ROX RESOURCES LIMITED ABN 53 107 202 602

ANNUAL REPORT

2006

	Page No
CORPORATE DIRECTORY	1
HIGHLIGHTS	$\overline{2}$
CHAIRMAN'S REVIEW	3
PHA LUANG LEAD-ZINC-SILVER PROJECT, LAOS	4
DIRECTORS' REPORT	13
CORPORATE GOVERNANCE	24
FINANCIAL STATEMENTS
Income Statement	27
Balance Sheet	28
Cash Flow Statement	29
Statement of Changes in Equity	30
Notes to and Forming Part of the Financial Statements	31
Directors' Declaration	57
Independent Audit Report to the Members of Rox Resources Limited	58
SCHEDULE OF MINING TENEMENTS	60
OTHER INFORMATION	61

CORPORATE DIRECTORY

Directors:

Dr Alistair Cowden Non-Executive Chairman

Mr Ian Mulholland Managing Director

Mr Michael Blakiston Non-Executive Director

Company Secretary:

Mr Brett D Dickson

Bankers:

Westpac Banking Corporation 40 St George's Terrace Perth WA 6000

Auditor:

Ernst & Young Ernst & Young Building 11 Mounts Bay Road Perth WA 6000

Telephone: (08) 9429 2222 Facsimile: (08) 9429 2436

Solicitor:

Blakiston & Crabb 1202 Hay Street West Perth WA 6005

Telephone: (08) 9322 7644 Facsimile: (08) 9322 1506

Stock Exchange:

Australian Stock Exchange Limited

Company Code: RXL (Fully Paid Shares)

Issued Capital:

56,375,333 Fully paid ordinary shares 5,250,000 20 cent, 31 January 2009 options 800,000 20 cent, 30 April 2007 options 4,000,000 20 cent, 2007 options 2,500,000 67.5 cent. 12 July 2009 options

Investor Relations:

Porter Novelli The Courtyard, 33 Broadway Nedlands WA 6009, Western Australia Telephone: (08) 9386 1233 Facsimile: (08) 9386 1715

For shareholder information contact:

Share Registry:

Computershare Registry Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace Perth WA 6000

Telephone: (08) 9323 2000 Facsimile: (08) 9323 2033

For information on your company contact:

Principal & Registered Office:

Ground Floor 1 Altona Street West Perth WA 6005

Telephone: (08) 9486 4537 Facsimile: (08) 9486 4933 Web: www.roxresources.com.au

HIGHLIGHTS

ACHIEVEMENTS FOR 2006

LAOS-LEAD & ZINC

Discovery of significant lead-zinc sulphide mineralisation in drilling at the Nam Yen prospect, including:

33 metres at 11.4% combined Pb+Zn, 19 g/t Ag, from 4 metres, 27 metres at 10.5% combined Pb+Zn, 23 g/t Ag, from 3 metres, and 19 metres at 8.6% combined Pb+Zn, 10 g/t Ag from 17 metres.

Intersection of significant oxide mineralisation at the Bon Noi prospect. 9 metres at 8.3% combined Pb+Zn, 25 g/t Aq, from 3 metres, indicating potential for sulphide mineralisation at depth.
A total of 20 prospects with Pb/Zn mineralisation identified. $\bullet$

SOUTH AFRICA - DIAMONDS

Assembly of a quality portfolio of alluvial and kimberlite diamond projects.
Divestment to Paramount Mining Limited, a dedicated diamond explorer, for up to 6 million shares in Paramount, representing 13% of its current issued share capital.

MENZIES - GOLD

Divestment to Regal Resources Limited for $600,000 and 3 million shares in Regal. $\bullet$

CAPITAL RAISINGS

Two capital raisings totalling 23.3 million shares to raise $6.3 million before costs. Funds to $\bullet$ be used primarily for further exploration of the company's Laos project.

INCREASE IN MARKET CAPITALISATION

• 326% increase in market capitalisation from $4.8 million to $15.8 million (1 July 2005 to 30 June 2006).

CHAIRMAN'S REVIEW

Dear Fellow Shareholders.

It gives me great pleasure to present Rox's Annual Report for 2006. The past year has been one of major transformation and achievement for the Company.

Shortly I will retire as Chairman to concentrate on other duties, and hand the reins over to my highly respected colleague Mr Jeff Gresham. I am sad to be leaving Rox, but know I leave the company in a strong position, with an exciting project in Laos and cash of $5.5 million. In addition Rox will have a share portfolio valued at approximately $1 million once recently announced transactions are finalised. As a fellow shareholder I am excited about the company's future.

Our initial work in Laos suggests we have discovered what may be a new district of lead-zinc mineralisation. Our joint venture gives us a 60% interest in the sulphide zone of a granted Mining Concession Area at Pha Luang, 180 kilometres north of the Lao capital Vientiane. Drilling has intersected economic grades of leadzinc up to 33 metres thick and the mineralized zone is currently open in all directions.

We have twenty other prospects on the property and the company is currently investigating these with a view to ranking prospects for drilling. Several large, high-grade soil geochemical anomalies have already been outlined which present immediate drill targets for further mineralisation.

As a result of our increasing focus on Laos, the Company decided to divest its other projects. The sale of the Menzies gold project has returned $600,000 and 3 million shares in Regal Resources Limited. The sale of the diamond projects in South Africa to Paramount Resources Limited, a dedicated diamond exploration company will result in the issue of up to 6 million Paramount shares to Rox. These strategic holdings in ASXlisted companies gives Rox the opportunity to further benefit from success with the diamond and gold projects through the endeavours of the new owners.

The company was successful in raising the capital it needed to pursue its projects through two share placements, both managed by Bell Potter Securities in Melbourne. The Company now has a strong cash position of $5.5 million permitting it to aggressively advance its interests in Laos.

The success of the company over the past year can be judged from the 326% increase in market capitalisation from $4.8 million to $15.8 million and an 87% share price increase from $0.15 to $0.28 (with a peak closing price of $0.52). For these results I would like to thank our hard working team, and we now look forward to another exciting year ahead.

Fair (und

Alistair Cowden Chairman

INTRODUCTION

Rox Resources Limited ("Rox") is exploring the Pha Luang lead-zinc project in Laos, where high grade drill intercepts of lead and zinc have been made at the Nam Yen prospect.

