ANNUAL REPORT

30 JUNE 2012

CORPORATE DIRECTORY 1
DIRECTORS' REPORT 2
AUDITOR'S INDEPENDENCE DECLARATION 42
DIRECTORS' DECLARATION 43
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 44
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 45
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 46
CONSOLIDATED STATEMENT OF CASH FLOWS 47
NOTES TO AND FORMING PART OF THE ACCOUNTS 48
INDEPENDENT AUDITOR'S REPORT 83
CORPORATE GOVERNANCE 85
SHAREHOLDER INFORMATION 98
SCHEDULE OF MINING TENEMENTS 101

CORPORATE DIRECTORY

DIRECTORS

Bruce Franzen Andrew Childs Ian Tchacos Jeffrey Moore

COMPANY SECRETARY

Bruce Franzen

REGISTERED & PRINCIPAL OFFICE

Suite 1 45 Ord Street WEST PERTH WA 6005

Telephone: (08) 9226 0866 Facsimile: (08) 9486 7375

AUDITORS

PKF Mack and Co Level 4 35 Havelock Street WEST PERTH WA 6005

SHARE REGISTRY

Computershare Investor Services Pty Limited Level 4, Reserve Bank Building 45 St George Terrace PERTH WA 6000

STOCK EXCHANGE LISTING

Australian Securities Exchange (Home Exchange: Perth, Western Australia) Code: RIE

DIRECTORS' REPORT

Your directors present the following report on Riedel Resources Limited (the Company) and the entities it controlled during or at the end of the financial year (the Group) for the financial year ended 30 June 2012.

DIRECTORS

The Directors of the Company at any time during or since the end of financial year are:

Ian TchacosQualifications	ChairmanB.Eng (Mech.)
Experience	Mr Tchacos is a mechanical engineer with over 25 years internationalexperience in corporate development and strategy, mergers andacquisitions,exploration,developmentandproductionoperations,marketing and finance. He has a proven management track record in arange of international company environments. In his last appointmentas Managing Director of Nexus Energy he was responsible for thiscompany's development from an onshore micro cap explorer to an ASXtop 200 offshore producer and operator. He is currently Non ExecutiveChairman of ADX Energy Limited, and Non Executive Director ofAustralian Oil Company Limited.
Directorships of otherlisted companies	ADX Energy LimitedAustralian Oil Company Limited
Interest in SharesInterest in Options	465,5002,150,000
Jeffrey MooreQualifications	Managing Director (Appointed on 30 September 2010)B.Sc, MAusIMM, MGSA
Experience	Mr Moore is a geologist with extensive technical, managerial andproject finance experience in exploration and mining for publicly listedcompanies. During his career, he has generated and managed projectsfor commodities including precious metals, base metals, diamonds,nickel and industrial minerals throughout Australia, Central and SouthAmerica, Africa and Asia.
	Mr Moore has held previous directorships with Allied Gold Limited from2004 to 2008, Great Australian Resources Limited from 2005 to 2007,Abra Mining Limited from 2006 to 2011, Alchemy Resources Limitedfrom 2010 to 2011 and is currently a director of Cougar MetalsNL (commencing 2008).
	Mr Moore is also a Corporate Member of the Australasian Institute ofMining and Metallurgy and a Member of the Geological Society ofAustralia.
Directorships of otherlisted companies	Cougar Metals NL
Interest in Shares	250,000

DIRECTORS' REPORT (CONT)

Interest in Options	100,000
Interest in Performance	6,000,000
Rights

Bruce Franzen Director & Company Secretary Qualifications B.Bus FCPA FFin

Experience Mr Franzen is a certified practicing accountant with over twenty year's local and international experience in the resources industry. Bruce has substantial experience in commercial administration and financial control related to offshore oil & gas drilling, exploration, and development of large scale capital resource projects.

Bruce has held senior positions for large companies such as Woodside Petroleum, Inpex and Origin Energy. He also was a former Chief Financial Officer and Company Secretary for Globe Metals & Mining from 2007 - 2009, and a founding Director of DMC Mining Limited. He served as an Executive Director, Company Secretary and Chief Financial Officer of DMC Mining from 2006 – 2009, and is currently a Non Executive Director of Reclaim Industries Limited.

Directorships of other listed companies Reclaim Industries Limited

Interest in Shares 686,760 Interest in Options 2,300,049 Interest in Performance Rights 2,000,000

Andrew Childs

Qualifications Director

Experience Mr Childs is currently Chairman of Australian Oil Company Limited, Non Executive Director of ADX Energy Limited. He also sits on the Boards of a number of unlisted private and public companies including AIM listed Stratic Energy Corporation. Andrew graduated from the University of Otago, New Zealand in 1980 with a Bachelor of Science in Geology and Zoology.

Having started his professional career as an Exploration Geologist in the Eastern Goldfields of Western Australia, Andrew moved to petroleum geology and geophysics with Perth-based Ranger Oil Australia (later renamed Petroz NL). He gained technical experience with Petroz as a Geoscientist and later commercial experience as the Commercial Assistant to the Managing Director. Andrew is a member of the Petroleum Exploration Society of Australia and the American Association of Petroleum Geologists.

Directorships of other	ADX Energy Limited
listed companies	Australian Oil Company Limited

DIRECTORS' REPORT (CONT)

Interest in Shares	1,225,000
Interest in Options	2,325,000

Wolfgang Zimmer Director (Resigned 30 June 2012) Qualifications PhD Geology and Petrology

Experience Mr Zimmer has 29 years experience in the oil and gas industry. He received his Ph.D from the University of Vienna in Geology and Petrology. His career began with Mobil Oil in Vienna where he worked for 11 years primarily in Europe and the USA in oil and gas exploration and production. In 1991 he joined OMV, the Austrian oil company, and fulfilled a variety of senior management roles for the next 15 years. Most recently he was the CEO of Grove Energy, a Canadian and UK listed oil and gas explorer which he successfully merged with another exploration company in 2007. Mr Zimmer is currently Managing Director of ADX Energy Limited.

Directorships of otherlisted companies	ADX Energy Limited
Interest in Shares	300,000
Interest in Options	2,000,000

The directors have been in office to the date of this report unless otherwise stated.

The position of company secretary was held by Bruce Franzen throughout and since the end of the financial year.

PRINCIPAL ACTIVITIES

The principal activity of the group during the year was mineral exploration.

OPERATING RESULTS

The net loss of the group for the financial period after provision for income tax was $1,923,970 (2011: $887,784)

DIRECTORS' REPORT (CONT)

REVIEW OF OPERATIONS

Figure 1: Western Australia and Burkina Faso (West Africa) Project Locations

CHERITONS FIND PROJECT

Background

The Company's 100%-owned Exploration Licence 77/1793 was granted on 14th May 2012.

The tenement contains the Cheriton's Find (Redwing) gold deposit which hosts 1 Inferred Mineral Resources of 1,400,000 tonnes @ 2.4g/t Au for 108,000 ounces of gold.

The exploration licence is located in the Forrestania-Southern Cross Greenstone Belt, approximately 48 kilometres south of St Barbara Limited's 2.2 Mtpa gold processing plant at Marvel Loch in the Eastern Goldfields Region of Western Australia (see Figure 2).

Geological Setting

E77/1793 covers a west-north-west striking sequence of mafic and ultramafic rocks, flanking the south-western part of the Parker Range Dome (see Figure 2).

At the Redwing deposit, significant gold mineralisation has been discovered along a strike length of 500 metres and to a vertical depth of 160 metres. The mineralised deformation zone dips shallowly to the south and has a true thickness of between 5 metres and 30 metres although the host rock sequence and associated structural deformation zone extends

1 Sons of Gwalia – Inferred Resource Report – 29 November 2000

DIRECTORS' REPORT (CONT)

for at least a further 2,500 metres to the south of Redwing.

Figure 2: Cheriton's Find and Redwing Gold Deposit – Location and regional geological map

Within the overall mineralised/deformation zone, free gold is hosted by a series of stacked, sheeted quartz veins ranging in thickness from one to four metres within alteration halos which are characterised by calc-silicate, carbonate, garnet and pyrite assemblages.

Inferred Mineral Resources

In 2000, resource estimation work carried out by Sons of Gwalia Limited ("SOG") resulted in an Inferred Mineral Resource Estimate of 1,400,000 tonnes @ 2.4g/t Au for 108,000 ounces of gold at the Redwing gold deposit (see Table 1 below).

DIRECTORS' REPORT (CONT)

Material	ResourceCategory	Lower GoldCutoff(g/t Au)	Top GoldCut(g/t Au)	Tonnes	GoldGrade(g/t Au)	ContainedGold(oz Au)
Oxide	Inferred	0.5	20	30,000	2.3
Transition	Inferred	0.5	20	100,000	2.0
Primary	Inferred	0.5	20	1,270,000	2.5
TOTAL	Inferred	0.5	20	1,400,000	2.4	108,000

TABLE 1: Redwing Gold Deposit – Inferred Mineral Resources

N.B. See detailed notes (attached) "Key inputs used for Inferred Mineral Resource estimation".

Riedel has subsequently carried out a peer review of the Resource Estimate using independent expert Bob Annett Consulting. This work has validated the overall geological and structural methodology adopted by SOG and the general tenor of the tonnage, grade and metal (ounces) estimates which resulted from SOG's work. Sample locations, drilling sample recoveries and analytical methods are deemed acceptable for resource estimation purposes.

Figure 3: Cheritons Find – Redwing Gold Deposit cross-section – All lodes projected to single section looking west.

Planned Work Programmes

Riedel plans to complete infill drilling with 50 metre deep, angled RC drill holes on 40 metre by 40 metre centres to upgrade the classification of the upper 30 metres of the Redwing gold deposit to measured and indicated status for the purpose of facilitating open-pit mining

DIRECTORS' REPORT (CONT)

studies and optimisations. The planned resource drilling programme will consist of 22 RC holes for a total of 1,100 metres of drilling.

The Company has also initiated discussions with other regional gold explorers and producers in relation to toll treatment and resource consolidation strategies.

Royalty

The Redwing gold deposit is subject to a 3.5% gross proceeds royalty, payable to St Barbara Limited and its associates.

Charteris Creek Project

Exploration Licence 45/2763 was granted on the 8th November 2011 and an endorsement to explore for iron was granted on the 15th February 2012. The tenement is located approximately 45 kilometres north of Nullagine and 50 kilometres south-east of Marble Bar in the Pilbara Region of Western Australia and covers an area of 131 square kilometres.

Although limited exploration has been previously completed on this tenement, there are numerous proximal gold, base metal and iron-ore deposits within prospective rock formations that extend into the Charteris Creek exploration licence (see Figure 4 for geological setting, metal occurrences and deposits).

Figure 4: Charteris Creek Project – Geological map highlighting known metal occurrences and deposits

DIRECTORS' REPORT (CONT)

Geological Setting

The exploration licence is located within a complex group of Paleo-Archaean to Neo-Archaean rock formations from the Warrawoona Group, Kelly Group, Soanesville Group, Gorge Creek Group, Fortescue Group and granitoids.

Mineral deposit and mineralisation types that the Company will target in forthcoming exploration programmes include:

─ Copper-lead-zinc and copper-molybdenum occurrences associated with a granodiorite intrusion have been identified in the south-east part of the tenement. These form part of a large cluster of base metal and specialty-metal occurrences related to stockwork mineralisation in the Gobbos Granodiorite.
─ Laconia Resources' Lennons Find deposit (2 Inferred Mineral Resource of 1.6 million tonnes @ 5.6% Zn, 1.5% Pb, 0.2% Cu and 81g/t Ag) is located approximately one kilometre along strike to the north of E45/2763. Initial reconnaissance work by Riedel confirms that the prospective Warrawoona Group host rocks extend into the tenement.
─ Numerous small but very high grade gold deposits are located adjacent to the tenement in Warrawoona Group rocks and several structures that control, or are associated with these gold deposits, extend into E45/2763.
─ The McPhee Creek Iron Ore deposit ( 3 Indicated and Inferred Mineral Resource of 270 million tonnes @ 56% Fe) is located approximately 8 kilometres along strike to the south of the tenement in rocks belonging to the Gorge Creek Group. Regional mapping indicates that the prospective Gorge Creek Group extends further north into E45/2763.

MARYMIA PROJECT

Exploration Activities

Royalties for Regions Co Funded Drilling Grant of $150,000

Riedel has been successful with an application for a grant of $150,000 that will go towards direct drilling costs associated with the testing of high priority gold targets at Chardonnay and Baumgartens South prospects.

Targets were generated following reinterpretation of historic Rotary Air Blast (RAB), Reverse Circulation (RC) and diamond core drilling results and structural setting at Baumgarten's South, Chardonnay and Champagne prospects within the Baumgarten Greenstone Belt (BGB).

2 Lennons Find Resource Estimate as of Jan 2012, http://www.laconia.com.au/projects-overview/western-australian-projectsoverview/lennons-find/ , accessed 14 August 2012

3 Atlas Iron Ltd AGM Presentation 8 November 2011

DIRECTORS' REPORT (CONT)

Previous drilling at Baumgartens South/Chardonnay was mostly shallow (averaging less than 50 metres) with depth to fresh rock typically 60-80 metres and discovered extensive zones of supergene gold. However, as was the case at Baumgartens Reward and the Champagne prospects, subsequent drilling focussed on the zones beneath the supergene enrichment and the drilling was generally not deep enough or possibly drilled in the wrong direction and so did not locate the primary source of the gold mineralisation.

Shallow intersections at Chardonnay included 2 metres @ 6.26 g/t Au from 32 metres in RB551, 2 metres @ 5.07 g/t Au from 29 metres in RB773 and 4 metres @ 3.74 g/t Au from 31 metres in RB705. Diamond drilling completed at Chardonnay (BD1, BD2 and BD3) intersected gold at depth including 5 metres @ 4.87 g/t Au from 239.24 metres in BD1. The Baumgartens South vein that returned a 56.6g/t Au rock chip assay has yet to be effectively drilled also (See Figure 5 for rock chip location).

The previous shallow drilling at the Champagne prospect delineated an east-west trending zone of supergene gold. Significant shallow intersections included 3 metres @ 9.53 g/t Au from 51 metres in BRC23, and 2 metres @ 7.15 g/t Au from 4 metres in RB620**.** This was followed by a diamond drill hole (BD4) drilled towards the south to intersect the interpreted primary source. The hole failed to intersect gold, despite having sufficient depth if the mineralisation was oriented east-west. Riedel´s interpretation is that the primary mineralisation is located in a northeast trending dextral shear zone about 100 metres west of BD4, which would explain the failure of BD4 to meet its target.

The location of the mineralised intersections supports Riedel`s structural interpretation and model of mineralisation for the area. Riedel plans to test extensions of the mineralisation intersected in BD1, BD2 and BD3 and associated structures with five diamond core holes (see CHARD1-5 in Figure 5).

DIRECTORS' REPORT (CONT)

Figure 5: Baumgarten's South and Chardonnay Prospects planned drill holes

Soil Geochemical Sampling

During the year a comprehensive geochemical soil sampling programme was undertaken with samples taken on 400 metre x 200 metre centres over previously unexplored or underexplored areas within the Marymia Project. Those areas with significant transported overburden such as the large alluvial drainage areas were not included in the soil sampling program. These will require aircore drill testing to penetrate the transported horizons.

A total of 4,200 samples were taken initially. Many anomalies interpreted as being associated with

gold and/or base metal mineralisation were identified which necessitated infill sampling on 100 metre by 100 metre centres.

1,941 infill soil geochemical samples were subsequently taken over selected areas and another 2,500 infill samples are planned for the coming year.

DIRECTORS' REPORT (CONT)

Detailed geological mapping was also completed over the same area covered by the initial soil sampling program. This has led to a significant improvement in our understanding of the geological setting and structural controls of mineralisation as well as aided planning of drill programs yet to be completed.

Soil Geochemical Sampling and Interpretation Methodology

Interpretation of all data from soil sampling programs completed during the year made the following findings.

Surface soil geochemical sampling over weathered in-situ regolith within the Marymia Project area commenced in November 2011 with orientation programmes designed to compare and contrast the results of several sampling techniques. This approach was taken to determine the most effective sampling methodology. Areas with significant transported cover or alluvial material were excluded from this programme in favour of geochemical drilling designed to test for geochemical anomalism below the transported cover.

As a result of this orientation work it was concluded that soil sample material sieved to a size of <2 millimetres, with samples spaced 400 metres x 200 metres apart should effectively discriminate areas prospective for the discovery of near-surface or buried copper, gold and base metals mineral deposits.

Interpretation of all 4,200 first-pass, multi-element soil geochemical assay results by consultant geochemist Scott Halley and Riedel geologists has identified numerous high priority areas prospective for copper, gold and/or base metals mineralisation. Closespaced, follow-up soil geochemical sampling has already commenced within these priority areas to better define the trend and tenor of the soil anomalies prior to the commencement of drilling.

At Marymia, the near surface regolith or soil profile is typically highly oxidised and weathered, in some instances to depths in excess of one hundred metres. Frequently, weathering occurs with lateritisation, a process whereby near-surface rocks become strongly oxidised and enriched in iron to the extent that many elements and metals of interest, including copper and gold, become highly mobile and leached or dispersed in the nearsurface environment.

The recognition and understanding of the effects of these processes is therefore crucial to the meaningful interpretation of surface soil geochemical assay results at Marymia.

To compensate for the loss of, or dispersion of key metals of economic interest in this geochemical environment, including copper and gold, a multi-element approach has been adopted at Marymia whereby key pathfinder elements were identified and selected for anomaly recognition. Although these pathfinder elements are relatively stable in the nearsurface weathered environment, in some instances it can be common for those pathfinder elements to become preferentially enriched in the presence of iron.

At Marymia, the ferruginisation or lateritisation process has greatly complicated the interpretation of the soil anomalies. Goethite, an iron-rich mineral, will scavenge most pathfinder elements leading to soil sample assay results which may be strongly elevated. Accordingly, without proper recognition of this process, it is possible that many anomalies may be false anomalies due to the high goethite concentration at that locality.

