft at the prevailing tax rates of the
respective jurisdictions)	163,277	118,711	–	–
A deferred income tax asset has not been recognised for these amounts at balance date as realisation of the beneft is not regarded as probable. The future beneft will only be obtained if: (i) future assessable income is derived of a nature and an amount suffcient to enable the beneft to be realised;
(ii) the conditions for deductibility imposed by tax legislation continue to be
complied with; and,
(iii) no changes in tax legislation adversely affect the consolidated entity in realising the beneft.
(e) Unrecognised temporary differences
As at 30 June 2008, aggregate unrecognised temporary differences of
$6.0m (2007: $6.3m) are in respect of investments in foreign controlled
entities for which no deferred tax liabilities have been recognised for amounts which arise upon translation of their fnancial statements.
(f) Movements in the deferred tax assets balance
Balance at the beginning of the year	7,439	15,411	–	–
Credited to equity	5,692	2,599	323	–
Charged to the income statement	(13,125)	(10,594)	(323)	–
Foreign exchange	(6)	23	–	–
Balance as at the end of the year	–	7,439	–	–
The deferred tax assets balance comprises temporary differences
attributable to:
Receivables	1,664	–	–	–
Shares in controlled entities	–	–	18,048	–
Financial derivative liabilities	37,397	21,721	–	–
Provision for site restoration	8,245	6,642	–	–
Other liabilities	127	45	121	40
Tax losses recognised (i)	19,346	7,713	–	15
Temporary differences not recognised	(32,174)	–	(18,147)	–
	34,605	36,121	22	55
Set off of deferred tax liabilities pursuant to set off provisions	(34,605)	(28,682)	(22)	(55)
Net deferred tax assets	–	7,439	–	–

(i) This amount includes tax losses recognised against deferred tax liabilities in foreign entities of $11.9m (2007: $7.7m).

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

72

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note 3: InCome tax continued (g) Movements in the deferred tax liabilities balance Balance at the beginning of the year Charged to equity Credited to the income statement Foreign exchange Balance as at the end of the year The deferred tax liabilities balance comprises temporary differences attributable to: Inventories Available for sale fnancial assets Financial derivative assets Mineral exploration and development interests Property, plant and equipment Deferred expenditure Other Set off of deferred tax liabilities pursuant to set off provisions Net deferred tax liabilities (h) The equity balance comprises temporary differences attributable to: Hedge reserve – gold put options Hedge reserve – forwards Unrealised gain/(loss) reserve Other Set off of deferred tax liabilities pursuant to set off provisions Net temporary differences in equity

1,673 103 – – 179 7,997 – – (338) (6,314) – – (184) (113) – – 1,330 1,673 – – 87 137 – 55 74 2,409 (80) – 2,689 152 – – 24,979 18,446 102 – 3,791 4,492 – – 3,335 4,678 – – 980 41 – – 35,935 30,355 22 55 (34,605) (28,682) (22) (55) 1,330 1,673 – – (18) (274) – – 4,067 6,270 – – 66 2,399 (80) 55 – 268 – 268 4,115 8,663 (80) 323 90 1,055 80 – 4,205 9,718 – 323

(i) Tax consolidation

Resolute Mining Limited and its wholly owned Australian controlled entities implemented the tax consolidation legislation on 1 July 2002. On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement, which limits the joint and several liability of the wholly owned entities in the case of a default by the head entity, Resolute Mining Limited.

The entities have also entered into a tax funding agreement under which the wholly owned entities fully compensate Resolute Mining Limited for any current tax payable assumed and are compensated by Resolute Mining Limited for any current tax receivable. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities’ financial statements. The head entity and controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. The Group has applied the group allocation approach in determining the appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated group.

The amount receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The tax funding agreement requires payments to/from the head entity to be recognised via an inter-entity receivable/payable which is at call.

notes to tHe FinanciaL statements

73

FOR THE YEAR ENDED 30 JUNE 2008

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note 4: DIvIDenDs paID or provIDeD for The amount of franking credits available for the subsequent fnancial year is as follows. The amount has been determined using a tax rate of 30%. There were no dividends paid or provided for during the year. note 5: CasH Cash at bank and on hand Short term deposits Cash at bank earns interest at foating rates based on daily bank deposit rates. Short-term deposits are made for varying periods depending on the immediate cash requirements of the Group, and earn interest at the respective short term deposit rates. The fair value of cash and cash equivalents is equal to their book value. The short term deposit is subject to certain restrictions pursuant to the Group’s performance bond credit facility agreement. The restrictions involve the Group maintaining a retention account requiring a minimum balance. The statement has been prepared on the basis that the cash which is subject to certain restrictions is still cash or a cash equivalent. note 6: traDe anD otHer reCeIvables Current Sundry debtors Loans receivable from controlled entities (a) Provision for doubtful debts (b) Bullion on hand Non Current Loans receivable from controlled entities (a) a) Loans are interest free and repayable on demand. b) Sundry debtors are non interest bearing and are generally on 30-60 day terms. A provision for doubtful debt is recognised when there is objective evidence that the Group may not be able to collect all amounts due according to original terms of the transaction. Receivables past due but not considered impaired are $9.3m (2007: $11.9m). Payment terms on these amounts have not been re-negotiated, however the Group maintains direct contact with the relevant debtor and is satisfed that payment will be received in full. Movements in provision for doubtful debts were as follows: At 1 July 2007 Charge for the year Foreign exchange translation At 30 June 2008 At 30 June 2008, the aging analysis of sundry debtors is as follows: 0-30 days 31-60 days 61-90 days PDNI +91 days PDNI +91 days CI** Total

5,453 5,453 4,646 4,646 28,705 66,201 – – 1,026 1,460 1,026 1,460 29,731 67,661 1,026 1,460 20,293 16,388 63 21 – – 387,487 – (5,685) (155) – – 314 125 – – 14,922 16,358 387,550 21 – – – 274,329 – – – 274,329 (155) (170) – – (5,546) – – – 16 15 – – (5,685) (155) – – 4,918 4,581 63 21 433 (216) – – 560 485 – – 8,697 11,383 – – 5,685 155 – – 20,293 16,388 63 21

• Past due not impaired, ** Considered impaired.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

74

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note 7: InventorIes Gold in circuit at cost Consumables at cost Ore stockpiles at cost Ore stockpiles at net realisable value Refer to Note 16 for details of amount pledged as security. note 8: avaIlable for sale fInanCIal assets Shares at fair value – listed Available for sale fnancial assets consist of investments in ordinary shares, and therefore have no maturity date or coupon rate. The consolidated entity sold a portion of its shareholding in a listed company. $1.0m was released from the unrealised gain/loss reserve. note 9: fInanCIal DerIvatIve assets Current Gold put options Non Current Gold put options note 10: otHer assets Current Prepayments Other (a) Non Current Shares in controlled entities (Note 31), (b) Prepayments (c)

11,689 8,094 – – 24,055 19,178 – – 7,465 3,806 – – – 756 – – 43,209 31,834 – – 4,708 13,480 436 886 4,708 13,480 436 886 9 205 – – 9 205 – – 8,951 300 – – 8,951 300 – – 3,629 1,610 149 65 – 22,064 – – 3,629 23,674 149 65 – – 16,643 76,803 2,733 6,310 – – 2,733 6,310 16,643 76,803

(a) This amount relates to advances paid by the Group for the Syama mining fleet which was reimbursed by the mining contractor, PW Mining International Ltd S.A.R.L.

(b) The shares in controlled entities are carried at cost, less any provision for diminution. During the year, the $60.2m investment in Carpentaria Gold Pty Ltd was reduced to nil. Refer to note 2(e).

(c) Amount represents monies paid in connection with mining operations for the Syama gold mine.

notes to tHe FinanciaL statements

75

FOR THE YEAR ENDED 30 JUNE 2008

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note 11: mIneral exploratIon anD
evaluatIon expenDIture
The consolidated entity has the following gold mineral exploration and
evaluation expenditure carried forward in respect of areas of interest:
Areas in exploration and evaluation (at cost)
Balance at beginning of the year	45,380	37,234	–	–
– Acquired/(disposed) during the year	6,463	(1,987)	–	–
– Expenditure for the year	13,855	14,210	–	144
– Amounts written off during the year (a)	(129)	(968)	–	(144)
– Foreign currency translation	(3,460)	(3,109)	–	–
Balance at the end of the year	62,109	45,380	–	–
(a) Ultimate recoupment of costs carried forward, in respect of areas
of interest in the exploration and evaluation phase, is dependent
upon the successful development and commercial exploitation, or
alternatively the sale of the respective areas at an amount at least
equivalent to the carrying value. For areas which do not meet the
criteria of the accounting policy per Note 1(o), those amounts are
charged to the Income Statements.
note 12: Development expenDIture
Areas in development (at cost)
Balance at beginning of the year	54,841	14,633	–	–
– Additions	146,744	64,157	460	–
– Transfers from property, plant and equipment	18,526	(22,037)	–	–
– Transfers to areas in production	(17,830)	–	–	–
– Amounts written off during the year	(34)	–	(34)	–
– Foreign currency translation	4,517	(1,912)	–	–
Balance at the end of the year	206,764	54,841	426	–
Areas in production (at cost)
Balance at beginning of the year	17,725	19,222	–	–
– Additions	15,708	3,285	–	–
– Transfers from property, plant and equipment	3,057	–	–	–
– Transfers from areas in development	17,830	–	–	–
– Amount amortised during the year	(9,292)	(3,087)	–	–
– Foreign currency translation	(586)	(621)	–	–
– Adjustments to rehabilitation obligations	6,227	(1,074)	–	–
Balance at the end of the year	50,669	17,725	–	–
Total development expenditure	257,433	72,566	426	–

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

76

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buIlDIngs plant & motor offICe plant anD total
equIpment veHICles equIpment equIpment
unDer lease
$'000 $'000 $'000 $'000 $'000 $'000
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note 13: property, plant & equIpment Consolidated 30 June 2008 At 1 July 2007 net of accumulated depreciation and impairment Additions Transfers to development expenditure and other Disposals Depreciation expense Foreign exchange translation At 30 June 2008 net of accumulated depreciation and impairment 30 June 2008 Cost or fair value Accumulated depreciation and impairment Net carrying amount 30 June 2007 At 1 July 2006 net of accumulated depreciation and impairment Additions Transfers/reallocations Disposals Depreciation expense Foreign exchange translation At 30 June 2007 net of accumulated depreciation and impairment 30 June 2007 Cost or fair value Accumulated depreciation and impairment Net carrying amount

3,265 89,819 1,265 637 5,379 100,365 347 29,411 410 176 229 30,573 – (21,978) – – – (21,978) – (8,565) (8) (6) – (8,579) (471) (10,560) (459) (258) (1,811) (13,559) (63) 8,708 (7) (22) – 8,616 3,078 86,835 1,201 527 3,797 95,438 5,995 132,781 2,721 1,492 7,345 150,334 (2,917) (45,946) (1,520) (965) (3,548) (54,896) 3,078 86,835 1,201 527 3,797 95,438 2,611 74,979 646 656 1,216 80,108 1,202 13,864 851 287 5,580 21,784 – 18,787 262 (17) – 19,032 – (43) – – – (43) (492) (12,134) (421) (257) (1,417) (14,721) (56) (5,634) (73) (32) – (5,795) 3,265 89,819 1,265 637 5,379 100,365 6,018 132,736 2,830 1,444 7,116 150,144 (2,753) (42,917) (1,565) (807) (1,737) (49,779) 3,265 89,819 1,265 637 5,379 100,365

The parent entity has no property, plant and equipment.

