RIEDEL RESOURCES LIMITED — Annual Report 2013

Sep 11, 2013

ANNUAL REPORT

30 JUNE 2013

CORPORATE DIRECTORY 1
DIRECTORS' REPORT 2
AUDITOR'S INDEPENDENCE DECLARATION 37
DIRECTORS' DECLARATION 38
CONSOLIDATED STATEMENT OF PROFIT OR LOSS 39
AND OTHER COMPREHENSIVE INCOME 39
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 40
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 41
CONSOLIDATED STATEMENT OF CASH FLOWS 41
CONSOLIDATED STATEMENT OF CASH FLOWS 42
NOTES TO AND FORMING PART OF THE ACCOUNTS 43
CORPORATE GOVERNANCE 76
SHAREHOLDER INFORMATION 89
SCHEDULE OF MINING TENEMENTS 92

CORPORATE DIRECTORY

DIRECTORS

Andrew Childs Ian Tchacos Jeffrey Moore Ed Turner

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 2013.

DIRECTORS

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

Ian Tchacos Qualifications	Chairman B.Eng (Mech.)
Experience	Mr Tchacos is a mechanical engineer with over 25 years international experience in corporate development and strategy, mergers and acquisitions, exploration, development and production operations, marketing and finance. He has a proven management track record in a range of international Company environments. In his last appointment as Managing Director of Nexus Energy he was responsible for this Company's development from an onshore micro cap explorer to an ASX top 200 offshore producer and operator. He is currently Non Executive Chairman of ADX Energy Limited.
Directorships of other listed companies	ADX Energy Limited
Interest in Shares Interest in Options	465,500 2,000,000
Jeffrey Moore Qualifications	Director (Appointed on 30 September 2010) B.Sc, MAusIMM, MGSA
Experience	Mr Moore is a geologist with extensive technical, managerial and project finance experience in exploration and mining for publicly listed companies. During his career, he has generated and managed projects for commodities including precious metals, base metals, diamonds, nickel and industrial minerals throughout Australia, Central and South America, Africa and Asia.
	Mr Moore has held previous directorships with Allied Gold Limited from 2004 to 2008, Great Australian Resources Limited from 2005 to 2007, Abra Mining Limited from 2006 to 2011, Alchemy Resources Limited from 2010 to 2011 and Cougar Metals NL from 2008 to 2012.
	Mr Moore is also a Corporate Member of the Australasian Institute of Mining and Metallurgy and a Member of the Geological Society of Australia.
Directorships of other listed companies	Nil
Interest in Shares	250,000

DIRECTORS' REPORT (con't)

Interest in Performance Rights 6,000,000

Andrew Childs 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 listed companies ADX Energy Limited Australian Oil Company Limited

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

Ed Turner Director (appointed 5 December 2012) Qualifications BAppSc (Geology), MAIG

Experience Mr Turner has been Exploration Manager of the Company since July 2011. Prior to his appointment he had accumulated 25 years of experience as a geologist in Australia and overseas, with primary focus on gold, nickel, uranium and base metals exploration and underground gold mining. He has extensive experience in project review, due diligence and acquisition.

Mr Turner has established exploration teams and managed exploration programmes in Romania, The Ukraine, Brazil and The Democratic Republic of Congo for companies including RSG Global (now Coffey Mining), Anvil Mining and Cougar Metals. In Romania Ed lead the exploration team that added five million ounces of gold to the Rosia Montana gold project in a twelve month period.

Directorships of other listed companies Nil Interest in Shares 400,000

Interest in Options	1,500,000

DIRECTORS' REPORT (con't)

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 \$4,412,238 (2012: \$1,923,970)

DIRECTORS' REPORT (con't)

REVIEW OF OPERATIONS

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

WESTERN AUSTRALIA

MARYMIA PROJECT

During the year Riedel completed a comprehensive review of 31 copper, gold, base metals

DIRECTORS' REPORT (con't)

and nickel targets which were identified from the results of geochemical soil sampling and geological mapping completed during 2011-2012, combined with the results of previous drilling and geophysical surveys within the Marymia Project area (see Figure 1 & 2 for project location).

Figure 2: Marymia Project - Location Map

Following the review, the targets were ranked on the basis of prioritising those which demonstrated the highest potential for the discovery of economic copper, gold and/or base metals mineralisation by cost effective shallow RAB and /or aircore drilling.

A first-pass drilling programme consisting of 129 RAB and aircore drill holes for a total of 6,826 metres was completed on Targets 12, 13, 14, 16, 17, 18, 19, 24 and 25 (see Table 1 and Figure 3 for summary of drilling completed).

DIRECTORS' REPORT (con't)

Figure 3: Marymia Project - RAB/aircore drilling completed

Discussion of Results

Gold Targets

Target 25 was initially tested with 20 angled, overlapping RAB drill holes for a total of 814 metres (MMRB025-044). The holes were drilled at -60° towards 105° and each hole was drilled until blade refusal, which was usually when semi-fresh or fresh rock was intersected.

Significant gold assay results were received from drill holes MMRB039 and MMRB040 (see Table 2) where weathered ultramafic and gabbro rock types were logged. Samples were typically collected as 5 metre composite samples with approximately 0.5 kg of sample material scooped from each consecutive single metre sample to make up the composite. Depending upon the final depth, the last sample interval at the end of the hole (EOH) may have been less than 5 metres. Some single metre scoop samples were taken at the time of drilling if they were logged as having geological significance and gold potential.

The results of this drilling programme, which targeted favourable structural positions identified from recent field mapping and geophysical interpretation of aeromagnetic data, are highly encouraging. Wide intervals with elevated gold results were recorded in both MMRB039 and MMRB040, for example, composite sample intercepts recorded 10m @ 1.19 g/t Au from surface in MMRB039, (including 5m @ 2.23 g/t Au from surface) and 30m @

DIRECTORS' REPORT (con't)

0.33 g/t Au from surface in MMRB040, (including 5m @ 0.86 g/t Au from 10m), and single metre intercepts include 4m @ 0.90 g/t Au from 24m, and 1m @ 2.57 g/t Au from 24m.

The best single metre assay was 1m @ 2.57 g/t Au from 24m in MMRB040 despite the corresponding composite sample assaying only 0.11 g/t Au.This demonstrates the high variability of the gold content within this target area and reinforces the need to sample every metre individually where any significant (> 0.10 g/t Au) composite assays are received. This suggests there may be other significant single metre intervals that are yet to be recognised.

Drill holes from Target 24 (MMRB022-024, MMAC043-067) have not returned any significant intersections.

Nickel Targets

Six aircore holes (MMAC080 – 085) were drilled for 331 metres within Targets 17-19. The objective for these holes was to better define the stratigraphic boundary between ultramafic komatiitic and mafic tholeiitic volcanics. The location of the komatiite/tholeiite contact is important in the search for Kambalda-type nickel sulphide deposits because massive sulphide deposits typically occur at the base of komatiitic lava flows, in contact with footwall tholeiitic basalt rocks. Sulphidic and carbonaceous sediments typically flank this zone and provide a source of sulphur for nickel sulphide mineralisation.

This contact has previously been partly mapped in the field at surface and by analysing bottom of hole drill chips using multi-element geochemistry. Outcropping rocks are rare within this project area so downhole geochemistry is heavily relied upon, along with interpretation of aeromagnetic data, to determine the underlying geology. The high magnetic response of the komatiite volcanic rocks is also useful to interpret the underlying stratigraphy in the absence of outcrop.

Within the Archaean Baumgarten Greenstone Belt in the Marymia Inlier, Riedel has identified thick komatiite volcanic rocks over an extensive area. This geology includes serpentinised dunitic rocks with distinctive orthocumulate, mesocumulate and adcumulate textures which are typical of prospective magnesian-rich olivine-rich basal flow facies. Shallow historic drilling has returned significant intersections for nickel, including 8m @ 1.05% Ni from 28m in K5-6 and 22m @ 0.58% Ni from 22m in NKB0724 (including 4m @ 1.07% Ni from 28m), see Table 3 for all historic drill intersections >0.3% Ni and Figure 4 for location of targets and historic drilling intercepts.

These highly encouraging historic drilling results warrant substantial follow-up exploration work for primary nickel sulphide mineralisation including extensive geophysical surveys and drilling programmes over the highest-order targets.

Riedel's geochemical analysis of the regolith and primary rocks from target areas outside of those with significant historic drill intersections suggests equally high potential for the discovery of nickel mineralisation. Several of these target areas exhibit high nickel and copper, and depleted chrome and zinc geochemistry. Analysis of the nickel:chrome/copper:zinc elemental ratios show numerous results at about unity or greater than one, which is a strong indicator of "fertile komatiites". These rocks host numerous economically important nickel deposits and mines at locations including the worldclass Kambalda nickel camp in Western Australia.

DIRECTORS' REPORT (con't)

Figure 4: Marymia Project – Nickel targets and historic drilling results on magnetic image

To further reinforce the nickel sulphide potential in the Marymia Project area, the Company compared its highest order nickel-in-soil anomalies with those areas indicative of fertile komatiite anomalies. From 4,809 soil samples collected by Riedel in 2012, 24 extensive nickel anomalies were delineated from soil geochemical assay results which fall within the top 3% of results (greater than the 97th percentile which is equivalent to 68.8ppm Ni). Significantly, five of these anomalies have a coincident fertile signature (see Figure 4 for Ni soil anomalies, fertile signature soil anomalies and Ni target areas on a grey scale aeromagnetic background).

In summary, Riedel has determined that there are numerous high priority nickel targets within the Marymia Project area, including Targets 17-19. These targets are located over a large part of the project area and aerial electromagnetic surveys are warranted to cover the entire Baumgarten Greenstone Belt in search of primary nickel sulphide deposits. The survey work will also cover Proterozoic-age sedimentary rocks to delineate copper sulphide deposits.

DIRECTORS' REPORT (con't)

Copper Targets

Composite sample results for the four copper targets (12, 13, 14 and 16) returned many significant intersections averaging greater than 5 metres @ 100ppm Cu (see Figure 5). All of the significant intersections in Targets 12, 13 and 16 are hosted by Proterozoic-aged sediments. The host rocks in Target 14 are Archaean-aged felsic volcanics (See Table 4 for a summary of significant intersections).