In September 2005 Rox exercised its option to acquire a 60% interest in the sulphide portion of the Pha Luang lead-zinc mine which lies 180 km north of Vientiane, the capital city of the Lao People's Democratic Republic (Laos).

A joint venture has been formed with local Lao company First Pacific Mining Co Lao Ltd (23%) and Thai company, Triple Nine Mining Co Ltd (17%). Application for a foreign investment licence has been made to the Lao Government to incorporate a joint venture company in Laos.

The Pha Luang project is situated close to the main north-south bitumen highway through Laos, and is adjacent to power lines, water supplies and established towns. Relief in the area is moderate to extreme, however road access to the top of the range has been established in two different locations. There is abundant water for process needs, and there is ample suitable ground for establishment of mine infrastructure. The town of Vangvieng is 20 km south of the mine area.

The lateral, along strike and across strike extent of the lead-zinc-silver oxide and sulphide outcrops at Pha Luang, and the intensity and widths of surface mineralisation, suggest that this area could potentially host a district of significant lead-zinc-silver deposits.

Location Map

Laos is a rapidly growing economy on the Indo-China peninsula, located close to markets in Thailand, China and Vietnam. Several Australian mining companies are enioving outstanding success operating in Laos, where the government is actively encouraging foreign investment in mining and exploration.

The Lao People's Democratic Republic (Lao PDR) is located on the Indo-China Peninsula, is bordered by Thailand, Myanmar, China, Vietnam and Cambodia, and covers an area of 237,000 km2 (similar in size to the State of Victoria). After many changes to its political system, political stability was achieved in 1975 when the Lao PDR was established by independence party The Pathet Lao.

Laos has promoted economic liberalisation since 1986 with a shift from a planned economy towards a free market system. The result was a shift towards a market-based economy which quarantees, amongst other things, the right for each Lao citizen to own private property and provides protection for both domestic and foreign investment. In 1997 Laos was admitted to the Association of South East Asian Nations (ASEAN) and is in the process of joining the World Trade Organisation (WTO).

The 50th anniversary of the establishment of diplomatic relations between Australia and Laos was celebrated in 2002 and Australia enjoys a positive reputation in Laos both as a result of this long unbroken relationship and a high profile development cooperation programme.

EXPLORATION RESULTS

Rock Sampling

Rock chip samples taken by Rox of zinc oxide mineralisation have graded up to 51% zinc. Samples from mixed lead-zinc oxide-carbonate mineralisation graded up to 32% lead and 24% zinc, and samples of galena (lead sulphide) have assaved up to 80% lead and 490 g/t silver.

Further outcrops of oxides and sulphides have been discovered during geological mapping, and over 20 prospects have now been defined over the Mining Concession Area. It is anticipated that as more exploration work is completed, more mineralised outcrops will be identified.

Prospect Locations

Selected Rock Chip sample results include:

	Zinc $%$	Lead $%$	Silver ppm
Pha Jom	11.3	18.7	140
Pha Sod	30.1	19.5	166
Bon Noi	29.4	21.2	161
Pha Luang 2/3	53.3	0.6	5
Nam Yen	25.8	33.5	19
Pha Daeng	27.1	1.23	251

Soil Sampling

Soil sampling has been undertaken over a relatively limited area of the Mining Concession Area with excellent results. Large soil anomalies over 2% combined lead + zinc have been delineated. These results indicate that mineralisation is potentially widespread, and based on geologic and geochemical evidence the company believes that a district of Mississippi Valley Type (MVT) lead-zinc mineralisation may exist at Pha Luang.

Soil anomalies have been outlined at the following prospects, Bon Noi, Switchback, Pha Luang, Nam Yen and Pha Daeng, and present immediate drilling targets. Soil sampling will continue during the 2006-2007 field season to extend the coverage.

Soil Sampling Results

Geology

Interpretation of the regional geology from satellite imagery has detected a number of tectonic zones and thrust faults, with large (several kilometres) offsets apparent. For example, the Pha Luang limestone shows an offset of 10km along a NW-SE direction (Tectonic Zone D). Such large scale structures are believed to be very important in the genesis and localisation of MVT lead-zinc mineralisation.

MVT lead-zinc deposits are well known from all continents around the world and form when material from limestone reefs is buried with other sedimentary rocks (siltstones and sandstones) in large sedimentary basins. As the basins sag under the weight of accumulated sedimentation, extremely high pressures are

formed and the basin develops large and small scale faults and fractures as the brittle rocks break apart. Lead-zinc bearing brines are produced as a result of the high pressures and these migrate to faults or fractures where the pressure is lower and where sulphide minerals can precipitate.

A significant amount of faulting and fracturing has occurred at Pha Luang, and almost all of the known prospects are associated with some structural feature. Another key indicator is the clay alteration that can be seen in the satellite imagery that is usually associated with large mineralising systems.

Average grade of MVT deposits above 5 million tonnes in size from the database of worldwide deposits is 8.5% Pb+Zn. The best known example of MVT deposits in Australia is the Lennard Shelf, which hosted 40 million tonnes at better than 10% combined lead-zinc; Rox's target is for similar or better.

Pha Luang Geology

DRILLING RESULTS

Drilling at Pha Luang has taken place at only two of prospects, with the most significant results obtained so far from the Nam Yen prospect. A zone of lead-zinc mineralisation has been identified over an area of 75 x 150 metres and up to 33 metres thick, with the limits still untested. Selected intercepts are listed below.

PLR008: 4 metres at 26.2% Pb+Zn, 23 g/t Ag PLR010: 8 metres at 8.7% Pb+Zn, 14 g/t Ag PLR015: 33 metres at 11.4% Pb+Zn, 19 g/t Ag PLR016: 27 metres at 10.5% Pb+Zn, 23 g/t Ag PLR023: 5 metres at 7.8% Pb+Zn, 17 g/t Ag PLR025: 19 metres at 8.6% Pb+Zn, 36 g/t Ag

A drill plan and schematic cross-section is shown below.

Nam Yen Drill Plan

The mineralised zone outcrop coincides with a strong soil anomaly, as shown in the top part of the diagram. Outcropping lead sulphide occurs to the east of the identified mineralised zone, and it is not closed off to the west or south either.

Nam Yen Drill Cross Section

The mineralisation at Nam Yen comprises galena (lead sulphide) and sphalerite (zinc sulphide) which form in the matrix of a limestone breccia. In zones where the breccia fragments are small (several centimetres), the matrix can form zones up to 10-30 cm wide, and relatively high lead-zinc grades result. In zones where the breccia fragments are large (up to several metres), or packed close together, there is less room for sulphide minerals and the grades are lower.

