Resolute Mining Limited

RESOLUTE MINING LIMITED FINANCIAL REPORT YEAR ENDED 30 JUNE 2008 A.C.N: 097 088 689

Corporate Directory	3
Directors’ Report	4
Corporate Governance Statement	17
Auditor’s Independence Declaration	22
Income Statements	23
Balance Sheets	24
Statements of Recognised Income and Expense	25
Cash Flow Statements	26
Notes to the Financial Statements	27
Directors’ Declaration	86
Independent Auditor’s Report to the Members	87
Shareholder Information	89

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

4[th] 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 [email protected]

ABN 39 097 088 689

Web Site

Resolute Mining Limited maintains a web site 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 [email protected]

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 (30/06/2008)

Ordinary Shares 280,829,725

Legal Advisor

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

Auditor

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

Standard Bank Plc Cannon Bridge House 25 Dowgate Hill, London EC4R 2SB, United Kingdom

Investec Bank (Australia) Limited Level 21, 140 St Georges Terrace Perth, Western Australia 6000

Citibank Limited Level 23, Citigroup Centre 2 Park Street Sydney, New South Wales 2000

Shareholders wishing to receive copies of Resolute Mining Limited ASX announcements by e-mail should register their interest by contacting the Company at [email protected]

RESOLUTE MINING LIMITED 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.

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

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:

P. Huston P. Sullivan T. Ford H. Price	Ordinary Shares Options Over Ordinary Shares 361,279 - 3,146,400 - 3,600 - 12,000 -
	3,523,279 -

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.

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

DIVIDENDS

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

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.

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.

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.

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

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 Ocotber 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.

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 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.

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.

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

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.

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.

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

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.

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:

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.

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

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.

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.

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

2008	Short term	benefits	Post	Share based
			employment	payments
			benefits
	Base Remuneration	Non Monetary	Super-	Options
	$	Benefits	annuation
			$
		$		$
		(i)
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	-
Officers
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

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

2007		Short term benefits	Short term benefits		Post employment	Post employment	Share
					benefits		based
							payments
	Base	Cash	Base	Non	Super-	Super-	Options
	Remuneration	Bonus	Remuneration	Monetary	annuation	annuation
	Resolute		Valhalla	Benefits	Resolute	Valhalla
	$	$	$	$	$	$	$
	(v)		(v)	(i)	(v)	(v)
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	-
Officers
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’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.
(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.

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

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

2008	Balance at	Exercised	Granted during	Balance at	Vested and	Fair value
	the start of	during the	the year as	the end of	exercisable	of options
	the year	year	compensation	the year	at the end of	at exercise
			(i)		the year	date
						$
Directors
P.Huston	-	-	-	-	-	-
P.Sullivan	-	-	-	-	-	-
T.Ford	-	-	-	-	-	-
H.Price	-	-	-	-	-	-
Officers
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	Exercised	Granted	Balance at	Vested and	Fair value
	the start of	during the	during the	the end of	exercisable	of options
	the year	year	year as	the year	at the end of	at exercise
			compensation		the year	date
						$
Directors
P.Huston	-	-	-	-	-	-
P.Sullivan (v)	2,000,000	(2,000,000)	-	-	-	2,470,000
T.Ford	-	-	-	-	-	-
H.Price	-	-	-	-	-	-
Officers
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 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.

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

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

2008	Balance at the start	Received during	Other changes	Balance at the end
	of the year	the year on the	during the year	of the year
		exercise of options
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
Officers
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	Received during	Other changes	Balance at the end
	of the year	the year on the	during the year	of the year
		exercise of options	(ii)
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
Officers
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.

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).

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

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:

Date options granted	Expiry date	Issue price of	Number under
		shares	option
		$
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 May 2008	22 May 2013	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:

P. Huston P. Sullivan T. Ford H. Price Number of meetings held	Full Board Audit Environment and Community Development Remuneration and Nomination Safety, Security & Occupation al Health Financial Risk Management 13 2 n/a 2 n/a n/a 13 n/a 4 n/a 4 23 13 2 n/a 2 n/a n/a 13 2 n/a 2 n/a n/a
	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.

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.

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

AUDITOR INDEPENDENCE

Refer to page 22 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

RESOLUTE MINING LIMITED 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;
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;
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.

Director	Role of Director	First Appointed	Non-executive	Independent
		(a)
Peter Ernest Huston	Non-executive	June 2001	Yes	Yes
	chairman
Peter Ross Sullivan	CEO	June 2001	No	No
Thomas Cummings Ford	Non-executive	June 2001	Yes	Yes
	director
Henry Thomas Stuart Price	Non-executive	November 2003	Yes	Yes
	director

(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".

RESOLUTE MINING LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2008

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 Directors 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-to-day 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 re-election.

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.

RESOLUTE MINING LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2008

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
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.

RESOLUTE MINING LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2008

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.

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.

RESOLUTE MINING LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2008

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.

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.

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”.

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Auditor’s Independence Declaration to the Directors of Resolute Mining Limited

In relation to our audit of the financial report of Resolute Mining Limited for the year ended 30 June 2008, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

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Ernst & Young

==> picture [177 x 51] intentionally omitted <==

Gavin A Buckingham Partner Perth 30 September 2008

Liability limited by a scheme approved under Professional Standards Legislation

GAB:KT:RESOLUTE:138

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

INCOME STATEMENTS

Note Continuing Operations Revenue from gold sales 2a Other revenue 2b Cost of sales 2c Gross profit Other income 2d Other expenses 2e Profit/(loss) from continuing operations before unrealised treasury, tax and finance costs Borrowing costs 2f Profit/(loss) before unrealised treasury and tax Treasury - unrealised (losses)/gains 2g (Loss)/profit before tax Income tax (expense)/benefit 3 (Loss)/profit from continuing operations after income tax Attributable to: Minority interests Members of the parent Earnings per share for (loss)/profit from continuing operations attributable to the ordinary equity shareholders of the Company: Basic earnings per share for (loss)/profit for the year (cents per share) 37 Diluted earnings per share for (loss)/profit for the year (cents per share) 37	2008 2007 $'000 $'000 231,501 185,297 3,933 6,851 (204,963) (187,903) 30,471 4,245 1,390 184,388 (26,560) (15,924) Consolidated	2008 2007 $'000 $'000 - - 579 130 - - Resolute Mining Limited
		579 130
		- 163,412 (62,949) (4,771)
	5,301 172,709 (1,835) (1,318)	(62,370) 158,771
		(428) (249)
	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	(62,798) 158,522
		927 -
		(61,871) 158,522
		(323) 65
		(62,194) 158,587
		- - (62,194) 158,587