DIRECTORS' REPORT (CONT)

To determine true anomalism, the concentration of the element of interest needs to be normalised or adjusted against the concentration of iron in the sample material to enable the meaningful recognition of pathfinders as proxies for the presence of important associated minerals, including copper, silver and zinc. This relationship is particularly relevant for the gold pathfinder element arsenic.

In summary, the recognition of common associations of minerals and metals in unweathered rocks, for example gold-arsenic-antimony, copper-molybdenum-bismuth and zinc-indium, provides a platform to use their near-surface weathered products or anomalies to point towards underlying or near-by primary mineral deposits.

As this approach has not been previously used in the Marymia Project area, the Company believes that it is likely that the identification of previous geochemical anomalies which were unsuccessful in locating associated minerals deposits may have represented false or transported anomalies. Riedel believes that the anomalies recognised by the key pathfinder elements referred to above represent high-order targets and that considerable potential exists for the discovery of mineral deposits including copper, gold/silver and base metals.

Notwithstanding, a strong understanding of sub-surface geology and the associated structural setting is important to complement soil geochemical data to most effectively generate the strongest drilling targets and accordingly, the Company has recently carried out detailed mapping programmes to provide this information.

Interpretation of Gold Pathfinder Anomalies

At Marymia, primary gold mineralisation within the Baumgarten Greenstone Belt is associated with arsenic (As), lead (Pb), copper (Cu), silver (Ag), bismuth (Bi), tellurium (Te) and antimony (Sb) ("pathfinder elements"). Of these gold associated elements, arsenic occurs at the highest concentrations and is generally considered to be the most useful pathfinder, particularly when normalised against the concentration of iron. This data highlights numerous strong arsenic anomalies that correspond to known gold mineralisation within the northern portion of E52/2394, at the Chardonnay, Champagne and Baumgartens Reward Prospects, (see Figure 6).

DIRECTORS' REPORT (CONT)

Figure 6: Normalised arsenic anomalies and prospects

Of particular interest are the southern extensions to these known gold prospects which are identified by strong arsenic anomalies that have not been previously drilled (see Figure 7). The anomalies extend for several kilometres and are coincident with prospective interpreted structures.

Several large untested arsenic anomalies have also been identified within E52/2395 that are untested for gold mineralisation.

In the central eastern portion of E52/2394 a strong bismuth anomaly (see Figure 8) is coincident with arsenic and indium anomalies which overlie an interpreted north-east trending structure. This geochemical and structural association is considered particularly prospective for gold mineralisation.

DIRECTORS' REPORT (CONT)

Figure 7: Arsenic/Iron ratio showing normalised arsenic anomalies within Baumgarten Greenstone Belt

Interpretation of Copper and Base Metals Pathfinder Anomalies

At Marymia, the entire project area has been subjected to intense weathering, to considerable depths in some parts, and accordingly copper is unlikely to form significant insitu anomalies in the near-surface environment due to dispersion and leaching. Therefore, the recognition of the key copper pathfinder elements, molybdenum and bismuth, in soil sample results can be a near-surface indication of underlying copper deposits. Both molybdenum and bismuth have a strong association with copper mineralisation in primary, unweathered rocks, however, these pathfinder elements have the positive characteristic of being much less mobile in near-surface, strongly weathered regions.

In the south-west portion of E52/2394 a distinct and strongly coincident molybdenumbismuth anomaly has been recognised (see Figures 8 and 9), which may point to underlying, primary copper mineralisation. These coincident anomalies partly overlie the Rooney's Syncline, a geological and structural feature which contains a thick sequence of prospective Proterozoic-age Yerrida Group rocks which also host Sipa Resources Ltd's Enigma copper prospect located 12 kilometres to the west.

In summary, soil geochemical sample assay results from the south-west portion of E52/2394 revealed highly anomalous molybdenum (up to 8.81 ppm) and bismuth (up to 0.94ppm) compared

to the low background concentration of these elements at Marymia (typically ≤0.5ppm Mo and ≤0.2 ppm Bi).

The coincident occurrence of anomalous gold (up to 16 ppb), which is more than 16 times the regional background for gold of ≤1.0 ppb Au is also considered to be significant because the strength of molybdenum and bismuth anomalism in this highly leached environment may point to the existence of an extensive sub-cropping hydrothermal copper system. Gold

DIRECTORS' REPORT (CONT)

mineralisation is also usually emplaced hydrothermally, adding further encouragement that significant minerals potential may exist in this area.

It is significant to note that Sandfire Resources NL's DeGrussa copper-gold mine, located 55 kilometres to the south-west, was discovered by the recognition of surface geochemical anomalies enriched in gold and strongly depleted in copper.

Figure 8: Bismuth anomalies

DIRECTORS' REPORT (CONT)

Figure 9: Molybdenum anomalies

A strong molybdenum anomaly prospective for copper mineralisation (see Figure 9) has also been delineated in the north-east portion of E52/2395. This area is underlain by the Proterozoic-age Yelma Formation near the basin margin and is adjacent to the regionally important Jenkin Fault.

The base metal zinc is highly mobile in a supergene environment, even more so than copper, however, the strongly zinc-associated element indium is far more stable within weathered regolith.

Therefore, indium is considered to act as a strong pathfinder or proxy for zinc in strongly weathered environments.

Of particular interest is the strong linear indium anomaly within thin Proterozoic-age Yelma Formation in the south-east part of E52/2394 (see Figure 10).

The Yelma Formation is interpreted to overlie the Baumgarten Greenstone Belt in this area and the coincident indium, bismuth and arsenic anomalies highlight potential for gold within the underlying Baumgarten Greenstone Belt as well as potential for zinc deposits within the overlying Yelma Formation.

DIRECTORS' REPORT (CONT)

Figure 10: Normalised indium results and prospects

Rock Chip Sampling

Seventy rock chip samples were collected from several prospects within the Baumgarten Greenstone Belt as well as within other areas considered prospective for base metals and iron ore mineralisation. The highest assay result of 56.6g/t Au was returned from an outcropping quartz vein within the Baumgarten's South prospect, located 2.5 kilometres south-east of the Baumgarten's Reward Prospect.

The iron-ore potential is illustrated by the return of several anomalous rock chip sample results up to 45.9% Fe collected to test outcropping ironstone within an area mapped as the Frere Formation. This formation has been shown to host significant iron-ore mineralisation in other locations to the south and east of the tenement and further field work including detailed geological mapping, rock chip sampling and aircore drilling is planned to better define the area of potential mineralisation.

Assay results for key pathfinder elements for the 70 rock chip samples collected at the Marymia Project since sampling commenced in November 2011 are detailed in Table 2.

DIRECTORS' REPORT (CONT)

		TABLE 2: Key pathfinder elements for the 70 rock chip samples
Sample	Easting	Northing	Au	Ag	As	Cu	Fe	Ni	Pb	Zn	Bi
No.	m(E)	m(N)	(ppm)	(ppm)	(ppm)	(ppm)	(%)	(ppm)	(ppm)	(ppm)	(ppm)
RR10944	785,065	7,196,285	0.01	0.63	18.6	69.4		19	18	23	0.54
RR10943	797,882	7,203,203	0.24	0.09	1070	76.2	9.96	242	107	136	0.02
RR10942	797,911	7,203,232	0.005	0.05	485	128.5	20.3	428	5.3	364	0.02
RR10941	798,130	7,203,260	0.03	0.29	60.3	72	3.44	26.1	9	19	0.02
RR10940	798,146	7,203,276	0.01	0.24	153	118	4.07	185	15.6	133	0.33
RR10939	798,154	7,203,267	0.03	0.07	175	103	8.43	82.9	16.1	60	0.02
RR10938	798,170	7,203,272	0.005	0.07	125	117.5	5.81	193	14.6	425	0.02
RR10937	798,989	7,201,528	0.01	0.03	587	102.5	7.3	40.2	5.9	129	0.04
RR10936	784,379	7,196,266	0.06	0.09	8.5	105.5	6.69	39.1	30.4	56	1.47
RR10935	785,071	7,196,317	0.03	0.09	3.9	516	45.5	71.4	32	160	0.07
RR10934	785,071	7,196,317	0.01	0.005	0.8	54	3.02	8.2	4.4	13	0.01
RR10933	785,064	7,196,304	0.005	0.03	1.1	48.7	3.58	10.7	2.9	23	0.02
RR10932	794,826	7,201,734	0.005	0.1	1.1	102		162.5	9.7	549	0.01
RR10931	799,025	7,201,069	1.45	0.2	1280	176.5	33.1	93.4	4.9	217	0.11
RR10930	799,025	7,201,069	1.17	0.13	830	148.5	17.35	65	5	162	0.07
RR10929	799,565	7,201,274	56.6	13	163	92.6	4.97	176.5	155.5	31	9.24
RR10928	799,557	7,201,287	8.81	14.85	79.3	58.5	1.51	66.2	14.3	11	2.82
RR10927	798,129	7,203,272	0.75	0.09	759	462	29.8	231	58.8	390	0.02
RR10926	798,131	7,203,267	0.01	0.03	54.6	53.1	2.21	17.8	3.1	12	0.01
RR10925	799,454	7,199,070	0.005	0.04	10.6	169	4.37	16.7	12.7	43	0.03
RR10924	799,470	7,199,093	0.005	0.08	29.5	392	13.95	47.7	52.9	139	0.18
RR10923	799,485	7,199,116	0.005	0.02	4.8	69.3	3.02	11.3	12	55	0.02
RR10922	790,394	7,201,022			20	310	11.4	60	390	220
RR10921	790,411	7,201,027			5	340	2.11	10	110	150
RR10920	790,407	7,201,028		1	5	350	1.59	30	70	150
RR10919	789,848	7,186,934	0.005	0.005	0.1	7.4	0.66	5.7	8.6	19	0.08
RR10918	789,862	7,186,990	0.005	0.005	0.1	3.5	1.05	2.5	6.8	19	0.05
RR10917	789,908	7,187,147	0.005	0.005	0.5	4.5	0.87	2.5	7.3	12	0.08
RR10916	790,063	7,187,167	0.005	0.02	0.1	9.2	1.04	3	13	21	0.08
RR10915	789,961	7,187,308	0.005	0.06	0.2	12.9	1.02	3.6	27.2	23	0.22
RR10914	790,026	7,187,442	0.005	0.005	0.1	5.6	1.13	3	10.6	24	0.15
RR10913	790,229	7,187,373	0.005	0.005	0.2	5.6	0.94	3.1	4.6	13	0.11
RR10912	790,251	7,187,335	0.005	0.005	0.1	7.8	0.69	8.5	2.9	5	0.1
RR10911	790,273	7,187,282	0.005	0.04	0.3	3.9	1.45	6.4	11.2	40	0.06
RR10910	790,300	7,187,180	0.005	0.005	0.1	7.1	0.5	4.6	8.8	9	0.07
RR10909	790,322	7,187,072	0.005	0.02	0.1	6	1.13	9.7	9.4	22	0.91
RR10908	790,230	7,187,042	0.005	0.005	0.1	7.9	1.11	7.5	12	29	0.04
RR10907	790,105	7,186,965	0.005	0.005	0.1	10.9	0.82	4.4	14.9	14	0.14
RR10906	790,100	7,186,877	0.005	0.03	0.1	10.8	0.79	50	5.3	11	0.08
RR10905	790,052	7,186,800	0.005	0.005	0.1	5.9	0.7	6.7	2.6	11	0.06
RR10904	789,851	7,186,608	0.005	0.005	0.1	13.1	0.71	12.4	2	2	0.02
RR10903	789,861	7,186,624	0.005	0.02	0.1	30.5	0.96	372	1.8	5	0.03
RR10902	789,968	7,186,744	0.005	0.005	0.1	21.7	1.03	178	6.4	11	0.05
RR10901	789,851	7,186,871	0.005	0.04	0.1	13.5	0.57	68.3	6	14	0.04
RR10818	786,884	7,185,859	0.005	0.04	2.5	15.9	15.35	5.6	26	14	0.31

RR10817	786,894	7,185,906	0.005	0.02	2.4	12.3	14.55	6.6	20.1	15	0.28
RR10816	790,282	7,187,345	0.005	0.005	1.2	14.6	1.22	8.7	9	12	0.11
RR10815	789,909	7,186,550	0.005	0.005	4	18	3.55	15.4	40.9	30	0.16
RR10814	790,012	7,186,994	0.005	0.06	0.1	26	3.27	5.7	14.6	30	1.72
RR10813	790,170	7,206,427	0.1	0.02	1.6	21.2	3.25	31.7	11.8	24	0.04
RR10811	199,084	7,198,302			5	120	30.36	60	5	80
RR10810	199,110	7,198,377			10	120	35.05	570	5	250

DIRECTORS' REPORT (CONT)

Sample	Easting	Northing	Au	Ag	As	Cu	Fe	Ni	Pb	Zn	Bi
No.	m(E)	m(N)	(ppm)	(ppm)	(ppm)	(ppm)	(%)	(ppm)	(ppm)	(ppm)	(ppm)
RR10809	200,518	7,197,343			10	40	35.56	160	5	190
RR10808	799,665	7,194,834			5	30	28.68	60	5	80
RR10807	799,327	7,194,380			10	310	38.19	360	5	450
RR10806	799,476	7,194,477			10	80	32.74	110	5	240
RR10805	799,233	7,194,295			5	140	35.67	130	5	170
RR10804	799,111	7,194,329			5	70	35.74	90	5	50
RR10803	798,997	7,194,290			5	40	33.06	160	30	180
RR10802	801,190	7,194,414			20	290	45.88	460	5	850
RR10801	799,447	7,194,473			5	80	25.79	90	10	110
M009	789,659	7,186,295	0.1	0.17	19	23	26.3	153.5	7.8	198	0.07
M008	789,662	7,186,297	0.1	0.12	25.1	28.1	18.45	164	4.5	96	0.03
M007	*199,227	7,196,424			5	50	32.46	70	5	290
M006	*199,314	7,196,204			5	60	22.44	110	5	220
M005	*199,221	7,196,296			5	5	28.42	350	5	360
M004	*199,150	7,196,376			5	110	40.15	160	5	490
M003	*198,722	7,195,259			10	80	44.8	210	40	660
M002	*198,628	7,195,115			5	5	9.81	5	5	40
M001	*198,564	7,195,133			10	90	15.42	10	5	110

N.B. Assay results for each element which fall within the top 10% of results (greater than the 90 percentile) are marked in bold text.

N.B. Grid coordinate system is GDA94 - MGA Zone50 unless denoted by * which denotes grid coordinate system GDA94 - MGA Zone51.

Grab/rock chip samples are collected from outcrop and submitted to ALS Global Perth Laboratory for analysis. The entire sample is crushed to 70% passing 6mm or better, a 1 kilogram split is taken and pulverised to 85% passing 75 micron. A 25 gram sample is analysed for gold by Aqua Regia extraction with an inductively coupled plasma mass spectrometry (ICPMS) finish and a multi-element suite (Ag, Al, As, Au, B, Be, Bi, Ca, Cd, Ce, Co, Cr, Cs, Cu, Fe, Ga, Ge, Hf, Hg, In, K, Li, Mg, Mo, Na, Nb, Ni, P, Pb, Rb, Re, S, Sb, Sc, Se, Sn, Sr, Ta, Te, Th, Ti, Tl, U, V, W, Y, Zn, Zr) by Aqua Regia with an ICPMS finish.

Specimens with visible mineralisation are analysed by ore grade methods, i.e. a 25 gram sample is analysed for gold using Aqua Regia extraction with an atomic absorption spectroscopy (AAS) or inductively coupled plasma mass spectrometry (ICPMS) finish. If gold is greater than 100ppm, then the analyte is re-assayed using fire assay and AAS. The sample is also analysed for a multi-element suite of 48 or 51 elements (Ag, Al, As, Au, B, Be, Bi, Ca, Cd, Ce, Co, Cr, Cs, Cu, Fe, Ga, Ge, Hf, Hg, In, K, Li, Mg, Mo, Na, Nb, Ni, P, Pb, Rb, Re, S, Sb, Sc, Se, Sn, Sr, Ta, Te, Th, Ti, Tl, U, V, W, Y, Zn, Zr) by Aqua Regia with an ICPMS finish. Ore grade elements (Ag, As, Cu, Fe, Mn, Ni, Pb and Zn) are analysed using a four acid digest (HF-HNO3-HCLO4 digestion, HCl leach and ICP-AES).

Ironstone samples were submitted for iron suite analysis (Al2O3, As, Ba, CaO, Cl, Co, Cr2O3, Cu, Fe, K2O, MgO, Mn, Na2O, Ni, P, Pb, S, SiO2, Sn, Sr, TiO2, V, Zn, Zr, Total, LOI, LOI 1000) by x-ray diffraction (XRF) fusion and Loss On Ignition (LOI) determination using a Thermo Gravimetric Analyser (TGA).

DIRECTORS' REPORT (CONT)

BURKINA FASO PROJECTS

Exploration Activities

Tagou Project

Commencing in late April 2012, exploration programmes completed have included:

─ the collection of 119 rock chip samples, mostly from quartz veins;

─ the collection of 4,705 soil geochemical samples on 400 metre by 100 metre centres across all of the Tagou Permit area not previously sampled;

─ detailed geological mapping, and;

─ 16 RC drillholes for a total of 1,826 metres of drilling (results pending).

Exploration commenced at Tagou with 119 rock chip vein samples collected in conjunction with 1:5,000 scale geological mapping over an area of 65 square kilometres.

Samples were submitted to ALS Global (Ouagadougou) for gold analysis by Fire Assay Fusion with an atomic absorption spectroscopy (AAS) finish. Of the 62 rock-chip assay results returned to date, nine samples can be considered high-grade (>1g/t Au) including 63.8g/t Au, 47.0g/t Au, 11.2g/t Au, 8.78g/t Au, 6.22g/t Au and 3.43g/t Au (see Figure 11 for rock chip results target areas). Full assay results for the 62 rock chip samples processed to date in Ouagadougou are detailed in Table 3.