Recent diamond drilling (holes PLD039-041) indicate that some structural complications (e.g. faults) may be present. These may be important in the localisation and hosting of mineralisation.

The company plans to continue drilling in the next field season seeking to extend the mineralisation in all directions and to understand its geological controls better. A programme of approximately 2,000 metres of drilling is envisaged.

Drilling at the Bon Noi prospect intersected mainly oxide mineralisation, although the presence of lead sulphide suggests that sulphide mineralisation may be close by. The best result from drilling in the past year was PLR025, 9 metres at 8.3% Pb+Zn, 25 g/t Ag.

At the Switchback prospect outcropping lead sulphide is coincident with a large 500 x 300 metre lead-zinc soil anomaly was targeted by 2 drillholes. Values from soil samples taken from the Switchback area were

exceptionally high, ranging up to 5.5% Pb, 14.4% Zn and 71 ppm Ag. The drilling intersected pyritic sulphide and anomalous lead and zinc.

PHA LUANG LEAD-ZINC-SILVER PROJECT, LAOS

More drilling is certainly warranted at both of these prospects as the geological controls on mineralisation are becoming better understood.

WORK PLANS

The Company is planning an aggressive exploration programme for the 2006-2007 field season from October 2006 to June 2007. This will involve up to 7,000 metres of RC and diamond drilling to further extend the mineralisation at Nam Yen and to test another 4 strong prospects. Extensive soil sampling and geological mapping will continue to identify new targets, while geophysical surveys are under consideration should current test work indicate their applicability. Road and track construction for drill access are an important component of the work programme.

New ground totalling 300 km2 has been applied for both north and south of Pha Luang to cover potential extensions of mineralisation along the limestone sequence. These applications are currently under consideration by the Laos Government.

Your Directors present their report on the Company for the year ended 30 June 2006.

DIRECTORS

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

Names, Qualifications, Experience and Special Responsibilities

Dr Alistair Cowden (appointed Non-Executive Chairman 27/11/2003, retires 30/9/06 - B.Sc. (Hons), Ph.D. MAusIMM, MAIG

Dr Cowden has over 25 years experience as a geologist and mining company executive in Australia, Africa, Europe and New Zealand. He has been involved with major projects and discoveries such as Nimbus silver-zinc, Sunrise Dam mine, Kanowna Belle gold mine, Magnetic Minerals Dongara mineral sands project, Syerston nickel - cobalt laterite deposit, Hartley platinum mine, St Ives gold mine and Kambalda nickel mines.

Dr Cowden has a B.Sc (Hons), Geology from the University of Edinburgh and a PhD in Geology from the University of London. He is currently Managing Director of Vulcan Resources Limited and is retiring from Rox to concentrate on this role. During the last three years he also served on the board of Australis Aquaculture Limited.

Mr Jeff Gresham (appointed Non-Executive Chairman effective 1/10/2006 - B.Sc. (Hons), MAusIMM, MGSA, MAICD

Mr Gresham is a geologist with a distinguished industry career of varied exploration, operational and corporate experience both in Australia and internationally spanning 38 years.

Most recently he was Managing Director of Titan Resources, an active nickel explorer in Western Australia, and roles prior to that have included Managing Director of gold miner Wiluna Mines Limited, General Manager - Exploration for Homestake Gold of Australia, and several senior executive roles with Western Mining Corporation (WMC). During his career spanning 19 years with WMC he held a number of senior and corporate positions most notably Chief Geologist of the Kambalda Nickel Operations between 1981 and 1985 and Executive Vice President Exploration for WMC's Canadian subsidiary Westminster Canada Ltd between 1988 and 1993.

Mr Gresham's extensive professional experience covers numerous mineral deposit types and he has authored a number of professional papers on the Kambalda nickel deposits and the Olympic Dam copperuranium deposit, and has a B.Sc (Hons) degree from the Victoria University, Wellington, New Zealand.

Mr lan Mulholland (appointed Managing Director 27/11/2003 - B.Sc. (Hons), M.Sc. FAuslMM, FAIG, FSEG

Mr Mulholland is a geologist with over 25 years broad experience in a number of commodity groups including gold, silver, copper, lead, zinc, uranium, nickel and kaolin in the exploration and mining industry. He has managed activities from grass roots exploration to advanced resource definition, feasibility studies and mining operations for major companies such as WMC and Esso, medium sized companies, Otter Gold and Aurora Gold and junior companies, Archaean Gold, Summit Resources and Conquest Mining. Ian's strength is in bringing resources to economic fruition and his experience is particularly appropriate for his role with Rox.

Mr Mulholland was Development Manager for Archaean Gold, managing the Nimbus silver-zinc project prefeasibility study prior to Archaean's take-over. He was then Exploration Manager for Anaconda Nickel Limited, managing their extensive tenement and exploration portfolio, with particular emphasis on resource and project management from exploration through development to the production stage adding some 1.3 billion tonnes to the resource available to Anaconda.

Mr Mulholland has a B.Sc. (Hons), Geology from the University of Sydney and a M.Sc. in Geology from the James Cook University of North Queensland. He is a Fellow of the AusiMM, the AIG, and the Society of Economic Geologists.

Mr Michael Blakiston (appointed Non-Executive Director 27/11/2003) - B.Juris. LLB

Mr Blakiston is a practicing solicitor with legal experience in the resources sector. Mr Blakiston holds the degrees of Bachelor of Jurisprudence and Bachelor of Laws from the University of Western Australia and is a partner of the corporate and resource law firm, Blakiston & Crabb. Mr Blakiston has been practicing law for over 25 years.

Mr Blakiston is also a director of Platinum Australia Ltd, Colltech Australia Limited, Vulcan Resources Limited. Aurora Oil & Gas Limited. Australian Development Capital Ltd and alternate director of Alcaston Mining NL. During the last three years Mr Blakiston has also served on the boards of Antares Energy Ltd. Black Range Minerals Limited, GFB Ltd, Southern Amity Ltd and Ranger Minerals Ltd.

Mr Blakiston has extensive commercial experience both in advisory and directorial capacities having been involved in project assessment, structuring and financing, joint ventures and strategic alliances in the resource industry. In addition, Mr Blakiston has experience in initial public offerings, takeovers and mergers, corporate and project fundraisings (either with debt or equity), construction, offtake and sales contracts.