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

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

BALANCE SHEETS

Note Current Assets Cash and cash equivalents 5 Receivables 6 Inventories 7 Available for sale financial 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 profits 23 Parent entity interest in equity Minority interest 24 Total Equity	2008 2007 $'000 $'000 29,731 67,661 14,922 16,358 43,209 31,834 4,708 13,480 9 205 3,629 23,674 96,208 153,212 - - 8,951 300 62,109 45,380 257,433 72,566 95,438 100,365 15,073 26,238 - 7,439 2,733 6,310 441,737 258,598 537,945 411,810 39,514 34,908 12,562 3,367 2,160 5,069 31,602 32,702 5,289 4,414 91,127 80,460 55,194 4,330 26,298 21,021 93,032 39,690 324 - 1,330 1,673 176,178 66,714 267,305 147,174 270,640 264,636 171,867 113,917 (9,333) (1,936) 105,402 150,239 267,936 262,220 2,704 2,416 270,640 264,636 Consolidated	2008 2007 $'000 $'000 1,026 1,460 387,550 21 - - 436 886 - - 149 65 Resolute Mining Limited
		389,161 2,432
		- 274,329 - - - - 426 - - - - - - - 16,643 76,803
		17,069 351,132
		406,230 353,564
		84,253 209 10,459 - - - - - - -
		94,712 209
		45,377 - - - - - 404 83,456 - -
		45,781 83,456
		140,493 83,665
		265,737 269,899
		171,867 113,917 836 754 93,034 155,228
		265,737 269,899
		- -
		265,737 269,899

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

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

STATEMENTS OF RECOGNISED INCOME AND EXPENSE

Note 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 financial assets, net of tax 22 Changes in hedge reserve unearned income, net of tax 22 Net (expense)/income recognised directly in equity (Loss)/profit 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	2008 2007 $'000 $'000 264,636 83,655 1,149 (16,318) - 1,233 - 36,156 675 - (4,161) - (5,536) (6,069) - (5,398) (7,873) 9,604 (44,863) 169,996 (52,736) 179,600 57,950 962 476 261 314 158 58,740 1,381 270,640 264,636 (53,024) 178,470 288 1,130 (52,736) 179,600 Consolidated	2008 2007 $'000 $'000 269,899 110,199 Resolute Mining Limited
		- - - - - - - - - - (394) (110) - -
		(394) (110) (62,194) 158,587
		(62,588) 158,477
		57,950 962 476 261 - -
		58,426 1,223

		265,737 269,899
		(62,588) 158,477 - -
		(62,588) 158,477

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

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

CASH FLOW STATEMENTS

Note 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 finance paid Net operating cash flows 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 financial assets Proceeds from the reimbursement for the Syama mining fleet Cash outflow on disposal of subsidiary 28 Payments for available for sale financial assets Loan to controlled entities Loans repaid by controlled entities Net investing cash flows 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 financing cash flows 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	2008 2007 $'000 $'000 224,275 179,370 (193,732) (166,385) (7,923) - 1,895 4,470 (2,416) (907) 22,099 16,548 (181,497) (110,442) (31,265) (22,366) 7,823 143 2,164 2,162 1,529 199,499 28,137 - - (4,096) - (4,655) - - - - (173,109) 60,245 51,591 968 (104) (6) 66,598 12,580 (3,138) (26,569) (1,568) (1,554) 113,379 (14,581) (37,631) 62,212 67,661 13,992 (299) (8,543) 29,731 67,661 Consolidated	2008 2007 $'000 $'000 - - (4,384) (2,264) - - 487 67 (428) (682) Resolute Mining Limited
		(4,325) (2,879)
		(460) - - - - - - - - 170,525 - - - - - - (125,031) (176,545) 19,449 24,397
		(106,042) 18,377
		51,591 968 (104) (6) 58,446 - - (15,000) - -
		109,933 (14,038)
		(434) 1,460 1,460 - - -
		1,026 1,460

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

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

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:

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.
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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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.
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.

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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(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 availablefor-sale financial assets, are included in the fair value reserve in equity.

(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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(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,
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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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-infirst-out basis.

(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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(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-forsale 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.

(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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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.

(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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(ii) Depreciation

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

Motor vehicles Office equipment Plant and equipment	Life Method
	3 years straight line 3 years straight line 6 years 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 cashgenerating unit to which the asset belongs.

If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cashgenerating 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.

(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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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.

(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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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 nontradeable 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.

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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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.

(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).

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(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.

(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:

Reference	Title	Summary	Application date of standard	Impact on Group financial report	Application date for Group
AASB 8 and AASB 2007-3	AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8	AASB 8 will result in a significant change in the approach to segment reporting, as it requires adoption of a ‘management approach’ to reporting on financial performance.	1 January 2009	AASB 8 is a disclosure standard so will have no direct impact on the amounts included in the Group’s financial statements.	1 July 2009
Revised AASB 123	Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to Australian Accounting Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and Interpretations 1 & 12]	The revised AASB 123 has removed the option to expense all borrowing costs and when adopted will require the capitalisation of all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset.	1 January 2009	There will be no impact on the Group, as the Group already capitalises material borrowing costs in relation to qualifying assets.	1 July 2009
AASB 101	Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian Accounting Standards arising from AASB 101	It requires the presentation of a statement of comprehensive income and makes changes to the statement of changes in equity, but will not affect any of the amounts recognised in the financial statements. If an entity has made a prior period adjustment or has reclassified items in the financial statements, it will need to disclose a third balance sheet, this one being as at the beginning of the comparative period.	1 January 2009	AASB 101 is a disclosure standard so will have no direct impact on the amounts included in the Group’s financial statements.	1 July 2009

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Reference	Title	Summary	Application date of standard	Impact on Group financial report	Application date for Group
AASB 2008-1	Amendments to Australian Accounting Standard – Share-based Payments: Vesting Conditions and Cancellations	The amendments clarify the definition of 'vesting conditions', introducing the term 'non-vesting conditions' for conditions other than vesting conditions as specifically defined and prescribe the accounting treatment of an award that is effectively cancelled because a non-vesting condition is not satisfied.	1 January 2009	The Group has share-based payment arrangements that may be affected by these amendments. However, the Group has not yet determined the extent of the impact, if any.	1 July 2009
AASB 2008-2	Amendments to Australian Accounting Standards – Puttable Financial Instruments and Obligations arising on Liquidation	The amendments provide a limited exception to the definition of a liability so as to allow an entity that issues puttable financial instruments with certain specified features, to classify those instruments as equity rather than financial liabilities.	1 January 2009	These amendments are not expected to have any impact on the Group’s financial report as the Group does not have on issue or expect to issue any puttable financial instruments as defined by the amendments.	1 July 2009
AASB 127 (Revised)	Consolidated and Separate Financial Statements	Under the revised standard, a change in the ownership interest of a subsidiary (that does not result in loss of control) will be accounted for as an equity transaction.	1 July 2009	If the Group changes its ownership interest in existing subsidiaries in the future, the change will be accounted 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.	1 July 2009
AASB 2008-3	Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127	Amending standard issued as a consequence of revisions to AASB 3 and AASB 127.	1 July 2009	Refer to AASB 3 (Revised) and AASB 127 (Revised) above.	1 July 2009