Drilling also intersected Proterozoic-age sedimentary rocks belonging to the Yerrida Group over a far greater area within E52/2394 than was previously interpreted. This is particularly important as this geological sequence hosts the copper deposits and advanced prospects, located immediately to the south west of the tenement, currently the focus of successful exploration by Ventnor Resources Limited, Sipa Resources Limited and Lodestar Minerals Limited. Significantly, it has also been demonstrated that Yerrida Group sediments on-lap or are in faulted contact with Archaean basement highs in several locations within Riedel's tenement, further enhancing the potential for the discovery of economic copper mineralisation.

Figure 5: Marymia Project- Drill holes with significant Cu intersections and their relative position compared to other Cu prospects and deposits

Discussion of the drilling results from the target areas which returned significant copper assay values follows.

DIRECTORS' REPORT (con't)

Target 12

Drilling intersected significant copper mineralisation in 9 of the 21 holes drilled. All drill holes were drilled vertically and the host rocks comprised clays, dolomites and chert. Hard chert bands limited the depth penetration of the drilling equipment to an average of only 38 metres at this target and future follow-up reverse circulation (RC) drilling will be required to test this target at greater depth.

Promising copper results include 30 metres @ 227.6ppm Cu from 5 metres in MMAC002 (including 5 metres @ 589.0ppm Cu from 10 metres) and 25 metres @ 264.1ppm Cu from 10 metres in MMAC015 (including 5 metres @ 534.0ppm Cu from 15 metres).

Significant lead intercepts were also recorded in five holes. The best intersections include 25 metres @ 542ppm Pb from 35 metres in MMAC016 and 18 metres @ 269.6ppm Pb from 25 metres in MMAC017.

Other significant results showing evidence of hydrothermal fluid flow and mineralisation include 5 metres @ 5.31ppm Ag from 10 metres in MMAC009 and 20 metres @ 4.98ppm Mo from surface in MMAC015. Drill holes that return significant silver and molybdenum values may indicate proximity to primary copper deposits.

Target 13

Drilling returned significant copper assay results from 13 of the 14 holes completed. All drill holes were drilled vertically and mineralisation is hosted within shales which are interpreted as belonging to the Juderina Formation or Johnsons Cairn Formation within the Yerrida Basin. Recent nearby copper discoveries, including Ventnor Resources' Thaduna and Green Dragon copper deposits, Sipa Resources' Enigma deposit and Lodestar Minerals' McDonald Well prospect are hosted in similar Yerrida Basin geology to that recognised at Target 13.

The anomalous copper intervals are typically detected at or near to the contact between haematitic and carbonaceous shale units. Faulting has been interpreted to exist between several of the drill holes, close to these significant intersections and these faults may have acted as conduits for mineralised fluid flow.

In one instance a vertical fault offset of approximately 60 metres is apparent between drill traverses and elevated molybdenum values coincident with significant copper intercepts occur in several drill holes proximal to such interpreted faults. Examples include 10 metres @ 13.03ppm Mo from 60 metres in MMAC022 and 10 metres @ 17.56ppm Mo from 125 metres in MMAC024.

Anomalous copper results include 25 metres @ 140.7ppm Cu from 125 metres in MMAC027 and 20 metres @ 144.1ppm Cu from 30 metres in MMAC034.

These anomalous initial results, prospective stratigraphy and proximity to interpreted structures provide strong encouragement and reinforce the potential for the discovery of nearby primary copper mineralisation and deposits.

DIRECTORS' REPORT (con't)

Target 14

Significant copper mineralisation was intersected in 2 of the 28 shallow drill holes within Target 14. Unlike Targets 12, 13 and 16, this area is underlain by felsic volcanic rocks belonging to the Archaean-age Baumgarten Greenstone Belt ("BGB"). The host rock is sheared and chloritised in places and significant copper intercepts coincide with these shear zones.

The best copper results include 5 metres @ 101.5ppm Cu from 5 metres in MMRB014 and 15 metres @ 171.0ppm Cu from 5 metres in MMRB017. A significant gold intersection of 5 metres @ 0.14 ppm Au from 20 metres in MMRB003 is also coincident with sheared felsic volcanic rocks.

Target 16

Significant copper mineralisation was intersected in 7 of the 12 vertical holes drilled in shaledominant, occasionally chlorite-altered rocks. Promising assay results for copper include 18 metres @ 150.6ppm Cu from 30 metres in MMAC074 and 20 metres @ 132.5ppm Cu from surface in MMAC075.

Significantly, the shale host rocks are interpreted as belonging to the Yerrida Group rather than the Yelma Group, as has been previously interpreted by the Geological Survey of Western Australia. This implies that highly prospective Yerrida Basin sediments extend over a far greater area than previously mapped, including the total extent of Target 16.

In this area, the basin sediments on-lap or are in faulted contact with the BGB basement, which is an ideal setting for large sediment-hosted base metal deposits. Basin sediments logged at depths of greater than 150 metres in drill holes completed in relatively close proximity to the BGB strongly implies significant fault bounded contacts exist between the sedimentary package and the BGB. Faults in this area may have provided conduits and traps for mineralising hydrothermal fluid flow.

These first-pass drilling results are considered to be very promising and clearly validate the geochemical "pathfinder" sampling methodology previously adopted by the Company. The targets were identified by ranking numerous multi-element soil geochemical pathfinder anomalies and tested by first-pass, mostly shallow RAB and aircore blade drilling. These results strongly imply that the surface geochemical target areas are indicative of subsurface alteration systems, probably due to the circulation of metalliferous hydrothermal fluids.

The Company is also encouraged to note that many of the most promising intercepts for copper, molybdenum, silver and lead are open-ended and limited at depth only by the refusal of the blade drilling technique to penetrate hard rock bands or fresh rock. Follow-up exploration work, including electromagnetic geophysical surveys and deep RC drilling is now warranted to accurately define structural trends and primary mineralised conductors which may indicate the presence of significant, proximal precious/base metals mineral deposits.

DIRECTORS' REPORT (con't)

Table 1: Summary of drilling completed at Marymia
Target ID	No of Holes	Hole ID's	Metres drilled	Planned drill metres
12	21	MMAC001 - MMAC021	799	1,000
13	14	MMAC022 – MMAC035	1,530	700
14	28	MMAC036 – MMAC042 MMRB001 – MMRB021	659	1,000
16	12	MMAC068 – MMAC079	977	1200
17	2	MMAC080 – MMAC081	105	100
18	2	MMAC082 – MMAC083	101	100
19	2	MMAC084- MMAC085	125	100
24	28	MMRB022 – MMRB024 MMAC043 – MMAC067	1,716	1,000
25	20	MMRB025 – MMRB044	814	800
Total =	129		6,826	6,000

Table 2: Significant Gold intersections - Target 25 (Composite assays >0.1 g/t Au and single metre assays >0.4 g/t Au)*
Hole ID	Sample Type	From (m)	To (m)	Width (m)	Assay Result (g/t Au)
MMRB039	composite	0	10	10	1.19
MMRB039	composite		inc.	5	2.23
MMRB039	composite	45	50	5	0.17
MMRB040	composite	0	30	30	0.33
			inc.	5	0.86
MMRB040	composite	45	50	5	0.52
MMRB039	single metre	46	47	1	0.46
MMRB040	single metre	24	28	4	0.90
MMRB040	single metre		inc.	1	2.57

* All samples were assayed for gold at ALS Laboratories in Perth by trace level method TL-43. If any gold results exceeded the 1.0 g/t upper limit then they were re-assayed by the ore grade method OG-43 and the ore grade method OG-43 values replaced the TL-43 results. Method Au-TL43 is applied to a totally pulverised 25g pulp which undergoes an aqua regia extraction with an ICPMS finish. It has a 0.001 ppm Au lower level of detection. Au-OG43 undergoes the same assaying procedure but is designed for ore grade analysis and so has a lower level of detection of 0.01 ppm Au.

DIRECTORS' REPORT (con't)

		Table 3: Significant Historic (c1995) Nickel Intersections at Marymia >0.3% Ni
Drill hole ID	Riedel Target ID	Nickel Intercept	Easting m(E)	Northing m(N)
A6-511	Target 10	4m@0.32%Ni from 20m	791306	7204168
A6-515	Target 10	12m@0.65%Ni from 8m	791565	7203968
A6-516	Target 10	16m@0.48%Ni from 20m	791563	7204003
A6-517	Target 10	20m@0.52%Ni from 20m	791561	7204039
A6-520	Target 10	4m@0.49%Ni from 8m	791555	7204145
NKB0657	Target 10	3m@0.36%Ni from 10m	792993	7204972
NKB0718	Target 8	11m@0.45%Ni from 3m	790691	7207868
NKB0723	Target 8	16m@0.67%Ni from 8m	790823	7208019
NKB0724	Target 8	22m@0.58%Ni from 22m	790849	7208049
NKB0724	Target 8	4m@1.07%Ni from 28m	790849	7208049
NKB0751	Target 8	7m@0.30%Ni from 4m	790153	7207861
NKB0753	Target 8	4m@0.30%Ni from 24m	790206	7207922
NKB0756	Target 8	2m@0.36%Ni from 18m	790285	7208012
NKB0757	Target 8	14m@0.40%Ni from 17m	790311	7208042
NKB0758	Target 8	3m@0.34%Ni from 33m	790338	7208072
NKB0759	Target 8	5m@0.30%Ni from 40m	790364	7208102
NKB0907	Target 8	15m@0.36%Ni from 12m	792913	7200786
NKB0908	Target 8	4m@0.39%Ni from 18m	792883	7200812
NKB0937	Target 8	2m@0.31%Ni from 20m	793477	7200823
NKB0943	Target 8	4m@0.36%Ni from 16m	793297	7200981
NKB0946	Target 8	9m@0.40%Ni from 16m	793207	7201060
NKB0948	Target 8	8m@0.54%Ni from 16m	793147	7201113
NKB0995	Target 30	4m@0.31%Ni from 20m	793800	7200008
NKB1000	Target 30	4m@0.32%Ni from 20m	793650	7200140
NKRC015	Target 7	28m@0.26%Ni from 20m	792081	7208640
K5-6	Target 7	8m@1.05%Ni from 28m	792037	7208922
K5-7	Target 7	13m@0.74%Ni from 28m	792067	7208951
K5-8	Target 7	24m@0.58%Ni from 12m	792102	7208997
K5-9	Target 7	8m@0.53%Ni from 24m	792137	7209037
K6-1	Target 7	4m@0.37%Ni from 4m	791813	7207957