COMPANY SECRETARY

Mr Brett Dickson - B.Bus, CPA

Mr Dickson has over 20 years experience in the financial management of companies, principally companies in early stage development of its resource or product, and offers broad financial management

skills. He has been Chief Financial Officer for a number of successful resource companies listed on the ASX.

He has had close involvement with the financing and development of a number of Greenfield resources in the oil and gas and mineral sectors. Mr Dickson is a Certified Practising Accountant with a Bachelors Degree in Economics and Finance from Curtin University.

Interest in the Share and Options of the Company

As at the date of this report, the interest of the directors in the shares and options of Rox Resources Limited were:

	Ordinary Shares	Options
A Cowden	2,620,000	1,250,000
l Mulholland	1,400,000	3,000,000
M Blakiston	1,197,857	1,000,000

LOSS PER SHARE

Basic earnings (Loss) per share	$(6.1 \text{ cents})$
Diluted earnings (Loss) per share	$(6.1 \text{ cents})$

DIVIDENDS

No amounts have been paid or declared by way of dividend of the Company since the date of incorporation and the Directors do not recommend the payment of any dividend.

CORPORATE INFORMATION

Corporate Structure

Rox Resources Limited is a company limited by shares which is incorporated and domiciled in Australia. During the year the Company acquired Rox (Laos) Pty Ltd as a 100% controlled entity. The group comprising Rox Resources Limited and Rox (Laos) Pty Ltd is not considered to be a reporting entity as Rox (Laos) Pty Ltd has not traded, therefore consolidated accounts have not been prepared.

Nature of Operations and Principal Activities

The principal activity of the Company during the year was the continued exploration of its Pha Luang leadzinc deposit in Laos and the realisation of value from the Company's other mineral assets.

Results from Operations

During the period the Company recorded a loss from operations of $2,343,249 (2005: loss of $1,589,085). While this is an increase over the previous year the Company has a sound capital structure and is in an excellent position to progress its mineral properties. At 30 June 2006 the Company had cash on hand of $4.294 million with a further $1.43 million raised from the issue of shares during July 2006.

Employees

At 30 June 2006 the Company had one employee (2005: 2 employees).

Review of Operations

A review of operations of the Company is set out elsewhere in this report.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

Total contributed equity increased to $8,439,777 from $4,626,327, an increase of $3,813,450. This movement was achieved through the issue of 17,170,000 shares at an average of $0.22 each.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

On 5 July 2006 the Company issued 6,933,333 shares at $0.35 each to raise $2,426,667 ($1,000,000 of which had been prepaid in June 2006) and on 12 July 2006 the Company issued 2,500,000 options exercisable at $0.675 each which expire on 12 July 2009 as part consideration for support in a capital raising.

On 11 August 2006 the Company completed the sale of its Menzies Project to Regal Resources Limited for $550,000 cash, of which $200,000 was deferred for six months, and 3,000,000 fully paid shares in Regal Resources Limited.

On 15 August 2006 the Company reached agreement to sell its South African diamond projects to Paramount Mining Corporation for $30,000 cash and up to 6 million Paramount Mining Corporation shares.

No other matter or circumstance has arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial periods.

ENVIRONMENTAL ISSUES

The Company carries out mineral exploration at its various projects which are subject to environmental regulations under both Commonwealth and State legislation. During the financial year there has been no significant breach of these regulations.

REMUNERATION REPORT

This report outlines the remuneration arrangements in place for directors and executives of Rox Resources Limited (the Company).

Remuneration Philosophy

The performance of the Company depends upon the quality of its directors and executives. To prosper, the Company must attract, motivate and retain highly skilled directors and executives.

To this end, the Company embodies the following principles in its remuneration framework:

Provide competitive rewards to attract high calibre executives
Link executive rewards to shareholder value
Encouragement for directors to sacrifice a portion of their fees to acquire shares in the Company at market price

Remuneration Committee

The full Board acts as the Remuneration Committee and is responsible for determining and reviewing compensation arrangements for the directors, the Managing Director (MD) and the senior management team.

The Board assesses the appropriateness of the nature and amount of remuneration of directors and senior managers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team.

Remuneration Structure

In accordance with best practice corporate governance, the structure of non-executive director and senior manager remuneration is separate and distinct.

Non-Executive Director Remuneration

Objective

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

Structure

The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the directors as agreed. The latest determination was in 2004 when shareholders approved an aggregate remuneration of $150,000 per year.

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

Each director receives a fee for being a director of the Company. No additional fees are paid for each board committee on which a director sits.

Non-executive directors have long been encouraged by the Board to hold shares in the Company (purchased by the director on market). It is considered good governance for directors to have a stake in the Company whose board he or she sits. In addition long term incentives in the form of options may be awarded to non-executive directors, subject to shareholder approval, in a manner which aligns this element of remuneration with the creation of shareholder wealth. At the date of this report no long term incentive options have been issued to non-executive directors.

The remuneration of non-executive directors for the year ending 30/6/06 is detailed later in this report.

Senior Manager and Executive Director Remuneration

Objective

The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and so as to:

reward executives for company and individual performance against targets set by reference to appropriate benchmarks;
align the interests of executives with those of shareholders;
link reward with the strategic goals and performance of the Company; and
ensure total remuneration is competitive by market standards.

Structure

In determining the level and make-up of executive remuneration, the Board Committee engaged an external consultant to provide independent advice detailing market levels of remuneration for comparable executive roles.

Remuneration consists of the following key elements:

Fixed Remuneration
Variable Remuneration Long Term Incentive ("LTI")

Fixed Remuneration

Objective

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

Fixed remuneration is reviewed annually by the Board and the process consists of a review of individual performance, relevant comparative remuneration in the market and, where appropriate, external advice on policies and practices.

Structure

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

The fixed remuneration component of the most highly remunerated senior managers is detailed later in this report.

Variable Remuneration - Long Term Incentive ("LTI")

Objective

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

As such LTI grants are only made to executives who are able to influence the generation of shareholder wealth and thus have a direct impact on the Company's performance.

Structure

LTI grants to executives are delivered in the form of options.

The options, when issued to executives, will not be exercisable for a price less than the then current market price of the Company's shares and the Company may use a number of measures as the performance hurdle for the long term incentive plan. At the date of this report no LTI grants have been made to any executive.