The high-grade gold assay results from Riedel's recent rock chip sampling work compliment previous sample results from the same area, including 65.5g/t Au, 28.0g/t Au and 14.3g/t Au.

DIRECTORS' REPORT (CONT)

Figure 11: Priority RC drill targets and rock chip and soil geochemical sample results – Tagou Project

Reverse circulation drilling comprising sixteen drill holes for a total of 1,826 metres of drilling was completed in June 2012. The initial drilling targets were identified by positive rock chip sample results from outcropping quartz veins and the presence of extensive artisanal workings on the veins.

Three main areas were drill tested. Fourteen of the drill holes targeted a north–south trending structural corridor (see Figures 12 and 13) and two were drilled into a parallel structure approximately 400 metres to the west, identified by a coincident geochemical soil anomaly. The drill holes typically intersected quartz veining within granodiorite and diorite host rocks. Dolerite dykes occasionally occurred at the base of, or close to a chloritic alteration zone where the main mineralised structure was located.

DIRECTORS' REPORT (CONT)

Figure 12: Rock chip gold sample results & structural corridor

Figure 13: Rock chip gold sample results & structural corridor

Tagou Soil Geochemistry and Geological Mapping

A total of 4,705 soil geochemical samples were collected on 400 metre by 100 metre centres in areas where no previous sampling had been undertaken. Assay results for 797 samples have been received so far, with encouraging initial results including 36ppb Au, 19ppb Au and 11ppb Au. Each sample was sourced from the "B horizon" which lies below any surface organic material, sieved to minus 2mm in size in the field and approximately 150 grams of sample material was collected and packaged for analysis. The samples were submitted to ALS Global (Ouagadougou) for transport to ALS Chemex (Perth) where the samples will be pulverised and assayed for gold by method Au-TL43. This method uses an aqua-regia digest with an ICP-MS finish. The pulps will be retrieved and tested with a hand-held NITON XRF analyser for multi-element analysis for pathfinder elements.

DIRECTORS' REPORT (CONT)

Sample No.	Local Eastingm(E)	Local Northing m(N)	Au(ppm)
RR15021	5,824	21,030	<0.01
RR15022	5,829	21,060	<0.01
RR15023	5,836	21,088	0.01
RR15024	7,647	14,876	0.01
RR15025	7,657	14,895	8.78
RR15026	7,693	14,917	0.8
RR15027	7,698	14,912	0.01
RR15028	6,965	15,866	0.09
RR15029	7,275	15,778	0.02
RR15030	7,289	15,807	0.01
RR15031	7,734	15,801	0.06
RR15032	7,726	15,832	0.01
RR15033	6,821	19,193	0.01
RR15034	6,811	19,176	0.01
RR15035	7,745	18,766	0.01
RR15036	7,751	18,692	6.22
RR15037	7,755	18,670	63.8
RR15038	7,726	15,459	47.0
RR15039	7,726	15,459	1.64
RR15040	7,726	15,459	1.40
RR15042	6,824	19,192	0.01
RR15043	6,824	18,954	0.01
RR15044	7,702	14,920	0.05
RR15045	7,703	14,930	0.09
RR15046	7,702	14,921	1.41
RR15047	7,694	14,967	3.43
RR15048	7,632	15,710	0.02
RR15049	7,706	15,552	0.01
RR15050	7,710	15,034	0.05
RR15051	7,704	15,042	0.44
RR15052	7,714	15,053	0.14
RR15053	7,716	15,080	0.92
RR15054	7,975	15,764	0.23
RR15055	7,939	15,771	0.01
RR15056	7,768	15,614	0.03
RR15057	7,073	15,289	0.01
RR15058	8,249	19,463	0.01
RR15059	8,121	19,027	0.01

TABLE 3: Tagou Project Rock Chip Sample Results to 30 June 2012

DIRECTORS' REPORT (CONT)

Sample No.	Local Eastingm(E)	Local Northing m(N)	Au(ppm)
RR15060	7,193	18,762	0.01
RR15061	7,237	18,655	0.08
RR15063	7,663	18,724	11.2
RR15064	7,741	18,722	0.02
RR15065	8,109	18,720	0.02
RR15066	7,351	18,315	0.01
RR15067	6,427	18,263	0.01
RR15068	6,438	18,290	0.01
RR15069	6,449	17,772	0.01
RR15070	6,446	17,769	0.01
RR15071	6,480	17,734	0.02
RR15072	6,506	17,733	0.01
RR15073	6,507	17,747	<0.01
RR15074	7,652	14,884	0.02
RR15075	7,946	17,413	0.01
RR15076	7,899	17,424	0.01
RR15077	7,839	17,456	0.01
RR15078	5,925	17,008	<0.01
RR15079	7,722	16,214	0.01
RR15080	7,198	16,206	0.01
RR15081	7,092	16,192	0.01
RR15082	7,000	16,314	0.01
RR15084	6,285	16,243	0.01
RR15085	7,589	16,061	0.01

Gonsin Project Auger Drilling

In the northern half of the Gonsin Permit area, 833 auger holes were drilled for a total of 5,995. The north-eastern part of Gonsin is interpreted to host multiple extensions to structures and shear zones that may control gold mineralisation in Cluff Gold PLC's 0.6M oz Kalsaka gold mine, which is located approximately 10 kilometres to the north-east of Gonsin. Auger drilling was preferred to soil sampling in this area as the depth of transported overburden is believed to increase to the north, possibly rendering surface soil sampling ineffective.

An auger sample is collected from the first metre of in-situ material in each hole and submitted to ALS Global (Ouagadougou) for gold assay by the LEACHWELL method. Assay results from 494 samples were received by 30 June 2012 with results for 339 samples still pending. Highly anomalous assay results for gold were returned from the first batch of samples, including 546 ppb Au and 541 ppb Au. (see Figure 14).

DIRECTORS' REPORT (CONT)

Figure 14: Auger drilling and soil sampling results - Gonsin Project

Moaga Project Soil Geochemistry

Exploration commenced at Moaga during June with the collection 436 soil geochemical samples. Sampling targeted a north-northeast/south-southwest trending structural corridor and assay results are pending.

Each sample was taken from the "B horizon" beneath the surface organic layer and a 100 to 200 grams sample collected after sieving to minus 2 millimetres. These samples were submitted to ALS in Ouagadougou for despatch to Perth for Au analysis using aqua regia method TL-43. The pulps will be retrieved and tested with the NITON for a multi-element suite to analyse pathfinder elements.

Keri Project Soil Geochemistry

Exploration commenced at Keri during June with the completion of geochemical soil sampling at 919 locations. The sampling targeted the mid-west part of the tenement where the more prospective mafic volcanic rocks are located as well as interpreted structures and the contact area between the mafic rocks and granitic rocks. All assays are pending. This programme will be completed in July 2012.

Each sample was taken from the "B horizon" beneath the surface organic layer and a 100- 200g sample collected after sieving to -2mm. These samples were submitted to ALS in Ouagadougou for despatch to Perth for Au analysis using aqua regia method TL-43. The pulps will be retrieved and tested with the NITON for a multi-element suite to analyse for pathfinder elements.

DIRECTORS' REPORT (CONT)

Planned Activities for Next Year

Marymia

─ Diamond core and RC drilling of Chardonnay and Baumgarten South priority gold targets;
─ Infill soil sampling over high priority soil geochemical anomalies, and;
─ Aircore or RAB drilling to test key gold and base metal targets and structural corridors.

Cheritons Find

─ Upgrade resource to measured and indicated category by completing 1,100 metres of infill RC drilling.

Charteris Creek

─ Complete initial geochemical soil sampling and geological mapping over most prospective areas.

Burkina Faso

─ Complete geochemical soil sampling at Keri Project;
─ Plan follow up exploration programs for Tagou, Gonsin, Moaga and Galgouli South projects once all assay results have been received for exploration programs completed in the June quarter.
─ Complete detailed aeromagnetic surveys over each permit.

DIRECTORS' REPORT (CONT)

Figure 15: Tenement Locations – Burkina Faso

Competent Person's Statement

The information in this report that relates to Exploration Results is based on information compiled by Mr Edward Turner, who is a Member of The Australian Institute of Geoscientists. Mr Turner is a full time employee of Riedel Resources Limited. Mr Turner has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Exploration Targets, Mineral Resources and Ore Reserves'. Mr Turner consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Key inputs used for Inferred Mineral Resource estimation – Cheriton's Find Project – Redwing Deposit

Drilling data from 61 reverse circulation (8,264 metres) and 1 diamond drill hole (177.7 metres) utilised; Drill hole density based on 80 metre spacing between drill lines and predominantly 40 metre spacing on drill lines;

Petrographic, metallurgical and bulk density work completed;

Dry bulk densities estimated

oxide material =	2.0t/m3,
transitional material =	2.5t/m3,
primary material =	2.8t/m3;

Resource sectional polygons (length weighted average polygons) based on

minimum 2 metre down hole intercept >0.5g/t Au to define boundaries,

maximum 2 metres of internal dilution,

intercept grade calculated as weighted arithmetic mean of individual intercepts using 20g/t high cut (~97.5th percentile);

Resource blocks projected midway between drill holes or maximum 20m down dip.

Metallurgical testwork based on 4 samples from 1 diamond hole with results confirming;

cyanide circuit recoveries >93% from oxide, transitional and fresh material,

gravity circuit gold recoveries from 35-70%;

ore exhibits low sulphide, As, Bi, Ni and Cu content with low reagent consumption predicted.

DIRECTORS' REPORT (CONT)

Corporate

On 12 July 2011, the Company granted 1,500,000 unlisted options to Ed Turner – Exploration Manager as executive incentives for nil consideration, the terms being exercisable at $0.30 on or before 30 June 2014. The options must be exercised within 60 days of ceasing employment with the Company or they will lapse.

Pursuant to a General Meeting of Shareholders held on 14 July, 2011 and the Company Performance Rights Plan, the following issues of securities to related parties were approved by shareholders as follows:

	Number of Performance
Holder	Rights	Exercise Price
Jeffrey Moore	2,000,000	27 cents
	2,000,000	36 cents
	2,000,000	45 cents
Bruce Franzen	666,667	27 cents
	666,667	36 cents
	666,666	45 cents

Zen Magnolia Pty Ltd (Bruce Franzen is a Director and Shareholder) was issued 86,660 ordinary fully paid shares.

All resolutions put to the meeting were passed unanimously on a show of hands.

On 13 April 2011, Riedel announced that it had entered through its wholly owned subsidiary AuDAX Minerals Pty Ltd, into a conditional agreement for the disposal of a 100% interest in Cheritons East Tenement EL77/1223 to Silverstone Minerals Pty Ltd, a wholly owned subsidiary of Silver Stone Resources Limited. The Agreement is conditional upon ASX granting Silver Stone conditional approval to be admitted to the Official List of the ASX, subject only to completion of the agreement occurring and the satisfaction of such other conditions as may reasonably be within Silver Stone's control. This transaction was completed on 11 August 2011.

On 30 September 2011, the Company announced the release 2,950,000 securities from Escrow.

On 30 November, 2011, the Company held its Annual General Meeting of Shareholders at the Citigate Hotel, Perth. All resolutions put to the meeting were subsequently passed unanimously on a show of hands.

On 15 December 2011, the Company announced that it had completed the due diligence review for the right to acquire 100% rights to five gold permits in Burkina Faso from Golden Rim Resources Limited. Acquisition consideration payable to Golden Rim Resources was US$875,000, and 12,500,000 fully paid ordinary shares in the Company.

On 17 January, 2012, the Company issued a Notice of General Meeting of Shareholders to be held on 22 February, 2012 at which shareholders must consider a sole resolution to approve and issue consideration shares to Golden Rim Resources Limited as part consideration for the proposed acquisition of 100% of Golden Rim's right, title, and interest by the Company in five prospective exploration permits in Burkina Faso. The issue of the Notice of General Meeting of Shareholders was subsequent to the execution of a Formal

DIRECTORS' REPORT (CONT)

Agreement which occurred on 16 January, 2012 between the Company and Golden Rim in respect of the proposed acquisition and tenements. All resolutions put to the meeting on 22 February 2012 were subsequently passed unanimously on a show of hands.

This Transaction was completed on 11 April 2012 with the payment of cash consideration, and the issue and allotment of 12,500,000 fully paid ordinary shares (voluntary escrow, 12 months from issue) to Golden Rim Resources Limited.

On 28 March 2012, the Company granted 500,000 unlisted options to Peter Nesveda – Investor Relations Consultant as executive incentives for nil consideration, the terms being exercisable at $0.30 on or before 30 June 2014.

On 24 April 2012, the Company announced that it has agreed to raise approximately $2.2 million before costs under a placement of up to 19,130,435 ordinary shares at $0.115 per share to sophisticated and professional investors (the "Placement"). Patersons Securities Limited was Lead Manager to the Offer.

Tranche 1 of the Placement, being 10,120,714 shares will be issued under Listing Rule 7.1, 15% capacity. It will subsequently be put to shareholders and ratified at a General Meeting to be held in late May 2012.
Tranche 2 of the Placement, being approximately 9,009,721 shares to be issued following approval by shareholders at a General Meeting to be held in late May 2012.

On or about 9 May 2012, the Company subsequently placed the equivalent of Tranche 1 of the proposed placement of 8,608,704 fully paid ordinary shares.

On 14 May, 2012, the Company issued a Notice of General Meeting of Shareholders to be held on 15 June, 2012 at which shareholders are to consider the ratification of Tranche 1 of the placement, and pre approve the issue and allotment of Tranche 2 of the placement. All resolutions put to the meeting held on 15 June 2012 were subsequently passed unanimously on a show of hands.

On 14 May 2012, the Company granted 500,000 fully paid ordinary shares to Peter Nesveda – Investor Relations Consultant as executive incentives for nil consideration.

Mr Wolfgang Zimmer resigned as a Director of the Company effective 30 June 2012.

During the reporting period, 10,000 listed options were exercised at 20c each into shares to raise $2,000.

POST BALANCE DATE EVENTS

On August 13 2012, the Directors of Riedel Resources Limited advised that they had completed a Share Placement to sophisticated and professional investor clients of DJ Carmichael Pty Limited in Australia and the United Kingdom.

The placement raised $1.22 million before costs, with the issue of 16,263,316 ordinary shares at an average issue price of $0.075 per share as follows;

DIRECTORS' REPORT (CONT)

POST BALANCE DATE EVENTS (CONT)

Tranche 2 Placement of 8,131,658 shares at an issue price of $0.115 per share to raise $0.94 million before costs
Further placement of 8,131,658 shares at an issue price of $0.035 per share to raise $0.28 million before costs

Tranche 2 of the Placement, being 8,131,658 shares were issued in accordance with pre approval by shareholders received at a General Meeting held on 15 June 2012.

The further placement, being 8,131,658 shares were issued under the 15% capacity under ASX Listing Rule 7.1. It will subsequently be put to shareholders and ratified at a General Meeting to be held in September 2012.

There are no other matters or circumstances that have arisen since the end of the financial period that have significantly affected or may significantly affect the operations of the group, the results of those operations or the state of affairs of the group, in future years.

DIVIDENDS PAID OR RECOMMENDED

No dividend has been paid or declared since the start of the financial period.

LIKELY DEVELOPMENT AND RESULTS

Likely developments in the operations of the group and the expected results of those operations in future financial years have not been included in this report, as inclusion of such information is likely to result in unreasonable prejudice to the group.

ENVIRONMENTAL REGULATION

The group's operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory.

INDEMNITIES

The group has not, during or since the financial year, in respect of any person who is or has been an officer of the company:

− Indemnified or made any relevant agreement for the indemnifying against a liability, including costs and expenses in successfully defending legal proceedings; or
− Paid or agreed to pay a premium in respect of a contract insuring against a liability for the costs or expenses to defend legal proceedings.

During the financial year the company paid a premium of $6,860 in respect of a contract insuring against a liability for the costs or expenses to defend legal proceedings that may be brought against the directors and secretary of the company.

DIRECTORS' REPORT (CONT)

MEETINGS OF DIRECTORS

During the financial year, 18 meetings of directors were held. The number of meetings attended by each director during the period is stated below:-

	Number of eligible to	Number attended
	attend
Ian Tchacos	18	17
Jeff Moore	18	18
Bruce Franzen	18	18
Andrew Childs	18	18
Wolfgang Zimmer (resigned 30 June 2012)	18	17

OPTIONS

Unissued shares under options

At the date of this report, the unissued ordinary shares of Riedel Resources Limited under options are as follows:

Expiry date	Exercise price(cents)	Quantity
30/06/2014	30	10,000,000
30/11/2012	20	29,094,050

		39,094,050

Each option entitles the holder to one fully paid ordinary share in the company at any time up to expiry date. To the date of this report no shares had been issued as a result of the exercise of options.

Shares issued on the exercise of options

The following ordinary shares of the Riedel Resources Limited were issued during the year ended 30 June 2012 on the exercise of options granted:

Date option granted	Exercise Price(cents)	Number of shares issued
6 May 2011	20	10,000

Unissued shares subject to performance rights

At the date of this report, the unissued ordinary shares of Riedel Resources Limited subject to performance rights are as follows:

Expiry date	Vesting Price(cents)	Quantity	QuantityVested
25/07/2014	27	2,666,667	-
25/07/2014	36	2,666,667	-
25/07/2014	45	2,666,666	-

		8,000,000	-

DIRECTORS' REPORT (CONT)

Each performance right entitles the holder to one fully paid ordinary share in the Company. The performance rights vest when the Company's share price is equal to or greater than the vesting price for 20 consecutive trading days. To the date of this report no shares had been issued under the performance rights.

PROCEEDINGS ON BEHALF OF COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the company or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The company was not a party to any such proceedings during the period.