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Reference	Title	Summary	Application date of standard	Impact on Group financial report	Application date for Group
AASB 3 (Revised)	Business Combinations	The revised standard introduces a number of changes to the accounting for business combinations, the most significant of which allows entities a choice for each business combination entered into – to measure a non-controlling interest (formerly a minority interest) in the acquiree either at its fair value or at its proportionate 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.	1 July 2009	If the Group were to enter into a business combination(s) during the next financial year it may consider early adopting the revised standard. The Group has not yet assessed the impact of early adoption, including which accounting policy to adopt.	1 July 2009
Amendme nts to Internation al Financial Reporting Standards	Improvements to IFRSs	The improvements project is an annual project that provides a mechanism for making non-urgent, but necessary, amendments to IFRSs. The IASB has separated the amendments into two parts: Part 1 deals with changes the IASB identified resulting in accounting changes; Part II deals with either terminology or editorial amendments that the IASB believes will have minimal impact.	1 January 2009 except for amendment s to IFRS 5, which are effective from 1 July 2009.	The Group has not yet determined the extent of the impact of the amendments, if any.	1 July 2009
IFRIC 16	Hedges of a Net Investment in a Foreign Operation	This interpretation proposes that the hedged risk in a hedge of a net investment in a foreign operation is the foreign currency risk arising between the functional currency of the net investment and the functional currency of any parent entity. This also applies to foreign operations in the form of joint ventures, associates or branches.	1 January 2009	The Interpretation will not have any impact on the Group since it does not have a net investment in a foreign operation or subsidiary.	1 July 2009

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Reference	Title	Summary	Application date of standard	Impact on Group financial report	Application date for Group
Amendme nts to Internation al Financial Reporting Standards	Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate	The main amendments of relevance to Australian entities are those made to IAS 27 deleting the ‘cost method’ and requiring all dividends from a subsidiary, jointly controlled entity or associate to be recognised in profit or loss in an entity's separate financial statements (i.e., parent company accounts). The distinction between pre- and post-acquisition profits is no longer required. However, the payment of such dividends requires the entity to consider whether there is an indicator of impairment. AASB 127 has also been amended to effectively allow the cost of an investment in a subsidiary, in limited reorganisations, to be based on the previous carrying amount of the subsidiary (that is, share of equity) rather than its fair value.	1 January 2009	Recognising all dividends received from subsidiaries, jointly controlled entities and associates as income will likely give rise to greater income being recognised by the parent entity after adoption of these amendments. In addition, if the Group enters into any group reorganisation establishing new parent entities, an assessment will need to be made to determine if the reorganisation meets the conditions imposed to be effectively accounted for on a ‘carry-over basis’ rather than at fair value.	1 July 2009

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 .

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

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
Profit on sale of available for sale financial assets
Profit on sale of subsidiary
Net write off of loans to/from controlled entities
Realised gain on gold options
Other

2008
2007
2008
2007
$'000
$'000
$'000
$'000
Resolute Mining Limited
Consolidated
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

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

			Consolidated	Consolidated	Consolidated	Resolute Mining	Limited
			2008		2007	2008	2007
			$'000		$'000	$'000	$'000
NOTE	2:	(LOSS)/PROFIT FROM CONTINUING OPERATIONS (continued)
(e)		Other expenses
		Management and administration expenses	3,446		4,294	2,156	2,504
		Foreign exchange loss	6,154		7,710	-	1,700
		Rehabilitation provision adjustment from non operating mine sites		-	121	-	-
		Insurance costs		475	465	57	53
		Loss on sale of plant and equipment		204	19	-	-
		Loss on sale of available for sale financial assets		-	-	333	-
		Operating lease expense		533	514	-	-
		Write down of mineral exploration and development costs		163	968	34	144
		Depreciation of non mine site assets		140	153	-	-
		Realised loss on net settlement of gold forward sales contracts		-	722	-	-
		Realised loss on gold loan	1,377		588	-	-
		Realised loss on expired gold put options	8,313		-
		Share based payments		209	370	209	370
		Provision for doubtful debts	5,546		-	-	-
		Write down of investment in subsidiary (i)		-	-	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.

(f)
Borrowing costs
Interest and fees paid/payable to other entities
Rehabilitation provision discount adjustment
(g)
Treasury - unrealised (losses)/gains
Unrealised (loss)/gain on gold forward contracts
Unrealised gain/(loss) on gold put options
Unrealised gain on gold loan
Unrealised gain on gold call options
Unrealised loss on lease rate swaps
Unrealised foreign exchange gain/(loss)
(h)
Employee benefit expense
Salaries
Superannuation
Share based payment expense

1,049
907
428
249
786
411
-
-
1,835
1,318
428
249
(54,190)
6,980
-
-
7,990
(1,634)
-
-
621
767
-
-
-
2,694
-
-
-
(29)
-
-
7,131
(833)
927
-
(38,448)
7,945
927
-
30,736
23,009
-
-
544
438
-
-
209
370
209
370
31,489
23,817
209
370

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3: INCOME TAX
(a) Income tax expense/(benefit) attributable to continuing operations
Current tax (benefit)/expense
Deferred tax expense/(benefit)
Income tax expense/(benefit) attributable to (loss)/profit from continuing
operations
Prima facie income tax (benefit)/expense at 30% (2007: 30%)
(b) Numerical reconciliation of income tax expense/(benefit) to prima facie
tax expense/(benefit)
(Loss)/profit from continuing operations before income tax
expense/(benefit)
Tax effect of permanent differences:
- recognition of tax losses to offset current year tax expense
- tax benefit of investment allowance
- effect of different rates of tax on overseas income
- foreign exchange loss on investment in subsidiaries
- effect of share based payments expense not deductible
- prior year over provision
- other
- derecognition of deferred tax assets attributable to temporary differences
- current year losses incurred for which no deferred tax asset has been
recognised
- intra Australian tax consolidated group diminution of investments and
loans to subsidiaries
Income tax expense/(benefit) attributable to (loss)/profit from continuing
operations
- (recognition)/derecognition of tax losses used to offset deferred tax
liabilities
(c) Amounts recognised directly in equity
Amounts (credited)/debited directly to equity
(d) Tax losses
Unused tax losses for which no deferred tax asset has been recognised
(potential tax benefit at the prevailing tax rates of the respective
jurisdictions)

2008
2007
2008
2007
$'000
$'000
$'000
$'000
Resolute Mining Limited
Consolidated
(2,908)
5,060
-
-
12,789
4,280
323
(65)
9,881
9,340
323
(65)
(34,982)
179,336
(61,871)
158,522
(10,495)
53,801
(18,561)
47,557
(8,608)
2,811
(65)
28
32,174
-
18,147
-
(4,379)
(51,267)
-
(38,405)
-
(4,332)
-
-
4,981
7,256
739
-
-
944
-
-
(700)
-
-
-
-
-
-
(9,356)
63
111
63
-
(3,070)
(53)
-
-
(85)
69
-
111
9,881
9,340
323
(65)
(5,513)
5,398
(323)
65
163,277
118,711
-
-

A deferred income tax asset has not been recognised for these amounts at balance date as realisation of the benefit is not regarded as probable. The future benefit will only be obtained if:

(i) future assessable income is derived of a nature and an amount sufficient to enable the benefit 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 benefit.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

Consolidated	Consolidated	Resolute	Mining Limited
2008	2007	2008	2007
$'000	$'000	$'000	$'000

NOTE 3: INCOME TAX (continued)

(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 financial statements.