Employment Contracts

The Managing Director, Mr Mulholland is employed under contract. The current employment contract commenced on 27 April 2004 and terminates on 27 April 2007, at which time the Company may chose to commence negotiation to enter into a new employment contract with Mr Mulholland. Under the terms of the present contact:

Mr Mulholland may resign from his position and thus terminate this contract by giving three months written notice.
The Company may terminate this employment agreement by providing three months' written notice. On termination on notice by the Company, the Company will pay Mr Mulholland an amount equal to the fixed component of his remuneration for the remainder of the term of the contract.
The Company may terminate the contract at any time without notice if serious misconduct has occurred. Where termination with cause occurs, the MD is only entitled to that portion of remuneration which is fixed, and only up to the date of termination. On termination with cause any unvested options will immediately be forfeited.

Relationship of rewards to performance

Currently there are no specific performance conditions in relation to remuneration, however the stock price for options, when awarded, is not less than the then current market price of the Company's shares traded on Australian Stock Exchange. As a result a reward is only provided to option holders if there is an increase in the Company's share price. This provides for a direct correlation between an increase in shareholder wealth and rewards to option holders.

Directors and Executive Remuneration for the Year Ended 30 June 2006

Details of the nature and amount of each element of the emolument of each director and executive of the Company are as follows:

		Short-TermSalary & Fees		Short-TermOther 2		Post EmploymentSuperannuation		Share-BasedPayments	Total
	2006	2005			2006	2005			2006	2005
DIRECTORS
M Blakiston 1	22,500	30,000	$\mathbf{r}$		10,200	2,700	۰		32,700	32,700
A Cowden	35,000	35,000	$\mathbf{r}$		3.150	3,150	۰	$\overline{\phantom{a}}$	38,150	38,150
Mulholland	183,480	183,480	$\mathbf{r}$	$\mathbf{r}$	16,513	16,513	۰	$\overline{\phantom{a}}$	199,993	199,993
EXECUTIVES
B Dickson 2			90,000	90,000			۰		90,000	90,000

1. Chatsworth Stirling Pty Ltd and Emerald Corporation Pty Ltd trading as Black Swan Consulting, companies in which Mr Blakiston is a shareholder and director, received fees totalling $8,000 and $16,000 respectively for corporate advice. In addition Blakiston & Crabb, an entity of which Mr Blakiston is a partner, received fees totalling $38,294 for legal advice.
1. Mr Dickson did not receive any executive remuneration. Coolform Investments Pty Ltd, a company in which Mr Dickson is a director and shareholder, received fees totalling $90,000 for the provision of services.

DIRECTORS' MEETINGS

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

	Directors' Normal Meetings	Directors' Audit Meetings
Number of meetings held:	11
Number of meetings attended:
A Cowden	11
M Blakiston	10	2
Mulholland	11

Committee Membership

As at the date of this report, the Company does not have separately constituted Audit, Nomination and Remuneration Committees. The full board acts as those committees under specific charters.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The Company has made an agreement to indemnify all the directors of the Company against all losses or liabilities incurred by each director in their capacity as directors of the Company. The Company did not make any payments for premiums for directors and officers insurance during the financial year.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Likely developments in the operations of the Company and the expected results of those operations in future financial years have not been included in this report as the directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in unreasonable prejudice to the Company.

SHARE OPTIONS

At the date of this report and at the reporting date there were 12,550,000 unissued shares under options. During the year 400,000 options lapsed. Refer to note 15 of the Financial Statements for further details on options outstanding.

Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate or in the interest issue of any other registered scheme.

AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES

Section 307C of the Corporations Act 2001 requires the Company's auditors to provide the directors of Rox Resources Limited with an Independence Declaration in relation to the audit of the full-year financial report. This report has been received and is attached to the Directors' Report.

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

Ernst & Young received or are due to receive the following amounts for the provision of non-audit services: Tax compliance services $2,189

Signed in accordance with a resolution of the directors.

First Crud

A. COWDEN Chairman Perth, 29 September 2006

AUDITORS INDEPENDENCE DECLARATION

ELLERNST & YOUNG

■ The Ernst & Young Building 11 Models Bay Road Perih WA 6000 Australia

GPO Box M939 Peth WA 6843 ■ Tef 61 8 9429 2222 100 - 01 0 7427 2436- Tax - 61 8 9429 2436

Auditor's Independence Declaration to the Directors of Rox Resources Limited

In relation to our audit of the financial report of Rox Resources Limited for the financial year ended 30 June 2006, 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.

Const + Tony

Ernst & Young

$7.74$

V W Tidy Partner Perth Date: 29 September 2006

CORPORATE GOVERNANCE

Since the introduction of the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations ("ASX Principles and Recommendations"), Rox Resources Limited ("Company") has made it a priority to adopt systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised in this report. Commensurate with the spirit of the ASX Principles and Recommendations, the Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for corporate governance practices, taking into account factors such as the size of the Company and the Board, resources available and activities of the Company. Where, after due consideration, the Company's corporate governance practices depart from the ASX Principles and Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own practice.

Further information about the Company's corporate governance practices is set out on the Company's website at www.roxresources.com.au. In accordance with the ASX Principles and Recommendations, information published on the Company's website includes charters (for the board and its sub-committees). the Company's code of conduct and other policies and procedures relating to the Board and its responsibilities.

EXPLANATIONS FOR DEPARTURES FROM BEST PRACTICE RECOMMENDATIONS

Principles 2 & 9

Recommendations 2.4 and 9.2: The Board should establish a Nomination Committee and a Remuneration Committee

Notification of Departure

There is no separate nomination or remuneration committee.

Explanation for Departure

The full Board considers those matters that would usually be the responsibility of a nomination committee or remuneration committee. The composition of the Board does not make the establishment of separate committees practicable and the Board considers that no efficiencies or other benefits would be gained by doing so. The Board has adopted respective Nomination and Remuneration Charters, which it applies when convening as the relevant committee.

Principle 4

Recommendation 4.2: The Board should establish an Audit Committee Recommendation: 4.3: Structure of the Audit Committee

Notification of Departure

A separate audit committee has not been formed.

Explanation for Departure

The composition of the Board is not suitable for the formation of an audit sub-committee, and neither would this be considered necessary to ensure integrity in financial reporting. The Board has adopted, and applies, an Audit Committee Charter, and the independent directors are available to meet separately with the external auditor should this be considered necessary.