DIRECTORS' REPORT (con't)

	Table 4: *Significant Cu intersections in Marymia RAB/aircore drilling
Target	Hole ID	Depth From (m)	Depth To (m)	Width (m)	Cu ppm	Ag ppm	Mo ppm	Pb ppm
12	MMAC001	30	35	5	110.5	0.12	1.03	595.0
12	MMAC002	5	35	30	227.6	0.50	2.26	77.7
	inc.	10	15	5	589.0	0.50	4.48	124.5
12	MMAC004	60	65	5	348.0	0.91	5.20	31.0
12	MMAC009	10	39	29	142.8	1.00	2.80	13.6
12	MMAC011	40	50	10	103.0	0.18	0.39	11.9
12	MMAC012	5	15	10	134.5	0.08	2.19	6.7
12	MMAC012	40	45	5	112.0	0.16	0.30	345.0
12	MMAC012	55	60	5	101.5	0.13	0.60	177.0
12	MMAC013	55	60	5	109.0	0.03	1.20	9.0
12	MMAC015	10	35	25	264.1	0.25	2.46	12.5
	inc.	15	20	5	534.0	0.40	4.99	7.6
12	MMAC016	15	20	5	107.5	0.13	4.99	16.2
13	MMAC022	55	70 (EOH)	15	107.8	0.75	9.08	31.6
13	MMAC024	100	105	5	106.5	0.02	0.31	6.4
13	MMAC024	130	134 (EOH)	4	125.0	1.14	23.02	28.6
13	MMAC025	65	70	5	159.0	0.14	0.12	5.2
13	MMAC025	145	150 (EOH)	5	101.5	0.43	1.76	205.0
13	MMAC026	130	138 (EOH)	8	136.0	0.05	2.01	89.4
13	MMAC027	125	150 (EOH)	25	140.7	0.39	2.98	11.0
13	MMAC028	60	65	5	212.0	0.04	0.52	11.7
13	MMAC029	5	10	5	117.0	0.07	3.38	22.8
13	MMAC029	50	55	5	293.0	0.27	1.84	9.8
13	MMAC029	80	85	5	107.5	0.08	2.99	12.7
13	MMAC030	45	50	5	150.0	0.17	0.91	8.1
13	MMAC030	70	75	5	109.0	0.62	8.19	38.3
13	MMAC030	85	90	5	241.0	0.06	0.47	15.8
13 13	MMAC031 MMAC031	65 85	75 110	10 25	191.3 116.0	0.14 0.05	1.74 0.68	20.8 13.4
13	MMAC032	115	125	10	110.8	0.03	0.71	7.5
13	MMAC033	5	10	5	157.0	0.02	0.29	7.1
13	MMAC033	25	35	10	130.0	0.05	3.85	9.7
13	MMAC034	30	50	20	144.1	0.07	1.48	9.4
13	MMAC034	75	95	20	108.5	0.06	3.02	28.6
13	MMAC035	45	65	20	121.4	0.45	3.76	18.8
13	MMAC035	75	80	5	167.0	0.04	0.30	4.4
14	MMRB014	5	10	5	101.5	0.02	0.54	3.0

Table 4: *Significant Cu intersections in Marymia RAB/aircore drilling
Target	Hole ID	Depth From (m)	Depth To (m)	Width (m)	Cu ppm	Ag ppm	Mo ppm	Pb ppm
14	MMRB014	25	30	5	101.5	0.02	0.92	2.8
14	MMRB014	45	50	5	102.0	0.02	0.85	6.8
14	MMRB017	5	20	15	171.0	0.05	1.96	6.2
16	MMAC068	60	65	5	165.5	0.07	0.07	2.6
16	MMAC068	70	75	5	104.0	0.04	0.07	5.1
16	MMAC069	40	45	5	118.5	0.05	0.08	2.1
16	MMAC069	90	99 (EOH)	9	156.3	0.16	0.22	2.5
16	MMAC070	35	45	10	125.3	0.08	0.13	1.3
16	MMAC070	55	90	35	125.0	0.08	0.06	2.0
16	MMAC073	0	15	15	101.8	0.04	0.42	2.6
16	MMAC073	40	45	5	172.5	0.04	0.74	5.9
16	MMAC074	15	20	5	112.0	0.04	0.25	10.4
16	MMAC074	30	48 (EOH)	18	150.6	0.05	0.74	12.8
16	MMAC075	0	20	20	132.5	0.05	0.28	4.3
16	MMAC075	40	50 (EOH)	10	106.0	0.08	0.19	4.9
16	MMAC075	80	90	10	208.5	0.03	0.07	7.7
16	MMAC076	40	50	10	138.5	0.09	0.36	47.1

* Significant copper intersections average greater than 5 metres @ 100ppm Cu.

All samples were taken as composite scoop samples from intervals up to 5 metres in width. If the mineralised interval finished at the end of hole (EOH) and the last composite was less than 5 metres then the grade was calculated as a weighted mean. Where assay results were less than detection limit a value equal to half the detection limit was used in calculations. All samples were initially assayed for Ag, As, Bi, Mo, Cu and Pb at ALS Laboratories in Perth by method ME-MS42. If Cu or Pb assays exceeded the 250ppm upper assay limit then they were re-assayed by method ME-MS41 and these values replaced the ME-MS42 assays. The As and Bi results were not significant and therefore not tabulated here.

DIRECTORS' REPORT (con't)

WEST AFRICA

BURKINA FASO PROJECTS

Gonsin Project

During the year, all of the assay results from an 833 hole auger drilling programme completed in the previous financial year were received. The 5,995 metre program targeted gold mineralisation below transported cover material in the north-east part of the Gonsin Permit (see Figures 6 & 7).

The interpretation of these results has generated numerous gold anomalies in a northeastsouthwest trending zone over a length of more than seven kilometres within the volcanosedimentary sequence in the north-eastern part of the project area. Some of the anomalies are characterised by highly significant results for gold, including 546 ppb Au, 541 ppb Au, 498 ppb Au, 335 ppb Au and 274 ppb Au.

Figure 6: Gonsin Project - Auger drilling area and Tenement Map

Further anomalies, with a peak gold value of 1,939 ppb Au, have been delineated outside of this corridor to the east and west (see Figure 7). These anomalies may be representative of previously undetected mineralised zones trending sub-parallel to the mineralised Kougtanga

DIRECTORS' REPORT (con't)

Prospect veins and associated geochemical soil anomalies, or extensions to these zones. Summary statistics for auger drilling geochemical sample results are detailed in Table 5.

The highest priority anomalies warrant aircore drilling to test for the presence of primary mineralised quartz veins and/or mineralised structures.

Figure 7: Gonsin Project - Auger drilling and soil sampling results

To ensure that the optimal gold geochemical sample horizon was selected in each of the auger drilling holes, an additional 357 auger drilling samples were collected from 48 of the auger holes to validate the sample interval selected in the original sampling programme. Samples were collected from each down-hole metre of the auger holes and submitted to ALS Global (Ouagadougou) for analysis by the same LEACHWELL assay method (Au-AA15a) as the original samples¹ .

The full-hole results were compared with the original sample interval to check whether a more reliable or more anomalous horizon exists within the regolith, which could provide a preferential interval to test for gold mineralisation. It was subsequently determined that the original interval sampled in each hole, equating to the first metre of identifiable in-situ material, provides the most representative and reliable results.

¹ Refer to Table 5 Notes for detailed sample analysis methodology.

DIRECTORS' REPORT (con't)

Element	Maximum Assay Assay	Minimum	Total No. of Auger	Assay Value Ranges (ppb Au) and Map Contour Intervals
	Value (ppb)	Value (LLD) (ppb)	Samples	Percentile Ranges	Assay Values Corresponding to Percentile Ranges (ppb Au)	No of Samples Within Percentile Range
Au (gold)	1,939	<1	833	>99	>77	8
				97 - 99	24 - 77	25
				95 - 97	17 - 24	42
				90 - 95	9 - 17	83
				75 – 90	4 - 9	208
				50 – 75	2 - 4	417

TABLE 5: Gonsin Project Auger Drilling Geochemical Sample Results – Statistical Analysis

LLD refers to "lowest level of detection" applicable to the relevant analytical technique.

First pass auger drilling geochemical sampling has been completed on 100 metre intervals on east-west oriented lines, spaced at 400 metres. One sample is collected from each auger drill hole from the first metre of in-situ material which is located below the transported overburden. Each sample is submitted for analysis by the LEACHWELL assay method for gold (Au-AA15a) at the ALS Global laboratory in Ouagadougou. The LEACHWELL method is particularly suitable for the detection of gold in soil or oxidised horizons. Samples are oven dried and pulverised so that >85% of the sample is less than 75 microns (0.075mm) in size. Samples are split and a sub-sample of 0.5kg of material is leached in a cyanide solution (LEACHWELL reagent) and the gold content determined by an AAS (atomic absorption spectroscopy) finish.

Tagou Project

During the year all of the assay results from 4,705 soil geochemical samples previously collected were received.

The interpretation of this data generated numerous strong gold-in-soil anomalies and in many instances, the anomalies are coincident with significant interpreted underlying structures. In the central portion of the Permit a broad 15 kilometre x 7 kilometre zone is characterised by elevated gold-in-soil geochemistry, representing a key focus for follow-up gold exploration including geophysical surveys and drilling.

The most significant results include 2,950ppb Au, 450ppb Au, 416ppb Au, 229ppb Au, 180ppb Au, 175ppb Au, 162ppb Au and 116ppb Au (see Figure 8).

DIRECTORS' REPORT (con't)

Figure 8: Tagou Project – Gold-in-soil geochemical anomalies

Figure 9: Tagou Project - RC drillhole traces in the southern area and rock chip sample results

All assay results were received from the 16 hole Reverse Circulation (RC) programme completed in June 2012. Best results included 4m @ 2.60 g/t Au from 49m in TGRC011 (including 1m @ 9.79 g/t Au), 11m @ 0.84 g/t Au from 28m in TGRC010 (including 2m @ 2.00 g/t Au) and 2m @ 2.44 g/t Au from 90m in TGRC009 (see Figure 9, Table 6).