Refer to Note 16 for information on encumbrances over property, plant and equipment.

notes to tHe FinanciaL statements

77

FOR THE YEAR ENDED 30 JUNE 2008

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note 14: DeferreD expenDIture Non Current Deferred mining costs These costs represent prepaid mining expenses deferred in accordance with the accounting policy referred in Note 1(n). note 15: payables Trade creditors and accruals (a) Other creditors Amount payable to controlled entities (b)	15,073 26,238 – – 15,073 26,238 – – 38,855 34,554 170 209 659 354 – – – – 84,083 – 39,514 34,908 84,253 209

(a) Payables are non interest bearing and generally settled on 30-90 day terms. Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.

(b) Loans are interest free and repayable on demand.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

78

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note 16: Interest bearIng lIabIlItIes Current Lease liability (a) Borrowings (b) Gold loan Non Current Lease liability (a) Borrowings (b) Gold loan	2,103 1,564 – – 10,459 – 10,459 – – 1,803 – – 12,562 3,367 10,459 – 1,873 3,751 – – 53,321 – 45,377 – – 579 – – 55,194 4,330 45,377 –

• (a) During the financial year ended 30 June 2005, Carpentaria Gold Pty Ltd (“CGPL”) entered into a finance lease with Esanda Finance Corporation Limited for the purchase of an oxygen plant for the Ravenswood project. Monthly instalments are required under the terms of the contract which has an expiration date of November 2008. RML has provided an unsecured parent entity guarantee to Esanda in relation to this finance lease.

• During the financial years ended 30 June 2006, 30 June 2007 and 30 June 2008 CGPL entered into a hire purchase agreement with Esanda Finance Corporation Limited for the purchase of underground mining equipment which is being used at Mt Wright, Ravenswood. Monthly instalments are required under the terms of the contract which has an expiration date of June 2010.

• (b) The US$55m (or $57.5m in AUD equivalent terms) senior debt facility provided by Barclays Bank Plc, the hedging facilities provided by Barclays Bank Plc, Investec Bank (Australia) Limited and Standard Bank Plc, a $5m bond facility and a US$7.6m (or $7.9m in AUD equivalent terms) deferred premium loan facility provided by Barclays Bank Plc are secured by the following:

• i. Cross Guarantee and Indemnity given by RML, Carpentaria Gold Pty Ltd, Resolute (Tanzania) Limited, Mabangu Mining Limited, Resolute Pty Ltd, Resolute (Treasury) Pty Ltd and Resolute (Somisy) Limited;

• ii. fixed and floating charge over all the current and future assets of Resolute (Tanzania) Limited including onshore and offshore bank accounts and shares of Mabangu Mining Limited;

• iii. fixed and floating charge over all the current and future assets of Mabangu Mining Limited including onshore and offshore bank accounts;

• iv. mortgage over mining lease ML 19/97 of the Resolute (Tanzania) Limited group;

• v. mortgage over prospecting licences PL 1461/2000, PL 1462/2000, PL 1732/2001, PL 347/95, PL 1833/2001, PL 1890/2002, PL 1891/2002 and PL 1892/2002 of Resolute (Tanzania) Limited;

• vi. share Mortgage by Resolute Pty Ltd over all of its shares in Resolute (Tanzania) Limited and including an assignment of Tanzanian general and political risks insurance policies with the Security Trustee being named as the loss payee;

• vii. share Mortgage by the Borrower over all of its shares in Carpentaria Gold Pty Ltd;

• viii. share Mortgage by the Borrower over all of its shares in Resolute (Somisy) Limited and including an assignment of rights under Malian general and political risks insurance policies with the Security Trustee being named as the loss payee;

• ix. fixed and floating charge over all the current and future assets of Resolute (Treasury) Pty Ltd including bank accounts and an assignment of all Hedging Contracts;

• x. fixed and floating charges over all the current and future assets of Carpentaria Gold Pty Ltd including bank accounts and an assignment of all Hedging Contracts; and,

• xi. mortgage over key Carpentaria Gold Pty Ltd mining tenements.

The US$55m senior debt facility is a revolving corporate loan that is to be repaid in half yearly instalments from December 2008 to December 2012. The term of the hedging facilities extends to 30 September 2011. The bond facility expires on 31 December 2012.

• (c) The total assets of the entities over which security exists amounts to A$453m.

• (d) The following debt ratios are required to be maintained:

• i. A debt service cover ratio of not less than 1.35:1;

• ii. a loan life cover ratio of not less than 1.65:1; and,

• iii. a reserve tail ratio of not less than 30%.

• There have been no breaches of the above ratios.

notes to tHe FinanciaL statements

79

FOR THE YEAR ENDED 30 JUNE 2008

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note 17: tax lIabIlItIes Tax payable note 18: fInanCIal DerIvatIve lIabIlItIes Current Gold forwards Non Current Gold forwards (a) Refer to Note 16 for details of amount pledged as security. note 19: provIsIons Current Employee entitlements Dividend payable Site restoration (a) Non Current Site restoration (a) Employee entitlements (a) Site restoration Balance at the beginning of the year Restoration borrowing cost unwound Change in scope of restoration provision Utilised during the year Foreign exchange Balance at the end of the year Reconciled as: Current provision Non current provision Total provision

2,160 5,069 – – 2,160 5,069 – – 31,602 32,702 – – 31,602 32,702 – – 93,032 39,690 – – 93,032 39,690 – – 3,143 2,601 – – 68 69 – – 2,078 1,744 – – 5,289 4,414 – – 26,012 20,823 – – 286 198 – – 26,298 21,021 – – 22,567 25,213 – – 786 411 – – 5,634 (1,183) – – (546) (637) – – (351) (1,237) – – 28,090 22,567 – – 2,078 1,744 – – 26,012 20,823 – – 28,090 22,567 – –

Nature and purpose of provisions

(a) The nature of restoration activities includes dismantling and removing structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation and revegetation of affected areas. Typically the obligation arises when the asset is installed at the production location. When the liability is initially recorded, the estimated cost is capitalised by increasing the carrying amount of the related mining assets. Over time, the liability is increased for the change in present value based on the discount rates that reflect the current market assessments and the risks specific to the liability. Additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability when incurred.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

80

	ConsolIDateD resolute mInIng lImIteD 08 07 08 07 $'000 $'000 $'000 $'000
note 20: otHer lIabIlItIes Amount payable to controlled entities Other (a)	– – – 83,323 324 – 404 133 324 – 404 83,456

(a) RML agreed to provide financial support to the Syama mining contractor (PW Mining International Ltd S.A.R.L.) by guaranteeing the repayment to its financier of outstanding amounts borrowed. The amount outstanding at 30 June 2008 by PW Mining International Ltd S.A.R.L. to its financier is US$19.8m. The amount shown is the recognition of the financial guarantee at fair value. The fair value has been calculated by assessing the probability that this guarantee will be called by the financier.

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resolute mInIng lImIteD
08 07
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note 21: ContrIbuteD equIty (a) Contributed equity Ordinary share capital 280,829,725 ordinary fully paid shares (2007: 231,144,559) (b) Movements in contributed equity, net of issuing costs Balance at the beginning of the year Exercise of 787,500 unlisted options at 81 cents per share Exercise of 70,000 unlisted options at $1.48 per share Exercise of 30,000 unlisted options at $1.28 per share Exercise of 30,000 unlisted options at $1.57 per share Exercise of 60,000 unlisted options at $1.33 per share Exercise of 200,000 unlisted options at $1.13 per share Exercise of 180,000 unlisted options at $1.42 per share Issue of 45,637,398 shares pursuant to the 1 for 5 Renounceable Rights Issue Issue of 2,960,268 shares pursuant to the Nyakafuru Sale & Purchase Agreement Exercise of 60,500 unlisted options at 81 cents per share Exercise of 50,000 unlisted options at $1.57 per share Exercise of 2,000,000 unlisted options at 42 cents per share Balance at the end of the year	171,867 113,917
	113,917 112,955 635 – 102 – 36 – 45 – 78 – 224 – 253 – 50,127 – 6,450 – – 49 – 76 – 837
	171,867 113,917

Effective 1 July 1998, the Corporations legislation abolished the concepts of authorised capital and par value shares. Accordingly the Company does not have authorised capital nor par value in respect of its issued capital.

(c) Terms and conditions of contributed equity

Ordinary shares have the right to receive dividends as declared and in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

(d) Employee share options

Refer to Note 34(b) for details of the Employee Share Option Plan. Each option entitles the holder to purchase one share. The names of all persons who currently hold employee share options, granted at any time, are entered into the register kept by the Company, pursuant to Section 215 of the Corporations Act 2001. Persons entitled to exercise these options have no right, by virtue of the options, to participate in any share issue by the parent entity or any other body corporate.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

81

note 21: ContrIbuteD equIty continued

(e) Rights issue

On 1 October 2007, the company invited its shareholders to subscribe to a rights issue of up to 46.4 million ordinary shares at an issue price of $1.10 per share on the basis of 1 share for every 5 fully paid ordinary shares held, with such shares issued on 5 November 2007. The issue was not fully subscribed or underwritten.

In addition, as a result of the above mentioned rights issue, from 1 October 2007, the exercise price of all remaining employee share options was reduced by 15 cents per share in accordance with the requirements of the RML Employee Share Option Plan. This had no impact on options held by executives.

(f) Capital management

The Group’s and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain a capital structure that is appropriate for the Group’s current and/or projected financial position.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders (if any), return capital to shareholders, issue new shares, borrow from financiers or sell assets to reduce debt.

The Group monitors the adequacy of capital by analysing cash flow forecasts over the term of the Life of Mine for each of its projects. To a lesser extent, gearing ratios are also used to monitor capital. Appropriate capital levels are maintained to ensure that all approved expenditure programs are adequately funded. This funding is derived from an appropriate combination of debt and equity.

The gearing ratio is calculated as net debt divided by total capital. Net debt is defined as interest bearing liabilities less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the Balance Sheet (including minority interest) plus net debt.

During the year ended 30 June 2008, interest bearing liabilities increased as a result of the draw down on the Barclays debt facilities. Total equity increased primarily from the $50m rights issue completed in November 2007. The net effect of these two factors was an increase in the gearing ratio.

	ConsolIDateD 08 07	08	parent 07
Gearing ratio	14% 0%	16%	0%

The Group is not subject to any externally imposed capital requirements. Refer to Note 1(a) for the discussion on going concern and future funding options.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

82

note 22: reserves

(a) Nature and purpose of reserves

• (i) Foreign currency translation reserve

Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency translation reserve, refer Note 1(d)(ii).

• (ii) Share based payment reserve

The share based payments reserve is used to recognise the fair value of options granted over the vesting period of the option, refer Note 1(x)(iv).

• (iii) Hedge reserves

The hedging reserves are used to record gains or losses on an effective hedging instrument, refer Note 1(m). Ineffective amounts are recognised in the Income Statements.

• (iv) Hedge reserve – unearned income

If a hedge instrument is terminated early or restructured, the gain or loss on termination or restructure is deferred and amortised in the period where the physical transaction originally hedged occurs.

• (v) Unrealised gain/(loss) reserve

This reserve records fair value changes on available for sale investments, refer Note 1(l)(iv).

• (vi) Equity reserve

The equity reserve records transactions between owners as owners.