NOMINATION COMMITTEE

The full Board carries out the role of the nomination committee. The full Board did not officially convene as a nomination committee during the Reporting Period.

AUDIT COMMITTEE

The full Board carries out the role of the audit committee. In its capacity as the Audit Committee, the Board held two meetings during the Reporting Period and all members attended.

The qualifications of each director are set out in the Directors Report. All meet the tests of financial literacy, financial expertise and industry knowledge.

REMUNERATION COMMITTEE

Company's Remuneration Policies

Details of remuneration, including the Company's policy on remuneration, are contained in the "Remuneration Report" which forms of part of the Directors' Report.

Names of Remuneration Committee Members and their attendance at Committee Meetings

The full Board carries out the roll of the Remuneration Committee. The full Board did not officially convene as a Remuneration Committee during the Reporting Period.

OTHER

Skills, Experience, Expertise and term of office of each Director

A profile of each director containing the skills, experience, expertise and term of office of each director is set out in the Directors' Report.

Identification of Independent Directors

In considering independence of directors, the Board refers to the criteria for independence as recommended by the ASX. To the extent that it is necessary for the Board to consider issues of materiality, the Board refers to the thresholds for qualitative and quantitative materiality as adopted by the Board and contained in the Statement of Board and Management Functions, which is disclosed in full on the Company's website.

The Board considers Dr Cowden and Mr Blakiston to be independent.

In the interests of disclosure, Mr Blakiston is a principal of the firm Blakiston & Crabb. Blakiston & Crabb have been the main provider of legal services to the Company. However, this relationship does not cause relevant materiality thresholds to be exceeded from the perspective of either the Company or Mr Blakiston.

During the Reporting Period Dr Alistair Cowden had an interest of 8% of the shares in the Company, currently 4.6%, and therefore does not fit within paragraph 1 of the ASX's independence criteria (which

CORPORATE GOVERNANCE

defines a "substantial" shareholding as being in excess of 5%). The Board notes that Dr Cowden's shareholding only marginally exceeded this threshold, and notes that Dr Cowden does not have a controlling share in the Company. For these reasons the Board considers Dr Cowden to be independent.

Statement concerning availability of Independent Professional Advice

If a director considers it necessary to obtain independent professional advice to properly discharge the responsibility of his/her office as a director, then, provided the director first obtains approval for incurring such expense from the chairperson, the Company will pay the reasonable expenses associated with obtaining such advice.

Confirmation whether performance Evaluation of the Board and its members have taken place and how conducted

Each year the Board undertakes an evaluation of its own performance during the year. Board members are required to complete a questionnaire regarding individual knowledge, satisfaction, reporting and performance on a range of topics that are responsibilities of the Board. Each director was required to rank performance according to a defined scale for each activity or area. Results of the questionnaires were collated and statistically analysed to rank collective board performance against each topic. Comparative analysis between individual director response and the overall board response was completed. Once the analysis was completed the Chairman reviewed the results with each director. In addition, the Board reviewed and discussed the outcomes of the performance review and implemented a range of initiatives to address significant issues where improvement could be monitored. In addition to the collective review, directors also discussed specific issues where the assessment by directors had been significantly different to the collective mean assessment. These strategies allow the Board's performance to be measured against both measurable and qualitative indicators.

The Board reviews the Managing Director and key executive performances annually against the Company's performance objectives and prepares a report to the Remuneration Committee outlining its assessment.

Existence and Terms of any Schemes for Retirement Benefits for Non-Executive Directors

There are no termination or retirement benefits for non-executive directors.

INCOME STATEMENT For the Year Ended 30 June 2006

Continuing Operations	Notes	2006$($ $)	2005$($ $)
Revenues	3	88,610	133,774
Depreciation	3(b)	(7,380)	(6, 875)
Other expenses	$3(c)$ , (d)	(2,424,479)	(1,715,984)
Loss before income tax expense		(2,343,249)	(1,589,085)
Income tax expense	4
Net loss attributable to members of RoxResources Limited	17	(2,343,249)	(1,589,085)
Basic loss per share (cents per share)	7	(6.1)	(4.9)
Diluted loss per share (cents per share)		(6.1)	(4.9)

BALANCE SHEET As at 30 June 2006

	Notes	2006(5)	2005(3)
Current Assets
Cash and cash equivalents	8	4,294,432	1,891,384
Trade and other receivables	9	7,442
Prepayments		1,014	1,159
Total Current Assets		4,302,888	1,892,543
Non-Current Assets
Plant and equipment	10	12,295	16,412
Other financial assets	11	104,500	104,500
Exploration and evaluation	12	1,339,216	1,057,347
Total Non-Current Assets		1,456,011	1,178,259
TOTAL ASSETS		5,758,899	3,070,802
Current Liabilities
Trade and other payables	13	1,176,534	88,111
Provisions	14	15,525	9,880
Total Current Liabilities		1,192,059	97,991
TOTAL LIABILITIES		1,192,059	97,991
NET ASSETS		4,566,840	2,972,811
EQUITY
Contributed equity	15	8,439,777	4,626,327
Reserves	15	123,828
Accumulated losses	17	(3,996,765)	(1,653,516)
TOTAL EQUITY		4,566,840	2,972,811

CASH FLOW STATEMENT For the Year Ended 30 June 2006

	Note	2006$($ $)	2005(5)
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received		88,610	133,774
Payments to suppliers and employees		(835,909)	(483, 587)
Expenditure on mineral interests		(1,517,389)	(950,121)
Net cash used in operating activities	8(b)	(2,264,688)	(1, 299, 934)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from equipment sales			500
Purchase of equipment		(3,264)	(9,707)
Purchase of mineral tenements			(57, 347)
Security deposits			(104, 500)
Net cash used in investing activities		(3,264)	(171, 054)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary shares		3,880,000
Share issue costs		(209,000)
Payment for shares to be issued		1,000,000
Net cash provided by financing activities		4,671,000
Net increase (decrease) in cash and cash equivalents		2,403,048	(1,470,988)
Cash and cash equivalents at beginning of period		1,891,384	3,362,372
Cash and cash equivalents at end of period	8(a)	4,294,432	1,891,384