The drilling results highlight the spotty or nuggety nature of gold which exists in the northsouth trending quartz veins. It is encouraging to note that gold mineralisation has been shown to continue to depths of at least 100 metres in the veins and in low grade mineralised

envelopes, as highlighted in the drilling intercept of 0.84 g/t Au over a width of 11 metres in TGRC010.

DIRECTORS' REPORT (con't)

Hole ID	Northing	Easting	Hole Depth	From	To	Width	Grade
	m(N)	m(E)	(m)	(m)	(m)	(m)	(g/t Au)
TGRC001	1,297,195	219,792	150	79	82	3	0.66
TGRC002	1,297,086	219,792	126	83	89	6	0.61
TGRC004	1,297,604	219,749	150	71	72	1	1.10
TGRC009	1,297,125	219,712	126	90	92	2	2.44
TGRC010	1,297,237	219,752	60	28	39	11	0.84
TGRC011	1,297,342	219,786	100	49	53	4	2.60
including				49	50	1	9.79
TGRC012	1,297,435	219,784	88	24	25	1	2.00
TGRC013	1,297,518	219,800	60	28	29	1	1.63

Table 6: Tagou Project - significant RC drilling intercepts

N.B.: Gold results reported are for consecutive one metre drilling intercepts with assay result ≥0.3 g/t Au, allowing for maximum internal dilution of 2 metres.

Keri Project

During June and July 2012 a total of 1,182 soil samples were collected at the Keri Project. The samples were collected at 100 metre intervals along east-west lines spaced 400 metres apart prior to the programme being terminated due to the onset of seasonal rains. The programme focused on the western half of the Permit which covers a NNE-SSW trending structural corridor and greenstone rock sequence.

Figure 10: Keri Project - Geochemical soil sample anomalies

Numerous significant gold-in-soil geochemical anomalies were discovered (see Figure 10), including a 1.8 kilometre long anomaly peaking at 159 ppb Au, which is coincident with a gabbro–felsic volcanic contact in the north-western portion of the sample area. The anomaly is also coincident with an interpreted demagnetised zone that appears to be related to a significant jog in a regional structure.

Moaga Project

During the year all of the assay results from a soil geochemical sampling programme completed in June 2012 were received. The programme comprised 436 sample locations over a NNE-SSW trending structural corridor which traverses the mid-west part of the Permit.

Samples were collected at 100 metre intervals along east-west lines spaced 400 metres apart.

Numerous anomalous results, including 74 ppb Au and 41ppb Au, were returned from the central part of the sampled area (see Figure 11).

DIRECTORS' REPORT (con't)

Figure 11: Moaga Project - Gold-in-soil geochemical anomalies

Competent Person's Statement

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Ed 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.

CORPORATE

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.

DIRECTORS' REPORT (con't)

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;

• 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 was 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 was issued under the 15% capacity under ASX Listing Rule 7.1. It was subsequently put to shareholders and ratified at a General Meeting held on 27 September 2012. All resolutions put to the meeting were passed unanimously on a show of hands.

On 12 November, 2012, the Company held its Annual General Meeting of Shareholders at The Celtic Club, West Perth. All resolutions put to the meeting were passed unanimously on a show of hands.

On 23 November 2012 the Company advised it had completed a Share Placement offered to sophisticated and professional investor clients of Oracle Securities in Australia and the UK.

The placement will raise up to \$0.7 million before costs, with the issue of 9.33 million ordinary shares at an issue price of \$0.075 per share and free attaching unlisted option on a 1:1 basis exercisable at 15¢ per share on or before 31 January 2016 ("Options") as follows;

• ─ Up to 9.33 million new shares at 7.5¢ per share to raise circa \$0.70 million to be issued within the Company's 10% placement capacity under Listing Rule 7.1A.
• ─ Up to 9.33 million Options to be issued within the Company's 15% placement capacity under Listing Rule 7.1.

The free attaching unlisted options to be issued on a 1:1 basis, being up to 9.33 million options, are to be issued under ASX Listing Rule 7.1, and will subsequently be put to shareholders for ratification at a General Meeting to be held in January 2013.

The placement will settle in two parts with Part 1 representing approximately \$0.533 million announced on 7 December 2012. The balance being Part 2 of the placement of approximately \$0.167 million, completed on 7 January 2013.

On 4 December 2012, The Company advised that the total number of listed options (RIEO) which were not exercised by 5.00pm WST on 30 November 2012, and have expired were 29,094,050 options.

Mr Ed Turner was appointed a Director of the Company on 5 December 2012.

On 11 December 2012, the Company granted 1,250,000 unlisted options to Collabrium Capital (Guernsey) Limited as incentives for nil consideration, forming part of an engagement letter to provide non-exclusive corporate advisory services in connection with

DIRECTORS' REPORT (con't)

future capital raising, broking arrangements in the United Kingdom and abroad, and potential merger and acquisition targets. The option terms being exercisable at \$0.15 on or before 31 January 2018.

On 25 January, 2013, the Company issued a Notice of General Meeting of Shareholders to be held on 28 February, 2013 at which shareholders must consider resolutions to approve the issue and ratification of 9.33 million shares and options granted to sophisticated and professional investor clients of Oracle Securities as part of the Share Placement announced on 23 November 2012. The General Meeting was subsequently held on 28 February 2013, all resolutions put to the meeting were passed unanimously on a show of hands.

Mr Bruce Franzen resigned as Director of the Company on 31 January 2013.

On 7 May 2013, the Company advised that it had completed a Share Placement offered to sophisticated and professional investors and has negotiated a Terms Sheet for a Convertible Note facility with clients of Oracle Securities Pty Ltd, raising combined funds of approximately \$0.49 million.

The placement has raised \$0.10 million before costs, with the issue of 1.71 million ordinary shares at an issue price of \$0.06 per share and free attaching unlisted option on a 1:1 basis exercisable at 10¢ per share on or before 30 April 2015 ("Options") as follows;

• ─ 1.71 million new shares at 6.0¢ per share to raise circa \$0.10 million to be issued within the Company's 15% placement capacity under Listing Rule 7.1.
• ─ 1.71 million Options to be issued within the Company's 15% placement capacity under Listing Rule 7.1.

On 27 June 2013 the Company issued \$400,000 Convertible Note at \$1 each to various parties introduced via Oracle Securities Pty Ltd (or its nominees).

Key terms of the Convertible Note are:

• The facility will raise up to approximately \$0.39 million before costs and has a maturity date of 30 June 2014;
• An interest rate of 8% is payable quarterly in arrears in cash or freely tradeable Ordinary Fully Paid Shares of the Company (the "Interest Shares"), at the lender's sole discretion. The Interest Shares will be issued at a price per share equal to the lower of 90% of the 10 consecutive trading day volume weighted average price ("VWAP") on the Australian Securities Exchange ("ASX") prior to execution of the Secured Convertible Debenture agreement or 90% of the 10 consecutive trading day volume weighted average price ("VWAP") on the Australian Securities Exchange ("ASX") prior to the relevant quarterly interest payment notice.
• The Secured Convertible Debentures will be secured by a first charge over the Company's Millrose Project Area and Cheritons Find (Redwing) gold prospect.
• The debentures can be converted in full or any part thereof into freely tradeable Ordinary Fully Paid Shares of the Company (the "Conversion Shares"), at the lender's sole discretion at any time after 30 June 2013. The Conversion Shares will

DIRECTORS' REPORT (con't)

be issued at a price per share equal to the lower of 90% of the 10 consecutive trading day VWAP on the ASX prior to execution of the Secured Convertible Debenture agreement or 80% of the 10 consecutive trading day VWAP on the ASX prior to the relevant conversion notice.

• The company shall issue to the investor 9.75 million unlisted options to purchase fully paid ordinary shares in the company with a strike price equal to 130% of the 10 consecutive trading day VWAP on the ASX prior to execution of the Secured Convertible Debenture agreement with an expiry date 31 December 2016.
• A fee equal to 6% of the Issue Amount is payable to Oracle Securities in cash or freely tradeable Ordinary Fully Paid Shares of the Company (the "Broker Shares"), at the Company's sole discretion. The Broker Shares will be issued at a price per share equal to 90% of the 10 consecutive trading day volume weighted average price ("VWAP") on the Australian Securities Exchange ("ASX") prior to execution of the Secured Convertible Debenture agreement.

Funds received under the Convertible Note Deed as at 30 June 2013 were \$160,000.

Funds raised from the Placement and Convertible Note will be applied to exploration of the company's projects and working capital.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

On 2 July, 2013, the Company issued a Notice of General Meeting of Shareholders to be held on 31 July, 2013 at which shareholders must consider resolutions to approve the issue and ratification of 1.71 million shares and options granted to sophisticated and professional investor clients of Oracle Securities as part of the Share Placement announced on 7 May 2013, together with securities issued and to be issued to subscribers pursuant to terms of the Convertible Note Deeds to raise a further \$400,000.

The General Meeting was subsequently held on 31 July 2013, all resolutions put to the meeting were passed unanimously on a show of hands.

In August 2013 the Company received a further \$165,000 cash in relation to the convertible note – Tranche 2 as detailed at note 12. The total receivable under tranche 2 is \$240,000.The balance of funds being \$115,000 remains outstanding.

There are no other matters or circumstances that have arisen since the end of the financial year 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 year.

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.

DIRECTORS' REPORT (con't)

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.

MEETINGS OF DIRECTORS

During the financial year, 25 meetings of directors were held. The number of meetings attended by each director during the period is stated below:-

	Number of eligible to attend	Number attended
Ian Tchacos	25	25
Jeff Moore	25	25
Andrew Childs	25	22
Bruce Franzen (resigned 31 January 2013)	15	14
Ed Turner (appointed 5 December 2012)	12	12

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
30/04/2015	10	1,712,333
31/01/2016	15	9,333,329
31/12/2016	5.2	4,000,000
31/01/2018	15	1,250,000
		26,295,662

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.