(b) Movements in reserves

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foreign Hedge Hedge Hedge unrealised share based equity total
Currency reserve put reserve reserve gain/(loss) payments reserve
translation options gain/ forwards unearned reserve reserve
reserve (loss) gain/(loss) Income
CONSOLIDATED $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
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As at 1 July 2006	(4,778)	(1,950)	(22,505)	5,398	11,668	366	6,764	(5,037)
Currency translation differences	(16,318)	–	–	–	–	–	–	(16,318)
Hedge reserve put options, net of tax	–	1,233	–	–	–	–	–	1,233
Hedge reserve forwards, net of tax	–	–	36,156	–	–	–	–	36,156
Hedge reserve unearned income, net of
tax	–	–	–	(5,398)	–	–	–	(5,398)
Unrealised gain/(losses) reserve, net of tax	–	–	–	–	(6,069)	–	–	(6,069)
Share option reserve	–	–	–	–	–	261	–	261
Transfer to retained earnings on disposal
of subsidiary	–	–	–	–	–	–	(6,764)	(6,764)
As at 30 June 2007	(21,096)	(717)	13,651	–	5,599	627	–	(1,936)
Currency translation differences	1,149	–	–	–	–	–	–	1,149
Hedge reserve put options, net of tax	–	675	–	–	–	–	–	675
Hedge reserve forwards, net of tax	–	–	(4,161)	–	–	–	–	(4,161)
Unrealised gain/(losses) reserve, net of tax	–	–	–	–	(5,536)	–	–	(5,536)
Share option reserve	–	–	–	–	–	476	–	476
As at 30 June 2008	(19,947)	(42)	9,490	–	63	1,103	–	(9,333)

RESOLUTE MINING LIMITED	share based payments reserve $'000	unrealised gain/(loss) reserve $'000	total $'000
As at 1 July 2006	366	237	603
Unrealised gain/(losses) reserve, net of tax	–	(110)	(110)
Share option reserve	261	–	261
As at 30 June 2007	627	127	754
Unrealised gain/(losses) reserve, net of tax	–	(394)	(394)
Share option reserve	476	–	476
As at 30 June 2008	1,103	(267)	836

notes to tHe FinanciaL statements

83

FOR THE YEAR ENDED 30 JUNE 2008

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ConsolIDateD resolute mInIng lImIteD
08 07 08 07
$'000 $'000 $'000 $'000
----- End of picture text -----

note 23: retaIneD profIts/
(aCCumulateD losses)
Retained profts/(accumulated losses) at the beginning of the year	150,239	(26,695)	155,228	(3,359)
Transfer of equity reserve to retained earnings on disposal of subsidiary	–	6,764	–	–
Net (loss)/proft attributable to members	(44,837)	170,170	(62,194)	158,587
Retained profts at the end of the fnancial year	105,402	150,239	93,034	155,228
note 24: mInorIty Interest
Share capital	912	912	–	–
Reserves	1,497	1,183	–	–
Retained profts	295	321	–	–
	2,704	2,416	–	–

note 25: exploratIon anD Development CommItments

a) Exploration commitments:

Due to the nature of the consolidated entity’s operations in exploring and evaluating areas of interest, it is very difficult to accurately forecast the nature or amount of future expenditure, although it will be necessary to incur expenditure in order to retain present interests in mineral tenements. Expenditure commitments on mineral tenure for the parent entity and consolidated entity can be reduced by selective relinquishment of exploration tenure or by the renegotiation of expenditure commitments. The approximate level of exploration expenditure expected in the year ending 30 June 2009 for the consolidated entity and parent entity is approximately $12.7m (2008: $11.2m) and $nil (2008: $nil) respectively. This includes the minimum amounts required to retain tenure.

b) Syama gold mine redevelopment:

As at 30 June 2008, the Group had development expenditure commitments of US$11m (2007: US$41.3m) with respect to the Syama gold mine redevelopment in Mali, Africa.

As at 31 August 2008, the estimated total costs of the Syama redevelopment project is US$174m (2007: US$141m), of which US$136m (2007: US$32m) had been spent as at 30 June 2008.

note 26: lease CommItments

a) Finance lease

a) Finance lease
Lease expenditure contracted and provided for: Due within one year Due between one and fve years Total minimum lease payments Less fnance charges Present value of minimum lease payments Reconciled to: Current liability Non current liability	2,289 1,919 – – 1,921 3,947 – –
	4,210 5,866 – – (234) (551) – –
	3,976 5,315 – –
	2,103 1,564 – – 1,873 3,751 – –
	3,976 5,315 – –

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

84

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ConsolIDateD resolute mInIng lImIteD
08 07 08 07
$'000 $'000 $'000 $'000
----- End of picture text -----

note 26: lease CommItments continued
b) Operating lease (non-cancellable)
Due within one year	211	202	–	–
Due between one and fve years	220	432	–	–
Aggregate lease expenditure contracted for at balance date but not
provided for	431	634	–	–
The operating lease expenditure relates to the rental of offce premises and are fxed.
note 27: notes to tHe CasH flow statements
(a) Reconciliation of net (loss)/proft from continuing operations after income tax to the net cash fows:
Net(loss)/proft from ordinary activities after income tax	(44,863)	169,996	(62,194)	158,587
Add/(deduct) non-cash items:
Write down of mineral exploration and development costs	163	968	34	144
Depreciation and amortisation of property, plant and equipment	9,649	11,282	–	–
Amortisation of exploration, development and rehabilitation costs	9,292	3,511	–	–
Rehabilitation provision discount adjustment	786	411	–	–
Share based payments	209	370	209	370
Loss on sale of property, plant and equipment	204	19	–	–
Proft on sale of investments	–	(180,093)	–	(132,225)
Foreign exchange (gain)/loss	(7,131)	833	(927)	1,700
Provision for employee entitlements	544	144	–	–
Provision for doubtful debts	(5,546)	–	–	–
Unearned income	–	(5,204)	–	–
Net write off of loans to/from controlled entities	–	–	–	(31,187)
Provision for diminution of investment	–	–	60,160	–
Other	853	4	(1,442)	(214)
Changes in operating assets and liabilities:
Decrease/(increase) in receivables	1,436	(5,499)	(42)	(15)
Increase in inventories	(11,375)	(1,932)	–	–
Decrease/(increase) in fnancial derivatives	43,787	(8,004)	–	–
(Increase)/decrease in prepayments	(2,019)	250	(84)	81
Decrease in deferred expenditure	11,165	16,782	–	–
Increase/(decrease) in payables	4,606	5,795	(39)	(63)
(Decrease)/increase in provision for taxation	(2,909)	5,059	–	(57)
Increase/(decrease) in provisions	6,152	(2,288)	–	–
Increase in deferred tax balances	7,096	4,144	–	–
Net operating cash fows	22,099	16,548	(4,325)	(2,879)

(b) Non cash investing activities:

The consolidated entity issued 2,690,268 fully paid ordinary shares at an issue price of $2.40 per share as consideration for the purchase of the remaining 34% interest in the Nyakafuru project from Iamgold Limited.

(c) Finance leases:

Refer to Note 16(a) for additions to finance leases and for terms and conditions.

notes to tHe FinanciaL statements

85

FOR THE YEAR ENDED 30 JUNE 2008

note 28: DIsposal of ControlleD entIty

On 11 September 2006, the consolidated entity sold its 83.3% interest in Valhalla Uranium Limited (“Valhalla”). The results of Valhalla for the period 1 July 2006 until the disposal date are presented below:

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----- Start of picture text -----

07
ConsolIDateD $'000
----- End of picture text -----

Revenue Expenses Loss before income tax Income tax beneft Loss after income tax Cash Receivables Exploration & evaluation Total Assets Creditors Total Liabilities Minority interests Net Assets Consideration received: Shares in Paladin Resources Limited Total disposal consideration Carrying amount of net assets sold Gain on sale before income tax Other costs incidental to the sale of Valhalla Income tax expense Gain on sale after income tax Net cash outfow on disposal: Cash consideration Outfow of cash held by disposed subsidiary Refected in cash fow statement	67 (394) (327)
	–
	(327)
	4,096 21 2,815
	6,932
	–
	–
	(1,146)
	5,786
	161,076
	161,076
	(5,786)
	155,290
	(876) –
	154,414
	– (4,096)
	(4,096)

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

86

note 29: relateD party transaCtIons

• (a) The following related party transactions occurred during the year:

• (i) Transactions with related parties in the wholly owned group

The parent entity entered into the following transactions during the year with related parties:

Management fees of $900,000 (2007: $900,000) were paid to a wholly owned controlled entity by RML during the year. All transactions were on normal commercial terms and conditions.

Appropriate disclosures of amounts due to and receivable from related parties are contained in the notes to the financial statements.

(ii) Transactions with other related parties

	08 07
	$’000 $’000
Management fees and technical services paid to a wholly owned controlled entity by Resolute Amansie Limited Management fees and technical services paid to a wholly owned controlled entity by Valhalla Uranium Limited (up to date of disposal)	66 90 – 115
	66 205

(iii) Loans receivable from and payable to controlled entities

Refer to Notes 6 and 15 for details, terms and conditions of loans receivable from and payable to controlled entities.

(b) RML is the ultimate Australian holding company and there is no controlling entity of RML at 30 June 2008.

note 30: Interests In JoInt ventures

Jointly controlled assets

The consolidated entity has an interest in the following material joint ventures, whose principal activities are to explore for gold. The Group’s interests in the assets employed in the joint venture are included in the consolidated balance sheet, in accordance with the accounting policy as described in Note 1(b).

	entIty HolDIng Interest	otHer partICIpant/JoInt venture	perCentage of Interest HelD 08 07	perCentage of Interest HelD 08 07
Mabangu	Mining Limited	Iamgold/Nyakafuru JV	100%	66%
Mabangu	Mining Limited	Sub-Sahara/Nyakafuru JV	51%	51%
			Elected to earn	Elected to earn
			additional 19%	additional 19%
Resolute	Pty Ltd	Etruscan/Finkolo JV	60%	60%

Refer to Note 27(b) for details regarding the full purchase of the Iamgold/Nyakafuru JV.

The interests in the joint ventures that are included in the accounts is as follows:

	ConsolIDateD
	08 07
	$’000 $’000
Exploration and evaluation expenditure	12,139 15,874

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

87

note 31: ControlleD entItIes

The following were controlled entities as at 30 June 2008 and have been included in the consolidated accounts. All entities in the consolidated entity carry on business in their place of incorporation.

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book value of DIreCt perCentage of
Investment HelD sHares HelD by
ConsolIDateD entIty
name of ControlleD entIty ConsolIDateD entItyCompany HolDIng 08 07 08 07
anD Country of InCorporatIon tHe Investment $'000 $'000 % %
----- End of picture text -----

Abore Mining Company Limited, Ghana Associated Gold Fields Pty Ltd Associated Gold Fields Pty Ltd, Aust. (a) Resolute Pty Ltd Kiwi International Resources Pty Ltd Tuki Nominees Pty Ltd Broken Hill Metals Pty Ltd, Aust. (a) Resolute (Treasury) Pty Ltd Carpentaria Gold Pty Ltd, Aust. Resolute Mining Limited Ghana Mining Investments Pty Ltd, Aust. (a) Associated Gold Fields Pty Ltd Goudhurst Pty Ltd, Aust. (a) Stockbridge Pty Ltd Kiwi Goldfelds Limited, Ghana Associated Gold Fields Pty Ltd Kiwi International Resources Pty Ltd Kiwi International Resources Pty Ltd, Aust. (a) Associated Gold Fields Pty Ltd Mabangu Mining Limited, Tanzania Resolute (Tanzania) Limited Mabangu Exploration Limited, Tanzania Resolute (Tanzania) Limited Marapana Gold Pty Ltd, Aust. (a) Resolute Pty Ltd N & J Mitchell Prospecting Pty Ltd, Aust. (a), (b) Resolute Pty Ltd Obenemase Gold Mines Ltd, Ghana Ghana Mining Investments Pty Ltd Resolute (Mali) S.A.,Mali (c) Resolute (Somisy) Limited Resolute (Somisy) Limited, Jersey (a) Resolute Mining Limited Resolute (Finkolo) Limited, Jersey (a) Resolute Mining Limited Resolute Amansie Limited, Ghana Associated Gold Fields Pty Ltd Kiwi International Resources Pty Ltd Resolute (Ghana) Limited, Ghana Associated Gold Fields Pty Ltd Resolute Pty Ltd, Aust. Resolute Mining Limited Resolute Resources Pty Ltd, Aust. (a) Resolute Pty Ltd Resolute (TZ Holdings) Limited, Jersey (a) Resolute Mining Limited Resolute (Tanzania) Limited, Tanzania Resolute Pty Ltd Resolute (Treasury) Pty Ltd, Aust. (a) Resolute Mining Limited Societe des Mines de Syama S.A., Mali Resolute (Somisy) Limited Stockbridge Pty Ltd, Aust. (a) Resolute (Treasury) Pty Ltd Stockbridge Services Unit Trust, Aust. (a) Stockbridge Pty Ltd Tuki Nominees Pty Ltd, Aust. (a) Resolute Pty Ltd

– – 90 90 – – 100 100 – – 100 100 – 60,160 100 100 – – 100 100 – – 100 100 – – 100 100 – – 100 100 – – 100 100 – – 100 100 – – 100 100 – – – 100 – – 90 90 – – 100 – – – 100 100 – – 100 100 – – 90 90 – – 100 100 16,643 16,643 100 100 – – 100 100 – – 100 100 – – 100 100 – – 100 100 – – 80 80 – – 100 100 – – 100 100 – – 100 100 16,643 76,803

• a) These entities are not required to be separately audited. An audit of the entity’s results and position is performed for the purpose of inclusion in the consolidated entity’s accounts.