STATEMENT OF CHANGES IN EQUITY For the Year Ended 30 June 2006

	Issued Capital	Share OptionReserve	AccumulatedLosses	Total
	$	S		$
At 1 July 2004	4,626,327		(64, 431)	4,561,896
Loss for the year			(1,589,085)	(1,589,085)
Total recognised income and expense forthe year			(1,589,085)	(1,589,085)
At 30 June 2005	4,626,327		(1,653,516)	2,972,811

At 1 July 2005	4,626,327		(1,653,516)	2,972,811
Loss for the year			(2,343,249)	(2,343,249)
Total recognised income and expense forthe year			(2,343,249)	(2,343,249)
Issue of share capital	4,022,450			4,022,450
Options issued - projects		123,828		123,828
Cost of share issue	(209,000)			(209,000)
At 30 June 2006	8,439,777	123,828	(3,996,765)	4,566,840

NOTE1 SUMMARY OF SIGNIFICANT ACCOUNTS POLICIES

Corporate Information

The financial report of Rox Resources Limited (the Company) for the year ended 30 June 2006 was authorised for issue in accordance with a resolution of the directors on 28 September 2006.

Rox Resources Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian stock exchange.

(a) Basis of Preparation

The financial report is a general-purposed financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report has also been prepared on a historical cost basis. The financial report is presented in Australian dollars.

As a result of the uncertainties inherent in business and other activities, certain items in a financial report cannot be measured with precision but can only be estimated. The estimation process involves best estimates based on the latest information available.

During the year the Company acquired Rox (Laos) Pty Ltd as a 100% controlled entity. The group comprising Rox Resources Limited and Rox (Laos) Pty Ltd is not considered to be a reporting entity as Rox (Laos) Pty Ltd has not traded, therefore consolidated accounts have not been prepared.

(b) Statement of Compliance

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

This is the first report prepared based on AIFRS and comparatives for the year ended 30 June 2005 have been restated accordingly except for the adoption of AASB 132 Financial Instruments: Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and Measurement. The Company has adopted the exemption under AASB 1 Fist-time Adoption of Australian Equivalents to International Financial Reporting Standards from having to apply AASB 132 and AASB 139 to the comparative period. Reconciliations of AIFRS equity and profit for 30 June 2005 to the balances reported in the 30 June 2005 financial report and at transition to AIFRS are detailed in note 24.

Australian accounting standards that have recently been issued or amended but are not yet effective have not been adopted for the annual reporting period ending 30 June 2006.

AASBAmendment	Affected Standard(s)	Nature of change toaccounting policy	Applicationdate ofstandard*	Applicationdate forCompany
2004-3	AASB 1: First Time Adoption of IFRSAASB101 Presentation of FinancialStatementsAASB 124 Related Party Disclosures	No change to accountingpolicy required. Thereforeno impact	1 January 2006	1 July 2006
2005-1	AASB 139: Financial Instruments:Recognition and Measurement	No change to accountingpolicy required. Thereforeno impact	1 January 2006	1 July 2006
2005-5	AASB 1: First-time adoption ofAIFRS, AASB 139: FinancialInstruments: Recognition andMeasurement	No change to accountingpolicy required. Thereforeno impact	1 January 2006	1 July 2006

SUMMARY OF SIGNIFICANT ACCOUNTS POLICIES (cont'd) NOTE1

AASBAmendment	Affected Standard(s)	Nature of change toaccounting policy	Applicationdate ofstandard*	Applicationdate forCompany
2005-6	AASB 3: Business Combinations	No change to accountingpolicy required. Thereforeno impact	1 January 2006	1 July 2006
2005-10	AASB 132: Financial Instruments:Disclosure and Presentation AASB101: Presentation of FinancialStatements, AASB 114: SegmentReporting, AASB 117: Leases, AASB133: Earnings per Share, AASB 139:Financial Instruments: Recognitionand Measurement, AASB 1: First-time adoption of AIFRS, AASB 4:Insurance Contracts, AASB 1023:General Insurance Contracts andAASB 1038: Life Insurance Contracts	No change to accountingpolicy required. Thereforeno impact	1 January 2007	1 July 2007
2006-1	AASB 121: The Effects of Change inForeign Currency Rates	No change to accountingpolicy required. Thereforeno impact	1 January 2006	1 July 2006
New Standard	AASB 7: Financial Instruments:Disclosures	No change to accountingpolicy required. Thereforeno impact	1 January 2007	1 July 2007
New Standard	AASB 119: Employee Benefits	No change to accountingpolicy required. Thereforeno impact	1 January 2007	1 July 2007
4	UIG 4: Determining whether anarrangement contains a lease	No change in accountingpolicy required. Thereforeno impact	1 January 2006	1 July 2006
8	UIG 8: Scope of AASB 2	No change to accountingpolicy required. Thereforeno impact	1 May 2006	1 July 2007

* Application date is for the annual reporting periods beginning on or after the date shown in the above table.

The following amendments are not applicable to the Company and therefore have no impact.

AASB	Affected Standard(s)
Amendment
2005-4	AASB 139: Financial Instruments: Recognition and Measurement, AASB 132: Financial Instruments:
	Disclosure and Presentation, AASB 1: First-time adoption of AIFRS, AASB 1023: General Insurance
	Contracts and AASB 1038: Life Insurance Contracts
2005-9	AASB 4: Insurance Contracts, AASB 1023: General Insurance Contracts, AASB 139: Financial
	Instruments: Recognition and Measurement and AASB 132: Financial Instruments: Disclosure and
	Presentation
5.	UIG5: Rights to Interests in Decommissioning, Restoration and Environmental Rehabilitation Funds
7	UIG 7: Applying the Restatement Approach under AASB 129: Financial Reporting in Hyperinflationary
	Economics
9	UIG 9: Reassessment of Embedded Derivates

NOTE1 SUMMARY OF SIGNIFICANT ACCOUNTS POLICIES (cont'd)

$(c)$ Summary of significant accounting policies

Significant Accounting Judgements, Estimates and Assumptions $(i)$

Significant accounting judgements

In the process of applying the Company's accounting policies management has made the following significant accounting judgements that have affected the financial statements.

Exploration and Evaluation

The Company's accounting policy for exploration and evaluation is set out below. The application of this policy necessarily requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of reserves have been found. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised expenditure under our policy, we conclude that we are unlikely to recover the expenditure by future exploitation or sale, then the relevant capitalised amount will be written off to the Income Statement.

$(ii)$ Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and shortterm deposits with an original maturity of three months or less.