DIRECTORS' REPORT (con't)

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	Quantity Vested
25/07/2014	27	2,666,667	-
25/07/2014	36	2,666,667	-
25/07/2014	45	2,666,666	-
		8,000,000	-

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 2013:

Accounting advice	-
Taxation compliance services	\$3,900

\$3,900

DIRECTORS' REPORT (con't)

AUDITOR'S INDEPENDENCE DECLARATION

The auditor's independence declaration for the year 30 June 2013 has been received and is included in the financial report on page 37.

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 2013. 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) Andrew Childs Ed Turner (appointed 5 December 2012) Bruce Franzen (resigned 31 January 2013)

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

DIRECTORS' REPORT (con't)

REMUNERATION REPORT – AUDITED (con't)

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:

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 or Binomial Option Pricing models.

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. 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 (con't)

REMUNERATION REPORT – AUDITED (con't)

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 2012 and 2013 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 (con't)

REMUNERATION REPORT – AUDITED (con't)

Remuneration of directors and key management personnel

For the year ended 30 June 2013

	Short-Term Benefits Salary and Directors Consulting		Post Employment Benefits	Equity Settled Share Based Payments		Value of equity as proportion of remuneration
	Fees	Fees	Superannuation		Total
Directors	\$	\$	\$	\$	\$	%
Ian Tchacos	41,667	-	3,750	-	45,417	-
Jeffrey Moore	10,000	274,990	25,649	77,333	387,972	20
Bruce Franzen	46,472	117,862	-	25,778	190,112	14
Andrew Childs	25,000	-	2,250	-	27,250	-
Ed Turner	10,000	198,852	18,797	-	227,649	-
Total	133,139	591,704	50,446	103,111	878,400

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 2012

	Short-Term Benefits Salary and Directors Consulting		Post Employment Benefits	Equity Settled Share Based Payments
	Fees	Fees	Superannuation		Total
	\$	\$	\$	\$	\$	%
Directors
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

DIRECTORS' REPORT (con't)

REMUNERATION REPORT – AUDITED (con't)

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.

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 of Options granted and vested in 2013	Grant date	Fair value per option at grant date (\$)	Exercise price (\$)	Expiry date
Directors/Person
Convertible Note Holder	4,000,000	27/06/2013	0.0126	0.052	31/12/2016
Corporate Advisory	1,250,000	11/12/2012	0.0520	0.150	31/01/2018

The options had no vesting conditions attached.

For details on the valuation of the options, including models and assumptions used, please refer to Note 14. 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.

Performance rights

On 14 July 2011, 8,000,000 performance rights were issued under the Company Performance Rights Plan to Jeffrey Moore (Managing Director) and Bruce Franzen (Director) as incentive to align the directors' interests with Company objectives. The following issues of securities to related parties were approved by shareholders as follows:

Holder	Number of Performance 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

DIRECTORS' REPORT (con't)

REMUNERATION REPORT – AUDITED (con't)

The performance rights are exercisable at the conversion price determined at the grant date. The terms and conditions relating to these performance rights including the parameters used to value them are as follows:

	Performance Rights
Underlying security spot price	\$0.135
Exercise price	\$0.27-\$0.45
Volatility	75%
Risk free rate	5.05%
Grant date	26/07/2011
Expiration date	25/07/2014
Expiration period (years)	3 yrs
Number of options	8,000,000
Valuation per option/performance rights	\$0.031-\$0.047
Total performance rights valuation	\$309,333

The total value of the performance rights of \$309,333 are expensed proportionately until 25 July 2014, being the vesting date. The total amount being expensed for the year ended 30 June 2013 is \$103,111 (30 June 2012: \$96,049).

Shares issued as compensation during the year.

No shares were issued as compensation during the year.

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: Title:	Bruce Franzen Company Secretary (resigned as Executive Director 31 January 2013)
Agreement commenced:	1 July 2011
Term of agreement:	12 months renewable annually
Details:	For the year ended 30 June 2013, the Company maintained 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. A consultancy fee was payable monthly in arrears as
	follows; \$6,354 per month (plus GST) for Executive Director
	services of up to 20 hours per week, thereafter at an hourly rate
	of \$150 per hour (plus GST) up to a maximum of eight hours per
	day. This was paid until Mr Franzen's resignation as Director on
	31 January 2013. Company Secretarial services fixed at \$5,000
	per month (plus GST). To be reviewed annually by the Board, 3
	month termination notice by either party. The Executive is
	entitled to Performance Rights, refer to Note 14.

DIRECTORS' REPORT (con't)

REMUNERATION REPORT – AUDITED (con't)

Name: Title: Agreement commenced: Term of agreement: Details:	Jeffrey Moore Managing Director 4 April 2011 3 years (Subject to re - election every 3 years from 1 May 2013) Base salary for the year ended 30 June 2013 of \$275,000 plus superannuation. Mr Moore terminated his role as Managing Director on 30 April 2013 and reverted to a Director of the Company from 1 May 2013, to which he is receiving annual Directors Fees of \$60,000 plus super from this date. Directors Fees are reviewed annually by the Board. The Executive is entitled to Performance Rights, refer to Note 14.
Name: Title: Agreement commenced: Term of agreement: Details:	Ian Tchacos Non executive Chairman 22 October 2010 Subject to re - election every 3 years. Base salary for the year ended 30 June 2013 of \$50,000 plus superannuation, to be reviewed annually by the Board. Salary foregone from 1 May 2013.
Name: Title: Agreement commenced: Term of agreement: Details:	Andrew Childs Non executive Director 22 October 2010 Subject to re - election every 3 years. Base salary for the year ended 30 June 2013 of \$30,000 plus superannuation, to be reviewed annually by the Board. Salary foregone from 1 May 2013.
Name: Title: Agreement commenced: Term of agreement: Details:	Ed Turner Executive Director and Exploration Manager 11 July 2011 (appointed as Director 5 December 2012) Subject to re - election every 3 years. Base salary for the year ended 30 June 2013 of \$201,835 plus superannuation. Mr Turner terminated his role as Exploration Manager on 30 April 2013 and remained a Director of the Company from 1 May 2013, to which he is receiving annual Directors Fees of \$60,000 plus super from this date. Directors Fees are reviewed annually by the Board. The Executive is entitled to Company options, refer to Note 14.

AUDITOR'S INDEPENDENCE DECLARATION

TO THE DIRECTORS OF RIEDEL RESOURCES LTD

In relation to our audit of the financial report of Riedel Resources Ltd for the year ended 30 June 2013, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

PKF MACK & CO

SHANE CROSS PARTNER

12 SEPTEMBER 2013 WEST PERTH, WESTERN AUSTRALIA

37

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2013

	NOTES	2013 \$	2012 \$
Interest revenue		21,555	150,516
Gain on sale of prospects Total revenue	2(a)	- 21,555	147,954 298,470
Administration expenses Depreciation Loss on sale of fixed assets Employee benefits expense Acquisition costs Impairment of exploration expenditure Write-off of exploration expenditure		(782,044) (39,629) (19,574) (592,546) - (3,000,000) -	(594,106) (33,201) - (968,055) (912) - (626,166)
Loss before income tax expense	2(b)	(4,412,238)	(1,923,970)
Income tax expense	3	-	-
Loss for the year		(4,412,238)	(1,923,970)
Other comprehensive loss Items that may be reclassified subsequently to profit or loss Exchange difference on translation of foreign
operation		662,316	(204,259)
Total comprehensive loss for the year		(3,749,922)	(2,128,229)
Basic and diluted (loss) per share (cents)	18	(4.42)	(3.08)

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013

	NOTES	2013 \$	2012 \$
CURRENT ASSETS
Cash and cash equivalents	5	350,281	897,520
Trade and other receivables	6	16,100	96,064
TOTAL CURRENT ASSETS		366,381	993,584
NON CURRENT ASSETS
Property, plant and equipment	7	45,893	174,810
Financial assets	8	-	85,000
Exploration and evaluation expenditure	9	8,770,570	10,020,122
TOTAL NON CURRENT ASSETS		8,816,463	10,279,932
TOTAL ASSETS		9,182,844	11,273,516
CURRENT LIABILITIES
Trade and other payables	10	82,324	598,094
Provisions	11	6,914	47,284
Convertible note	12	106,585	-
TOTAL CURRENT LIABILITIES		195,823	645,378
TOTAL LIABILITIES		195,823	645,378
NET ASSETS		8,987,021	10,628,138
EQUITY
Issued capital	13	15,083,730	13,193,436
Option reserve	14	290,941	290,941
Share based payment reserve	14	383,060	164,549
Foreign currency translation reserve	15	458,057	(204,259)
Accumulated losses	16	(7,228,767)	(2,816,529)
TOTAL EQUITY		8,987,021	10,628,138

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2013

	Issued Capital	Option Reserve	Foreign Currency Translation Reserve	Share Based Payments Reserve	Accumulated Losses	Total
	\$	\$	\$	\$	\$	\$
Balance at 1 July 2012	13,193,436	290,941	(204,259)	164,549	(2,816,529)	10,628,138
Loss for the period	-	-	-	-	(4,412,238)	(4,412,238)
Other comprehensive loss	-	-	662,316	-	-	662,316
Total comprehensive loss for the		-		-
period	-		662,316		(4,412,238)	(3,749,922)
Transactions with owners, recorded
directly in equity
Issue of share capital	2,032,088	-	-	-	-	2,032,088
Issue of options	-	-	-	218,511	-	218,511
Less: share issue costs	(141,794)	-	-	-	-	(141,794)
	1,890,294	-	-	218,511	-	2,108,805
Balance at 30 June 2013	15,083,730	290,941	458,057	383,060	(7,228,767)	8,987,021
Balance at 1 July 2011	10,450,602	291,041	-	-	(892,559)	9,849,084
Loss for the period	-	-	-	-	(1,923,970)	(1,923,970)
Other comprehensive loss	-	-	(204,259)	-	-	(204,259)
Total comprehensive loss for the period	-	-	(204,259)	-	(1,923,970)	(2,128,229)
Transactions with owners, recorded directly in equity
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	(100)	-	164,449	-	2,907,283
Balance at 30 June 2012	13,193,436	290,941	(204,259)	164,549	(2,816,529)	10,628,138

The accompanying notes form part of their financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2013

	NOTES	2013 \$	2012 \$
Cash Flows from Operating Activities Interest received Payments to suppliers and employees		21,555 (1,348,374)	189,162 (1,191,975)
Net cash used in operating activities	17	(1,326,819)	(1,002,813)
Cash Flows from Investing Activities Purchase of plant and equipment Payment for exploration and evaluation Proceeds from the disposal of exploration tenements Proceeds from sale of equity investments Proceeds from sale of other fixed assets Payments for prospects		- (1,404,822) - 73,993 69,714 -	(196,035) (2,289,441) 109,088 - - (1,139,048)
Net cash used in investing activities		(1,261,115)	(3,515,436)
Cash Flows from Financing Activities Proceeds from issue of shares Proceeds from issue of options Payments for share issue costs Proceeds from issue of convertible note		2,022,487 - (141,792) 160,000	992,001 168,211 (62,166) -
Net cash provided in financing activities		2,040,695	1,098,046
Net decrease in cash and cash equivalents held		(547,239)	(3,420,203)
Cash and cash equivalents at 1 July		897,520	4,317,723
Cash and cash equivalents at 30 June	5	350,281	897,520

The accompanying notes form part of these financial statements

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

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 2013 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 as appropriate for for-profit oriented entities. 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 11 September 2013.