• b) N&J Mitchell Prospecting Pty Ltd was deregistered on 11 June 2008.

• c) On 13 February 2008 Resolute (Mali) S.A. was incorporated in Mali as a wholly owned subsidiary of Resolute (Somisy) Limited.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

88

note 32: segment InformatIon

a) Primary segments – geographical

The consolidated entity operates in four geographical segments.

2008	tanzanIa gHana malI australIa	ConsolIDateD
GEOGRAPHICAL SEGMENTS	$'000 $'000 $'000 $'000	$'000
Revenue Sales Other revenue Segment revenue Results Segment results from continuing operations Group loss from ordinary activities before income tax expense Income tax expense Group loss from ordinary activities after income tax expense Assets Segment assets Liabilities Segment liabilities Other Segment Information Depreciation and amortisation Acquisition of non-current assets Write off of mineral exploration and development expenditur	122,171 – – 109,330 83 – – 3,850	231,501 3,933
	122,254 – – 113,180	235,434
	28,000 (197) – (62,785)	(34,982)
	92,449 7,223 268,057 170,216	(34,982) (9,881)
		(44,863)
		537,945
	31,317 72 24,219 211,697	267,305
	3,699 – – 15,242	18,941
	27,552 1,023 155,057 32,768	216,400
	e 122 7 – 34	163
2007
Revenue Sales Other revenue Segment revenue Results Segment results from continuing operations Group proft from ordinary activities before income tax expense Income tax expense Group proft from ordinary activities after income tax expense Assets Segment assets Liabilities Segment liabilities Other Segment Information Depreciation and amortisation Acquisition of non-current assets Write off of mineral exploration and development expenditur	99,126 – – 86,171 177 – 11 6,663	185,297 6,851
	99,303 – 11 92,834	192,148
	15,907 (1,142) 75 164,496	179,336
	81,251 6,983 119,872 203,704	179,336 (9,340)
		169,996
		411,810
	32,791 372 14,445 99,566	147,174
	6,627 6 – 8,160	14,793
	12,776 2,515 80,498 37,021	132,810
	e 75 729 – 164	968

Gold is sold on the global market with proceeds being realised at point of sale.

notes to tHe FinanciaL statements

89

FOR THE YEAR ENDED 30 JUNE 2008

note 32: segment InformatIon continued

(b) Secondary segment – business

The Group has one business segment being mining and exploration of gold and other minerals.

	mInIng anD exploratIon of golD 08 07 $'000 $'000 231,501 185,297 537,945 411,810 216,400 132,810
Segment revenue Segment assets Acquisition of non-current assets
	ConsolIDateD resolute mInIng lImIteD
	08 07 08 07
	$ $ $ $
note 33: auDItor remuneratIon Amounts received or due and receivable by Ernst & Young Australia, from entities in the consolidated entity or related entities: Auditing accounts Taxation planning advice and review Amounts received or due and receivable by a related overseas offce of Ernst & Young, from entities in the consolidated entity or related entities: Auditing accounts Total amounts received or due and receivable by Ernst & Young globally Services performed by other frms: Auditing accounts (Societe d’Expertise Comptable Diarra, Mali) Auditing accounts (PricewaterhouseCoopers, Ghana) Total	226,767 195,000 77,189 91,918 53,050 232,526 53,050 214,240
	279,817 427,526 130,239 306,158
	28,464 14,651 – –
	308,281 442,177 130,239 306,158
	27,670 31,570 – – 16,129 – – –
	352,080 473,747 130,239 306,158

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

90

	ConsolIDateD resolute mInIng lImIteD 08 07 08 07 $’000 $’000 $’000 $’000
note 34: employee benefIts a) Employee entitlements The aggregate employee entitlement liability is comprised of: Provisions (current) (Note 19) Provisions (non current) (Note 19)	3,143 2,601 – – 286 198 – – 3,429 2,799 – –

b) Employee share option plan

An employee share option plan has been established where executives and members of staff of the consolidated entity are issued with options over the ordinary shares of RML. The options, issued for nil consideration, are issued in accordance with the terms and conditions of the shareholder approved RML Employee Share Option Plan and performance guidelines established by the directors of RML.

The options do not provide any dividend or voting rights. The options are not quoted on the ASX.

Options outstanding at balance date are 265,000 options (Options B) which are comprised of the opening balance of 475,000 less 210,000 options exercised during the year. These options were issued on 21 December 2004 with an exercise price of $1.57 and an expiry date of 21 December 2009. One third of the options were able to be exercised 6 months after issue, a further one third 18 months after issue and the remaining one third 30 months after issue. Pursuant to the rights issue in October 2007, the strike price reduced by 15 cents per option in accordance with the RML Share Option Plan. The strike price is now $1.42.

Also outstanding at balance are 175,000 options (Options C) which are comprised of the opening balance of 405,000 less 230,000 options exercised during the year. These options were issued on 24 March 2006 with an exercise price of $1.28 and an expiry date of 23 March 2011. One third of the options were able to be exercised 6 months after issue, a further one third 18 months after issue and the remaining one third 30 months after issue. Pursuant to the rights issue in October 2007, the strike price reduced by 15 cents per option in accordance with the RML Share Option Plan. The strike price is now $1.13.

Options D were also outstanding at balance date comprising 570,000 options issued under the employee share option plan on 25 October 2006, with a strike price of $1.48 and an expiry date of 24 October 2011. One third of the options were able to be exercised 6 months after issue, a further one third 18 months after issue and the remaining one third 30 months after issue. The balance of these options is 335,000, being the opening balance less 130,000 options exercised and 105,000 options lapsing during the year. Pursuant to the rights issue in October 2007, the strike price reduced by 15 cents per option in accordance with the RML Share Option Plan. The strike price is now $1.33.

Options E were issued under the employee share option plan on 23 May 2008. These options were comprised of 471,000 options, with a strike price of $2.13 and an expiry date of 23 May 2013. One third of the options will be able to be exercised 6 months after issue, a further one third 18 months after issue and the remaining one third 30 months after issue.

Employees will only be able to exercise the options allocated to them if they meet certain performance criteria. Details of the employee share option plan for both the parent and the consolidated entity are as follows:

	2008 2007
	number of optIons weIgHteD average exerCIse prICe number of optIons weIgHteD average exerCIse prICe
	$ $
Balance at the beginning of the year – granted – exercised/lapsed Balance at end of year Vested and exercisable at the end of the year	2,237,500 1.23 3,778,000 0.76 471,000 2.13 570,000 1.48 (1,462,500) 1.06 (2,110,500) 0.46
	1,246,000 1.62 2,237,500 1.23
	775,000 1.32 1,587,500 1.16

notes to tHe FinanciaL statements

91

FOR THE YEAR ENDED 30 JUNE 2008

note 34: employee benefIts continued

The following table summarises information about options exercised by employees during the year:

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----- Start of picture text -----

number of grant exerCIse expIry weIgHteD proCeeDs number of Issue Date faIr value
optIons Date Date Date average from sHares of tHe of sHares
exerCIse sHares IssueD sHares IssueD
prICe IssueD
$ $ $
----- End of picture text -----

2008
425,000	20	Sept	02	9 Aug 07	19 Sep 07	0.81	344,250	425,000	9 Aug 07	1.43
362,500	20	Sept	02	17 Sep 07	19 Sep 07	0.81	293,625	362,500	17 Sep 07	1.36
20,000	24	Mar	06	26 Sep 07	23 Mar 11	1.28	25,600	20,000	26 Sep 07	1.89
45,000	25	Oct	06	26 Sep 07	24 Oct 11	1.48	66,600	45,000	26 Sep 07	1.89
10,000	21	Dec	04	26 Sep 07	21 Dec 09	1.57	15,700	10,000	26 Sep 07	1.89
10,000	24	Mar	06	28 Sep 07	23 Mar 11	1.28	12,800	10,000	28 Sep 07	1.82
25,000	25	Oct	06	28 Sep 07	24 Oct 11	1.48	37,000	25,000	28 Sep 07	1.82
20,000	21	Dec	04	28 Sep 07	21 Dec 09	1.57	31,400	20,000	28 Sep 07	1.82
40,000	25	Oct	06	15 Oct 07	24 Oct 11	1.33	53,200	40,000	15 Oct 07	1.87
10,000	24	Mar	06	30 Jan 08	23 Mar 11	1.13	11,300	10,000	30 Jan 08	2.15
60,000	24	Mar	06	6 Feb 08	23 Mar 11	1.13	67,800	60,000	6 Feb 08	2.06
130,000	24	Mar	06	25 Feb 08	23 Mar 11	1.13	146,900	130,000	25 Feb 08	2.44
20,000	25	Oct	06	14 Apr 08	24 Oct 11	1.33	26,600	20,000	14 Apr 08	2.15
30,000	21	Dec	04	14 Apr 08	21 Dec 09	1.42	42,600	30,000	14 Apr 08	2.15
150,000	21	Dec	04	30 Jun 08	21 Dec 09	1.42	213,000	150,000	30 Jun 08	1.98
2007
50,000	21	Dec	04	13 Jul 06	21 Dec 09	1.57	78,500	50,000	13 Jul 06	2.05
40,500	20	Sep	02	13 Jul 06	19 Sep 07	0.81	32,805	40,500	13 Jul 06	2.05
20,000	20	Sep	02	25 Oct 06	19 Sep 07	0.81	16,200	20,000	25 Oct 06	1.56
2,000,000	11	Dec	01	8 Dec 06	10 Dec 06	0.42	840,000	2,000,000	8 Dec 06	1.63

Fair value of the shares issued is estimated to be the market price of the shares of Resolute Mining Limited on the ASX as at close of trading on their respective issue dates.

The following table lists the key variables used in the option valuation:

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----- Start of picture text -----

optIons b optIons C optIons D optIons e
----- End of picture text -----

Number of options at year end	265,000	175,000	335,000	471,000
Dividend yield (%)	0.00	0.00	0.00	0.00
Expected volatility (%)	50%	50%	50%	40%
Risk free interest rate (%)	5.50%	5.50%	5.50%	8.30%
Expected life of options (years)	5	5	5	5
Option exercise price ($)	1.57	1.28	1.48	2.13
Share price at grant date ($)	1.43	1.16	1.35	1.94
Value per option at grant date ($)	0.68	0.55	0.65	0.88

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.