NON AUDIT SERVICES

The board of directors is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditors' independence for the following reasons:

− All non-audit services are reviewed and approved by the directors prior to commencement to ensure they do not adversely affect the integrity and objectivity of the audit; and
− The nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

The following fees were paid out to PKF Mack & Co Chartered Accountants for non-audit services provided during the year ended 30 June 2012:

Accounting advice	$2,500
Taxation compliance services	$1,700

$4,200

AUDITOR'S INDEPENDENCE DECLARATION

The auditor's independence declaration for the year ended 30 June 2012 has been received and is included in the financial report.

DIRECTORS' REPORT (CONT)

REMUNERATION REPORT - AUDITED

This report outlines the remuneration arrangements in place for the key management personnel of Riedel Resources Limited (the "Company") for the financial year ended 30 June 2012. The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.

The remuneration report details the remuneration arrangements for key management personnel ("KMP") who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company, and includes the five executives in the Company and the Group receiving the highest remuneration.

Key Management Personnel

Directors

Ian Tchacos (Chairman) Jeffrey Moore (Managing Director) Bruce Franzen Andrew Childs Wolfgang Zimmer (Resigned 30 June 2012) Ed Turner (Exploration Manager, appointed 11 July 2011)

Remuneration Philosophy

The performance of the Company depends upon the quality of the directors and executives. The philosophy of the Company in determining remuneration levels is to:

set competitive remuneration packages to attract and retain high calibre employees;
link executive rewards to shareholder value creation; and
establish appropriate, demanding performance hurdles for variable executive remuneration

Remuneration Committee

The Remuneration Committee is to assist the Board in establishing human resources and compensation policies and practices for the Directors (executive and non-executive) and senior executives, including retirement termination policies and practices, company share schemes and other incentive schemes, Company superannuation arrangements and remuneration arrangements.

Remuneration Policy

The remuneration policy of Riedel Resources Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component which is assessed on an annual basis in line with market rates and offering specific long-term incentives based on key performance areas affecting the Group's financial results. The Board of Riedel Resources Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best directors and executives to run and manage the Group.

The Board's policy for determining the nature and amount of remuneration for Board members and senior executives of the Group is as follows:

DIRECTORS' REPORT (CONT)

REMUNERATION REPORT – AUDITED (CONT)

The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed by the Board. All executives receive a base salary (which is based on factors such as length of service and experience) and superannuation. The Board reviews executive packages annually by reference to the Group's performance, executive performance and comparable information from industry sectors and other listed companies in similar industries.

The Board may exercise discretion in relation to approving incentives, bonuses and options. The policy is to attract the highest calibre of executives and reward them for performance that results in long-term growth in shareholder wealth.

Directors and executives are also entitled to participate in the Employee Incentive Option Scheme and Performance Rights Plan. The executive directors and executives receive a superannuation guarantee contribution required by the government, which is currently 9%,

and do not receive any other retirement benefits. All remuneration paid to directors and executives is valued at the cost to the Company and expensed. Options are valued using the Black-Scholes method.

The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting (currently $250,000). Fees for non-executive directors are not linked to the performance of the Group. However, to align directors' interests with shareholder interests, the directors are encouraged to hold shares in the Company and are able to participate in the Employee Incentive Option Scheme.

DIRECTORS' REPORT (CONT)

REMUNERATION REPORT – AUDITED (CONT)

The objective of the Company's executive reward framework is set to attract and retain the most qualified and experienced directors and senior executives. The board ensures that executive reward satisfies the following key criteria for good reward governance practices:

Competitiveness
Acceptability to shareholders
Performance linkage
Capital management

Directors' fees

A director may be paid fees or other amounts as the directors determine where a director performs special duties or otherwise performs services outside the scope of the ordinary duties of a director. A director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.

Bonuses

No bonuses were given to key management personnel during the 2011 and 2012 year.

Performance based remuneration

The Company currently offers eligible Directors and Key Executives participation in the Company Performance Rights Plan and/or Incentive Option Scheme. This is in addition to cash remuneration.

Company performance, shareholder wealth and director's and executive's remuneration

The remuneration policy has been tailored to increase goal congruence between shareholders and directors and executives. Currently, this is facilitated through the issue of options or Performance Rights to eligible directors and executives to encourage the alignment of personal and shareholder interests. The Company believes the policy will be effective in increasing shareholder wealth. For details of directors and executives interests in options at year end, refer Note 23 of the financial statements.

DIRECTORS' REPORT (CONT)

REMUNERATION REPORT – AUDITED (CONT)

Remuneration of directors and key management personnel

For the year ended 30 June 2012

		Short-TermBenefitsSalary and	PostEmploymentBenefits	EquitySettledShare-BasedPayments		Value ofequity asproportionofremuneration
	Directors	Consulting	Superannuati	Shares and
	Fees	Fees	on	Options	Total
	$	$	$	$	$	%
Directors/Person
Ian Tchacos	50,000	-	4,500	-	54,500	-
Jeffrey Moore	275,000	-	24,750	72,036	371,786	19
Bruce Franzen	-	282,842	-	34,411	317,253	11
Andrew Childs	30,000	-	2,700	-	32,700	-
Wolfgang Zimmer	35,574	-	-	-	35,574	-
Ed Turner	-	197,029	17,732	48,000	262,761	18
Total	390,574	479,871	49,682	154,447	1,074,574

Consulting fees paid to Mr Bruce Franzen for the financial year were made to Zen Magnolia Pty Ltd, a company to which he is a Director and Shareholder. Payments made were in relation to the provision of Directors Fees, Company Secretarial and Accounting services.

For the year ended 30 June 2011

		Short-TermBenefitsSalary and	PostEmploymentBenefits	EquitySettledShare-BasedPayments		Value ofequity asproportion ofremuneration
	Directors	Consulting	Superannuatio
	Fees	Fees	n	Shares	Total
	$	$	$	$	$	%
Directors
Ian Tchacos	21,053	-	1,895	-	22,948	-
Jeffrey Moore	5,132	67,615	6,547	-	79,294	-
Bruce Franzen	-	105,263	9,474	120,000	234,737	51
Andrew Childs	12,632	-	1,137	-	13,769	-
Wolfgang Zimmer	12,632	-	-	-	12,632	-
Total	51,449	172,878	19,053	120,000	363,380

DIRECTORS' REPORT (CONT)

REMUNERATION REPORT – AUDITED (CONT)

The overall level of key management personnel remuneration takes into account the performance of the Company since the Company's incorporation on 9 April 2010. In the previous year, remuneration was not paid to directors or executives until the Company was admitted to the Official List of ASX on 31 January 2011.

Options and rights over equity instruments granted as compensation

Details of options over ordinary shares in the Company that were granted as compensation to each key management person during the reporting period and details on options that vested during the period are as follows;

Options	Number ofOptionsgranted andvested in2012	Grant date	Fair valueper optionat grantdate ($)	Exerciseprice ($)	Expirydate
Directors/Person
Ed TurnerConsultant	1,500,000500,000	12/07/201128/03/2012	0.0320.041	0.300.30	30/06/201430/06/2014

The options had no vesting conditions attached.

For details on the valuation of the options, including models and assumptions used, please refer to Note 13. There were no alterations to the terms and conditions of options granted as remuneration since their grant date.

No options have been exercised or granted since the end of the financial year. The options were provided at no cost to the recipients.

Details of performance rights convertible to ordinary shares in the Company that were granted as compensation to each key management person during the reporting period and details of performance rights that vested during the period are as follows;

DIRECTORS' REPORT (CONT)

REMUNERATION REPORT – AUDITED (CONT)

PerformanceRights	Number ofPerformance Rightsgranted in2012	Number ofPerformance Rightsvested in2012	Grant date	Fair valueperperformance right atgrant date($)	Exercise price($)	Expiry date
Directors
Jeff Moore	2,000,000	-	26/07/2011	0.047	0.27	30/06/2014
	2,000,000	-	26/07/2011	0.038	0.36	30/06/2014
	2,000,000	-	26/07/2011	0.031	0.45	30/06/2014
Bruce Franzen	666,667666,667	--	26/07/201126/07/2011	0.0470.038	0.270.36	30/06/201430/06/2014
	666,666	-	26/07/2011	0.031	0.45	30/06/2014

For details on the valuation of the performance rights, including models and assumptions used, please refer to Note 14. There were no alterations to the terms and conditions of the performance rights granted as remuneration since their grant date.

No performance rights have vested or been granted since the end of the financial year. The performance rights were provided at no cost to the recipients.

Shares issued as compensation during the year.

Shares	Number of sharesissued	Issue date	Fair value pershare at issuedate ($)
Directors/Person2012
Bruce Franzen	86,660	25/07/2011	0.12
Consultant	500,000	14/05/2012	0.105
2011Bruce Franzen	600,000	20/01/2011	0.20

DIRECTORS' REPORT (CONT)

REMUNERATION REPORT – AUDITED (CONT)

Service agreements

Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows:-

Name:	Bruce Franzen
Title:	Executive Director and Company Secretary
Agreement commenced:	1 July 2011
Term of agreement:Details:	12 months renewable annuallyFor the year ended 30 June 2012, the Company maintained aConsultancy Agreement with Zen Magnolia Pty Ltd (Mr BruceFranzen is a Director and Shareholder) for the provision ofDirector and Company Secretarial Services byMr BruceFranzen. A consultancy fee is payable monthly in arrears asfollows; $6,354 per month (plus GST) for Executive Directorservices of up to 20 hours per week, thereafter at an hourly rateof $150 per hour (plus GST) up to a maximum of eight hours perday, and Company Secretarial services fixed at $5,000 permonth (plus GST). To be reviewed annually by the Board, 3month termination notice by either party. The Executive isentitled to Performance Rights, refer to Note 14.
Name:Title:Agreement commenced:Term of agreement:Details:	Jeffrey MooreManaging Director4 April 20113 yearsBase salary for the year ended 30 June 2012 of $275,000 plussuperannuation, to be reviewed annually by the Board. 6 monthtermination notice by either party. The Executive is entitled toPerformance Rights, refer to Note 14.
Name:Title:Agreement commenced:Term of agreement:Details:	Ian TchacosNon executive Chairman22 October 2010Subject to re - election every 3 years.Base salary for the year ended 30 June 2012 of $50,000 plussuperannuation, to be reviewed annually by the Board.
Name:Title:Agreement commenced:Term of agreement:Details:	Andrew ChildsNon executive Director22 October 2010Subject to re - election every 3 years.Base salary for the year ended 30 June 2012 of $30,000 plussuperannuation, to be reviewed annually by the Board.
Name:Title:Agreement commenced:Term of agreement:Details:	Wolfgang ZimmerNon executive Director22 October 2010Subject to re - election every 3 years. (resigned 30 June 2012)Base salary for the year ended 30 June 2012 of $30,000 plussuperannuation, to be reviewed annually by the Board.

DIRECTORS' REPORT (CONT)

REMUNERATION REPORT – AUDITED (CONT)

Name: Ed Turner Title: Exploration Manager Agreement commenced: 11 July 2011 Term of agreement: Not specified

Details: Base salary for the year ended 30 June 2012 of $201,835 plus superannuation, to be reviewed annually. 2 month termination notice by either party. The Executive is entitled to Company options, refer to Note 13.

Signed in accordance with a resolution of the Board of Directors.

Bruce Franzen Director

Date: 31 August 2012

DIRECTORS' DECLARATION

The directors of the company declare that:

1. The attached financial statements and notes are in accordance with the Corporations Act 2001:
- (a) comply with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
- (b) give a true and fair view of the consolidated entity's financial position as at 30 June 2012 and of its performance for the year ended on that date.
- (c) comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 1 to the financial statements.
1. In the directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
1. The director's have been given the declaration required by section 295A of the Corporations Act 2001.

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

Bruce Franzen Director

Date: 31 August 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012

	NOTES	2012$	2011$
Interest revenueGain on sale of prospects		150,516147,954	114,151-
Total revenue		298,470	114,151
Administration expensesDepreciationEmployee benefits expenseAcquisition costsWrite-off of exploration expenditure		(594,106)(33,201)(968,055)(912)(626,166)	(271,692)(2,056)(395,791)(61,258)(271,061)
Loss before income tax expense	2	(1,923,970)	(887,707)
Income tax expense	3	-	(77)
Loss for the year		(1,923,970)	(887,784)
Other comprehensive incomeExchange difference on translation of foreignoperation		(204,259)	-
Total comprehensive loss for the year		(2,128,229)	(887,784)
Basic and diluted (loss) per share (cents)	17	(3.08)	(3.19)

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

	NOTES	2012$	2011$
CURRENT ASSETS
Cash and cash equivalents	5	897,520	4,317,723
Trade and other receivables	6	96,064	258,199
TOTAL CURRENT ASSETS		993,584	4,575,922
NON CURRENT ASSETS
Property, plant and equipment	7	174,810	11,976
Financial assets	8	85,000	-
Exploration and evaluation expenditure	9	10,020,122	5,680,285
TOTAL NON CURRENT ASSETS		10,279,932	5,692,261

TOTAL ASSETS		11,273,516	10,268,183
CURRENT LIABILITIES
Trade and other payables	10	598,094	411,387
Provisions	11	47,284	7,712
TOTAL CURRENT LIABILITIES		645,378	419,099
TOTAL LIABILITIES		645,378	419,099
NET ASSETS		10,628,138	9,849,084

EQUITYIssued capital	12	13,193,436	10,450,602
Option reserve	13	290,941	291,041
Other reserves	14	(39,710)	-
Accumulated losses	15	(2,816,529)	(892,559)
TOTAL EQUITY		10,628,138	9,849,084

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012

	IssuedCapital	Reserves	AccumulatedLosses	Total
Balance at 1 July 2011	10,450,602	291,041	(892,559)	9,849,084
Total comprehensive income forthe year
Loss for the period	-	-	(1,923,970)	(1,923,970)
Other comprehensive income	-	(204,259)	-	(204,259)
	-	(204,259)	(1,923,970)	(2,128,229)
Contributions by anddistributions to owners
Equity issued during the year	2,740,001	-	-	2,740,001
Options exercised during year	2,100	(100)	-	2,000
Transaction costs	(62,166)	-	-	(62,166)
Share based payment transactions	62,899	164,549	-	227,448
	2,742,834	164,449	-	2,907,283
Balance at 30 June 2012	13,193,436	251,231	(2,816,529)	10,628,138

	Issued		Accumulated
	Capital	Reserves	Losses	Total
Balance at 1 July 2010	100	-	(4,775)	(4,675)
Total comprehensive income forthe year
Loss for the period	-	-	(887,784)	(887,784)
Other comprehensive income	-	-	-	-
	-	-	(887,784)	(887,784)
Contributions by anddistributions to owners
Equity issued during the year	10,871,600	291,041	-	11,162,641
Transaction costs	(541,098)	-	-	(541,098)
Share based payment transactions	120,000	-	-	120,000
	10,450,502	291,041	-	10,741,543
Balance at 30 June 2011	10,450,602	291,041	(892,559)	9,849,084

The accompanying notes form part of their financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012

	NOTES	2012$	2011$
Cash Flows from Operating ActivitiesInterest receivedPayments to suppliers and employees		189,162(1,191,975)	70,727(451,465)
Net cash (used in) operating activities	16	(1,002,813)	(380,738)
Cash Flows from Investing ActivitiesPurchase of plant and equipmentPayment for exploration and evaluationProceeds from the disposal of explorationtenementsPayments for prospectsPayment for subsidiary		(196,035)(2,289,441)109,088(1,139,048)-	(14,032)(251,351)--(489,843)
Net cash used in investing activities		(3,515,436)	(755,226)
Cash Flows from Financing ActivitiesProceeds from issue of sharesProceeds from issue of optionsPayments for share issue costsProceeds from application for sharesLoan to subsidiary		992,001168,211(62,166)--	5,756,600122,830(541,098)--
Net cash provided in financing activities		1,098,046	5,338,332
Net increasein cash and cash equivalentsheld		3,420,203	4,202,368
Cash and cash equivalents at 1 July		4,317,723	115,355
Cash and cash equivalents at 30 June	5	897,520	4,317,723

The accompanying notes form part of these financial statements

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Riedel Resources Limited (the "Company") is a Company domiciled in Australia.

The address of the Company's registered office is Suite 1, 45 Ord Street, West Perth WA 6005. The consolidated financial statements of the Company as at and for the year ended 30 June 2012 comprise the Company and its subsidiaries (together referred to as the "Group" and individually as "Group entities") and the Group's interest in associates and jointly controlled entities.

The Group primarily is involved in mining and exploration activity.

Basis of Preparation

The accounting policies set out below have been consistently applied to all years presented.

Statement of Compliance

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial report of the Group comply with International Financial Reporting Standards (lFRSs) and interpretations adopted by the International Accounting Standards Board (IASB).

The consolidated financial statements were authorised for issue by the Board of Directors on 31 August 2012.

Basis of Measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position:

financial instruments at fair value through profit or loss are measured at fair value
available-for-sale financial assets are measured at fair value
liabilities for cash-settled share-based payment arrangements are measured at fair value

Functional and Presentation Currency

These consolidated financial statements are presented in Australian dollars, which is the Company's functional and presentation currency.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

Use of Estimates and Judgements

The preparation of financial statements in conformity with AASBs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Going Concern

The accounts have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. The Group incurred a loss of $1,923,970 for the year ended 30 June 2012 (2011: $887,784).

The ability of the Company and the Group to continue to pay its debts as and when they fall due is dependent upon the Company successfully raising additional share capital and ultimately developing one of its mineral properties.

The Directors believe it is appropriate to prepare these accounts on a going concern basis because:

the Directors have an appropriate plan to raise additional funds as and when it is required. In light of the Group's current exploration and evaluation projects, the Directors believe that the additional capital required can be raised in the market; and
the Directors have an appropriate plan to contain certain operating and exploration expenditure if appropriate funding is unavailable.

The accounts have been prepared on the basis that the Company and the Group can meet its commitments as and when they fall due and can therefore continue normal business activities, and the realisation of assets and liabilities in the ordinary course of business. In the event that the Group is not successful in raising funds from the issue of new equity there exists an significant uncertainty as to whether the Group will be able to continue as a going concern and realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

(a) Critical Accounting Judgements, 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:

Share Based Payment Transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an internal valuation using Black-Scholes option pricing model, using the assumptions detailed in Note 13.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

Exploration and Evaluation Costs

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward in respect of an area that has not at reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or relating to, the area of interest are continuing.