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 2013

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con't)

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 \$4,412,238 for the year ended 30 June 2013 (2012: \$1,923,970).

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 a 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 independent external valuation using Black-Scholes and Binomial Option Pricing models, using the assumptions detailed in Note 14.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con't)

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 of profit or loss and other 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 2013

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con't)

(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 loss 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 profit or loss and other 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 2013

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con't)

(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 loss 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 2013

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con't)

(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 2013

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con't)

(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 2013

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con't)

(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 profit or loss and other 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 profit or loss and other 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 2013

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con't)

(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 independent external valuation using a Black-Scholes and Binomial Option Pricing models.

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 2013

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con't)

(o) 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.

(p) 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 REPORTING PERIODS BEGINNING ON OR AFTER)
10	Consolidated Financial Statements	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	Sept 2011	1 Jan 2013
119	Employee Benefits	Sept 2011	1 Jan 2013
127	Separate Financial Statements	Aug 2011	1 Jan 2013
128	Investments in Associates and Joint Ventures	Aug 2011	1 Jan 2013
Int 20	Stripping Costs in the Production Phase of a Surface Mine	Nov 2011	1 Jan 2013
2012-2	Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities	Jun 2012	1 Jan 2013
2012-5	Amendments to Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle	Jun 2012	1 Jan 2013

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con't)

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

AASB NO.	TITLE	ISSUE DATE	OPERATIVE DATE (ANNUAL REPORTING PERIODS BEGINNING ON OR AFTER)
2012-9	Amendment to AASB 1048 arising from the withdrawal of Australian Interpretation 1039	Dec 2012	1 Jan 2013
2011-4	Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements [AASB 124]	Jul 2011	1 Jul 2013
1053	Application of Tiers of Australian Accounting Standards	Jun 2010	1 Jan 2013
2012-3	Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities	Jun 2012	1 Jan 2014
Int 21	Levies	May 2013	1 Jan 2014
9	Financial Instruments	Dec 2010	1 Jan 2015
2013-3	Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets	June 2013	1 Jan 2013
2013-4	Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation of Hedge Accounting	July 2013	1 Jan 2013
2013-5	Amendments to Australian Accounting Standards – Investment Entities	Aug 2013	1 Jan 2013

	2013 \$	2012 \$
NOTE 2: LOSS FROM ORDINARY ACTIVITIES
(a) Other revenue
Bank Interest	21,555	150,516
Gain on sale of tenement	-	147,954
	21,555	298,470

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 2: LOSS FROM ORDINARY ACTIVITIES (con't)	2013 \$	2012 \$
(b) Expenses Depreciation	39,629	33,201
Convertible note – cost	6,586	-
Exploration expenditure written off	-	626,166
Share based payments expense	168,111	227,448
Superannuation - defined contribution	77,289	76,415
Loss on investments	11,007	-
Loss on sale of fixed assets	19,574	-
Impairment of exploration expenditure	3,000,000	-
Rental expense – operating lease	106,839	96,242
Impairment of available for sale financial asset	-	15,000
NOTE 3: INCOME TAX EXPENSE
Income tax expense/(benefit):
Current tax	-	-
Prior year under provision	-	-
Deferred tax	-	-
	-	-
The prima facie income tax expense/(benefit) on pre-tax accounting profit from operations reconciles to the income tax expense/ (benefit) in the financial statements as follows:
Prima facie income tax expense/(benefit) on loss at 30% (2012: 30%)	(1,323,671)	(577,191)
Add:
Tax effect of:
Other non-allowable items	719	100,154
Share based payment	50,433	68,234
Impairment of exploration expenditure	900,000	-
Provisions and accruals	-	21,294
Revenue losses not recognised	953,993	700,586
Accrued income	1,574	11,594
Other	2,682 1,909,402	18,614 920,477

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

(con't) NOTE 3: INCOME TAX EXPENSE	2013 \$	2012 \$
Less:
Tax effect of:
Exploration and evaluation expenditure Capital raising costs Provisions and accruals	525,134 44,704 15,892 585,730	307,089 36,196 - 343,285
Income tax expense/(benefit)	-	-
The applicable average weighted tax rates are as follows:	0%	0%
The following deferred tax balances have not been recognised:
Deferred Tax Assets: At 30%:
Carry forward revenue losses Capital raising cost Provisions and accruals Other	3,601,973 110,152 11,837 2,682 3,726,644	2,647,980 112,317 27,730 4,500 2,792,527

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

(c) no changes in income tax legislation adversely affect the Company in utilising the benefits.

Deferred Tax Liabilities: At 30%:

Exploration and evaluation expenditure	540,365	433,806
Accrued income	-	1,574
	540,365	435,381

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.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

	2013	2012
	\$	\$
NOTE 4: AUDITORS' REMUNERATION
Remuneration of the auditor of the parent entity for:
- Auditing or reviewing the financial report	50,000	47,650
- Tax compliance and accounting advice	3,900	4,200
	53,900	51,850
Remuneration of firms other than the auditor
- Tax compliance	-	385
- Other non-audit services	34,565	3,806
	34,565	4,191
NOTE 5: CASH AND CASH EQUIVALENTS
Cash on hand	8,272	12,332
Cash at bank	342,009	885,188
	350,281	897,520
NOTE 6: TRADE AND OTHER RECEIVABLES CURRENT Accrued interest GST refundable Prepayments	- 4,428 11,672 16,100	5,248 73,755 17,061 96,064

Refer to note 20 for further information on financial instruments.

NOTE 7: PROPERTY, PLANT & EQUIPMENT

Office Equipment
At cost	31,068	31,068
Accumulated amortisation	(22,737)	(14,406)
Total office equipment	8,331	16,662
Motor Vehicles
At cost	-	123,695
Accumulated amortisation	-	(14,143)
Total motor vehicles	-	109,552
Exploration Equipment
At cost	55,304	55,304
Accumulated amortisation	(17,742)	(6,708)
Total exploration equipment	37,562	48,596
Total property, plant and equipment	45,893	174,810

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 7: PROPERTY, PLANT & EQUIPMENT (con't)

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:

	2013 \$	2012 \$
Office Equipment
Carrying amount at beginning of period	16,662	11,976
Additions/(disposals)	-	17,036
Depreciation	(8,331)	(12,350)
Carrying amount at end of period	8,331	16,662
Motor Vehicles
Carrying amount at beginning of period	109,552	-
Additions/(disposals)	(89,288)	123,695
Depreciation	(20,264)	(14,143)
Carrying amount at end of period	-	109,552
Exploration Equipment
Carrying amount at beginning of period	48,596	-
Additions/(disposals)	-	55,304
Depreciation	(11,034)	(6,708)
Carrying amount at end of period	37,562	48,596
NOTE 8: FINANCIAL ASSETS
Available for sale financial assets carried at fair value Listed shares	-	85,000
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and previous financial year are set out below:
Opening fair value	85,000	-
Additions	-	100,000
Disposals	(85,000)	-
Impairment	-	(15,000)
Closing fair value	-	85,000

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 9: EXPLORATION AND EVALUATION

EXPENDITURE	2013 \$	2012 \$
Exploration and evaluation expenditure reconciliation
Opening balance	10,020,122	5,680,285
Tenement and application fees – at cost	-	2,705,900
Tenements disposed	-	(62,046)
Exploration written off	-	(263,642)
Impairment	(3,000,000)	-
Monies spent on exploration and evaluation during financial
year	1,750,448	1,959,625
Closing balance	8,770,570	10,020,122
NOTE 10: TRADE AND OTHER PAYABLES
Trade creditors	42,521	52,058
Accruals	15,328	498,544
Payroll liabilities	22,426	46,074
Other	2,049	1,418
	82,324	598,094

Refer to note 20 for further information on financial instruments.

NOTE 11: PROVISIONS

Employee benefits	6,914	47,284
NOTE 12: CONVERTIBLE NOTE
Convertible note payable	160,000	-
Convertible note – cost	(9,600)	-
Convertible note – cost of options	(50,400)	-
Amortised costs	6,585	-
Carrying amount	106,585	-

On 27 June 2013 the Company issued a Secured Convertible Note to Oracle Securities Pty Ltd (or its nominees). The Convertible Note (and any accrued interest) can be converted in full or any part thereof into Shares in the Company at the lender's sole discretion at any time after 30 June 2013. The Conversion Shares will be issued at a price per share equal to the lower of 90% of the 10 consecutive trading day Volume Weighted Average Price ("VWAP") on the ASX prior to execution of the Secured Convertible Note agreement or 80% of the 10 consecutive trading day VWAP on the Australian Securities Exchange ("ASX") prior to the relevant conversion notice.

An interest rate of 8% is payable quarterly in arrears in cash or freely tradeable Ordinary Fully Paid Shares of the Company (the "Interest Shares"), at the lender's sole discretion. The Interest Shares will be issued at a price per share equal to the lower of 90% of the 10 consecutive trading day VWAP on the ASX prior to execution of the Secured Convertible Note agreement or 90% of the 10 consecutive trading day VWAP on the ASX prior to the relevant quarterly interest payment notice.