(f) Movements in the deferred tax assets balance

Balance at the beginning of the year Credited to equity Charged to the income statement Foreign exchange Balance as at the end of the year	7,439 15,411 - - 5,692 2,599 323 - (13,125) (10,594) (323) - (6) 23 - - - 7,439 - -

The deferred tax assets balance comprises temporary differences attributable to:

Receivables Shares in controlled entities Financial derivative liabilities Provision for site restoration Other liabilities Tax losses recognised (i) Temporary differences not recognised Set off of deferred tax liabilities pursuant to set off provisions Net deferred tax assets	1,664 - - - - - 18,048 - 37,397 21,721 - - 8,245 6,642 - - 127 45 121 40 19,346 7,713 - 15 (32,174) - (18,147) - 34,605 36,121 22 55 (34,605) (28,682) (22) (55) - 7,439 - -

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

(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	1,673 103 - - 179 7,997 - - (338) (6,314) - - (184) (113) - - 1,330 1,673 - -

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3: INCOME TAX (continued)
Inventories
Available for sale financial 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
The deferred tax liabilities balance comprises temporary differences
attributable to:
(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

2008
2007
2008
2007
$'000
$'000
$'000
$'000
Resolute Mining Limited
Consolidated
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

NOTE 3: INCOME TAX (continued)

(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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 4: DIVIDENDS PAID OR PROVIDED FOR The amount of franking credits available for the subsequent financial 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	2008 2007 2008 2007 $'000 $'000 $'000 $'000 Resolute Mining Limited Consolidated 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

Cash at bank earns interest at floating 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)		20,293 16,388 63 21 - - 387,487 - (5,685) (155) - - 314 125 - - 14,922 16,358 387,550 21 - - - 274,329 - - - 274,329

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 satisfied that payment will be received in full.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 6: TRADE AND OTHER RECEIVABLES (continued) Movements in the 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 * Past due not impaired, Considered impaired. 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		2008 2007 2008 2007 $'000 $'000 $'000 $'000 Resolute Mining Limited Consolidated (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 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

Available for sale financial 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	9 205 - - 9 205 - -

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 9: FINANCIAL DERIVATIVE ASSETS (continued) Non Current Gold put options NOTE 10: OTHER ASSETS Current Prepayments Other (a) Non Current Shares in controlled entities (Note 31), (b) Prepayments (c)	2008 2007 2008 2007 $'000 $'000 $'000 $'000 Resolute Mining Limited Consolidated 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).

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 - Acquired/(disposed) during the year - Expenditure for the year - Amounts written off during the year (a) - Foreign currency translation Balance at the end of the year	45,380 37,234 - - 6,463 (1,987) - - 13,855 14,210 - 144 (129) (968) - (144) (3,460) (3,109) - - 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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

				Consolidated	Consolidated	Resolute Mining Limited	Resolute Mining Limited	Resolute Mining Limited
				2008 2007			2008	2007
				$'000 $'000			$'000	$'000
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 & 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 & 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	-
NOTE 13: PROPERTY, PLANT & EQUIPMENT
	Buildings		Plant &	Motor	Office		Plant and	Total
			Equipment	Vehicles	Equipment		Equipment
							under Lease
Consolidated
	$'000		$'000	$'000	$'000		$'000	$'000
30 June 2008
At 1 July 2007 net of accumulated depreciation
and impairment	3,265		89,819 1,265		637		5,379	100,365
Additions	347		29,411 410		176		229	30,573
Transfers to development expenditure, and other		-	(21,978) -			-	-	(21,978)
Disposals		-	(8,565) (8)			(6)	-	(8,579)
Depreciation expense	(471)		(10,560) (459)		(258)		(1,811)	(13,559)
Foreign exchange translation	(63)		8,708 (7)		(22)		-	8,616
At 30 June 2008 net of accumulated depreciation
and impairment	3,078		86,835 1,201		527		3,797	95,438
30 June 2008
Cost or fair value	5,995		132,781 2,721		1,492		7,345	150,334
Accumulated depreciation and impairment	(2,917)		(45,946) (1,520)		(965)		(3,548)	(54,896)
Net carrying amount	3,078		86,835 1,201		527		3,797	95,438

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 13: PROPERTY, PLANT & EQUIPMENT (continued)

Consolidated 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	Buildings Plant & Equipment Motor Vehicles Office Equipment Plant and Equipment under Lease Total $'000 $'000 $'000 $'000 $'000 $'000 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.

	Consolidated	Consolidated	Resolute Mining Limited	Resolute Mining Limited
	2008	2007	2008	2007
	$'000	$'000	$'000	$'000
NOTE 14: DEFERRED EXPENDITURE
Non Current
Deferred mining costs	15,073	26,238	-	-
	15,073	26,238	-	-
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)	38,855	34,554	170	209
Other creditors	659	354	-	-
Amount payable to controlled entities (b)	-	-	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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 16: INTEREST BEARING LIABILITIES Current Lease liability (a) Borrowings (b) Gold loan Non Current Lease liability (a) Borrowings (b) Gold loan	2008 2007 $'000 $'000 Consolidated 2,103 1,564 10,459 - - 1,803 12,562 3,367 1,873 3,751 53,321 - - 579 55,194 4,330	2008 2007 $'000 $'000 Resolute Mining Limited - - 10,459 - - -
		10,459 -
		- - 45,377 - - -
		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 Ltd;
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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

Consolidated	Consolidated	Resolute	Mining Limited
2008	2007	2008	2007
$'000	$'000	$'000	$'000

NOTE 16: INTEREST BEARING LIABILITIES (continued)

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.

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)		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 - -

NOTE 18: FINANCIAL DERIVATIVE LIABILITIES

Current

Non Current

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19: PROVISIONS (continued) 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	2008 2007 2008 2007 $'000 $'000 $'000 $'000 Resolute Mining Limited Consolidated 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.

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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

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 cents 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	2008 2007 $'000 $'000 Resolute Mining Limited 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

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 cents 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

2008
2007
$'000
$'000
Resolute Mining Limited
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.

(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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 21: CONTRIBUTED EQUITY (continued)

(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	Consolidated		Parent
	2008	2007	2008		2007
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.