Impairment of Exploration and Evaluation Assets and Investments in and Loans to Subsidiaries

The ultimate recoupment of the value of exploration and evaluation assets, the Company's investment in subsidiaries, and loans to subsidiaries is dependent on the successful development and commercial exploitation, or alternatively, sale, of the exploration and evaluation assets.

Impairment tests are carried out on a regular basis to identify whether the asset carrying values exceed their recoverable amounts. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts.

The key areas of judgement and estimation include:

Recent exploration and evaluation results and resource estimates;
Environmental issues that may impact on the underlying tenements;
Fundamental economic factors that have an impact on the operations and carrying values of assets and liabilities.

Classification of Investments

The Group has decided to classify investments in listed securities as fair value through the profit and loss. These securities are accounted for at fair value. Any increments or decrements in their value at year end are charged or credited to the profit or loss in the statement or comprehensive income.

Income tax expenses

Judgement is required in assessing whether deferred tax assets and liabilities are recognised on the statement of financial position. Deferred tax assets, including those arising from temporary differences, are recognised only when it is considered more likely than not that they will be recovered, which is dependent on the generation of future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised.

(b) Principles of Consolidation

The consolidated financial statements incorporate the financial statements of Riedel Resources Limited and entities controlled by Riedel Resources Limited (its subsidiaries). A list of subsidiaries is contained in note 22. All controlled entities have a 30 June financial year-end. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of the subsidiaries acquired or disposed of during the year are included in consolidated statement of profit or loss from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

(b) Principles of Consolidation (con't)

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquire and the equity instruments issued by the Group in exchange for control of the acquire. Acquisition-related costs are recognised in profit or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the acquisition date, except that:

Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measure in accordance with AASB 112 'Income Taxes' and AASB 119 'Employee Benefits' respectively;
Liabilities or equity instruments related to share-based payment arrangement of the acquire or share-based payments of the Group entered into to replace share-based payment arrangements of the acquire are measured in accordance with AASB 2 'Share-based Payment' at the acquisition date; and

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.

(c) Income Tax

The charge for current income tax expense is based on the profit for the year adjusted for any nonassessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the reporting date.

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

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

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

(c) Income Tax (con't)

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

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

(d) Exploration and Evaluation Expenditure

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which:

such costs are expected to be recouped through successful development and exploitation or from sale of the area; or
exploration and evaluation activities in the area have not, at reporting date, reached a stage which permit a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations in, or relating to, the area are continuing.

Accumulated costs in respect of areas of interest which are abandoned are written off in full against profit in the year in which the decision to abandon the area is made.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

The recoverability of the carrying amount of the exploration and development assets is dependent on the successful development and commercial exploitation or alternatively sale of the respective areas of interest.

Rehabilitation, Restoration and Environmental Costs

Long-term environmental obligations are based on the Company's environmental management plans, in compliance with current environmental and regulatory requirements.

The costs will include obligations relating to reclamation, waste site closure, plant closure and other costs associated with the restoration of the site, when relevant.

Full provision is made based on the net present value of the estimated cost of restoring the environmental disturbance that has been incurred as at the reporting date. Increases due to additional environmental disturbance (to the extent that it relates to the development of an asset) are capitalised and amortised over the remaining lives of the mines.

Annual increases in provision relating to the change in the present value of the provision are accounted for in earnings.

The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation, technology or other circumstances. Cost estimates are not reduced by the potential proceeds from sale of assets or from plant clean-up at closure.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

(e) Financial Instruments

The Company classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, 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.

Recognition

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

(i) Financial assets at fair value through profit or loss

Financial assets are classified at 'fair value through profit or loss' when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

(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 company 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 reportingdate which are classified as non-current assets. Loans and receivables are included in receivables in the statement of financial position.

(iii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

Fair value

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

Financial liabilities

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

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

(f) Cash and Cash Equivalents

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

(g) Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. All revenue is stated net of the amount of goods and services tax (GST).

(h) Goods and Services Tax (GST)

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

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

(i) Impairment

(i) Financial Assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in Groups that share similar credit risk characteristics. All impairment losses are recognised either in the income statement or revaluation reserves in the period in which the impairment arises.

(ii) Exploration and Evaluation Assets

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount at the reporting date.

Exploration and evaluation assets are tested for impairment in respect of cash generating units, which are no larger than the area of interest to which the assets relate.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

(i) Impairment (con't)

(iii) Non-Financial Assets Other Than Exploration and Evaluation Assets

The carrying amounts of the Group's non-financial assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each reporting date.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units, then to reduce the carrying amount of the other assets in the unit on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exits. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss has been recognised.

(j) Investments

All investments are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with the investment.

After initial recognition, investments, which are classified as held for trading and available-for-sale, are measured at fair value. Gains or losses on investments held for trading are recognised in the profit or loss in the statement of comprehensive income.

Gains or losses on available-for-sale investments are recognised as a separate component of equity until the investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the profit or loss in the statement of comprehensive income..

For investments that are actively traded in organised financial markets, fair value is determined by reference to Stock Exchange quoted market bid prices at the close of business on the reporting date.

(k) Trade and Other Payables

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

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

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

(l) Share-Based Payment Transactions

The Group provides benefits to employees (including Directors) of the Group in the form of sharebased payment transactions, whereby employees render services in exchange for shares or rights over shares ("equity-settled transaction").

The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an internal valuation using a Black-Scholes option pricing model.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ("vesting date").

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the Company, will ultimately vest. This opinion is formed based on the best available information at reporting date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

(m) Trade and Other Receivables

Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an allowance for any uncollectible amounts.

Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An allowance for doubtful debts is raised when there is objective evidence that the group will not be able to collect the debt.

(n) Issued capital

Ordinary shares are classified as equity.

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.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

(o) Acquisition of Assets

The purchase method of accounting is used for all acquisitions of assets regardless of whether equity instruments or other assets are acquired. Cost is determined as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the acquisition.

(p) Foreign currency translation

Foreign currency transactions

Foreign currency transactions are translated into Australian dollars 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 financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Foreign operations

The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximates the rate at the date of the transaction, for the period. All resulting foreign exchange differences are recognised in the foreign currency translation reserve in equity

The foreign currency translation reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.

(q) New standards and interpretations not yet adopted

The AASB has issued the following new and amended accounting standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against early adoption of these standards, and has not yet determined the potential impact on the financial statements from the adoption of these standards and interpretations.

AASB NO.	TITLE	ISSUE DATE	OPERATIVE DATE(ANNUAL REPORTINGPERIODS BEGINNINGON OR AFTER)
9	Financial Instruments	Dec 2010	1 Jan 2013
10	Consolidation	Aug 2011	1 Jan 2013
11	Joint Arrangements	Aug 2011	1 Jan 2013
12	Disclosure of Interests in Other Entities	Aug 2011	1 Jan 2013
13	Fair Value Measurement	Sep 2011	1 Jan 2013
1053	Application of Tiers of AustralianAccounting Standards	Jun 2010	1 Jul 2013
2010 – 2	Amendments to Australian AccountingStandards arising from ReducedDisclosure Requirements	Jun 2010	1 Jul 2013

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

(q) New standards and interpretations not yet adopted (con't)

AASB NO.	TITLE	ISSUE DATE	OPERATIVE DATE(ANNUAL REPORTINGPERIODS BEGINNINGON OR AFTER)
2010 – 7	Amendments to Australian AccountingStandards arising from AASB 9(December 2010)[AASB 1, 3, 4, 5, 7, 101, 102, 108, 112,118, 120, 121, 127, 128, 131, 132, 136,137, 139, 1023 & 1038 andInterpretations 2, 5, 10, 12, 19 & 127]	Dec 2010	1 Jan 2013
2010 – 8	Amendments to Australian AccountingStandards – Deferred Tax: Recovery ofUnderlying Assets[AASB 112]	Dec 2010	1 Jan 2012
2010 – 10	Further Amendments to AustralianAccounting Standards – Removal ofFixed Dates for First-time Adopters[AASB 2009-11 & AASB 2010-7]	Dec 2010	1 Jan 2013
2011 - 4	Amendments to Australian AccountingStandards to Remove Individual KeyManagement Personnel DisclosureRequirements[AASB 124]	Jul 2011	1 Jul 2013
2012 - 2	Amendments to Australian AccountingStandards – Disclosures – OffsettingFinancial Assets and Financial Liabilities[AASB 7 & AASB 132]	Jun 2012	1 Jan 2013
2012 - 3	Amendments to Australian AccountingStandards – Offsetting Financial Assetsand Financial Liabilities[AASB 132]	Jun 2012	1 Jan 2014
2012 - 5	Amendments to Australian AccountingStandards arising from AnnualImprovements 2009–2011 Cycle[AASB 1, AASB 101, AASB 116, AASB132 & AASB 134 and Interpretation 2]	Jun 2012	1 Jan 2013

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

(q) New standards and interpretations not yet adopted (con't)

Australian Interpretations

AASB NO.	TITLE	ISSUEDATE	OPERATIVE DATE(ANNUAL REPORTINGPERIODS BEGINNINGON OR AFTER))
20	Stripping Costs in the Production Phaseof a Surface Mine	Nov 2011	1 Jan 2013

	2012$	2011$
NOTE 2: LOSS FROM ORDINARY ACTIVITIES(a) Other revenue
Bank Interest	150,516	114,151
Gain on sale of tenement	147,954	-
(b) ExpensesDepreciationExploration expenditure written offShare based payments expense	33,201626,166227,448	2,056271,061120,000
Superannuation - defined contributionImpairment of available for sale financial asset	76,41515,000	19,190-

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 3: INCOME TAX EXPENSE

		Consol2012		Consol2011
Income tax expense/(benefit):
Current taxPrior year under provisionDeferred tax	$$$$	----	$$$$	-77-77
The prima facie income tax expense/(benefit)onpre-tax accounting profit from operationsreconciles to the income taxexpense/(benefit)in the financial statements as follows:
Prima facie income tax expense/(benefit) on loss at 30%(2011: 30%)		($577,191)		($266,312)
Add:
Tax effect of:
Other non-allowable itemsShare Based PaymentProvisions and accrualsRevenue losses not recognisedAccrued incomePrior year under provisionOther		$100,154$68,234$21,294$700,586$11,594$0$18,614$920,477		$23,212$36,000$9,287$447,394$0$77$0$515,970
Less:
Tax effect of:
Exploration and evaluation expenditureCapital raising costsAccrued income		$307,089$36,196$0$343,285		$204,086$32,466$13,029$249,581
Income tax expense/(benefit)		$0		$77
The applicable average weighted tax ratesare as follows:		0%		0%
The following deferred tax balances have notbeen recognised:

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 3: INCOME TAX EXPENSE (CONT)

	2011
$	$
	$1,947,394
	$129,864
	$10,936
	$0
$2,792,527	$2,088,194
	2012$2,647,980$112,317$27,730$4,500

The tax benefits of the above Deferred Tax Assets will only be obtained if:

(a) the company derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised

(b) the company continues to comply with the conditions for deductibility imposed by law; and

Deferred Tax Liabilities: At 30%:

Exploration and evaluation expenditure	$433,806	$204,086
Accrued income	$1,574	$13,169
	$435,381	$217,255

The above Deferred Tax Liabilities have not been recognised as they have given rise to the carry forward revenue losses for which the Deferred Tax Asset has not been recognised.

	2012	2011
	$	$
NOTE 4: AUDITORS' REMUNERATION
Remuneration of the auditor of the parent entity for:
-Auditing or reviewing the financial report	47,650	31,000
-Tax compliance and accounting advice	4,200	1,350
	51,850	32,350
Remuneration of firms other than the auditor
-Tax compliance	385	9,050
-Other non-audit services	3,806	8,322
	4,191	17,372

NOTE 5: CASH AND CASH EQUIVALENTS
Cash on hand	12,332	11,949
Cash at bank	885,188	4,305,774
	897,520	4,317,723

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 6: TRADE AND OTHER RECEIVABLES CURRENT

Accrued interest	5,248	43,895
Option subscription funds held by share registry	-	168,211
GST refundable	73,755	26,094
Prepayments	17,061	19,999
	96,064	258,199

Refer to note 19 for further information on financial instruments.

	2012	2011
	$	$
NOTE 7: PROPERTY, PLANT & EQUIPMENT
Office Equipment
At cost	31,068	14,032
Accumulated amortisation	(14,406)	(2,056)
Total office equipment	16,662	11,976
Motor Vehicles
At cost	123,695	-
Accumulated amortisation	(14,143)	-
Total office equipment	109,552	-
Exploration Equipment
At cost	55,304	-
Accumulated amortisation	(6,708)	-
Total office equipment	48,596	-
Total property, plant and equipment	174,810	11,976

Reconciliations

Reconciliations of the carrying amounts of each class of property, plant & equipment at the beginning and end of the current and previous financial year are set out below:

Office Equipment
Carrying amount at beginning of period	11,976	-
Additions	17,036	14,032
Depreciation	(12,350)	(2,056)
Carrying amount at end of period	16,662	11,976
Motor VehiclesCarrying amount at beginning of period	-	-
Additions	123,695	-
Depreciation	(14,143)	-
Carrying amount at end of period	109,552	-

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 7: PROPERTY, PLANT & EQUIPMENT (CONT)

Exploration EquipmentCarrying amount at beginning of periodAdditionsDepreciationCarrying amount at end of period	-55,304(6,708)48,596	----
	2012	2011
NOTE 8: FINANCIAL ASSETS	$	$
Available for sale financial assets carried at fair valueListed shares	85,000	-
ReconciliationReconciliation of the fair values at the beginning and end ofthe current and previous financial year are set out below:
Opening fair valueAdditions	-100,000		--
DisposalsImpairment	-(15,000)		--
Closing fair value	85,000		-
NOTE 9: EXPLORATION AND EVALUATIONEXPENDITURE
Exploration and evaluation expenditure reconciliation
Opening balance	5,680,285	-
Tenement and application fees – at cost	2,705,900	5,421,004
Tenements disposedExploration written off	(62,046)(263,642)	--
Monies spent on exploration and evaluation during financial
year	1,959,625	259,281
Closing balance	10,020,122	5,680,285

NOTE 10: TRADE AND OTHER PAYABLES

Trade creditors	52,058	74,374
AccrualsPayroll liabilities	498,54447,284	297,16039,853
Other	1,418598,094	-411,387

Refer to note 19 for further information on financial instruments.

NOTE 11: PROVISIONS

Employee benefits 47,284 7,712

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

		2011Shares	2011$
NOTE 12: ISSUED CAPITAL
(a)Share capitalOrdinary shares
shares	Issued and paid up capital – consisting of ordinary	58,208,100	10,991,700
Less: cost of issue		-	(541,098)
	Closing balance at 30 June 2011	58,208,100	10,450,602
		2012Shares	2012$
shares	Issued and paid up capital – consisting of ordinary	79,913,464	13,796,700
Less: cost of issue		-	(603,264)
	Closing balance at 30 June 2012	79,913,464	13,193,436
(b)	Movement in ordinary shares capital
Date	Details	No of Shares	$
1 July 2010	Opening balance	100	100
30 September 2010	Seed Capital	6,500,000	650,000
20 January 2011	SharesissuedunderProspectusdated 12 November 2010	26,708,000	5,341,600
20 January 2011	Shares issue as consideration for
	the acquisition of AuDAX MineralsPty Ltd	25,000,000	5,000,000
	Costs of issue	-	(541,098)
30 June 2011	Closing balance	58,208,100	10,450,602

1 July 2011	Opening balance	58,208,100	10,450,602
11 July 2011	Options exercised	10,000	2,100
26 July 2011	Equity settled benefits	86,660	10,399
10 April 2012	Shares issued as consideration forthe acquisition of projects in Burkina
	Faso	12,500,000	1,750,000
7 May 2012	Shares placement	7,973,914	917,000
9 May 2012	Share placement	634,790	73,001
14 May 2012	Equity settled benefits	500,000	52,500
	Costs of issue	-	(62,166)
30 June 2012	Closing balance	79,913,464	13,193,436

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 12: ISSUED CAPITAL (CONT)

(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 proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. The fully paid ordinary shares have no par value.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.

(d) Capital management

Management controls the capital of the Group by monitoring performance against budget to provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern.

The Group's liabilities and capital includes ordinary share capital, options and financial liabilities, supported by financial assets.

There are no externally imposed capital requirements as the Group has no debt during the year and/or no debt outstanding at reporting date.

Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

There have been no changes in the strategy by management to control the capital of the group since the prior year.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

			2011	2011
NOTE 13: OPTION RESERVE			Options	$

Opening balance at 1 July 2010expiry)	Director options (30c exercise, 30 June 2014		-8,000,000	--
2012 expiry)	Entitlement options (20c exercise, 30 November		29,104,050	291,041
Closing balance at 30 June 2011			37,104,050	291,041
			2012Options	2012$
Opening balance at 1 July 2011Options exercised			37,104,050(10,000)	291,041(100)
expiry)	Executive options (30c exercise, 30 June 2014	(i)	2,000,000	-
Closing balance at 30 June 2012			39,094,050	290,941

Movements in optionsDate	Details		No of Options	$
1 July 201029 September 20109 June 201130 June 2011	Opening balanceDirector optionsEntitlement optionsEntitlement options – shortfall	(ii)(ii)	-8,000,00012,282,93916,821,111	--122,830168,211
30 June 2011	Closing balance		37,104,050	291,041
1 July 20114 July 201112 July 2011	Opening balanceOptions exercisedExecutive options	(i)	37,104,050(10,000)1,500,000	291,041(100)-
28 March 2012	Executive options	(i)	500,000	-
30 June 2012	Closing balance		39,094,050	290,941

(i) The value of options granted during the period was calculated using the Black-Scholes Option Pricing Model and totalled $68,500. The values and inputs are as follows;

	ExecutiveOptions
Options issued	1,500,000
Underlying share value	$0.115
Exercise price	$0.30
Risk free interest rate	4.42%
Share price volatility	75%
Expiration period	30/06/2014
Valuation per option	$0.032

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 13: OPTION RESERVE (CONT)

	Executive
	Options
Options issued	500,000
Underlying share value	$0.145
Exercise price	$0.30
Risk free interest rate	3.61%
Share price volatility	80%
Expiration period	30/06/2014
Valuation per option	$0.041

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 historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

(ii) The option premium represents amounts paid by subscribers to the Company's Entitlement Option issue under Prospectus dated 6 May 2011.