During the period ended 30 June 2013, \$160,000 cash was received under Tranche 1. The maximum number of shares to be issued upon conversion is 4,444,444 at 3.6c per share, with 8% interest payable quarterly. The redemption date is 30 June 2014.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 12: CONVERTIBLE NOTE (con't)

The Company also issued 266,667 Fully Paid Ordinary Shares at 3.6c per share as broker fees in lieu of cash payable in respect Tranche 1 of the Convertible Note.

Noteholders also received for nil consideration on a 25:1 basis, 4,000,000 unlisted options exerciseable at 5.2c per share, expiry 31 December 2016.

			2012	2012
	NOTE 13: ISSUED	CAPITAL	Shares	\$
(a)	Share capital
	Ordinary shares
	Issued and paid up capital – shares	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
			2013 Shares	2013 \$
	Issued and paid up capital – shares	consisting of ordinary	107,489,109	15,828,787
	Less: cost of issue		-	(745,057)
		Closing balance at 30 June 2013	107,489,109	15,083,730
(b)		Movement in ordinary shares capital
Date		Details	No of Shares	\$
	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 for
		the acquisition of projects in Burkina
	7 May 2012	Faso Shares placement	12,500,000 7,973,914	1,750,000 917,000
	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
	1 July 2012	Opening balance	79,913,464	13,193,436
	10 August 2012	Share placement	8,131,658	935,140
	10 August 2012 4 December 2012	Share placement Share placement	8,131,658	284,608
	7 January 2013	Share placement	7,111,107 2,222,222	533,333 166,667
	7 May 2013	Share placement	1,712,333	102,740
	27 June 2013	Issue of shares as broker fee	266,667	9,600
		Costs of issue	-	(141,794)
	30 June 2013	Closing balance	107,489,109	15,083,730

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 13: ISSUED CAPITAL (con't)

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.

(c) 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.

NOTE 14: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE

	2013 \$	2012 \$
Options reserve (a)	290,941	290,941
Share based payments reserve (b)	383,060	164,549
	674,001	455,490

(a) Refers to money received in consideration for issued 29,094,050 options.

(b) Refers to fair value of options and performance rights issued in accordance with AASB 2 Share Based Payment.

Options reserve

Movements in options reserve:

	2012	2012
	Options	\$
Opening balance at 1 July 2011	29,104,050	291,041
Options exercised	(10,000)	(100)
Closing balance at 30 June 2012	29,094,050	290,941

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 14: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE (con't)

Movements in options reserve (con't):		2013 Options	2013 \$
Opening balance at 1 July 2012 Options expired 30 Nov 2012		29,094,050 (29,094,050)	290,941 -
Closing balance at 30 June 2013		-	290,941
Share based payment reserve
		2012	2012
		quantity	\$
Options		10,000,000	68,500
Performance rights		8,000,000	96,049
Total share based payments reserve		18,000,000	164,549
		2013	2013
		quantity	\$
Options Performance rights		26,295,662 8,000,000	183,900 199,160
Total share based payments reserve		34,295,662	383,060
Movements in options (share based payments reserve):		2012	2012
		Options	\$
Opening balance at 1 July 2011		8,000,000	-
Executive options (30c exercise, 30 June 2014 expiry)		2,000,000	68,500
Closing balance at 30 June 2012		10,000,000	68,500
		2013 Options	2013 \$
Opening balance at 1 July 2012 Investor options (15c exercise, 31 Jan 2016)		10,000,000 9,333,329	68,500 -
Corporate advisor options (10c exercise, 31 Jan 2018)	(i)	1,250,000	65,000
Investor options (10c exercise, 30 April 2015 expiry)		1,712,333	-
Convertible note options (5.2c exercise, 31 Dec 2016 expiry)	(ii)	4,000,000	50,400
Closing balance at 30 June 2013		26,295,662	183,900

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 14: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE (con't)

(i) The value of options granted during the period was calculated using the Black-Scholes Option Pricing Model and totalled \$65,000. The values and inputs are as follows;

	Adviser
	Options
Options issued	1,250,000
Underlying share value	\$0.08
Exercise price	\$0.15
Risk free interest rate	2.73%
Share price volatility	95%
Expiration period	31/01/2018
Valuation per option	\$0.052

(ii) The value of options granted during the period was calculated using the Black-Scholes Option Pricing Model and totalled \$50,400. The values and inputs are as follows;

	Noteholder
	Options
Options issued	4,000,000
Underlying share value	\$0.018
Exercise price	\$0.05
Risk free interest rate	2.75%
Share price volatility	139%
Expiration period	31/12/2016
Valuation per option	\$0.0126

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.

Movements in performance rights:

	2012 Options	2012 \$
Opening balance at 1 July 2011	-	-
Performance rights issued	8,000,000	96,049
Closing balance at 30 June 2012	8,000,000	96,049
	2013 Options	2013 \$
Opening balance at 1 July 2012 Vesting expense charge for the year	8,000,000 -	96,049 103,111
Closing balance at 30 June 2013	8,000,000	199,160

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 15: FOREIGN CURRENCY TRANSLATION RESERVE

	2013 \$	2012 \$
Opening balance	(204,259)	-
Foreign currency translation of foreign subsidiaries	662,316	(204,259)
	458,057	(204,259)

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

	2013	2012
	\$	\$
NOTE 16: ACCUMULATED LOSSES
Accumulated losses at the beginning of the year	2,816,529	892,559
Net loss for the year	4,412,238	1,923,970
Accumulated losses at the end of the year	7,228,767	2,816,529
NOTE 17: NOTES TO THE STATEMENT OF CASH FLOWS	2013	2012
Reconciliation of cash flow from operating activities to profit	\$	\$
Loss from ordinary activities after income tax	(4,412,238)	(1,923,970)
Add: non cash items:
Share based payments	168,111	227,448
Depreciation	39,629	33,201
Impairment of exploration expenditure	3,000,000	15,000
Acquisition costs expensed	-	912
Loss on sale of PPE	19,574	-
Gain on sale of tenement	-	(147,954)
Exploration and evaluation costs amortised	(443)	626,166
Convertible note costs expensed	6,585	-
Loss on disposal of investment	11,007	-
Changes in assets and liabilities:
Decrease/(increase) in receivables	79,965	(44,723)
Decrease/(increase) in accrued income	-	38,647
Increase/(decrease) in payables	(198,639)	132,888
Increase/(decrease) in provisions	(40,370)	39,572
	(1,326,819)	(1,002,813)

(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 13 and 14.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 18: EARNINGS PER SHARE	2013 \$	2012 \$
Loss from operations attributable to ordinary equity holders of Riedel Resources Limited used to calculate basic loss per share	4,412,238	1,923,970
	2013 Number	2012 Number
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share	99,717,182	62,454,877

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

NOTE 19: 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.

2013	Australia \$	Burkina Faso \$	Unallocated \$	Total \$
Revenue from external sources	-	-	21,555	21,555
Net loss before tax	3,001,907	51,089	1,359,242	4,412,238
Reportable segment assets	4,452,386	4,324,480	405,978	9,182,844
Reportable segment liabilities	1,359	2,048	192,416	195,823
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

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 20: 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.

(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:

	Carrying Amount 2013 \$	Carrying Amount 2012 \$
Financial assets
Cash and cash equivalents	350,281	897,520
Other receivables	16,100	96,064
Available for sale financial assets	-	85,000
	366,381	1,078,584

(b) Impairment losses

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

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 20: FINANCIAL INSTRUMENTS (con't)

(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 CFA. 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 reporting date are as follows:

	Liabilities		Assets
	2013 \$	2012 \$	2013 \$	2012 \$
US Dollars	-	-	-	984
Burkina Faso CFA	2,048	319,910	4,250	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 2013 and 30 June 2012 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.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 20: FINANCIAL INSTRUMENTS (con't)

(f) Interest rate risk (con't)

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

	Weighted Average		Fixed Interest Rate Maturing
	Effective Interest Rate	Floating Interest Rate	Within 1 year	Over 1 year	Non Interest Bearing	Total
FINANCIAL ASSETS	2013 %	2013 \$	2013 \$	2013 \$	2013 \$	2013 \$
Cash and cash equivalents	2.64	287,452	50,000	-	12,829	350,281
Trade and other receivables	-	-	-	-	16,100	16,100
Total Financial Assets		287,452	50,000	-	28,929	366,381
FINANCIAL LIABILITIES Trade and other
payables	-	-	-	-	82,324	82,324
Convertible note Total Financial Liabilities	8.00	- -	106,585 106,585	- -	- 82,324	106,585 188,909
	Weighted Average		Fixed Interest Rate Maturing
		Floating		Over	Non	Total
FINANCIAL ASSETS	Effective Interest Rate 2012 %	Interest Rate 2012 \$	Within 1 year 2012 \$	1 year 2012 \$	Interest Bearing 2012 \$	2012 \$
Cash and cash	4.14	325,537	550,000	-	21,983	897,520
equivalents Trade and other receivables	-	-	-	-	96,064	96,064
Available for sale	-	-	-	-	85,000	85,000
financial assets Total Financial Assets		325,537	550,000	-	203,047	1,078,584
FINANCIAL LIABILITIES
Trade and other payables	-	-	-	-	598,094	598,094

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 20: FINANCIAL INSTRUMENTS (con't)

(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 2012.

Change in profit	2013 \$	2012 \$
Increase in interest rate by 1% (100 basis points)	3,375	8,755
Decrease in interest rate by 1% (100 basis points)	(3,375)	(8,755)
Change in equity Increase in interest rate by 1%
(100 basis points) Decrease in interest rate by 1%	3,375	8,755
(100 basis points)	(3,375)	(8,755)

NOTE 21: COMMITMENTS AND CONTINGENCIES

Operating lease commitments

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

	2013 \$	2012 \$
Within one year After one year but not more than five years	105,020 -	120,245 102,475
More than five years	-	-
	105,020	222,720

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:

	2013 \$	2012 \$
Within one year	1,450,012	770,380
After one year but not more than five years	749,591	804,486
More than five years	-	-
	2,199,603	1,574,866

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 22: INTERESTS IN CONTROLLED ENTITIES

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

	Country of	Equity Interest %
Name	Incorporation	2013	2012
AuDAX Minerals Pty Ltd	Australia	100	100
Riedel (Burkina Faso) Limited	Mauritius	100	100
BF Exploration SARL	Burkina Faso	100	100

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

NOTE 23: RELATED PARTY DISCLOSURE

Entity with significant influence over the Group

ADX Energy Limited owns 23% of the ordinary shares in Riedel Resources Limited (2012: 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

	2013 \$	2012 \$
The key management personnel compensation comprised:
Short term employment benefits	724,843	870,445
Post employment benefits	50,446	49,682
Share based payments	103,111	154,447
	878,400	1,074,574

Detailed remuneration disclosures are provided in the Remuneration Report on pages 29 to 35.