The fair value of the options is measured at the grant date using the Black Scholes option pricing model taking into account the terms and conditions upon which the instruments were granted. The services received and a liability to pay for those services are recognised over the expected vesting period.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

92

note 35: ContIngent lIabIlItIes

(a) Native Title Claims

Native title determination applications have been lodged with the National Native Title Tribunal established under the Native Title Act 1993 over areas of interest currently leased by the consolidated entity. Some of those claims have been accepted by the Tribunal. Acceptance of an application by the Tribunal is merely a preliminary step in the procedure established by the Native Title Act to determine whether or not native title exists. The final effect of these claims is not known and the claims are not currently affecting the mining and exploration projects of the consolidated entity.

(b) Randgold/Syama Royalty

Pursuant to the terms of the Syama Sale and Purchase agreement, Randgold Resources Limited will receive a royalty on Syama production, where the gold price exceeds US$350 per ounce, of US$10 per ounce on the first million ounces of gold production attributable to Resolute Mining Limited (“RML”) and US$5 per ounce on the next three million attributable ounces of gold production.

(c) Tanzanian Tax Authorities

i) general

The operations and earnings of the Group continue, from time to time, to be affected to varying degrees by fiscal, legislative, regulatory and political developments, including those relating to environmental protection, in the countries in which the Group operates.

The industry in which Group is engaged is also subject to physical risks of various types. The nature and frequency of these developments and events, not all of which are covered by insurance, as well as their effect on future operations and earnings, are unpredictable.

ii) CorporatIons tax assessment

In 2005, Resolute (Tanzania) Limited (“RTL”) received an income tax assessment from the Tanzanian Revenue Authority (“TRA”). The assessment is in relation to the period 1 July 1998 to 30 June 2004 and is for an amount of US$32.4 million. The assessment follows a review of RTL’s affairs by a government appointed auditor. The review purports that RTL has not been able to substantiate the capital development costs and operating costs associated with the Golden Pride gold mine. In formulating the assessment, the TRA has decided to arbitrarily deny RTL deductions for 60% of its capital expenditure and 40% of all operating expenditure between 1 July 1998 and 30 June 2004. It has also increased assessable sales revenue by 40% over the same period, and not recognised some of the carry forward losses for expenditures incurred prior to 30 June 1998.

The TRA assessment, in the Company’s opinion, contains fundamental and material errors, has no substance or foundation in fact, and its issue appears to be a serious breach of due process. The Company strongly disputes the validity of the assessment and believes that there is no amount of income tax owing by RTL to the TRA. RTL will vigorously defend its position. Pursuant to the Tanzanian taxation system, taxpayers have the ability to object against an assessment by lodging a deposit with the tax authorities equal to one third of the assessed amount. The deposit must be made within one month of receiving an assessment. An objection to the assessment and a waiver to the requirement to lodge a deposit has been lodged by RTL with the appropriate Authority.

Considerable time has since lapsed, and no response has been received on RTL’s objection or waiver request, nor has any attempt been made to enforce the payment of the assessed tax.

An additional income tax assessment was received in June 2008 for US$1.6 million. The company believes that this assessment is equally flawed.

The financial effect of the above two TRA assessment has not been recognised within the accounts.

iii) InDIreCt taxes

The TRA has changed its interpretation on the tax legislation relating to the fuel levy and fuel excise and duties (“fuel taxes”). The amount paid by RTL when it purchases fuel includes this payment of fuel taxes. The fuel supplier remits the fuel tax to the TRA, and as in a similar manner as is done with a Goods and Services Tax or a Value Added Tax, RTL would then lodge a claim to claim back from the TRA the fuel taxes it has paid to the supplier. Up until December 2005, the TRA refunded all of the fuel taxes paid by RTL. From January 2006 onwards, the TRA has changed its interpretation and has denied further refunding of fuel taxes if the fuel is used by a sub-contractor.

The TRA had previously refunded US$7.9m of fuel taxes to RTL during the period from 1999 to 2005, but due to their new interpretation are now arguing they should not have. As a result, they have demanded that refunds amounting to US$7.9m be returned by RTL to the TRA by 3 October 2008. RTL strongly disagrees with the TRA revised interpretation and it will vigorously defend its position. The majority of the amounts sought by the TRA are “time barred” and can only be claimed from RTL if RTL has acted in a fraudulent manner. RTL has acted in accordance with the law. In addition, further protection is provided to RTL by its Mining Development Agreement, which limits the amount of fuel taxes to be paid by RTL.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

93

note 35: ContIngent lIabIlItIes continued

(d) Summit Resources (Aust) Pty Ltd

On 6 September 2006 Resolute Mining Limited (“RML”) entered into a Deed of Indemnity with Paladin Resources Limited (“Paladin”) to indemnify Paladin and its related parties for any loss they suffer as a result of a material breach of the Isa Uranium Joint Venture Agreement due to disclosure of information concerning the Joint Venture to persons not party to the Joint Venture. Under this indemnity, in the circumstances which now pertain, RML’s liability is capped at $65m. The Isa Uranium Joint Venture is a joint venture between Summit Resources (Aust) pty Ltd (“Summit”) and Mount Isa Uranium Pty Ltd (“MIU”) (a wholly owned subsidiary of Valhalla Uranium Limited, which in turn is wholly owned by Paladin). Valhalla Uranium Limited was previously a wholly owned subsidiary of RML.

In September 2006 Summit commenced proceedings (“Proceedings”) in the Supreme Court of Western Australia against RML and MIU in relation to disclosures allegedly in breach of the Isa Uranium Joint Venture Agreement. Summit claimed it was entitled to acquire MIU’s interest in the Isa Uranium Joint Venture at 85% of value, on account of alleged disclosure of joint information by MIU and it predecessor Resolute, to amongst others, Paladin. Were this allegation to be made good, RML would become liable to Paladin for an amount equal to 15% of the value of MIU’s joint venture interest, capped at $65m.

On 3 August 2007, Summit, after having an Independent Committee (of the Board of Summit Resources Limited, Summit’s holding company) obtain legal advice and review the commercial rationale for litigation, determined it to be in Summit’s best interests to discontinue the Proceedings and as a result, a Deed of Release and Settlement was executed by Summit and the other parties to the Proceedings. The principal terms of settlement were that Proceedings be terminated on the basis that each party bears its own costs.

On 3 August 2007, Areva NC (Australia) Pty Ltd (“Areva”) (a wholly owned subsidiary of French company, Areva NC) by then a 10% shareholder in Summit Resources Limited commenced an application to the Supreme Court of Western Australia to intervene in the Proceedings and act on behalf of Summit in the Proceedings (under section 237 of the Corporations Act). The application is due to be heard by the Court in December 2008, and is being contested by each of Summit, Summit Resources Limited, MIU and RML.

If Areva’s application is successful, the Proceedings will be resumed and both MIU and Resolute will defend them to trial. If MIU and Resolute are not successful in the Proceedings, RML will be exposed to liability under the Deed of Indemnity equal to 15% of the value of a one half interest in the joint venture, capped at $65m.

RML is confident that at all times the disclosure obligations under the Isa Uranium Joint Venture Agreement have been complied with.

(e) Tanesco Electricity Supply Contract

Tanesco (the Tanzanian national electricity provider) provides electricity to RTL pursuant to an Electricity Supply Agreement. The Agreement refers to an annual price escalation formula containing escalation factors that are open to interpretation. Pursuant to Tanesco’s interpretation of the escalation formula, an invoice covering the period from 1 January 2008 to 30 June 2008 for an amount of $4m has been sent to RTL. A portion of this invoice ($0.9m) has been recognised by RTL as a trade creditor as at 30 June 2008. The balance of Tanesco’s invoice has not been provided for due to RTL’s belief that no further amounts are payable. The rates charged by Tanesco in their $4m invoice were significantly higher than the rates charged by Tanesco to the general Tanzanian public. Pursuant to the Agreement, RTL has the right to terminate by giving 30 days notice. If RTL had been made aware on a timely basis of the divergence between the rates charged to the general Tanzanian public and the Agreement price, the contract would have been promptly renegotiated or terminated. The $0.9m liability recognised by RTL reflects the amounts payable to Tanesco by RTL if it had terminated the Agreement and elected to receive and pay for electricity as a member of the general public. Contract discussions are continuing and both parties have confirmed their commitment to find a fair and reasonable solution.

note 36: ContIngent assets

Challenger/Dominion Royalty

Resolute will continue to receive A$20 per ounce for every ounce of gold production in relation to the Challenger project in the Gawler Craton region of South Australia. As at 30 June 2008, the gold reserves at the Challenger project were 727,860 ounces of gold.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

94

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ConsolIDateD
08 07
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note 37: earnIngs per sHare (eps)
Basic earnings per share
(Loss)/proft used in calculation of basic EPS ($'000)	(44,837)	170,170
Weighted average number of ordinary shares outstanding during the
period used in the calculation of basic EPS	262,465,888	230,252,733
Basic EPS (cents per share)	(17.08)	73.91
Diluted earnings per share
(Loss)/proft used in calculation of dilutive EPS ($'000)	(44,837)	170,170
Weighted average number of ordinary shares outstanding during the
period used in the calculation of basic EPS	262,465,888	230,252,733
Weighted average of notional shares used in determining diluted EPS	n/a	1,107,301
Weighted average number of ordinary shares outstanding during the
period used in the calculation of diluted EPS	262,465,888	231,360,034
Number of potential ordinary shares that are not dilutive and hence not
included in calculation of diluted EPS	471,000	475,000
Diluted EPS (cents per share)	(17.08)	73.55

note 38: key management personnel

(a) Key management personnel

• (i) DIreCtors P. Huston Non-Executive Chairman P. Sullivan Director and Chief Executive Officer T. Ford Non-Executive Director H. Price Non-Executive Director

• (ii) exeCutIves M. Turner General Manager – Operations (Resigned 12 September 2008) D. Cairns General Manager – Project Development (Resigned 21 December 2007) G. Fitzgerald General Manager – Finance & Administration and Company Secretary M. Christie General Manager – Exploration (Resigned 18 July 2008)

(b) Compensation of key management personnel

Details of remuneration provided to key management personnel are as follows:

	ConsolIDateD resolute mInIng lImIteD
	2008 2007 2008 2007
	$ $ $ $
Short-term employee benefts Post-employment benefts Share-based payments	1,868,073 1,997,747 176,429 200,715 248,817 221,325 83,571 54,285 20,883 26,092 – –
	2,137,773 2,245,164 260,000 255,000

notes to tHe FinanciaL statements

95

FOR THE YEAR ENDED 30 JUNE 2008

note 38: key management personnel continued

(c) Details of option holdings of key management personnel are as follows:

2008	balanCe at tHe start of tHe year	exerCIseD DurIng tHe year	granteD DurIng tHe year as CompensatIon (i)	balanCe at tHe enD of tHe year	vesteD anD exerCIsable at tHe enD of tHe year	faIr value of optIons at exerCIse Date $
Directors
P.Huston	–	–	–	–	–	–
P.Sullivan	–	–	–	–	–	–
T.Ford	–	–	–	–	–	–
H.Price	–	–	–	–	–	–
Offcers
M.Turner	–	–	75,000	75,000	–	–
D.Cairns (ii)	300,000	(300,000)	–	–	–	181,800
G.Fitzgerald (iii)	250,000	(250,000)	75,000	75,000	–	139,750
M.Christie (iv)	300,000	(150,000)	75,000	225,000	150,000	72,000
2007	balanCe at tHe start of tHe year	exerCIseD DurIng tHe year	granteD DurIng tHe year as CompensatIon	balanCe at tHe enD of tHe year	vesteD anD exerCIsable at tHe enD of tHe year	faIr value of optIons at exerCIse Date $
Directors
P.Huston	–	–	–	–	–	–
P.Sullivan (v)	2,000,000	(2,000,000)	–	–	–	2,470,000
T.Ford	–	–	–	–	–	–
H.Price	–	–	–	–	–	–
Offcers
M.Turner	–	–	–	–	–	–
D.Cairns	300,000	–	–	300,000	300,000	–
G.Fitzgerald (vi)	270,000	(20,000)	–	250,000	250,000	25,000
M.Christie	300,000	–	–	300,000	300,000	–

• (i) These options were granted on 23 May 2008. The fair value of the options at grant date was $0.88 per option. The total fair value of the options granted was $65,805. The exercise price of these options is $2.13.