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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 22: RESERVES (continued)

(b) Movements in reserves

Consolidated As at 1 July 2006 Currency translation differences Hedge reserve put options, net of tax Hedge reserve forwards, net of tax Hedge reserve unearned income, net of tax Unrealised gain/(losses) reserve, net of tax Share option reserve Transfer to retained earnings on disposal of subsidiary As at 30 June 2007 Currency translation differences Hedge reserve put options, net of tax Hedge reserve forwards, net of tax Unrealised gain/(losses) reserve, net of tax Share option reserve As at 30 June 2008	Foreign Currency Translation Reserve Hedge Reserve Put Options Gain/(Loss) Hedge Reserve Forwards Gain/(Loss) Hedge Reserve Unearned Income Unrealised Gain/(Loss) Reserve Share Based Payments Reserve Equity Reserve Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 (4,778) (1,950) (22,505) 5,398 11,668 366 6,764 (5,037) (16,318) - - - - - - (16,318) - 1,233 - - - - - 1,233 - - 36,156 - - - - 36,156 - - - (5,398) - - - (5,398) - - - - (6,069) - - (6,069) - - - - - 261 - 261 - - - - - - (6,764) (6,764)
	(21,096) (717) 13,651 - 5,599 627 - (1,936) 1,149 - - - - - - 1,149 - 675 - - - - - 675 - - (4,161) - - - - (4,161) - - - - (5,536) - - (5,536) - - - - - 476 - 476
	(19,947) (42) 9,490 - 63 1,103 - (9,333)

Consolidated
As at 1 July 2006
Currency translation
differences
Hedge reserve put options,
net of tax
Hedge reserve forwards,
net of tax
Hedge reserve unearned
income, net of tax
Unrealised gain/(losses)
reserve, net of tax
Share option reserve
Transfer to retained
earnings on disposal of
subsidiary
As at 30 June 2007
Currency translation
differences
Hedge reserve put options,
net of tax
Hedge reserve forwards,
net of tax
Unrealised gain/(losses)
reserve, net of tax
Share option reserve
As at 30 June 2008

Foreign
Currency
Translation
Reserve
Hedge
Reserve Put
Options
Gain/(Loss)
Hedge
Reserve
Forwards
Gain/(Loss)
Hedge
Reserve
Unearned
Income
Unrealised
Gain/(Loss)
Reserve
Share
Based
Payments
Reserve
Equity
Reserve
Total
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
(4,778)
(1,950)
(22,505)
5,398
11,668
366
6,764
(5,037)
(16,318)
-
-
-
-
-
-
(16,318)
-
1,233
-
-
-
-
-
1,233
-
-
36,156
-
-
-
-
36,156
-
-
-
(5,398)
-
-
-
(5,398)
-
-
-
-
(6,069)
-
-
(6,069)
-
-
-
-
-
261
-
261
-
-
-
-
-
-
(6,764)
(6,764)

(21,096)
(717)
13,651
-
5,599
627
-
(1,936)
1,149
-
-
-
-
-
-
1,149
-
675
-
-
-
-
-
675
-
-
(4,161)
-
-
-
-
(4,161)
-
-
-
-
(5,536)
-
-
(5,536)
-
-
-
-
-
476
-
476

(19,947)
(42)
9,490
-
63
1,103
-
(9,333)

Resolute Mining Limited As at 1 July 2006 Unrealised gain/(losses) reserve, net of tax Share option reserve As at 30 June 2007 Unrealised gain/(losses) reserve, net of tax Share option reserve As at 30 June 2008	Share Based Payments Reserve Unrealised Gain/(Loss) Reserve Total $'000 $'000 $'000 366 237 603 - (110) (110) 261 - 261
	627 127 754 - (394) (394) 476 - 476
	1,103 (267) 836

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 23: RETAINED PROFITS/(ACCUMULATED LOSSES) Retained profits/(accumulated losses) at the beginning of the year Transfer of equity reserve to retained earnings on disposal of subsidiary Net (loss)/profit attributable to members Retained profits at the end of the financial year NOTE 24: MINORITY INTEREST Share capital Reserves Retained profits	2008 2007 2008 2007 $'000 $'000 $'000 $'000 Resolute Mining Limited Consolidated 150,239 (26,695) 155,228 (3,359) - 6,764 - - (44,837) 170,170 (62,194) 158,587 105,402 150,239 93,034 155,228 912 912 - - 1,497 1,183 - - 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

Lease expenditure contracted and provided for:

Due within one year Due between one and five years Total minimum lease payments Less finance 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 - -

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 26: LEASE COMMITMENTS (continued) b) Operating lease (non-cancellable) Due within one year Due between one and five years Aggregate lease expenditure contracted for at balance date but not provided for	2008 2007 2008 2007 $'000 $'000 $'000 $'000 Resolute Mining Limited Consolidated 211 202 - - 220 432 - - 431 634 - -

The operating lease expenditure relates to the rental of office premises and are fixed.

NOTE 27: NOTES TO THE CASH FLOW STATEMENTS

(a) Reconciliation of net (loss)/profit from continuing operations after income tax to the net cash flows:

Net(loss)/profit from ordinary activities after income tax
Add/(deduct) non-cash items:
Write down of mineral exploration and development costs
Depreciation and amortisation of property, plant and equipment
Amortisation of exploration, development and rehabilitation costs
Rehabilitation provision discount adjustment
Share based payments
Loss on sale of property, plant and equipment
Profit on sale of investments
Foreign exchange (gain)/loss
Provision for employee entitlements
Provision for doubtful debts
Unearned income
Net write off of loans to/from controlled entities
Provision for diminution of investment
Other
Changes in operating assets and liabilities:
Decrease/(increase) in receivables
Increase in inventories
Decrease/(increase) in financial derivatives
(Increase)/decrease in prepayments
Decrease in deferred expenditure
Increase/(decrease) in payables
(Decrease)/increase in provision for taxation
Increase/(decrease) in provisions
Increase in deferred tax balances
Net operating cash flows

(44,863)
169,996
(62,194)
158,587
163
968
34
144
9,649
11,282
-
-
9,292
3,511
-
-
786
411
-
-
209
370
209
370
204
19
-
-
-
(180,093)
-
(132,225)
(7,131)
833
(927)
1,700
544
144
-
-
(5,546)
-
-
-
-
(5,204)
-
-
-
-
-
(31,187)
-
-
60,160
-
853
4
(1,442)
(214)
1,436
(5,499)
(42)
(15)
(11,375)
(1,932)
-
-
43,787
(8,004)
-
-
(2,019)
250
(84)
81
11,165
16,782
-
-
4,606
5,795
(39)
(63)
(2,909)
5,059
-
(57)
6,152
(2,288)
-
-
7,096
4,144
-
-
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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 27: NOTES TO THE CASH FLOW STATEMENTS (continued)

(c) Finance Leases

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

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:

Consolidated 2007 $'000

Revenue Expenses Loss before income tax Income tax benefit 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 outflow on disposal: Cash consideration Outflow of cash held by disposed subsidiary Reflected in cash flow 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)

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

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

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)	2008 2007 $’000 $’000 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 Mabangu Mining Limited Mabangu Mining Limited Resolute Pty Ltd	Other Participant/Joint Venture 2008 2007 % % Iamgold/Nyakafuru JV 100% 66% Sub-Sahara/Nyakafuru JV 51% 51% Elected to earn additional 19% Elected to earn additional 19% Etruscan/Finkolo JV 60% 60% Percentage of Interest Held

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

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 30: INTERESTS IN JOINT VENTURES (continued)

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

Exploration and evaluation expenditure	Consolidated 2008 2007 $’000 $’000 12,139 15,874

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.