(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. Following Mr Franzen's resignation as a Director on 31 January 2013, only Company Secretarial fees have been paid. The amount relating to both these services which has been recognised for the year is \$154,184 excluding GST (2012:\$275,892).

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 23: RELATED PARTY DISCLOSURE (con't)

(b) Individual directors' and executives' compensation disclosure (con't)

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 ended in December 2012. The amount relating to these services which has been recognised for the year is \$10,150 excluding GST (2012: \$6,950) 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:

2013	Balance at beginning of period	Granted as remuneration	Exercise of options	Net change other	Balance at end of period
Directors/Company
Secretary
Ian Tchacos	465,500	-	-	-	465,500
Jeffrey Moore	250,000	-	-	-	250,000
Bruce Franzen	686,760	-	-	-	686,760
Andrew Childs	1,225,000	-	-	-	1,225,000
Ed Turner	-	-	-	-	-
	2,627,260	-	-	-	2,627,260
2012
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

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

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 23: RELATED PARTY DISCLOSURE (con't)

(b) Option holdings of Key Management Personnel

	Balance at beginning	Granted as		Net change	Balance at
2013	of period	remuneration	Exercised	other	end of period
Directors/Company
Secretary
Ian Tchacos	2,150,000	-	-	(150,000)	2,000,000
Jeffrey Moore	100,000			(100,000)	-
Bruce Franzen	2,300,049	-	-	(300,049)	2,000,000
Andrew Childs	2,325,000	-	-	(325,000)	2,000,000
Ed Turner	1,500,000	-	-	-	1,500,000
Total	8,375,049	-	-	(875,049)	7,500,000
2012
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

(c) Performance Rights of Key Management Personnel

	Balance at beginning	Granted as		Net change	Balance at
2013	of period	remuneration	Exercised	other	end of period
Directors/Company
Secretary
Ian Tchacos	-	-	-	-	-
Jeffrey Moore	6,000,000	-	-	-	6,000,000
Bruce Franzen	2,000,000	-	-	-	2,000,000
Andrew Childs	-	-	-	-	-
Ed Turner	-	-	-	-	-
Total	8,000,000	-	-	-	8,000,000
2012
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

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.

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 23: RELATED PARTY DISCLOSURE (con't)

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

NOTE 24: EVENTS AFTER THE REPORTING DATE

On 2 July, 2013, the Company issued a Notice of General Meeting of Shareholders to be held on 31 July, 2013 at which shareholders must consider resolutions to approve the issue and ratification of 1.71 million shares and options granted to sophisticated and professional investor clients of Oracle Securities as part of the Share Placement announced on 7 May 2013, together with securities issued and to be issued to subscribers pursuant to terms of the Convertible Note Deeds to raise a further \$400,000.

The General Meeting was subsequently held on 31 July 2013, all resolutions put to the meeting were passed unanimously on a show of hands.

In August 2013 the Company received \$165,000 cash under tranche 2 of the convertible note issued on 27 June 2013 as detailed at note 12. The total receivable under tranche 2 is \$240,000.

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.

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 accommodation of \$30,000 (2012: \$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

	2013 \$	2012 \$
Assets
Current Assets	360,087	937,856
Non Current Assets	2,045,894	5,174,811
Total Assets	2,405,979	6,112,667
Liabilities Current Liabilities	192,416	230,713
Non Current Liabilities	-	-
Total Liabilities	192,416	230,713

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2013

NOTE 28: PARENT ENTITY DISCLOSURES (con't)

Financial position (con't)	2013 \$	2012 \$
Equity
Issued Capital	15,083,733	13,193,436
Reserves	674,001	455,489
Accumulated Losses	(13,544,171)	(7,766,971)
	2,213,563	5,881,954
Financial Performance
	2013 \$	2012 \$
Loss for the year	5,777,198	6,874,297
Other comprehensive income/(loss)	-	-
Total comprehensive loss	5,777,198	6,874,297

Commitments

For details see note 21.

Contingent Liabilities/Guarantees

For details see note 25.

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF

RIEDEL RESOURCES LTD

Report on the Financial Report

We have audited the accompanying financial report of Riedel Resources Ltd, which comprises the statement of financial position as at 30 June 2013, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of Riedel Resources Ltd (the company) and the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the year's end or from time to time during the financial year.

Directors' Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor's Responsibility

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

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

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

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

74

Opinion

In our opinion:

• (a) the financial report of Riedel Resources Ltd is in accordance with the Corporations Act 2001, including:
• (i) giving a true and fair view of the company's and consolidated entity's financial positions as at 30 June 2013 and of their performance for the year ended on that date; and
• (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
• (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Emphasis of Matters

Without modifying our opinion, we draw attention to Note 1 in the financial report, which indicated that the consolidated entity incurred a net loss after tax of \$4,412,238 during the year ended 30 June 2013 (2012: \$1,923,970). These conditions, along with other matters as set for in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the company and consolidated entity's ability to continue as a going concern and therefore, the company and consolidated entity maybe unable to realise its assets and discharge its liabilities in the normal course of business.

The financial report of the consolidated entity does not include any adjustments in relation to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the company and/or the consolidated entity not continue as going concerns.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 29 to 35 of the directors' report for the year ended 30 June 2013. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Riedel Resources Ltd for the year ended 30 June 2013, complies with section 300A of the Corporations Act 2001.

PKF MACK & CO

SHANE CROSS PARTNER

12 SEPTEMBER 2013 WEST PERTH, WESTERN AUSTRALIA

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 (con't)

Recommendation	Section of this Report
Recommendation 1.1 Functions of the Board and Management	1.1, 1.3, 1.4 and 1.5
Recommendation 1.2 Evaluating the Performance of Senior Executives	1.6.11
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 Committees	1.6.11
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 Disclosure	1.6.5
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 System	1.6.14 and 2.1.3
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 Remuneration	2.2.3 and 2.2.4
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 (con't)

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 (con't)

1.4. The Managing Director/CEO

The Managing Director which is currently vacant 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 (con't)

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 (con't)

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 (con't)

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 (con't)

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 (con't)

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 (con't)

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 (con't)

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 (con't)

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 (con't)

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 5 September 2013.

Shareholdings as at 5 September 2013

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	23.26%
Satori International Pty Ltd	9,300,000	8.65%
Skiffington Super Pty Ltd	6,250,000	5.81%
Meriwa Street Pty Ltd	4,095,000	3.81%

Unmarketable parcels

The number of shareholders holding less than a marketable parcel is 193. 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 of Options	Number of Holders	Holders with more than 20%
Options exercisable at \$0.30 on or before 30 June 2014	10,000,000	6	refer note 23
Options exercisable at \$0.10 on or before 30 April 2015	1,712,333	10
Options exercisable at \$0.15 on or before 31 January 2016	9,333,329	11
Options exercisable at \$0.052 on or before 31December 2016	4,000,000	5
Options exercisable at \$0.15 on or before 31 January 2018	1,250,000	1
Performance Rights	8,000,000	2	refer note 23

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 2013, 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.

Securities subject to escrow

The following securities are currently subject to escrow:

		Release
Securities	Escrow Period	Date	Number
Nil

SHAREHOLDER INFORMATION

Distribution of security holders

Category	Number of Holders	Number of Shares
1 – 1,000	7	892
1,001 – 5,000	9	37,554
5,001 – 10,000	71	688,053
10,001 – 100,000	206	10,008,362
100,001 and over	115	96,754,248
	408	107,489,109

Twenty largest shareholders – Ordinary Shares

Name	Number of ordinary shares held	Percentage of capital held
ADX ENERGY LIMITED	25,000,000	23.26
SATORI INTERNATIONAL PTY LTD SKIFFINGTON SUPER PTY LTD	9,300,000 6,250,000	8.65 5.81
MERRIWA STREET PTY LTD	4,095,000	3.81
MR JAMES WALLACE HOPE	3,639,578	3.39
MR PETER CHARLES MOREY + MRS VALMAI ANN MOREY < MOREY SUP[ERFUND A/C>	2,891,858	2.69
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	2,486,644	2.31
QUINLYNTON PTY LTD	1,510,000	1.40
MR WILLIAM RICHARD BROWN	1,403,033	1.31
KAILIS CONSOLIDATED PTY LTD	1,333,332	1.24
COLLABRIUM CAPITAL (GUERNSEY) PTY LTD BRAZELL PTY LTD	1,333,200 1,180,000	1.24 1.10
NINETEEN NINETEEN PTY LTD	1,180,000	1.10
FGL ASSET MANAGEMENT LIMITED	1,100,000	1.02
DROPMILL PTY LTD	1,041,017	0.97
JP MORGAN NOMINEES AUSTRALIA LIMITED	1,015,500	0.94
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LTD	1,000,000	0.93
MR DEAN ANDREW POWELL	1,000,000	0.93
SEVEN FOUR SEVEN PTY LTD	911,897	0.85
PROVISTA HOLDINGS PTY LTD	833,332	0.78
TOTAL	68,504,391	63.73

SCHEDULE OF MINING TENEMENTS

	Tenement
Area of Interest	reference	Nature of interest	Interest
Western Australia
Charteris Creek	E45/2763	Direct	100%
Bronzewing South	E36/623	Indirect	80%
Bronzewing South	M36/670	Indirect	80%
Delaney Well	E36/734	Direct	100%
West Yandal	M36/615	Royalty	0%
Marymia	E52/2394	Direct	100%
Marymia	E52/2395	Direct	100%
Milrose	E53/1304	Direct	100%
Milrose	E53/1305	Direct	100%
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%