• (ii) On 9 August 2007, 300,000 options were exercised at a price of $0.81 per option. These options were due to expire on 19 September 2007. The total fair value of the options granted and exercised was $98,190.

• (iii) On 17 September 2007, 250,000 options were exercised at a price of $0.81 per option. These options were due to expire on 19 September 2007. The total fair value of the options granted and exercised was $81,825.

• (iv) On 30 June 2008, 150,000 options were exercised at a price of $1.42. These options were due to expire on 21 December 2009. The total fair value of the options granted and exercised was $102,165. On 29 August 2008, 150,000 options were exercised at a price of $1.42. These options were due to expire on 21 December 2009. The total fair value of options granted and exercised was $19,500. All remaining options lapsed.

• (v) The options were granted on 11 December 2001. The fair value of the options at grant date was $0.04 per option. The total fair value of the options granted and exercised was $84,000. The exercise price of the options was $0.42 per option.

• (vi) The options were granted on 20 September 2002. The fair value of the options at grant date was $0.11 per option. The total fair value of the options granted and exercised was $29,700. The exercise price of the options was $0.81 per option.

• (vii) No key management personnel options lapsed during the year.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

96

note 38: key management personnel continued

(d) Details of share holdings of key management personnel are as follows:

2008	balanCe at tHe start of tHe year	reCeIveD DurIng tHe year on tHe exerCIse of optIons	otHer CHanges DurIng tHe year	balanCe at tHe enD of tHe year
Directors
P.Huston (i)	301,066	–	60,213	361,279
P.Sullivan (i)	2,622,000	–	524,400	3,146,400
T.Ford (i)	3,000	–	600	3,600
H.Price (i)	10,000	–	2,000	12,000
Offcers
M.Turner	–	–	–	–
D.Cairns (ii), (iii)	42,000	300,000	(291,600)	50,400
G.Fitzgerald (ii)	–	250,000	(250,000)	–
M.Christie (i)	30,000	150,000	6,000	186,000
2007	balanCe at tHe start of tHe year	reCeIveD DurIng tHe year on tHe exerCIse of optIons	otHer CHanges DurIng tHe year (ii)	balanCe at tHe enD of tHe year
Directors
P.Huston	301,066	–	–	301,066
P.Sullivan	822,000	2,000,000	(200,000)	2,622,000
T.Ford	3,000	–	–	3,000
H.Price	10,000	–	–	10,000
Offcers
M.Turner	–	–	–	–
D.Cairns	42,000	–	–	42,000
G.Fitzgerald	–	20,000	(20,000)	–
M.Christie	30,000	–	–	30,000

(i) These shares were acquired through participation in the rights issue.

(ii) These shares were acquired or sold at the prevailing market price, no amounts remain unpaid as at 30 June 2008. (iii) Balance at the end of the year refers to the date of resignation being 21 December 2007.

note 39: fInanCIal Instruments anD fInanCIal rIsk management

The Group’s activities expose it to a variety of financial risks: market risk (including gold price risk, diesel fuel price risk and currency risk), interest rate risk, credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks, where considered appropriate, to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial instruments to hedge certain risk exposures. Derivatives are used exclusively for managing financial risks, and not as trading or other speculative instruments.

Risk management is carried out by the Group’s Financial Risk Management Committee under policies approved by the Board of Directors. The Financial Risk Management Committee identifies, evaluates and hedges financial risks as deemed appropriate. The Board provides guidance for overall risk management, including guidance on specific areas, such as mitigating commodity price, foreign exchange, interest rate and credit risks, by using derivative financial instruments.

(a) Market risk

use of DerIvatIve Instruments to assIst In managIng golD prICe rIsk

The Group is exposed to movements in the gold price. As part of the risk management policy of the Group and in compliance with the conditions required by the Group’s financiers, a variety of financial instruments (such as gold forward sales contracts, gold call options and gold put options) are used from time to time to reduce exposure to unpredictable fluctuations in the project life revenue streams. Within this context, the hedging programs undertaken are structured with the objective of retaining as much upside to the gold price as possible, but in any event, by limiting hedging commitments to no more than 50% of the Group’s gold reserves. The value of these financial instruments at any given point in time, will in times of volatile market conditions, show substantial variation over the short term. The hedging facilities provided by the Group’s various hedging counterparties do not contain margin calls. The Group does not hedge account for these instruments as at balance date as noted below.

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

97

note 39: fInanCIal Instruments anD fInanCIal rIsk management continued

As part of the new financing agreement with Barclays Bank Plc, the Group purchased 110,000 ounces of gold put options and restructured its remaining gold forward sales contracts. During the financial year, the Group delivered 155,612 ounces of gold into forward sales contracts at an average price of A$632 per ounce.

Details of the gold hedging contracts at year end are shown below. To calculate the Group’s total gold hedging contracts in the table below, gold hedging denominated in USD has been converted to an AUD equivalent using the year end USD/AUD spot rate of US$0.9562 (2007: US$0.8491).

	forwarD sales put optIons bougHt total
2008	ounCes sales prICe $/ounCe ounCes strIke prICe $/ounCe ounCes $/ounCe
AUD Denominated Contracts Maturity within 1 year Between 1 and 2 years Between 2 and 3 years Between 3 and 4 years Total USD Denominated Contracts Maturity within 1 year Between 1 and 2 years Total Total (converted to AUD) Maturity within 1 year Between 1 and 2 years Between 2 and 3 years Between 3 and 4 years Total	4,310 732 55,000 673 59,310 677 77,361 726 – – 77,361 726 108,061 726 52,800 1,000 160,861 816 27,015 726 57,200 1,000 84,215 912
	216,747 726 165,000 891 381,747 797
	71,178 530 30,000 446 101,178 505 37,065 522 – – 37,065 522
	108,243 527 30,000 446 138,243 509
	75,488 564 85,000 600 160,488 583 114,427 667 – – 114,427 667 108,061 726 52,800 1,000 160,861 816 27,015 726 57,200 1,000 84,215 912
	324,991 668 195,000 826 519,991 727
2007
AUD Denominated Contracts Maturity within 1 year Between 1 and 2 years Between 2 and 3 years Total USD Denominated Contracts Maturity within 1 year Between 1 and 2 years Total Total (converted to AUD) Maturity within 1 year Between 1 and 2 years Between 2 and 3 years Total	129,333 696 160,000 645 289,333 668 84,333 697 55,000 673 139,333 688 88,334 699 – – 88,334 699
	302,000 697 215,000 652 517,000 678
	78,853 498 105,000 443 183,853 467 99,750 540 30,000 446 129,750 518
	178,603 522 135,000 443 313,603 488
	208,186 655 265,000 596 473,186 622 184,083 664 85,000 621 269,083 651 88,334 699 – – 88,334 699
	480,603 667 350,000 602 830,603 639

Movements in the fair value of these contracts are accounted for through the income statement. From 1 July 2007, no contracts satisfy the criteria for hedge accounting. As at 30 June 2007, 625,404 contracted ounces met the criteria for hedge accounting. As a result $43.4m was deferred in equity in the prior year. In accordance with accounting policy at Note 1(m) this amount is transferred to the income statement when the forecasted sales transaction occurs.

Hedge ineffectiveness recognised directly in the Income Statement is $102.2m deficit (2007: $13.5m deficit).

The parent entity had no gold forward sales contracts, gold put options bought or gold call options sold as at 30 June 2008 or 30 June 2007.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

98

note 39: fInanCIal Instruments anD fInanCIal rIsk management continued

DIesel fuel prICe rIsk

The Group is exposed to movements in the diesel fuel price. The costs incurred purchasing diesel fuel for use by the Group’s operations is significant. The Group’s Financial Risk Management Committee continues to manage and monitor diesel fuel price risk. At present, the Group does not specifically hedge its exposure to diesel fuel price movements.

foreIgn exCHange CurrenCy rIsk

The Group receives USD proceeds on the sale of some of its gold production and significant costs for the Syama Gold Project and the Golden Pride Project are denominated in both USD and the local currencies of those operations, and as such movements within these currencies expose the Group to exchange rate risk.

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The risk can be measured by performing a sensitivity analysis that quantifies the impact of different assumed exchange rates on the Group’s forecast cash flows.

The Group’s Financial Risk Management Committee continues to manage and monitor foreign exchange currency risk. At present, the Group does not specifically hedge its exposure to foreign currency exchange rate movements.

The Group’s exposure to foreign exchange currency risk at the reporting date was as follows:

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----- Start of picture text -----

30 June 2008 30 June 2007
united states australian other total united states australian other total
Dollars Dollars Dollars Dollars
a$'000 a$'000 a$'000 a$'000 a$'000 a$'000 a$'000 a$'000
----- End of picture text -----

Financial Assets Cash (i) Receivables Available for sale fnancial assets Financial derivative assets Financial Liabilities Payables Interest bearing liabilities Financial derivative liabilities Other fnancial liabilities	12,949 16,386 396 29,731 6,207 3,488 5,227 14,922 – 4,272 436 4,708 – 8,960 – 8,960 19,156 33,106 6,059 58,321 12,034 12,057 15,423 39,514 63,780 3,976 – 67,756 30,501 94,133 – 124,634 324 – – 324 106,639 110,166 15,423 232,228	18,029 4,043 45,589 67,661 10,842 3,001 2,515 16,358 – 12,594 886 13,480 2 503 – 505
		28,873 20,141 48,990 98,004
		13,792 12,100 9,016 34,908 – 7,697 – 7,697 14,505 57,887 – 72,392 – – – –
		28,297 77,684 9,016 114,997

(i) Other cash includes $0.02m (2007: $28.8m) held in Euro and $nil (2007: $14.5m) held in Canadian dollars.

The parent entity’s exposure to foreign exchange currency risk at the reporting date was as follows:

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----- Start of picture text -----

30 June 2008 30 June 2007
united states australian other total united states australian other total
Dollars Dollars Dollars Dollars
a$'000 a$'000 a$'000 a$'000 a$'000 a$'000 a$'000 a$'000
----- End of picture text -----

	a$'000 a$'000 a$'000 a$'000 a$'000 a$'000 a$'000 a$'000
Financial Assets Cash Receivables Available for sale fnancial assets Financial Liabilities Payables Interest bearing liabilities Other fnancial liabilities	– 1,026 – 1,026 – 1,460 – 1,460 – 387,550 – 387,550 – 274,350 – 274,350 – – 436 436 – – 886 886
	– 388,576 436 389,012 – 275,810 886 276,696
	– 84,253 – 84,253 – 209 – 209 55,836 – – 55,836 – – – – 324 80 – 404 – 83,456 – 83,456
	56,160 84,333 – 140,493 – 83,665 – 83,665

notes to tHe FinanciaL statements

99

FOR THE YEAR ENDED 30 JUNE 2008

note 39: fInanCIal Instruments anD fInanCIal rIsk management continued

(b) Interest rate risk

The Group’s main interest rate risk arises from long term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. For the 2008 and 2007 financial years the Group’s borrowings have been denominated in both USD and AUD dollars.

The Group’s Financial Risk Management Committee continues to manage and monitor interest rate risk. There is no intention at this stage to enter into any interest rate swaps.