		2012$	2011$
NOTE14: OTHER RESERVES
Share based payments reserveForeign currency translation reserve		164,549(204,259)	--
		(39,710)	-
Share based payments reserve
Opening balance		-	-
Issue of executive optionsIssue of executive performance rights	13 (i)	68,50096,049	--
Closing balance		164,549	-
Foreign currency translation reserve
Opening balanceForeign currency translation of foreign subsidiaries		-(204,259)	--
		(204,259)	-

Nature and purpose of reserves

Share based payments reserve

This reserve is used to record the value of equity benefits provided to employees and directors as part of their remuneration.

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 14: OTHER RESERVES (CONT)

Performance Rights

During the year the Company granted performance rights to Jeffrey Moore and Bruce Franzen. The issue of the performance rights was approved by shareholders at a meeting held on 14 July 2011.

Performance rights on issue at year end are as set out in the Remuneration Report.

The value of performance rights granted during the period was calculated using the Black-Scholes Option Pricing Model and totalled $309,333. The values and inputs are as follows;

Performance Rights	Tranche A	Tranche B	Tranche C
Performance Rights issued	2,666,667	2,666,667	2,666,666
Underlying share value	$0.135	$0.135	$0.135
Exercise price	$0.27	$0.36	$0.45
Risk free interest rate	5.05%	5.05%	5.05%
Share price volatility	75%	75%	75%
Expiration period	30/06/2014	30/06/2014	30/06/2014
Valuation per option	$0.047	$0.038	$0.031

The expected life of the performance rights is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

	2012	2011
	$	$
NOTE 15: ACCUMULATED LOSSES
Accumulated losses at the beginning of the year	892,559	4,775
Net loss for the year	1,923,970	887,784
Accumulated losses at the end of the year	2,816,529	892,559

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 16: NOTES TO THE STATEMENT OFCASHFLOWS	2012	2011
Reconciliation of cash flow from operating activities to profitLoss from ordinary activities after income tax	$(1,923,970)	$(887,784)
Add: non cash items:
Share based payments	227,448	120,000
Depreciation	33,201	2,056
Impairment of investment	15,000	-
Changes in assets and liabilities:
Decrease/(increase) in receivables	(44,723)	(46,093)
Decrease/(increase) in accrued income	38,647	(43,425)
Increase/(decrease) in payables	132,888	141,214
Increase/(decrease) in provisions	39,572	7,712
Other items:
Acquisition costs expensed	912	61,258
Gain on sale of tenement	(147,954)	-
Exploration and evaluation costs expensed	626,166	264,324
	(1,002,813)	(380,738)

(a) Non-cash investing and financing activities.

There were no other non-cash investing and financing activities, except the shares and options issued detailed in notes 12 and 13.

NOTE 17: EARNINGS PER SHARE	2012$	2011$
Loss from operations attributable to ordinary equity holdersof Riedel Resources Limited used to calculate basic
earnings per share	1,923,970	887,784
	2012Number	2011Number
Weighted average number of ordinary shares used as thedenominator in calculating basic earnings per share	62,454,877	27,829,404

The Company has not disclosed diluted earnings per share as the effect of potential ordinary shares is to decrease the loss per share.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 18: SEGMENT REPORTING

The Company has identified its operating segments based on the internal reports that are reviewed and used by the chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

Operating segments are identified by Management based on the mineral resource and exploration activities in Australia and Burkina Faso. Discrete financial information about each project is reported to the chief operating decision maker on a regular basis.

The reportable segments are based on aggregated operating segments determined by the similarity of the economic characteristics, the nature of the activities and the regulatory environment in which those segments operate.

Operating segments are identified by management based on exploration activities in Australia and Burkina Faso.

2012	Australia$	Burkina Faso$	Unallocated$	Total$
Revenue from external sources	147,954	-	150,516	298,470
Net loss before tax	144,709	29,624	1,749,638	1,923,970
Reportable segment assets	6,825,113	3,334,753	1,113,650	11,273,516
Reportable segment liabilities	94,756	319,910	230,712	645,378
2011	Australia$	Burkina Faso$	Unallocated$	Total$
Revenue from external sources	114,151	-	-	114,151
Net loss before tax	887,707	-	-	887,707
Reportable segment assets	10,268,183	-	-	10,268,183

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 19: FINANCIAL INSTRUMENTS

The Group's principal financial instruments comprise cash and short term deposits. The main purpose of the financial instruments is to earn the maximum amount of interest at a low risk to the Group. The Group also has other financial instruments such as trade debtors and creditors which arise directly from its operations. For the period under review, it has been the Group's policy not to trade in financial instruments

The main risks arising from the Group's financial instruments are interest rate risk, foreign exchange risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below:

(a) Interest Rate Risk

The Group is exposed to movements in market interest rates on short term deposits. The policy is to monitor the interest rate yield curve out to 180 days to ensure a balance is maintained between the liquidity of cash assets and the interest rate return. The Group does not have short or long term debt, and therefore this risk is minimal.

(b) Foreign exchange risk

The Group undertakes certain transactions in foreign currencies, hence exposure to exchange rate fluctuations arise. Payments made by the group are made at the prevailing exchange rate at the time of payment. Loans advanced from the ultimate holding Company to subsidiary companies are denominated in Australian dollars. The Group does not utilise derivative instruments to hedge the exchange rate risk.

(c) Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults.

The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having similar characteristics. The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the Group's maximum exposure to credit risk.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 19: FINANCIAL INSTRUMENTS (CONT) (a) Exposure to credit risk

The carrying amount of the group's financial assets represents the maximum credit exposure. The group's maximum exposure to credit risk at the reporting date was:

	CarryingAmount2012$	CarryingAmount2011$
Financial assets
Cash and cash equivalents	897,520	4,317,723
Other receivables	96,064	258,199
Available for sale financial assets	85,000	-
	1,078,584	4,575,922

(b) Impairment losses

None of the group's other receivables are past due hence no impairment were provided for.

(c) Liquidity risk

Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash flows. The Group does not have any external borrowings.

The Company does anticipate a need to raise additional capital in the next 12 months to meet forecasted operational and exploration activities.

The contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements are shown at (f) below.

(d) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the group's income or the value of its holdings of financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(e) Currency risk

The Group is exposed to fluctuations in foreign currencies arising from exploration commitments in currencies in other than the Group measurement currency. The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures to the US Dollar and the Burkina Faso Cefa. The Group has not formalised a foreign currency risk management policy, however it monitors its foreign currency expenditure in light of exchange rate movements.

The carrying amount of the Group's foreign currency denominated monetary assets and monetary liabilities at the balance date are as follows:

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 19: FINANCIAL INSTRUMENTS (CONT)

	Liabilities		Assets
	2012$	2011$	2012$	2011$
US Dollars	-	-	984	-
Burkina Faso CFA	319,910	-	18,546	-

Sensitivity analysis

The Group's main foreign currency risk arises from cash and cash equivalents held in foreign currency bank accounts and trade and other payable amounts denominated in currencies other than the functional currency. At 30 June 2012 and 30 June 2011 the Group's exposure to foreign currency risk is not considered material.

(f) Interest rate risk

The Group is exposed to interest rate risk (primarily on its cash and cash equivalents), which is the risk that a financial instrument's value will fluctuate as a result of changes in the market interest rates on interest-bearing financial instruments. The Group does not use derivatives to mitigate these exposures.

The Group adopts a policy of ensuring that as far as possible it maintains excess cash and cash equivalents in short terms deposit at interest rates maturing over 30-180 day rolling periods.

Interest Rate Risk Exposure Analysis

	WeightedAverage			Fixed Interest RateMaturing
	EffectiveInterest Rate2012	FloatingInterestRate2012	Within 1year2012	Over 1year2012	NonInterestBearing2012
FINANCIAL ASSETS	%	$	$	$	$
Cash and cash equivalents	4.14%	325,537	550,000	-	21,983
Trade and other receivables	0%	-	-	-	96,064
Available for sale financialassets	-	-	-	-	85,000
Total Financial Assets		325,537	550,000	-	203,047
FINANCIAL LIABILITIESTrade and other payables	0%	-	-	-	598,094

Total Financial Liabilities		-	-	-	598,094

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 19: FINANCIAL INSTRUMENTS (CONT)

	WeightedAverage			Fixed Interest RateMaturing
FINANCIAL ASSETS	EffectiveInterest Rate2011%	FloatingInterestRate2011$	Within 1year2011$	Over 1year2011$	NonInterestBearing2011$
Cash and cash equivalents	5.55%	200,101	4,103,260	-	14,362
Trade and other receivablesTotal Financial Assets	0%	-200,101	-4,103,260	--	258,199272,561
FINANCIAL LIABILITIESTrade and other payablesTotal Financial Liabilities	0%	--	--	--	411,387411,387

(h) Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. The analysis is performed on the same basis for 2011.

Change in profit	2012$	2011$
Increase in interest rate by 1%(100 basis points)Decrease in interest rate by 1%	8,755	43,033
(100 basis points)	(8,755)	(43,033)
Change in equityIncrease in interest rate by 1%
(100 basis points)Decrease in interest rate by 1%	8,755	43,033
(100 basis points)	(8,755)	(43,033)

(j) Other market price risk

Other Equity price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market.

Investments are managed on an individual basis and material buy and sell decisions are approved by the Board of Directors. The primary goal of the Group's investment strategy is to maximise investment returns.

The Group's investments are solely in equity instruments. These instruments are classified as available-for-sale and are carried at fair value, with fair value changes recognised directly in equity until derecognised, unless they are impaired.

If there was a 10% increase or decrease in the market price of the listed available-for-sale financial asset, the change in the loss before income tax and the equity for the group would have been an increase/decrease of $8,500 (2011: $-). This has impacted the profit or loss as the value of the listed shares would be below their original cost, and therefore impaired.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 19: FINANCIAL INSTRUMENTS (CONT)

(k) Commodity price risk

The Group operates primarily in the exploration and evaluation phase and accordingly the Group's financial assets and liabilities are subject to minimal commodity price risk.

Fair value of financial instruments

The following tables detail the Group's fair values of financial instruments categorised by the following levels:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices)

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

Consolidated - 2012	Level 1$	Level 3$	Total$
Assets
Ordinary shares	85,000	-	-85,000
Total assets	85,000	-	-85,000

There were no transfers between levels during the financial year.

NOTE 20: BUSINESS COMBINATION

Acquisition of AuDAX Minerals Pty Ltd

On 20 January 2011, Riedel Resources Limited acquired 100% of the voting shares of AuDAX Minerals Pty Ltd.

The total cost of the combination was $5,000,000 and comprised an issue of equity instruments. The Group issued 25,000,000 ordinary shares with a fair value of $0.20 each, based on the price of the shares of Riedel Resources Limited in the Prospectus dated 12 November 2011.

The Group has recognised the fair values of the identifiable assets and liabilities of AuDax Minerals Pty Ltd based upon the best information available as of the reporting date.

	Fair value atacquisition date$
Cash and cash equivalents	6,739
Exploration expenditure	163,109
Fair value adjustment to exploration expenditure	5,257,895
Trade and other payables	(427,743)
Total	5,000,000

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 20: BUSINESS COMBINATION (CONT)

	2011$
Acquisition date fair value of consideration transferred:Shares issued, at fair valueConsideration transferred	5,000,000-
Direct costs relating to the acquisition	61,258
	Consolidated$
The cash inflow on acquisition is as follows:Cash paid	-
Net cash acquired with the subsidiary	6,739
Net cash inflow	6,739

Acquisition related costs of $61,258 are included in other expenses in the statement of comprehensive income. Directly attributable costs of raising equity have been included as a deduction from equity.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 21: COMMITMENTS AND CONTINGENCIES

Operating lease commitments

Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:

	2012$	2011$
Within one year	120,245	123,790
After one year but not more than five yearsMore than five years	102,475-	229,712-
	222,720	353,502

Lease of company offices at Suite 1, 45 Ord Street West Perth, and Konica Minolta photocopier machine.

Exploration commitments

Future minimum commitments in relation to exploration and mining tenements as at 30 June are as follows:

	2012$	2011$
Within one year	770,380	504,438
After one year but not more than five years	804,486	1,369,323
More than five years	-	-
	1,574,866	1,873,761

NOTE 22: INTERESTS IN CONTROLLED ENTITIES

The consolidated financial statements include the financial statements of Riedel Resources Limited and the subsidiary listed in the following table.

	Country of	Equity Interest %		Investment $
Name	Incorporation	2012	2011	2012	2011
AuDAX Minerals Pty Ltd	Australia	100	100	5,000,000	5,000,000
Riedel (Burkina Faso) Limited (1)	Mauritius	100	-	1	-
BF Exploration SARL(2)	Burkina Faso	100	-	1,777	-

Riedel Resources Limited is the ultimate Australian parent entity and ultimate parent of the Group.

(1) Riedel (Burkina Faso) Limited was incorporated within Mauritius on 18 November 2011.
(2) BF Exploration SARL was incorporated in Burkina Faso on 12 January 2012.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 23: RELATED PARTY DISCLOSURE

Entity with significant influence over the Group

ADX Energy Limited owns 31% of the ordinary shares in Riedel Resources Limited (2011: 43%).

Terms and conditions of transactions with related parties

Sales to and purchases from related parties are made in arm's length transactions both at normal market prices and on normal commercial terms.

Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash.

(a) Key management personnel compensation

	2011$	2011$
The key management personnel compensationcomprised:
Short term employment benefits	870,445	224,327
Post employment benefits	49,682	19,053
Share based payments	154,447	120,000
	1,074,574	363,380

Detailed remuneration disclosures are provided in the Remuneration Report on pages 34 to 41.

(b) Individual directors' and executives' compensation disclosure

Information regarding individual directors' and executives' compensation and some equity instruments disclosures as required by Corporation Regulation 2M.3.03 is provided in the remuneration report section of the directors' report.

From 1 July 2011, the Company commenced a Consultancy Agreement with Zen Magnolia Pty Ltd (Mr Bruce Franzen is a Director and Shareholder) for the provision of Director and Company Secretarial Services by Mr Bruce Franzen. This agreement is to be renewed annually. The amount relating to these services which has been recognised for the year is $275,892 (2011:$105,263)

On 23 January 2012, the Company entered into a Services Agreement with Zen Magnolia Pty Ltd (Mr Bruce Franzen is a Director and Shareholder) for the provision of Accounting Services. This agreement is to be renewed annually. The amount relating to these services which has been recognised for the year is $6,950 (2011:$-)Apart from the details disclosed in this note, no director has entered into a material contract with the group since the end of the previous financial year and there were no material contracts involving directors' interest existing at year end.

(d) Loans to key management personnel

There were no loans to key management personnel at the end of the year.

(e) Shareholdings of key management personnel

The movement during the reporting period in the number of shares in Riedel Resources Limited held, directly, indirectly or beneficially, by each key management person, including related parties, is as follows:

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 23: RELATED PARTY DISCLOSURE (CONT)

(a) Ordinary shares held in Riedel Resources Limited (number)

2012	Balance atbeginningof period	Granted asremuneration	Exerciseof options	Net changeother	Balance atend of period
Directors
Ian Tchacos	300,000	-	-	165,500	465,500
Jeffrey Moore	200,000	-	-	50,000	250,000
Bruce Franzen	600,100	86,660	-	-	686,760
Andrew Childs	650,000	-	-	575,000	1,225,000
Wolfgang Zimmer	300,000	-	-	-	300,000
	2,050,100	86,660	-	790,500	2,927,260
2011
Directors
Ian Tchacos	-	-	-	300,000	300,000
Jeffrey Moore	-	-	-	200,000	200,000
Bruce Franzen	100	600,000	-	-	600,100
Andrew Childs	-	-	-	650,000	650,000
Wolfgang Zimmer	-	-	-	300,000	300,000
	100	600,000	-	1,450,000	2,050,100

(b) Option holdings of Key Management Personnel

2012	Balance atbeginningof period	Granted asremuneration	Exercised	Net changeother	Balance atend of period
Directors
Ian Tchacos	2,150,000	-	-	-	2,150,000
Jeffrey Moore	100,000	-	-	-	100,000
Bruce Franzen	2,300,049	-	-	-	2,300,049
Andrew Childs	2,325,000	-	-	-	2,325,000
Wolfgang Zimmer	2,000,000	-	-	-	2,000,000
Total	8,875,049	-	-	-	8,875,049
2011Directors
Ian Tchacos	-	2,000,000	-	150,000	2,150,000
Jeffrey Moore	-	-	-	100,000	100,000
Bruce Franzen	-	2,000,000	-	300,049	2,300,049
Andrew Childs	-	2,000,000	-	325,000	2,325,000
Wolfgang Zimmer	-	2,000,000	-	-	2,000,000
Total	-	8,000,000	-	875,049	8,875,049

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 23: RELATED PARTY DISCLOSURE (CONT)

(c) Performance Rights of Key Management Personnel

2012	Balance atbeginningof period	Granted asremuneration	Exercised	Net changeother	Balance atend of period
Directors
Ian Tchacos	-	-	-	-	-
Jeffrey Moore	-	6,000,000	-	-	6,000,000
Bruce Franzen	-	2,000,000	-	-	2,000,000
Andrew Childs	-	-	-	-	-
Wolfgang Zimmer	-	-	-	-	-
Total	-	8,000,000	-	-	8,000,000

2011
Directors
Ian Tchacos	-	-	-	-	-
Jeffrey Moore	-	-	-	-	-
Bruce Franzen	-	-	-	-	-
Andrew Childs	-	-	-	-	-
Wolfgang Zimmer	-	-	-	-	-
Total	-	-	-	-	-

All equity transactions with key management personnel other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the Group would have adopted if dealing at arm's length.