Name of Controlled Entity and
Consolidated Entity
Country of Incorporation
Company Holding
the Investment
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 Goldfields 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

2008
2007
2008
2007
$'000
$'000
%
%
-
-
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
Consolidated Entity
Book Value of Direct
Investment Held
Percentage of
Shares Held by

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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 31: CONTROLLED ENTITIES (continued)

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.

NOTE 32: SEGMENT INFORMATION

a) Primary segments – geographical

The consolidated entity operates in four geographical segments.

2008 Geographical Segments 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 expenditure	Tanzania Ghana Mali Australia Consolidated $'000 $'000 $'000 $'000 $'000 122,171 - - 109,330 231,501 83 - - 3,850 3,933	Tanzania Ghana Mali Australia Consolidated $'000 $'000 $'000 $'000 $'000 122,171 - - 109,330 231,501 83 - - 3,850 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
	122 7 - 34	163

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 32: SEGMENT INFORMATION (continued)

2007 Geographical Segments Revenue Sales Other revenue Segment revenue Results Segment results from continuing operations Group profit from ordinary activities before income tax expense Income tax expense Group profit 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 expenditure	Tanzania Ghana Mali Australia $'000 $'000 $'000 $'000 99,126 - - 86,171 177 - 11 6,663	Consolidated $'000 185,297 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
	75 729 - 164	968

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

(b) Secondary segment - business

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

Segment revenue Segment assets Acquisition of non-current assets	2008 2007 $'000 $'000 235,434 192,148 537,945 411,810 216,400 132,810 Mining and Exploration of Gold

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

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	Consolidated Resolute Mining Limited 2008 2007 2008 2007 $ $ $ $ 226,767 195,000 77,189 91,918 53,050 232,526 53,050 214,240
	279,817 427,526 130,239 306,158

Amounts received or due and receivable by a related overseas office 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 firms: Auditing accounts (Societe d’Expertise Comptable Diarra, Mali) Auditing accounts (PricewaterhouseCoopers, Ghana) Total	Consolidated Resolute Mining Limited 2008 2007 2008 2007 $ $ $ $ 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

NOTE 34: EMPLOYEE BENEFITS

a) Employee entitlements

The aggregate employee entitlement liability is comprised of:

Provisions (current) (Note 19) Provisions (non current) (Note 19)	Consolidated Resolute Mining Limited 2008 2007 2008 2007 $’000 $’000 $’000 $’000 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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 34: EMPLOYEE BENEFITS (continued)

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:

Balance at the beginning of the year - granted - exercised/lapsed Balance at end of year Vested and exercisable at the end of the year	Number of Weighted Number of Weighted Options Average Options Average Exercise Price Exercise Price $ $ 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 2008 2007
	1,246,000 1.62 2,237,500 1.23
	775,000 1.32 1,587,500 1.16

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 34: EMPLOYEE BENEFITS (continued)

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

2008
Number of		Grant	Exercise	Expiry	Weighted Average	Proceeds from	Number of Shares	Issue Date of the	Fair Value of
Options		Date	Date	Date	Exercise Price	Shares Issued	Issued	Shares	Shares Issued
					$	$			$
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
Number of		Grant	Exercise	Expiry	Weighted Average	Proceeds from	Number of Shares	Issue Date of the	Fair Value of
Options		Date	Date	Date	Exercise Price	Shares Issued	Issued	Shares	Shares Issued
					$	$			$
	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 Sept 02	13 Jul 06	19 Sept 07	0.81	32,805	40,500	13 Jul 06	2.05
	20,000	20 Sept 02	25 Oct 06	19 Sept 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:

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

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

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 the 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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 35: CONTINGENT LIABILITIES (continued)

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.

(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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 35: CONTINGENT LIABILITIES (continued)

(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.

NOTE 37: EARNINGS PER SHARE (EPS)

Earnings per share
Basic earnings per share
(Loss)/profit used in calculation of basic EPS ($'000)
Weighted average number of ordinary shares outstanding during the
period used in the calculation of basic EPS
Basic EPS (cents per share)
Diluted earnings per share
(Loss)/profit used in calculation of dilutive EPS ($'000)
Weighted average number of ordinary shares outstanding during the
period used in the calculation of basic EPS
Weighted average of notional shares used in determining diluted EPS
Weighted average number of ordinary shares outstanding during the
period used in the calculation of diluted EPS
Number of potential ordinary shares that are not dilutive and hence
not included in calculation of diluted EPS
Diluted EPS (cents per share)

2008
2007
(44,837)
170,170
262,465,888
230,252,733
(17.08)
73.91
Consolidated
(44,837)
170,170
262,465,888
230,252,733
n/a
1,107,301
262,465,888
231,360,034
471,000
475,000
(17.08)
73.55

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

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	Consolidated	Resolute Mining Limited	Resolute Mining Limited
			2008	2007	2008	2007
			$	$	$	$
Short-term employee benefits			1,868,073	1,997,747	176,429	200,715
Post-employment benefits			248,817	221,325	83,571	54,285
Share-based payments			20,883	26,092	-	-
			2,137,773	2,245,164	260,000	255,000
(c) Details of option holdings of key		management personnel are as follows:
2008	Balance at	Exercised	Granted during	Balance at	Vested and	Fair value
	the start of	during the	the year as	the end of	exercisable	of options
	the year	year	compensation	the year	at the end of	at exercise
			(i)		the year	date
						$
Directors
P.Huston	-	-	-	-	-	-
P.Sullivan	-	-	-	-	-	-
T.Ford	-	-	-	-	-	-
H.Price	-	-	-	-	-	-
Officers
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

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 38: KEY MANAGEMENT PERSONNEL (continued)

2007	Balance at	Exercised	Granted	Balance at	Vested and	Fair value
	the start of	during the	during the	the end of	exercisable	of options
	the year	year	year as	the year	at the end of	at exercise
			compensation		the year	date
						$
Directors
P.Huston	-	-	-	-	-	-
P.Sullivan (v)	2,000,000	(2,000,000)	-	-	-	2,470,000
T.Ford	-	-	-	-	-	-
H.Price	-	-	-	-	-	-
Officers
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.

(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.