The following tables summarises balances subject to interest rate risk for the Group, together with effective interest rates as at balance date.

2008	floatIng Interest rate fIxeD Interest rate maturIng In non Interest bearIng total average Interest rate < 1 year 1-5 years > 5 years floatIng fIxeD
	$'000 $'000 $'000 $'000 $'000 $'000
Financial Assets Cash Receivables Available for sale fnancial assets Financial derivative assets Financial Liabilities Payables Interest bearing liabilities Financial derivative liabilities Other fnancial liabilities	28,705 1,026 – – – 29,731 4.3% 7.3% – – – – 14,922 14,922 – – – – – – 4,708 4,708 – – – – – – 8,960 8,960 – – 28,705 1,026 – – 28,590 58,321 – – – – 39,514 39,514 – – – 57,939 9,817 – – 67,756 – 4.7% – 31,602 93,032 – – 124,634 – 8.5% – – – – 324 324 – – – 89,541 102,849 – 39,838 232,228
2007
Financial Assets Cash Receivables Available for sale fnancial assets Financial derivative assets Financial Liabilities Payables Interest bearing liabilities Financial derivative liabilities	66,201 1,460 – – – 67,661 3.8% 6.3% – – – – 16,358 16,358 – – – – – – 13,480 13,480 – – – – – – 505 505 – – 66,201 1,460 – – 30,343 98,004 – – – – 34,908 34,908 – – – 3,367 4,330 – – 7,697 – 6.2% – 32,702 39,690 – – 72,392 – 7.2% – 36,069 44,020 – 34,908 114,997

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

100

note 39: fInanCIal Instruments anD fInanCIal rIsk management continued

The following tables summarises interest rate risk for the parent entity, together with effective interest rates as at balance date.

2008	fIxeD Interest rate maturIng In non Interest bearIng total average Interest rate < 1 year 1 - 5 years > 5 years floatIng fIxeD
	$'000 $'000 $'000 $'000 $'000
Financial Assets Cash Receivables Available for sale fnancial assets Financial Liabilities Payables Interest bearing liabilities Other fnancial liabilities	1,026 – – – 1,026 – 7.3% – – – 387,550 387,550 – – – – – 436 436 – – 1,026 – – 387,986 389,012 – – – 84,253 84,253 – – 55,836 – – – 55,836 – 4.3% – – – 404 404 – – 55,836 – – 84,657 140,493
2007
Financial Assets Cash Receivables Available for sale fnancial assets Financial Liabilities Payables Other fnancial liabilities	1,460 – – – 1,460 – 7.3% – – – 274,350 274,350 – – – – – 886 886 – – 1,460 – – 275,236 276,696 – – – 209 209 – – – – – 83,456 83,456 – – – – – 83,665 83,665

(c) Credit risk exposure

Credit risk is managed on a Group basis. Credit risk predominately arises from cash, cash equivalents, derivative financial instruments, deposits with banks and financial institutions and receivables from statutory authorities. For derivative financial instruments, management mitigates some credit risk by using a number of different hedging counterparties.

Credit risk further arises in relation to financial guarantees given to certain parties. Such guarantees are only provided in exceptional circumstances and are subject to Financial Risk Management Committee approval. Refer to Note 16 (a) & (b) and Note 20 for information on guarantees provided.

notes to tHe FinanciaL statements

101

FOR THE YEAR ENDED 30 JUNE 2008

note 39: fInanCIal Instruments anD fInanCIal rIsk management continued

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:

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----- Start of picture text -----

ConsolIDateD resolute mInIng lImIteD
08 07 08 07
$'000 $'000 $'000 $'000
----- End of picture text -----

Trade receivables Counterparties with external credit ratings AAA B Counterparties without external credit ratings Group 1 Group 2 Total trade receivables Cash at bank & short term deposits Counterparties with external credit ratings AA AA– A– BBB+ Counterparties without external credit ratings No rating Total cash at bank & short term deposits Financial derivative assets AA– BBB+ Total fnancial derivative assets*	1,332 871 19 15 1,063 1,110 – – 6,324 6,790 44 6 11,574 7,617 – –
	20,293 16,388 63 21
	9,791 5,170 1,026 1,460 – 35 – – 10,170 5,170 – – 9,175 55,053 – – 595 2,233 – –
	29,731 67,661 1,026 1,460
	8,951 411 – – 9 94 – –
	8,960 505 – –

• Group 1 refers to existing counterparties with no defaults in the past. Group 2 refers to existing counterparties where difficulty in recovering these debts in the past has been experienced.

(d) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, or having the availability of funding through an adequate amount of undrawn committed credit facilities.

As at 30 June 2008, the Group had $nil in unused facilities (2007: $nil) and Resolute Mining Limited had $nil in unused facilities (2007: $nil).

Refer to Note 1(a) for the discussion on going concern and future funding options.

The remaining contractual maturities of the Group’s and parent entity’s financial liabilities are:

The remaining contractual maturities of the Group’s and parent entity’s fnancial liabilities are:
Due within 1 to 3 months Due within 4 months to one year Due between one and fve years Total minimum repayments Less fnance charges Less establishment fees Present value of minimum repayments	43,739 46,214 170 209 43,463 23,766 97,880 – 152,820 45,764 50,003 83,456
	240,022 115,744 148,053 83,665
	(6,110) (747) (5,876) – (1,684) – (1,684) –
	232,228 114,997 140,493 83,665

(e) Fair values

The fair value of all the Group’s financial instruments recognised in the financial statements approximates or equals their carrying amounts. For details on how fair values are calculated for each class of financial instrument, refer to Note 1.

notes to tHe FinanciaL statements FOR THE YEAR ENDED 30 JUNE 2008

102

note 39: fInanCIal Instruments anD fInanCIal rIsk management continued

(f) Sensitivity analysis

The following table summarises the sensitivity of the Group’s financial assets and financial liabilities at balance date to interest rate risk, foreign exchange currency risk and gold price risk.

Interest rate rIsk foreIgn exCHange rIsk golD prICe rIsk	Interest rate rIsk foreIgn exCHange rIsk golD prICe rIsk
-1% +1% -10% +10% -10% +10%
ConsolIDateD CarryIng amount profIt equIty profIt equIty profIt equIty profIt equIty profIt equIty profIt equIty
2008 $'000	$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Financial Assets Cash and cash equivalents 29,731 Trade and other receivables 14,922 Available for sale fnancial assets 4,708 Financial derivative assets 8,960 Financial Liabilities Payables 39,514 Interest bearing liabilities 67,756 Financial derivative liabilities 124,634 Other fnancial liabilities 324 Total increase/ (decrease)	(25) (25) 25 25 1,456 1,456 (1,191) (1,191) – – – – – – – – 1,529 1,529 (1,251) (1,251) (31) (31) 31 31 – – – – 23 23 (21) (21) – – – – 1,064 1,064 (980) (980) – – – – 2,912 2,912 (2,191) (2,191) – – – – (4,759) (4,759) 3,894 3,894 – – – – 56 56 (56) (56) (3,027) (3,027) 2,739 2,739 – – – – 2,768 2,768 (2,665) (2,665) (5,235) (5,235) 4,283 4,283 31,363 31,363 (31,363) (31,363) – – – – – – – – – – – –
	3,863 3,863 (3,676) (3,676) (10,013) (10,013) 8,453 8,453 34,244 34,244 (33,523) (33,523)
2007
Financial Assets Cash and cash equivalents 67,661 Trade and other receivables 16,358 Available for sale fnancial assets 13,480 Financial derivative assets 505 Financial Liabilities Payables 34,908 Interest bearing liabilities 7,697 Financial derivative liabilities 72,392 Other fnancial liabilities – Total increase/ (decrease)	(56) (56) 56 56 7,203 7,203 (5,894) (5,894) – – – – – – – – 1,600 1,600 (1,309) (1,309) (12) (12) 12 12 – – – – 98 98 (81) (81) – – – – 83 83 (72) (72) – – – – 1,428 1,428 (384) (384) – – – – (3,160) (3,160) 2,585 2,585 – – – – 6 6 (6) (6) – – – – 238 238 (238) (238) 3,415 3,415 (3,269) (3,269) (3,637) (3,637) 2,976 2,976 36,630 36,630 (36,630) (36,630) – – – – – – – – – – – –
	3,448 3,448 (3,291) (3,291) 2,104 2,104 (1,723) (1,723) 38,284 38,284 (37,240) (37,240)

notes to tHe FinanciaL statements

103

FOR THE YEAR ENDED 30 JUNE 2008

note 39: fInanCIal Instruments anD fInanCIal rIsk management continued

Interest rate rIsk foreIgn exCHange rIsk	Interest rate rIsk foreIgn exCHange rIsk
-1% +1% -10% +10%
parent CarryIng amount profIt equIty profIt equIty profIt equIty profIt equIty
2008 $'000	$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Financial Assets Cash and cash equivalents 1,026 Trade and other receivables 387,550 Available for sale fnancial assets 436 Financial Liabilities Payables 84,253 Interest bearing liabilities 55,836 Other fnancial liabilities 404 Total increase/ (decrease)	(1) (1) 1 1 – – – – – – – – – – – – – – – – 48 48 (40) (40) – – – – – – – – 47 47 (47) (47) (6,391) (6,391) 5,229 5,229 – – – – – – – –
	46 46 (46) (46) (6,343) (6,343) 5,189 5,189
2007
Financial Assets Cash and cash equivalents 1,460 Trade and other receivables 274,350 Available for sale fnancial assets 886 Financial Liabilities Payables 209 Other fnancial liabilities 83,456 Total (decrease)/ increase	(1) (1) 1 1 – – – – – – – – – – – – – – – – 98 98 (81) (81) – – – – – – – – – – – – – – – –
	(1) (1) 1 1 98 98 (81) (81)

notes to tHe FinanciaL statements

FOR THE YEAR ENDED 30 JUNE 2008

104

note 40: subsequent events

• (i) Subsequent to year end, the Group has entered into an unconditional unsecured credit facility with a financier for $20 million. A first tranche of $10 million dollars was drawn down on this facility on 24 September 2008, with settlement to occur on 1 October 2008 and it is currently expected the second tranche of $10 million will be drawn down in late October 2008.

• (ii) Subsequent to year end, the Group has entered into a mandate with Patersons Securities Limited for a placement of ordinary shares in Resolute Mining Limited to raise approximately $10 million. The Group expects the placement to be completed during the course of October 2008 and thus the funds to be available prior to the end of October 2008.

105

Directors’ DecLaration

In the opinion of the directors:

• a) the financial statements and notes are in accordance with the Corporations Act 2001, including:

• (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and,

• (ii) giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2008 and of their performance, as required by Accounting Standards, for the financial year ended on that date; and,

• b) Subject to the matters mentioned in Note 1(a), there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and,

• c) the audited remuneration disclosures set out on pages 40 to 45 of the directors’ report comply with Accounting Standard AASB 124 Related Party Disclosures and the Corporations Regulation 2001.

The directors have been given the declaration by the Chief Executive Officer and General Manager – Finance and Administration required by Section 295A of the Corporations Act 2001.

This declaration has been made in accordance with a resolution of the directors.