The fair value of the equity-settled share options granted is estimated as at the date of grant using a Black Scholes Model taking into account the terms and conditions upon which the options were granted. Refer to Note 14 for details.

(d) Other transactions and balances with Key Management Personnel

During the year the Company paid Zen Magnolia Pty Ltd, a company associated with Bruce Franzen, a total of $Nil (2011:$96,060) for services provided in relation to the Company's Initial Public Offering and listing on the ASX under a consulting agreement. Zen Magnolia Pty Ltd was also issued 86,660 fully paid ordinary shares (2011: 600,000) in the Company pursuant to that consulting agreement.

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated

NOTE 24: EVENTS AFTER THE REPORTING DATE

The placement raised $1.22 million before costs, with the issue of 16,263,316 ordinary shares at an average issue price of $0.075 per share as follows;

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 24: EVENTS AFTER THE REPORTING DATE (CONT)

Tranche 2 Placement of 8,131,658 shares at an issue price of $0.115 per share to raise $0.94 million before costs
Further placement of 8,131,658 shares at an issue price of $0.035 per share to raise $0.28 million before costs

Tranche 2 of the Placement, being 8,131,658 shares were issued in accordance with pre approval by shareholders received at a General Meeting held on 15 June 2012.

There are no other matters or circumstances that have arisen since the end of the financial period that have significantly affected or may significantly affect the operations of the company, the results of those operations or the state of affairs of the company, in future years.

NOTE 25: CONTINGENT ASSETS AND LIABILITIES

The company is not aware of any contingent assets or liabilities, other than the indemnity guarantee related to lease of office accomodation of $30,000 (2011: $30,000) that it has with the ANZ bank that expires 31 March 2014.

NOTE 26: DIVIDENDS

No dividends were paid or declared during the year.

NOTE 27: COMPANY DETAILS

The registered office and principal place of business of the company is Suite 1, 45 Ord Street, West Perth, WA 6005.

NOTE 28: PARENT ENTITY DISCLOSURES

Financial Position

	2012	2011
	$	$
Assets
Current Assets	937,856	4,567,756
Non Current Assets	5,174,811	5,690,398
Total Assets	6,112,667	10,258,154

Liabilities
Current Liabilities	230,713	404,650
Non Current Liabilities	-	-
Total Liabilities	230,713	404,650

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 28: PARENT ENTITY DISCLOSURES (CONT)

Equity
Issued Capital	13,193,436	10,455,138
Reserves	455,489	291,041
Accumulated Losses	(7,766,971)	(892,675)
	5,881,954	9,853,504

Financial Performance

	2012	2011
	$	$
Loss for the year	6,874,297	887,890
Other comprehensive income/(loss)	-	-
Total comprehensive loss	6,874,297	887,890

Commitments

For details see note 21.

Contingent Liabilities/Guarentees

For details see note 25.

CORPORATE GOVERNANCE

The Company is committed to implementing the highest standards of corporate governance.

This Statement reports on the Company's key governance principles and practices. These principles and practices are reviewed regularly and revised as appropriate by the Company to ensure they comply with changes in the law and reflect developments in Corporate Governance.

The ASX Listing Rules require the Company to report on the extent to which it has followed the Corporate Governance Recommendations published by the ASX Corporate Governance Council (ASXCGC). In August 2007 the ASXCGC issued a second edition of its Corporate Governance Principles and Recommendations which were amended in 2010 ("ASX Recommendations").

The Company is pleased to advise that the Company's practices are largely consistent with the revised ASX Recommendations. As consistency with the guidelines has been a gradual process, where the Company did not have certain policies or committees recommended by the ASXCGC in place during the reporting period, we have identified such policies or committees.

Where the Company's corporate governance practices do not correlate with the practices recommended by the ASXCGC, the Company is working towards compliance however it does not consider that all the practices are appropriate for the Company due to the size and scale of Company operations.

To illustrate where the Company has addressed each of the ASXCGC Recommendations, the following table cross-references each recommendation with sections of this report. The table does not provide the full text of each recommendation but rather the topic covered. Details of all of the recommendations can be found on the ASX Corporate Governance Council's website at http://www.asx.com.au/supervision/governance/index.htm.

CORPORATE GOVERNANCE (CONT)

Recommendation	Section of thisReport

Recommendation 1.1 Functions of the Board and Management	1.1, 1.3, 1.4 and1.5
Recommendation 1.2 Evaluating the Performance of Senior	1.6.11
Executives
Recommendation 1.3 Reporting on Principle 1	1.1 and 1.6.11
Recommendation 2.1 Independent Directors	1.2,
Recommendation 2.2 Independent Chairman	1.3
Recommendation 2.3 Role of the Chairman and CEO	1.3 and 1.4
Recommendation 2.4 Establishment of Nomination Committee	2.3
Recommendation 2.5 Evaluation of Board, Directors and	1.6.11
Committees
Recommendation 2.6 Reporting on Principle 2	1.2, 1.3 1.4, 1.6.11
	and 2.3.1
Recommendation 3.1 Code of Conduct	1.6.1
Recommendation 3.2 Company Diversity Policy	1.6.13
Recommendation 3.3 Gender Diversity Objectives	1.6.13
Recommendation 3.4 Gender Breakdown of Company Structure	1.6.13
Recommendation 3.5 Reporting on Principle 3	1.6.13
Recommendation 4.1 Establishment of Audit Committee	2.1
Recommendation 4.2 Structure of Audit Committee	2.1
Recommendation 4.3 Audit Committee Charter	2.1
Recommendation 4.4 Reporting on Principle 4	2.1
Recommendation 5.1 Policy for Compliance with Continuous	1.6.5
Disclosure
Recommendation 5.2 Reporting on Principle 5	1.6.5
Recommendation 6.1 Communications Strategy	1.6.9
Recommendation 6.2 Reporting on Principle 6	1.6.9
Recommendation 7.1 Policies on Risk Oversight and Management	1.6.14 and 2.1.3
Recommendation 7.2 Risk Management and Internal Control	1.6.14 and 2.1.3
System
Recommendation 7.3 Attestations by CEO and CFO	1.6.12
Recommendation 7.4 Reporting on Principle 7	1.6.12, 1.6.14 and
	2.1.3
Recommendation 8.1 Establishment of Remuneration Committee	2.2.1
Recommendation 8.2 Remuneration Committee Structure	2.2.1
Recommendation 8.3 Executive and Non-Executive Director	2.2.3 and 2.2.4
Remuneration
Recommendation 8.4 Reporting on Principle 8	2.2.1 to 2.2.5

1. Board of Directors of the Company

1.1. Role of the Board

The Board's role is to govern the Company rather than to manage it. It is the role of senior management to manage the Company in accordance with the direction and delegations of the Board and the responsibility of the Board to oversee the activities of management in carrying out these delegated duties.

CORPORATE GOVERNANCE (CONT)

In carrying out its governance role, the main task of the Board is to drive the performance of the Company. The Board must also ensure that the Company complies with all of its contractual, statutory and any other legal obligations, including the requirements of any regulatory body. The Board has the final responsibility for the successful operations of the Company.

To assist the Board carry out its functions, it has developed and approved a Board Charter which details the Board's role, powers, duties and functions to guide the Directors and its senior executives in the performance of their roles.

Other than as reserved to the Board in the Charter, responsibility for the management of the Company's business activities is delegated to the Company's executive Directors (and other key executives) who are accountable to the Board. The Charter and the delegation of Board authority are reviewed regularly.

1.2. Composition of the Board

To add value to the Company the Board has been formed so that it has effective composition, size and commitment to adequately discharge its responsibilities and duties given its current size and scale of operations. Directors are appointed based on the specific skills required by the Company and on their decision-making and judgment skills.

As at the date of this report, the Board is comprised of four (4) Directors, two (2) non-executive Directors and two (2) executive Directors.

The Company recognises the importance of Non-Executive Directors and the external perspective and advice that Non-Executive Directors can offer. The following criteria has been adopted by the Company as a non-prescriptive guide for independence:

An Independent Director is a Non-Executive Director and:

(a) is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
(b) 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;
(c) within the last three years has not been a principal of a material professional adviser or a material consultant to the Company or another group member. Or an employee materially associated with the service provided;
(d) is not a material supplier or customer of the Company or another group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer;
(e) has no material contractual relationship with the Company or other group member other than as a Director of the Company;
(f) has 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; and
(g) 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.

1.3. The Chairman

The Chairman is responsible for leadership and effective performance of the Board. Mr Ian Tchacos is Non Executive Chairman of the Company. The Chairman's responsibilities are set out in more detail in the Board Charter which is available in the corporate governance section of the Company's website.

CORPORATE GOVERNANCE (CONT)

1.4. The Managing Director/CEO

The Managing Director of the Company is Jeffrey Moore. The Managing Director is responsible for running the affairs of the Company under delegated authority from the Board and to implement the policies and strategy set by the Board. In carrying out his/her responsibilities the Managing Director must report to the Board in a timely manner and ensure all reports to the Board present a true and fair view of the Company's financial condition and operational results. The Managing Director is also responsible for overall shareholder communication in conjunction with the Chairman.

1.5. Responsibilities of the Board

In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company. It is required to do all things that may be necessary to be done in order to carry out the objectives of the Company. On appointment to the Board, all new Directors are required to sign a formal letter of appointment setting out the key terms and conditions relevant to their position.

Without intending to limit this general role of the Board, the principal functions and responsibilities of the Board include the following.

(a) Leadership of the Organisation: overseeing the Company and establishing codes that reflect the values of the Company and guide the conduct of the Board.
(b) Strategy Formulation: to set and review the overall strategy and goals for the Company and ensuring that there are policies in place to govern the operation of the Company.
(c) Overseeing Planning Activities: the development of the Company's strategic plan.
(d) Shareholder Liaison: ensuring effective communications with shareholders through an appropriate communications policy and promoting participation at general meetings of the Company.
(e) Monitoring, Compliance and Risk Management: the development of the Company's risk management, compliance, control and accountability systems and monitoring and directing the financial and operational performance of the Company.
(f) Company Finances: approving expenses and approving and monitoring acquisitions, divestitures and financial and other reporting.
(g) Human Resources: appointing, and, where appropriate, removing the Chief Executive Officer or Managing Director (CEO / MD) and Chief Financial Officer (CFO) as well as reviewing the performance of the CEO and monitoring the performance of senior management in their implementation of the Company's strategy.
(h) Ensuring the Health, Safety and Well-Being of Employees: in conjunction with the senior management team, developing, overseeing and reviewing the effectiveness of the Company's occupational health and safety systems to ensure the well-being of all employees.
(i) Delegation of Authority: delegating appropriate powers to the Company's executives to ensure the effective day-to-day management of the Company and establishing and determining the powers and functions of the Committees of the Board.

Full details of the Board's role and responsibilities are contained in the Board Charter, a copy of which is available in the corporate governance section of the Company's website.

CORPORATE GOVERNANCE (CONT)

1.6. Code of Conduct and Other Board Policies

1.6.1. Code of Conduct

The Board has adopted a Code of Conduct which details the Company's commitment to ethical and responsible decision marking and corporate practices.

The Code of Conduct sets out the Company's principles, practices and standards of personal and corporate behaviour. The Company expects everyone who works for or with the Company to adopt in their daily business activities. The code covers matters such as compliance with laws regulations, responsibility to shareholders and the community, confidentiality, privacy, conflicts of interest and the protection and proper use of the Company's assets.

1.6.2. Conflicts of Interest

Directors must:

(a) disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to exist between the interests of the Director and the interests of any other parties in carrying out the activities of the Company; and
(b) if requested by the Board, within seven days or such further period as may be permitted, take such necessary and reasonable steps to remove any conflict of interest.

If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as per the Corporations Act 2001, absent himself or herself from the room when discussion and/or voting occurs on matters about which the conflict relates.

1.6.3. Commitments

Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director of the Company.

1.6.4. Confidentiality

In accordance with legal requirements and agreed ethical standards, Directors and key executives of the Company have agreed to keep confidential, information received in the course of the exercise of their duties and will not disclose non-public information except where disclosure is authorised or legally mandated.

1.6.5. Continuous Disclosure

The Company is committed to ensuring that shareholders and the market are provided with full and timely information and that all stakeholders have equal opportunities to receive externally available information issued by the Company's Continuous Disclosure Policy reinforces the Company's commitment to continuous disclosure and outlines individual responsibilities, accountabilities and the processes to be followed for ensuring compliance.

A copy of the Continuous or Market Disclosure Policy is available in the corporate governance section of the Company's website.

CORPORATE GOVERNANCE (CONT)

1.6.6. Education and Induction

It is the policy of the Company that all new Directors and senior executives undergo an induction process in which they are given a full briefing on the Company. Where possible this includes meetings with key executives, tours of the premises, an induction package and presentations. Information conveyed to new Directors and senior executives include:

(a) details of the respective rights, duties, roles and responsibilities of a Director and senior executives of the Company;
(b) formal policies on Director appointment as well as conduct and contribution expectations;
(c) formal policies on director interaction with each other, senior executives and other stakeholders;
(d) access to a copy of the Board Charter and all corporate governance documents;
(e) guidelines on how the Board processes function;
(f) details of past, recent and likely future developments relating to the Board;
(g) background information on and contact information for key people in the organisation;
(h) an analysis of the Company (including the Company's financial position, operations and risk management policies);
(i) a synopsis of the current strategic direction of the Company;
(j) a copy of the Constitution of the Company;
(k) meeting arrangements; and
(l) details on the culture and values of the Company.

In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo continual professional development. These are paid for by the Company where appropriate. Specifically, Directors are provided with the resources and training to address skills gaps where they are identified.

1.6.7. Independent Professional Advice

The Board collectively and each Director has the right to seek independent professional advice at the Company's expense, up to specified limits, to assist them to carry out their responsibilities.

1.6.8. Related Party Transactions

Related party transactions include any financial transaction between a Director and the Company. Unless there is an exemption under the Corporations Act from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction.

CORPORATE GOVERNANCE (CONT)

1.6.9. Shareholder Communication

The Board recognizes that Shareholders, as the ultimate owners of the Company, are entitled to receive timely and relevant, high quality information about their investment. Similarly, prospective new investors are entitled to be able to make informed investment decisions when considering the purchase of shares in the Company.

The Company respects the rights of its Shareholders and to facilitate the effective exercise of those rights the Company is committed to:

(a) communicating effectively with Shareholders through releases to the market via ASX, information mailed to shareholders, information posted on the company's website or sent directly to Shareholders and Stakeholders via Email alerts, and the general meetings of the Company;
(b) giving Shareholders ready access to balanced and understandable information about the Company and corporate proposals;
(c) making it easy for Shareholders to participate in general meetings of the Company; and
(d) requesting the external auditor to attend the annual general meeting and be available to answer Shareholder questions about the conduct of the audit and the preparation and content of the auditor's report.

The Company also makes available a telephone number and email address for shareholders to make enquiries of the Company.

The Board is committed to monitoring ongoing developments that may enhance communications with Shareholders, including technological developments, regulatory changes and the continuing development of "best practice" in the market, and to implementing changes to the Company's communication strategies whenever reasonable practicable to reflect any such development.

A copy of the Shareholder Communication Policy is available in the corporate governance section of the Company's website.

1.6.10. Trading in Company Shares

The Company's share trading policy applies to all Directors and employees of the Company and their associates (including spouses, children, family trusts and family companies), contractors, consultants, advisers and auditors of the Company.

This policy provides a brief summary of the law on insider trading and other relevant laws, sets out the restrictions on dealing in securities by people who work for, or are associated with the Company and is intended to assist in maintaining market confidence in the integrity of dealings in the Company's securities.

The policy stipulates that the only appropriate time for a Director or employee to deal in the Company's securities is when they are not in possession of price sensitive information that is not generally available to the market. As a general rule, any Director, employee, or contractor is not permitted to deal in Company securities in the two (2) week period prior to and forty eight (48) hours after the:

a) date of the Company's Annual General Meeting;
b) release of the quarterly results announcement to the Australian Securities Exchange (ASX);
c) release of the half yearly results announcement to the ASX;
d) release of the preliminary final results announcement to the ASX; or
e) release of a disclosure document offering securities in the Company.

CORPORATE GOVERNANCE (CONT)

The Company may at its discretion vary this rule in relation to a particular period by general announcement to all employees either before or during the period. The Company may also impose any other restriction periods that the Board declares from time to time when it is considering matters which are subject to the exceptions to the continuous disclosure requirements set out in Listing Rule 3.1A.

Any dealing in Company securities by Directors is notified to the ASX within five business days of the dealing.

The Company does not condone short term or speculative trading in its securities by directors or employees, nor does it permit directors or employees to enter into any price protection arrangements with third parties to pledge such securities.

This policy is separate from and additional to the legal constraints imposed by common law, the Corporations Act, and the ASX Listing Rules.

A copy of the Company's share trading policy is available in the corporate governance section of the Company's website.

1.6.11. Performance Review/Evaluation

It is the policy of the Board to conduct an annual evaluation of its performance and that of its senior executives. The objective of this evaluation will be to provide best practice corporate governance to the Company.

A copy of the Company's Board Performance Evaluation Policy is available in the corporate governance section of the Company's website.

1.6.12. Attestations by MD/CEO and CFO

The Board receives regular reports on the Company's financial position and business operations from the Company's senior executives.

It is the Board's policy, that the MD/CEO and the CFO (or their equivalents) make the attestations recommended by the ASX Corporate Governance Council as to the Company's financial condition prior to the Board signing the Annual Report.

The Board also requires the MD/CEO and CFO to attest to the implementation and compliance to the company's internal control and risk management policies and to ensure that these policies are being managed effectively.