(d) Details of share holdings of key management personnel are as follows:

2008	Balance at the start	Received during the	Other changes	Balance at the end
	of the year	year on the exercise	during the year	of the year
		of options
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
Officers
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

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 38: KEY MANAGEMENT PERSONNEL (continued)

2007	Balance at the start	Received during the	Other changes	Balance at the end
	of the year	year on the exercise	during the year	of the year
		of options	(ii)
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
Officers
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.

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).

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 39: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)

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 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	Ounces Sales Price Ounces Strike Price $/Ounce $/Ounce Ounces $/Ounce 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 Total Forward Sales Put Options Bought
	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
	Ounces Sales Price Ounces Strike Price $/Ounce $/Ounce Ounces $/Ounce 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 Forward Sales Put Options Bought Total

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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

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:

Financial Assets
Cash (i)
Receivables
Available for sale financial assets
Financial derivative assets
Financial Liabilities
Payables
Interest bearing liabilities
Financial derivative liabilities
Other financial liabilities

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
12,949
16,386
396
29,731
18,029
4,043
45,589
67,661
6,207
3,488
5,227
14,922
10,842
3,001
2,515
16,358
-
4,272
436
4,708
-
12,594
886
13,480
-
8,960
-
8,960
2
503
-
505
19,156
33,106
6,059
58,321
28,873
20,141
48,990
98,004
12,034
12,057
15,423
39,514
13,792
12,100
9,016
34,908
63,780
3,976
-
67,756
-
7,697
-
7,697
30,501
94,133
-
124,634
14,505
57,887
-
72,392
324
-
-
324
-
-
-
-
106,639
110,166
15,423
232,228
28,297
77,684
9,016
114,997
30 June 2008
30 June 2007

(i) Other cash includes $0.02m (2007: $28.8) held in Euro and $nil (2007: $14.5) held in Canadian dollars.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 39: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)

The parent entity’s exposure to foreign exchange currency risk at the reporting date was as follows:

Financial Assets
Cash
Receivables
Available for sale financial assets
Financial Liabilities
Payables
Interest bearing liabilities
Other financial liabilities

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
-
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
30 June 2008
30 June 2007

(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 Financial Assets Cash Receivables Available for sale financial assets Financial derivative assets Financial Liabilities Payables Interest bearing liabilities Financial derivative liabilities Other financial liabilities	Floating Interest Rate $'000 28,271 - - -	Non Interest Total Bearing < 1 Year 1 to 5 Years > 5 Years Floating Fixed $'000 $'000 $'000 $'000 $'000 1,460 - - - 29,731 4.3% 7.3% - - - 14,922 14,922 - - - - - 4,708 4,708 - - - - - 8,960 8,960 - - 1,460 - - 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 Fixed Interest Rate Average Interest Rate Maturing in
	28,271
	- - - -
	-

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 39: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)

2007 Financial Assets Cash Receivables Available for sale financial assets Financial derivative assets Financial Liabilities Payables Interest bearing liabilities Financial derivative liabilities	Floating Interest Rate $'000 66,201 - - -	Non Interest Total Bearing < 1 Year 1 to 5 Years > 5 Years Floating Fixed $'000 $'000 $'000 $'000 $'000 1,460 - - - 67,661 3.8% 6.3% - - - 16,358 16,358 - - - - - 13,480 13,480 - - - - - 505 505 - - 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 Fixed Interest Rate Average Interest Rate Maturing in
	66,201
	- - -
	-

The following tables summarises interest rate risk for the parent entity, together with effective interest rates as at balance date.

2008 Financial Assets Cash Receivables Available for sale financial assets Financial Liabilities Payables Interest bearing liabilities Other financial liabilities	Non Interest Total Bearing < 1 Year 1 to 5 Years > 5 Years $'000 $'000 $'000 $'000 $'000 1,026 - - - 1,026 - - - 387,550 387,550 - - - 436 436 Fixed Interest Rate Maturing in	Average Interest Rate
		Floating Fixed - 7.3% - - - - - - - 4.3% - -
	1,026 - - 387,986 389,012
	- - - 84,253 84,253 55,836 - - - 55,836 - - - 404 404
	55,836 - - 84,657 140,493

2007 Financial Assets Cash Receivables Available for sale financial assets Financial Liabilities Payables Other financial liabilities	Fixed Interest Rate Non Interest Total Maturing in Bearing < 1 Year $'000 $'000 $'000 1,460 - 1,460 - 274,350 274,350 - 886 886	Average Interest Rate
		Floating Fixed - 7.3% - - - - - - - -
	1,460 275,236 276,696
	- 209 209 - 83,456 83,456
	- 83,665 83,665

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 39: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)

(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.

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:

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 financial derivative assets*

2008
2007
2008
2007
$'000
$'000
$'000
$'000
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
Consolidated
Resolute Mining Limited
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).

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 39: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)

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:

Due within 1 to 3 months Due within 4 months to one year Due between one and five years Total minimum repayments Less finance charges Less establishment fees Present value of minimum repayments	2008 2007 2008 2007 $'000 $'000 $'000 $'000 Consolidated Resolute Mining Limited 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.

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

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.

Consolidated
30 June 2008
Carrying
Amount
$'000
Financial Assets
Cash and cash equivalents
29,731
Trade and other receivables
14,922
Available for sale financial assets
4,708
Financial derivative assets
8,960
Financial Liabilities
Payables
39,514
Interest bearing liabilities
67,756
Financial derivative liabilities
124,634
Other financial liabilities
324
Total increase/(decrease)

Profit
Equity
Profit
Equity
Profit
Equity
Profit
Equity
Profit
Equity
Profit
Equity
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
(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)
-
-
-
-
-
-
-
-
-
-
-
-
Foreign exchange risk
-10%
+10%
-1%
+1%
Interest rate risk
+10%
-10%
Gold price risk

3,863
3,863
(3,676)
(3,676)
(10,013)
(10,013)
8,453
8,453
34,244
34,244
(33,523)
(33,523)

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 39: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)

Consolidated
30 June 2007
Carrying
Amount
$'000
Financial Assets
Cash and cash equivalents
67,661
Trade and other receivables
16,358
Available for sale financial assets
13,480
Financial derivative assets
505
Financial Liabilities
Payables
34,908
Interest bearing liabilities
7,697
Financial derivative liabilities
72,392
Other financial liabilities
-
Total increase/(decrease)

Profit
Equity
Profit
Equity
Profit
Equity
Profit
Equity
Profit
Equity
Profit
Equity
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
(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)

-
-
-
-
-
-
-
-
-
-
-
-
Interest rate risk
Foreign exchange risk
-1%
+1%
-10%
+10%
+10%
-10%
Gold price risk

3,448
3,448
(3,291)
(3,291)
2,104
2,104
(1,723)
(1,723)
38,284
38,284
(37,240)
(37,240)

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 39: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)