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P.R. Sullivan Director Perth, Western Australia 30 September 2008

inDepenDent aUDit report TO MEMBERS OF RESOLUTE MINING LIMITED

106

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inDepenDent aUDit report TO MEMBERS OF RESOLUTE MINING LIMITED

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107

sHareHoLDer inFormation

108

substantIal sHareHolDers at 30 september 2008

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----- Start of picture text -----

number of % of
name orDInary sHares IssueD CapItal
----- End of picture text -----

name	number of orDInary sHares % of IssueD CapItal
Alliance Life Common Fund Ltd Barclays Bank Plc and Carello Investments Limited Bond Street Custodians Limited ACF Offcium Special Situations Fund Acorn Capital Limited	112,054,122 39.9% 18,590,805 8.0% 15,222,541 6.7% 11,541,979 6.5%
	157,409,447 61.1%

DIstrIbutIon of sHareHolDIngs as at 30 september 2008

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----- Start of picture text -----

orDInary % of
sIze of HolDIng sHareHolDers IssueD CapItal
----- End of picture text -----

sIze of HolDIng	orDInary sHareHolDers % of IssueD CapItal
1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over Total shareholders Number of shareholders with less than a marketable parcel	966 0.16% 1,551 1.47% 468 1.22% 577 5.31% 79 91.84%
	3,641 100%
	425

votIng rIgHts

Under the Company’s Constitution, all ordinary shares issued by the Company carry one vote per share without restriction.

twenty largest sHareHolDers as at 30 september 2008

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number of % of
name orDInary sHares IssueD CapItal
----- End of picture text -----

HSBC Custody Nominees Australia Limited SAC All Ordinaries Index Fund National Nominees Limited ANZ Nominees Limited Fitel Nominees Limited Bond Street Custodians Limited Avanteos Investments Limited (Symetry Retire) J P Morgan Nominees Australia Limited Custodial Capital Management Pty Ltd Equity Trustees Limited Avanteos Investments Limited (Symetry Delegates) Citicorp Nominees Pty Ltd RBC Dexia Investor Services Mr Peter Sullivan NEFCO Nominees Pty Ltd Citicorp Nominees Pty Ltd (Cwlth Bank Off Sup) DMG Capital pty Ltd Mr David Matthew Guy David &Therese GUy Alan Wheatley Total held by twenty largest shareholders as a percentage of this class	74,077,350 35,238,604 33,244,594 21,079,175 17,311,358 13,557,470 11,284,568 8,793,259 5,523,490 5,095,043 4,268,581 4,021,594 2,522,012 2,400,000 1,631,200 1,358,000 1,120,000 1,059,000 800,000 717,461	26.36% 12.54% 11.83% 7.50% 6.16% 4.82% 4.02% 3.13% 1.97% 1.81% 1.52% 1.43% 0.90% 0.85% 0.58% 0.48% 0.40% 0.38% 0.28% 0.26%
	245,102,759	87.22%
		87.22%

37

www.rml.com.au

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A.B.N. 39 097 088 689

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the annual general meeting of the shareholders of Resolute Mining Limited (the " Company ") will be held at 10.00 a.m. (WST) on Tuesday, 25 November 2008 at the Conference Room, Ground Floor, BGC Centre, 28 The Esplanade, Perth, Western Australia.

BUSINESS

1. Financial Statements and Reports

To receive the Financial Report of the Company and the Directors' Report and Auditor's Report for the year ended 30 June 2008.

2. Resolution 1 – Adopt Remuneration Report

To consider and if thought fit, pass as an ordinary resolution with or without amendment the following:

"That the Remuneration Report for the year ended 30 June 2008 be adopted by Shareholders on the terms and conditions in the Explanatory Memorandum."

3. Resolution 2 - Re-election of Director – Mr Thomas Cummings Ford

To consider and if thought fit, pass as an ordinary resolution with or without amendment the following:

"That Mr Thomas Cummings Ford, who retires by rotation in accordance with the Constitution and being eligible, offers himself for re-election, be re-elected as a Director."

4.

Resolution 3 - Ratify Share Issue

To consider and, if thought fit, pass as an ordinary resolution with or without amendment the following:

“That, in accordance with Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 2,690,268 Shares each at an issue price of $2.40 to Iamgold Limited on the terms and conditions in the Explanatory Memorandum ( Share Issue ).”

Voting Exclusion:

The Company will disregard any votes cast on this Resolution by a person who participated in the Share Issue, or an associate of those persons. However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Determination of Shareholders Right to Vote

For the purposes of the Meeting, persons who are registered holders of Shares as at 9.00am (WST) on Monday, 24 November 2008 will be voting members.

BY ORDER OF THE BOARD

_____ G. W. Fitzgerald Company Secretary Dated : 20 October 2008

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A.B.N. 39 097 088 689

EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Meeting to be held at 10.00am (WST) on Tuesday, 25 November 2008 at Conference Room, Ground Floor, BGC Centre, 28 The Esplanade, Perth, Western Australia.

1. Financial Statements and Reports

Shareholders will be offered the opportunity to discuss the Financial Report, Directors' Report and Auditor's Report for the financial year ended 30 June 2008, copies of which are on the Company's website at www.resolute-ltd.com.au or by contacting the Company on telephone number: +61 8 9261 6100.

Shareholders will be offered the opportunity to ask questions or make comments on the management of the Company.

2. Resolution 1 – Adopt Remuneration Report

Pursuant to section 250R(2) of the Corporations Act, the Company is required to put the Remuneration Report to the vote of Shareholders. The Financial Report for the year ended 30 June 2008 contains a Remuneration Report which sets out the remuneration policy for the Company and reports the remuneration arrangements in place for the managing Director, specified executives and non-executive Directors.

The provisions of the Corporations Act provide that Resolution 1 need only be an advisory vote of Shareholders.

Therefore, Resolution 1 is advisory only and does not bind the Directors. Of itself, a failure of Shareholders to pass Resolution 1 will not require the Directors to alter any of the arrangements in the Remuneration Report. However, the Board will take the outcome of the vote into consideration when considering the remuneration policy.

The chairman of the Meeting will allow a reasonable opportunity for Shareholders as a whole to ask about, or make comments on, the Remuneration Report.

3. Resolution 2 - Re-election of Director - Mr Thomas Cummings Ford

Article 3.6 of the Constitution requires that one-third of the Directors must retire at each annual general meeting (or if that is not a whole number, the whole number nearest to onethird).

Article 3.6 also provides that a Director who retires is eligible for re-election.

Pursuant to these Articles, Mr Thomas Cummings Ford will retire by rotation and seek reelection.

A brief resume of Mr Thomas Cummings Ford is contained in the Annual Report.

The Board believes that Mr Thomas Cummings Ford has performed the duties and responsibilities of a director diligently and professionally, in the best interests of all Shareholders.

The Board unanimously supports the re-election of Mr Thomas Cummings Ford.

4. Resolution 3 - Ratify Share Issue

General

On 28 February 2008, the Company announced that it had purchased Iamgold Limited's 34% interest in the Nyakafuru Project in Tanzania ( Project ).

Consideration for the purchase was US$6,000,000 payable by the issue of the Company's Shares.

On 17 March 2008, the Company announced that it had completed the issue of 2,690,268 Shares to Iamgold Limited each at a deemed issue price of $2.40 for its 34% interest in the Project.

Resolution 3 seeks Shareholder approval for the ratification of the Share Issue to Iamgold Limited, who is not a related party of the Company.

Listing Rule 7.4

The Shares issued under the Share Issue were issued within the Company’s 15% limit permitted under Listing Rule 7.1, without the need for Shareholder approval. The effect of Shareholders passing Resolution 3 will be to restore the Company’s ability to issue securities within that limit, to the extent of the 2,690,268 Shares.

Specific Information required by Listing Rule 7.5

Listing Rule 7.5 requires that the following information be provided to Shareholders for the purposes of obtaining Shareholder approval pursuant to Listing Rule 7.4:

• (a) 2,690,268 Shares were issued on 17 March 2008 each at a deemed issue price of $2.40 to Iamgold Limited (who is not a related party to the Company);

• (b) The Shares under the Share Issue are fully paid ordinary shares in the capital of the Company;

• (c) A voting exclusion statement is included in the Notice; and

• (d) No funds were raised by the issue of Shares under the Share Issue because the Shares were issued as consideration to acquire Iamgold Limited's interest in the Nyakafuru Project.

Schedule 1 – Definitions

In this Explanatory Memorandum and Notice:

Annual Report means the 2008 Annual Report of the Company and its controlled entities (if any) a copy of which was lodged with the ASX.

Article means an article of the Constitution.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited ABN 98 008 624 691 and where the context permits the Australian Securities Exchange operated by ASX Limited.

Auditor's Report means the auditor's report on the Financial Report.

Board means the board of Directors.

Company means Resolute Mining Limited ABN 39 097 088 689.

Constitution means the Constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company and Directors means the directors of the Company.

Directors' Report means the annual directors report prepared under Chapter 2M of the Corporations Act for the Company and its controlled entities (if any).

Explanatory Memorandum means the explanatory memorandum to the Notice.

Financial Report means the annual financial report prepared under Chapter 2M of the Corporations Act of the Company and its controlled entities (if any).

Listing Rules means the Listing Rules of ASX.

Meeting has the meaning given in the introductory paragraph of the Notice.

Notice means this notice of meeting.

Proxy Form means the proxy form attached to the Notice.

Remuneration Report means the remuneration report of the Company contained in the Annual Report.

Resolution means a resolution contained in this Notice.

Schedule means a Schedule to this Notice.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a shareholder of the Company.

Share Issue has the meaning in Resolution 3.

WST means Western Standard Time, being the time in Perth, Western Australia.

RESOLUTE MINING LIMITED (the "Company") ANNUAL GENERAL MEETING ON 25 NOVEMBER 2008 PROXY FORM

The Secretary Resolute Mining Limited C/- Security Transfer Registrars Pty Ltd PO Box 535, Applecross WA 6953 AUSTRALIA

I/We,....................................................................................of......................................................................……………..

...............................................................................………. being a member/members of the Company hereby appoint …………………………………………….. of……………........................................………................……………………….

or in that person’s absence, the Chairman of the meeting as my/our proxy to vote for me/us and on my/our behalf at the annual general meeting of the Company to be held on 25 November 2008, at 10.00am and at any meeting held subsequent and pursuant to an adjournment of that meeting.

This form is to be used in accordance with the directions below. Unless the proxy is directed, your proxy may vote as he/she thinks fit.

In respect of the items contained in the Notice of Meeting, I/We instruct the above proxy/proxies to vote :

Resolution For	Resolution For	Resolution For	Against	Against	Abstain Chairman’s	Abstain Chairman’s	Abstain Chairman’s	Abstain Chairman’s	Abstain Chairman’s
1. Adopt Remuneration Report							Discretion
2. Re-elect Director - Mr T. C. Ford 3. Ratify Share Issue

By marking the “Chairman’s Discretion” box, you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of that item and that votes cast by him, other than as proxy holder, would be disregarded because of that interest. The Chairman intends to vote undirected proxies in favour of the resolutions.

Appointment of a second proxy

If appointing a second proxy, state the percentage of your voting rights applicable to the proxy appointed by this form.

%

Shareholder Reference or CHESS Number

DATED this ............. day of ............................................ 2008.

................................................................. .............................................................. Signature of member or Attorney Signature of joint member or Attorney

Or if a company:

Executed for and on behalf of by its duly authorised officer(s),............................................................………. in accordance with S.127 of the Corporations Act 2001:

................................................................. .............................................................. Director / Sole Director Director / Secretary

A member entitled to attend and vote is entitled to appoint not more than two proxies to attend and, on a poll, to vote in his stead. Where two proxies are appointed, the appointment may specify the proportion or number of votes which each proxy may exercise. If it does not, then each proxy may exercise one-half of the votes. A proxy need not be a member of the Company.

To be effective, proxy forms must be either:

• a) deposited at the office of Security Transfer Registrars, 770 Canning Highway, Applecross, WA 6153

• b) returned by mail to Security Transfer Registrars – PO Box 535, Applecross WA 6953, or

• c) faxed to the Company’s share registry (Fax No. 08 9315 2233 and for overseas shareholders 618 9315 2233) not less than 48 hours before the time fixed for holding the Meeting.