Other specific policies have been developed to support the Code. These policies include:

(a) Criminal Convictions;
(b) Indigenous Affairs;
(c) Environment;and
(d) Diversity.

CORPORATE GOVERNANCE (CONT)

1.6.13. Diversity

The Board has adopted a Diversity Policy to encourage employee and board diversity, including a broader pool of high quality employees, improving employee retention, accessing different perspectives and ideas and benefiting from all available talent.

Diversity includes, but is not limited to, gender, age, ethnicity and cultural background.

This Diversity Policy does not form part of an employee's contract of employment with the Company, nor gives rise to contractual obligations. However, to the extent that the Diversity Policy requires an employee to do or refrain from doing something and at all times subject to legal obligations, this Diversity Policy forms a direction of the Company with which an employee is expected to comply.

The Company's measureable objectives for achieving gender diversity are:

(a) recruiting from a diverse pool of candidates for all positions, including senior management and the Board;
(b) identifying specific factors to take account of in recruitment and selection processes to encourage gender diversity;
(c) developing programs to develop a broader pool of skilled and experienced senior management and board candidates, including, workplace development programs, mentoring programs and targeted training and development; and
(d) developing a culture which takes account of domestic responsibilities of employees.

The Company's employee gender structure is set out in the Company's annual report.

1.6.14. Risk Management Policy

The Company has a Risk Management Policy which sets out the manner in which the Company identifies, assesses, monitors and manages business risk. All high level strategies and new initiative risks are reviewed annually by the Board at its annual strategy and planning meeting.

In relation to risk management, monitoring the status of each risk and any necessary action plans relating to their treatment takes place on a regular basis by controlled self assessment as well as by management's regular review of risk action plans, with respect to the effectiveness and suitability of each risk action plan.

The overall results of these assessments are presented to the Board at least annually and updated as necessary.

Any action or recommendations by senior management arising out of these review processes are approved by the Board and implemented by management.

A copy of the Risk Management Policy is available on the Company's website in the corporate governance section.

CORPORATE GOVERNANCE (CONT)

2. Board Committees

2.1. Audit Committee

Due to the size and scale of its operations (the Board only consists of four (4) members) the Company does not have a separate audit committee. It is the Boards view that an Audit Committee would not be a more efficient mechanism than the full Board for focusing the Company on specific issues and it cannot be justified based on a cost benefit analysis. The Audit Committee is chaired by an independent director (who is not the Chairman) and is responsible for assisting the Board in fulfilling its financial reporting, risk management and compliance responsibilities, compliance with legal and regulatory requirements, internal control structure and the internal and external audit functions (the responsibilities of the Risk Management Committee have also been delegated to the Audit Committee). Other members of the Audit Committee include are the Chairman, and Chief Financial Officer. The Audit Committee meets at least twice per year and at such other times as the Audit Committee deems necessary.

The functions and responsibilities of the Audit Committee are set out in the Audit Committee Charter and include:

(a) overseeing the Company's system of financial reporting and safeguarding its integrity;
(b) overseeing risk management and compliance systems and the internal control framework;
(c) monitoring the activities and effectiveness of the internal audit function and the activities and performance of the external auditor and coordinating both operations; and
(d) providing reports to the Board on all matters relevant to the Committees responsibilities

A copy of the Company's Audit Committee Charter is available on the Company's website in the corporate governance section.

2.1.1. Role

The Audit Committee is responsible for reviewing the integrity of the Company's financial reporting and overseeing the independence of the external auditors.

2.1.2. Responsibilities

The Audit Committee reviews the audited annual and half-yearly financial statements and any reports which accompany published financial statements and recommends their approval to the members.

The Audit Committee each year reviews the appointment of the external auditor, their independence, the audit fee, and any questions of resignation or dismissal.

The Audit Committee is also responsible for establishing policies on risk oversight and management.

CORPORATE GOVERNANCE (CONT)

2.1.3. Risk Management Policies

The Board recognizes that risk management and internal compliance and control are key elements of good corporate governance.

The Audit Committee is responsible for reviewing, approving and monitoring the Company's risk management strategy, policy and key risk parameters. It is also responsible for ensuring that management has developed and implemented a sound system of risk management and internal control.

The Company's Risk Management Policy sets out the manner in which the Company identifies, assesses, monitors and manages business risk. All high level strategies and new initiative risks are reviewed annually by the Board at its annual strategy and planning meeting.

A copy of the Risk Management Policy is available on the Company's website in the corporate governance section.

2.2. Remuneration Committee

2.2.1. Role

The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and incentive policies and practices which:

(a) enable the Company to attract, retain and reward talented Directors and employees; and
(b) reward Directors and employees fairly and responsibility.

As the whole Board only consists of four (4) members, the Company does not have a remuneration committee because it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues. However, in accordance with the ASX Listing Rules, the Company is moving towards establishing a remuneration committee consisting primarily of Independent Directors, chaired by an independent director and consisting of at least 3 members.

2.2.2. Responsibilities

The responsibilities of a Remuneration Committee, or the full Board include setting policies for senior officers' remuneration, setting the terms and conditions of employment for the CEO/ Managing Director, reviewing and making recommendations to the Board on the Company's incentive schemes and superannuation arrangements, reviewing the remuneration of both Executive and Non-Executive Directors and making recommendations on any proposed changes and undertaking reviews of the CEO/ Managing Director's performance, including, setting with the goals and reviewing progress in achieving those goals.

CORPORATE GOVERNANCE (CONT)

2.2.3. Senior Executive Remuneration Policy

The Company is committed to remunerating its senior executives in a manner that is market-competitive and consistent with best practice as well as supporting the interests of shareholders. Consequently, under the Senior Executive Remuneration Policy the remuneration of senior executive may be comprised of the following:

(a) fixed salary that is determined from a review of the market and reflects core performance requirements and expectations;
(a) a performance bonus designed to reward actual achievement by the individual of performance objectives and for materially improved Company performance;
(b) participation in any share/option scheme with thresholds approved by shareholders; and
(c) statutory superannuation.

By remunerating senior executives through performance and long-term incentive plans in addition to their fixed remuneration the Company aims to align the interests of senior executives with those of shareholders and increase Company performance. The value of shares and options were they to be granted to senior executives would be calculated using the Black and Scholes method.

The objective behind using this remuneration structure is to drive improved Company performance and thereby increase shareholder value as well as aligning the interests of executives and shareholders.

The Board may use its discretion with respect to the payment of bonuses, stock options and other incentive payments.

2.2.4. Non-Executive Director Remuneration Policy

Non-Executive Directors are to be paid their fees out of the maximum aggregate amount approved by shareholders for the remuneration of Non-Executive Directors. Non-Executive Directors do not receive performance based bonuses, but are able to participate in equity schemes of the Company.

Non-Executive Directors are entitled to but not necessarily paid statutory superannuation.

2.2.5. Current Director Remuneration

Full details regarding the remuneration of Directors, is included in the Directors' Report.

2.3. Nomination Committee

2.3.1. Role

The role of a Nomination Committee is to help achieve a structured Board that adds value to the Company by ensuring an appropriate mix of skills are present in Directors on the Board at all times.

As the whole Board only consists of four (4) members, the Company does not have a nomination committee because it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues.

CORPORATE GOVERNANCE (CONT)

2.3.2. Responsibilities

The responsibilities of a Nomination Committee would include devising criteria for Board membership, regularly reviewing the need for various skills and experience on the Board and identifying specific individuals for nomination as Directors for review by the Board. The Nomination Committee would also oversee management succession plans including the CEO/ MD and his/her direct reports and evaluate the Board's performance and make recommendations for the appointment and removal of Directors. Currently the Board as a whole performs this role.

2.3.3. Criteria for selection of Directors

Directors are appointed based on the specific governance skills required by the Company. Given the size of the Company and the business that it operates, the Company aims at all times to have at least two Directors with experience appropriate to the Company's target market. In addition, Directors should have the relevant blend of personal experience in accounting and financial management and Director-level business experience.

A copy of the Company's Director Selection Policy is available in the corporate governance section of the Company's website.

SHAREHOLDER INFORMATION

Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below. The information is as at 27 August 2012.

Shareholdings as at 27 August 2012

Substantial shareholders

The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act are:

Shareholder Name	Number of Shares	Percentage
ADX Energy Limited	25,000,000	25.99%
Golden Rim Resources Limited	12,500,000	13.00%
HSBC Custody Nominees (Australia) Limited	9,906,449	10.30%

Unmarketable parcels

The number of shareholders holding less than a marketable parcel is 15. There is only one class of share and all ordinary shareholders have equal voting rights.

Voting rights

All ordinary shares carry one vote per share without restriction.

Unquoted securities

Securities	Number ofOptions	Number ofHolders	Holders withmore than 20%
Options exercisable at $0.30 on or before
30 June 2014	10,000,000	6	4, refer note 23
Performance Rights	8,000,000	2

On-market buyback

There is no current on-market buy-back.

Statement in relation to Listing Rule 4.10.19

The Directors of Riedel Resources Limited confirm in accordance with ASX Listing Rule 4.10.19 that during the financial year ended 30 June 2012, the Company has used its cash, and assets that are readily convertible to cash, in a way consistent with its business objectives.

Stock Exchange listing

Quotation has been granted for the Company's Ordinary Shares and for the Option series exercisable at $0.20, expiring on 30 November 2012.

Securities subject to escrow

The following securities are currently subject to escrow:

		Release
Securities	Escrow Period	Date	Number
Fully Paid Shares	24 months from quotation	31/01/2013	25,900,000
Fully Paid Shares	12 months from issue(Voluntary)	10/04/2013	12,500,000
Unlisted Options, 30c,exp 30/6/14	24 months from quotation	31/01/2013	8,000,000

SHAREHOLDER INFORMATION

Distribution of security holders

Category	Number of Holders	Number of Shares
1 – 1,000	5	23
1,001 – 5,000	9	37,454
5,001 – 10,000	105	1,042,477
10,001 – 100,000	210	10,453,069
100,001 and over	108	84,643,757
	437	96,176,780

Twenty largest shareholders – Ordinary Shares

Name	Number ofordinary sharesheld	Percentage ofcapital held
ADX ENERGY LIMITED	25,000,000	25.99
GOLDEN RIM RESOURCES LIMITED	12,500,000	13.00
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	9,906,449	10.30
NEFCO NOMINEES PTY LTD	2,250,000	2.34
KAILIS CONSOLIDATED PTY LTD	1,333,332	1.39
RIVERVIEW CORPORATION PTY LTD	1,324,000	1.38
MR WILLIAM RICHARD BROWN	1,198,033	1.25
BRAZELL PTY LTD <a &="" a="" c="" fund="" m="" super="">	1,180,000	1.23
NINETEEN NINETEEN PTY LTD	1,180,000	1.23
FGL ASSET MANAGEMENT LIMITED	1,100,000	1.14
QUINLYNTON PTY LTD	1,000,000	1.04
TOLTEC HOLDINGS PTY LTD	802,413	0.83
JP MORGAN NOMINEES AUSTRALIA LIMITED	790,500	0.82
MS PENELOPE ZUPPAR	760,000	0.79
MR BRUCE ROBERT ERROL FRANZEN	686,760	0.71
CAMPEON PTY LTD	666,666	0.69
ORITOR PTY LTD	666,666	0.69
MR GIUSEPPE PAOLO GRAZIANO	600,000	0.62
EUROGOLD LIMITEDDR PETER CHOON LIM + DR FRANCES GRAY LIM <pc fund<br="" lim="" super="">A/C>TOTAL	500,000500,00063,944,819	0.520.5266.49

SHAREHOLDER INFORMATION

Distribution of option holders

Category	Number of Holders	Number of Options
1 – 1,000	0	0
1,001 – 5,000	79	383,250
5,001 – 10,000	20	158,000
10,001 – 100,000	107	3,798,540
100,001 and over	51	24,754,260
	257	29,094,050

Twenty largest option holders – Options exercisable at 20c, expiring 31 November 2012

Name	Number ofoptions held	Percentage ofcapital held
MR EDWARD JAMES TURNER + MRS ADINA LARISA TURNERTALEX INVESTMENTS PTY LTDMS PENELOPE ZUPPAR	1,570,0001,500,0001,480,000	5.405.165.09
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	1,397,500	4.80
JAEK HOLDINGS PTY LTD	1,310,000	4.50
NEFCO NOMINEES PTY LTD	1,125,000	3.87
BRANMEA PTY LTD M&K KORKIDAS PTY LTD <m&k a="" c="" fund="" korkidas="" l="" p="" s="">THE TRUST COMPANY (SUPERANNUATION) LIMITED <amg super<br="">ASHLEY BRANDON A/C></m&k>	1,000,000932,500679,538	3.443.212.34
RIVERVIEW CORPORATION PTY LTDALOUISUS PTY LTD	654,500650,000	2.252.23
MR WILLIAM RICHARD BROWN	591,562	2.03
MR RICHARD TAUNTON SAUNDERS <rt &="" fam="" gm="" no2<br="" saunders="">A/C>	550,000	1.89
MR LAWRENCE ANGELO BUONO + MRS VALERIE JEAN BUONOJUST WALK INVESTMENTS PTY LTD	505,000505,000	1.741.74
MR TERENCE GRAY + MRS ELIZABETH GRAY <the &="" a="" c="" e="" f="" gray="" s="" t="">	500,000	1.72
MR GIUSEPPE PAOLO GRAZIANO	500,000	1.72
GULIV NO 2 PTY LTD	500,000	1.72
MR MOHAMMED MUNKAILAH	500,000	1.72
NINETEEN NINETEEN PTY LTD	500,000	1.72
TOTAL	16,950,600	58.26

SCHEDULE OF MINING TENEMENTS

	Tenement
Area of Interest	reference	Nature of interest	Interest

Western Australia
Bronzewing South	E36/215	Indirect	80%
Bronzewing South	E36/623	Indirect	80%
Bronzewing South	M36/670	Indirect	80%
Delaney Well	E36/734	Direct	100%
West Yandal	M36/615	Royalty	0%
Kara	E36/509	Direct	100%
Marymia	E52/2394	Direct	100%
Marymia	E52/2395	Direct	100%
Milrose	E53/1304	Direct	100%
Milrose	E53/1305	Direct	100%
Porphyry	M31/145	Royalty	0%
Porphyry	M31/157	Royalty	0%
Dulcie	P77/3727	Direct	20%
Dulcie	P77/3728	Direct	20%
Dulcie	P773729	Direct	20%
Cheritons Find	E77/1793	Direct	100%
Burkina Faso
Tagou	11-369	Staged Payments	100%
Gonsin	09-229	Staged Payments	100%
Galgouli South	09-114	Staged Payments	100%
Moaga	08-143	Staged Payments	100%
Keri	09-163	Staged Payments	100%

AI assistant

RIEDEL RESOURCES LIMITED — Annual Report 2012

65702_rns_2012-08-30_27b3b83d-538b-4c2a-9912-ca796f4cddf4.pdf

CORPORATE DIRECTORY

DIRECTORS

COMPANY SECRETARY

REGISTERED & PRINCIPAL OFFICE

AUDITORS

SHARE REGISTRY

STOCK EXCHANGE LISTING

DIRECTORS' REPORT

DIRECTORS

DIRECTORS' REPORT (CONT)

Andrew Childs

DIRECTORS' REPORT (CONT)

PRINCIPAL ACTIVITIES

OPERATING RESULTS

DIRECTORS' REPORT (CONT)

REVIEW OF OPERATIONS

CHERITONS FIND PROJECT

Background

Geological Setting

DIRECTORS' REPORT (CONT)

Inferred Mineral Resources

DIRECTORS' REPORT (CONT)

TABLE 1: Redwing Gold Deposit – Inferred Mineral Resources

N.B. See detailed notes (attached) "Key inputs used for Inferred Mineral Resource estimation".

Planned Work Programmes

DIRECTORS' REPORT (CONT)

Royalty

Charteris Creek Project

DIRECTORS' REPORT (CONT)

Geological Setting

MARYMIA PROJECT

Exploration Activities

Royalties for Regions Co Funded Drilling Grant of $150,000

DIRECTORS' REPORT (CONT)

DIRECTORS' REPORT (CONT)

Soil Geochemical Sampling

DIRECTORS' REPORT (CONT)

Soil Geochemical Sampling and Interpretation Methodology

DIRECTORS' REPORT (CONT)

Interpretation of Gold Pathfinder Anomalies

DIRECTORS' REPORT (CONT)

DIRECTORS' REPORT (CONT)

Interpretation of Copper and Base Metals Pathfinder Anomalies

DIRECTORS' REPORT (CONT)

DIRECTORS' REPORT (CONT)

Figure 9: Molybdenum anomalies

DIRECTORS' REPORT (CONT)

Rock Chip Sampling

DIRECTORS' REPORT (CONT)

DIRECTORS' REPORT (CONT)

DIRECTORS' REPORT (CONT)

BURKINA FASO PROJECTS

Exploration Activities

Tagou Project

DIRECTORS' REPORT (CONT)

Figure 11: Priority RC drill targets and rock chip and soil geochemical sample results – Tagou Project

DIRECTORS' REPORT (CONT)

Tagou Soil Geochemistry and Geological Mapping

DIRECTORS' REPORT (CONT)

TABLE 3: Tagou Project Rock Chip Sample Results to 30 June 2012

DIRECTORS' REPORT (CONT)

Gonsin Project Auger Drilling

DIRECTORS' REPORT (CONT)

Moaga Project Soil Geochemistry

Keri Project Soil Geochemistry

DIRECTORS' REPORT (CONT)

Planned Activities for Next Year

Marymia

Cheritons Find

Charteris Creek

Burkina Faso

DIRECTORS' REPORT (CONT)

Competent Person's Statement

Key inputs used for Inferred Mineral Resource estimation – Cheriton's Find Project – Redwing Deposit

DIRECTORS' REPORT (CONT)

Corporate

DIRECTORS' REPORT (CONT)

RIEDEL RESOURCES LIMITED Annual Report 2012