Parent 30 June 2008 Carrying Amount $'000 Financial Assets Cash and cash equivalents 1,026 Trade and other receivables 387,550 Available for sale financial assets 436 Financial Liabilities Payables 84,253 Interest bearing liabilities 55,836 Other financial liabilities 404 Total increase/(decrease) Parent 30 June 2007 Carrying Amount $'000 Financial Assets Cash and cash equivalents 1,460 Trade and other receivables 274,350 Available for sale financial assets 886 Financial Liabilities Payables 209 Other financial liabilities 83,456 Total (decrease)/increase	Profit Equity Profit Equity Profit Equity Profit Equity $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 (1) (1) 1 1 - - - - - - - - - - - - - - - - 48 48 (40) (40) - - - - - - - - 47 47 (47) (47) (6,391) (6,391) 5,229 5,229 - - - - - - - - Interest rate risk Foreign exchange risk -1% +1% -10% +10%
	46 46 (46) (46) (6,343) (6,343) 5,189 5,189
	Profit Equity Profit Equity Profit Equity Profit Equity $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 (1) (1) 1 1 - - - - - - - - - - - - - - - - 98 98 (81) (81) - - - - - - - - - - - - - - - - Interest rate risk Foreign exchange risk -1% +1% -10% +10%
	(1) (1) 1 1 98 98 (81) (81)

RESOLUTE MINING LIMITED FINANCIAL REPORT For the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

NOTE 40: SUBSEQUENT EVENTS

RESOLUTE MINING LIMITED 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 8 to 15 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

==> picture [103 x 61] intentionally omitted <==

Independent auditor’s report to the members of Resolute Mining Limited

Report on the Financial Report

We have audited the accompanying financial report of Resolute Mining Limited, which comprises the balance sheet as at 30 June 2008 and the income statement, statement of recognised income and expense and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1(a), the directors also state that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit we have met the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration. In addition to our audit of the financial report, we were engaged to undertake the services disclosed in the notes to the financial statements. The provision of these services has not impaired our independence.

Liability limited by a scheme approved under Professional Standards Legislation

GAB:KT:RESOLUTE:136

Auditor’s Opinion

In our opinion:

the financial report of Resolute Mining Limited is in accordance with the Corporations Act 2001, including:
i giving a true and fair view of the financial position of Resolute Mining Limited and the consolidated entity at 30 June 2008 and of their performance for the year ended on that date; and
ii complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.
the financial report also complies with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Report on the Remuneration Report

We have audited the Remuneration Report included on pages 8 to 15 of the directors’ report for the year ended 30 June 2008. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion, the Remuneration Report of Resolute Mining Limited for the year ended 30 June 2008 complies with section 300A of the Corporations Act 2001.

Inherent Uncertainty Regarding Continuation as a Going Concern

Without qualifying our opinion, we draw attention to Note 1(a) of the financial report. There is significant uncertainty whether the company and the consolidated entity will be able to continue as going concerns and therefore whether they will be able to pay their debts as and when they fall due and realise their assets and extinguish their liabilities in the normal course of business at the amounts stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the company and the consolidated entity not continue as going concerns.

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Ernst & Young

==> picture [177 x 51] intentionally omitted <==

Gavin A Buckingham Partner Perth 30 September 2008

GAB:KT:RESOLUTE:136

SHAREHOLDER INFORMATION

Substantial shareholders at 31 August 2008

Name Alliance Life Common Fund Ltd Barclays Bank Plc and Carello Investments Limited Bond Street Custodians Limited ACF Officium Special Situations Fund Acorn Capital Limited Distribution of shareholdings as at 31 August 2008 Size of Holding 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	Number of % of Issued Ordinary Shares Capital 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%
	Ordinary % of Issued Shareholders Capital 967 0.16% 1,559 1.48% 472 1.23% 568 5.22% 81 91.91%
	3,647 100%
	356

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 31 August 2008

Name
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
Citicorp Nominees Pty Ltd
Avanteos Investments Limited (Symetry Delegates)
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
Merrill Lynch Australia Nominees PL
Total held by twenty largest shareholders as a percentage of this class

Number of
% of Issued
Ordinary Shares
Capital
77,596,530
27.62%
35,238,604
12.54%
29,896,924
10.64%
20,080,631
7.15%
17,311,358
6.16%
13,557,470
4.83%
11,219,220
3.99%
9,071,220
3.23%
5,523,490
1.97%
4,845,043
1.72%
4,620,895
1.64%
4,284,301
1.52%
2,524,373
0.90%
2,400,000
0.85%
1,631,200
0.58%
1,358,000
0.48%
1,120,000
0.40%
1,059,000
0.38%
800,000
0.28%
773,247
0.28%

244,911,506
87.16%

87.16%

Total held by twenty largest shareholders as a percentage of this class

AI assistant

Resolute Mining Limited — Annual Report 2008

10548_rns_2008-09-30_43e46490-c955-4a8b-8c4e-eb3c732c05a0.pdf

RESOLUTE MINING LIMITED

CONTENTS

CORPORATE DIRECTORY

Directors

Secretary

Registered Office and Business Address

ABN 39 097 088 689

Web Site

Share Registry

Home Exchange

Securities on Issue (30/06/2008)

Legal Advisor

Auditor

Bankers

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

CORPORATE INFORMATION

DIRECTORS

Names, qualifications, experience and special responsibilities

Peter Ernest Huston (Non-Executive Chairman) B. Juris, LLB (Hons), B.Com., LLM

Peter Ross Sullivan (Chief Executive Officer) B.E., MBA

Thomas Cummings Ford (Non-Executive Director) FAICD

Henry Thomas Stuart (Bill) Price (Non-Executive Director)

B.Com., FCA, FAICD

COMPANY SECRETARY

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

RESULTS

DIVIDENDS

REVIEW OF OPERATIONS

Production

Exploration

Project Development

Corporate

OUTLOOK

Operations

Golden Pride

Ravenswood

Syama

Project Development

Syama

Mt Wright

Exploration and Project Evaluation

Funding of Future Exploration and Development Expenditure

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

SIGNIFICANT EVENTS AFTER BALANCE DATE

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

ENVIRONMENTAL REGULATION PERFORMANCE

REMUNERATION REPORT

RML Remuneration Policy

Remuneration and Nomination Committee

Remuneration Structure

Non-Executive Director Remuneration

Objective

Structure

Chief Executive Officer and Senior Executive Remuneration

Objective

Structure

Fixed Remuneration

Objective

Structure

Variable Remuneration – Short Term Incentive (STI)

Objective

Structure

Variable Remuneration – Long Term Incentive (LTI)

Objective

Structure

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

RESOLUTE MINING LIMITED DIRECTORS’ REPORT For the year ended 30 June 2008

Employment Contracts

SHARES UNDER OPTIONS

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

DIRECTORS' MEETINGS

ROUNDING

AUDITOR INDEPENDENCE

NON-AUDIT SERVICES

RESOLUTE MINING LIMITED CORPORATE GOVERNANCE STATEMENT For the year ended 30 June 2008

1. The Board of Directors

Resolute Mining Limited Annual Report 2008