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

$(iii)$ Deferred Exploration and Evaluation Expenditure

The Company has adopted AASB6 Exploration for and Evaluation of Mineral Resources, the Australian equivalent to IFRS6, in preparing its financial statements.

Costs arising from exploration and evaluation activities are carried forward provided such costs are expected to be recouped through successful development, or by sale, or where exploration and evaluation activities have not, at balance date, reached a stage to allow a reasonable assessment regarding the existence of economically recoverable reserves.

Costs carried forward in respect of area of interest that is abandoned are written off in the year in which the decision to abandon is made. Costs incurred on areas where rights of tenure are not yet granted are written off as incurred.

Trade and other payables $(iv)$

The Company has elected to apply the option available under AASB 1 of adopting AASB 132 and AASB 139 from 1 July 2005. Outlined below are the relevant accounting policies for trade and other payables applicable for the years ending 30 June 2006 and 30 June 2005.

Accounting Policies Applicable for the Year Ending 30 June 2006

Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.

Accounting Policies Applicable for the Year Ended 30 June 2005

Trade payables and other payables are carried at costs which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed. Payables to related parties are carried out at the principal amount.

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTS POLICIES (cont'd)

$(v)$ Issued capital

Ordinary share capital is recognised at the fair value of the consideration received by the Company.

Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction, net of tax, of the share proceeds received.

Income Tax $(vi)$

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and laws used to compute the amount are those that are enacted or substantially enacted by the balance sheet date.

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

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

except where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries. associates and interest in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

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

except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interest in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

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

Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

NOTE1 SUMMARY OF SIGNIFICANT ACCOUNTS POLICIES (cont'd)

Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the preferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

Trade and other receivables $(vi)$

The Company has elected to apply the option available under AASB 1 of adopting AASB 132 and AASB 139 from 1 July 2005. Outlined below are the relevant accounting policies for trade and other receivables applicable for the years ending 30 June 2006 and 30 June 2005.

Accounting policies applicable for the year ending 30 June 2006

Trade receivables generally have 30 day terms and are recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

Accounting policies applicable for the year ending 30 June 2005

Trade receivables were recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.

$(vii)$ Plant and equipment

All classes of plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation

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

	2006	2005
Computers	3 years	3 years
Office Equipment	10 years	10 years
Vehicles	10 years	10 years

Impairment

The carrying values of plant and equipment are reviewed for impairment at each balance date, with recoverable amount being estimated when events or changes in circumstances indicate the carrying value may not be recoverable.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its fair value.

An impairment exists when the carrying values of an asset or cash generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.

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

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the period the item is derecognised.

$(vii)$ Employee Benefits

Provision is made for the employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave, sick leave and long service leave.

Liabilities arising in respect of wages and salaries, annual leave, sick leave and other employee benefits expected to be settled within 12 months of the reporting date are measured at the nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the market vield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, are used.

Revenue Recognition $(ix)$

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Interest

The Company has elected to apply the option available under AASB1 of adopting AASB132 and AASB139 from 1 July 2005. Outlined below are the relevant accounting policies for interest income applicable for the years ending 30 June 2006 and 30 June 2005.

Accounting Policies Applicable for the Year Ending 30 June 2006

Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

Accounting Policies Applicable for the Year Ending 30 June 2005 Revenue is recognised when control of the right to receive the interest payment passes to the Company.

$(x)$ Leases

Leases are classified at the inception as either operating or finance leases, based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

NOTE1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

Operating leases

The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense on a straight-line basis.

Contingent rentals are recognised as an expense in the financial year in which they are incurred.

$(xi)$ Impairment of Assets

At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

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

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset.

Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset.

An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

Goods and Service Tax (GST) $(xii)$

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

where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.

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

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

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

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(xiii) Earnings Per Share
- $(i)$ Basic Earnings Per Share - Basic earnings per share is determined by dividing the profit from ordinary activities after related income tax expense by the weighted average number of ordinary shares outstanding during the financial year.
- Diluted Earnings Per Share Diluted EPS is calculated as net profit attributable to $(ii)$ members, adjusted for:
  - costs of servicing equity (other than dividends);
  - the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
  - other discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

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

(xiv) Share based payment transactions

The Company provides benefits to employees (including directors) of the Company in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares ('equity-settled transactions').

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.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Rox Resources Limited ('marker conditions').

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 balance 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 transactions a result of the modification, as measured at the date of modification.

NOTE1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not vet 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 modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

(xv) Foreign Currency

The functional currency of the Company is measured using the currency of the primary economic environment in which it operates, being Australia. The financial statements are presented in Australian dollars.

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

NOTE2 SEGMENT INFORMATION

The Company operates as a mineral exploration company in Western Australia, South Africa and Laos and these are the primary segments for reporting purposes.

		Australia	South Africa		Laos		Total
	2006	2005	2006	2005	2006	2005	2006	2005
InterestRevenue	88.610	133,774	$\overline{\phantom{a}}$				88.610	133,774
Result	(762, 790)	(1, 188, 566)	(518.835)	(243, 539)	(1,061,624)	(156.980)	(2,343,249)	(1,589,085)
Assets	5,492,621	3,070,802	266,278				5.758.899	3,070,802
Liabilities	1,064,101	55,156	1.600	24.581	126.358	18.254	1.192.059	97.991
Depreciation	$^{\prime}$ .380	6.875	$\overline{\phantom{a}}$				7,380	6,875

		Australia	South AfricaLaos		Total
Cash FlowInformation	2006	2005	2006	2005	2006	2005	2006	2005
Net cashflow fromoperatingactivities	(761,910)	(942, 251)	(540, 048)	(243, 539)	(962, 730)	(114.144)	(2,264,688)	(1,299,934)
Net cashflow frominvestingactivities	(3,264)	(171, 054)	$\overline{\phantom{a}}$	u.	A.		(3,264)	(171, 054)
Net cashflow fromfinancingactivities	4,671,000		$\mathbf{a}$		$\overline{\phantom{a}}$		4,671,000

		2006(3)	2005$($ $)
NOTE 3	REVENUE AND EXPENSES FROMCONTINUING OPERATIONS
	(a) Revenue from non-operating activities
	Bank interest received	88,610	133,774
(b) Depreciation		7,380	6,875
	(c) Other expenses from ordinary activities
	Corporate expenses	369,767	197,383
	Occupancy and related expenses	102,368	90,978
	Exploration expenditure expensed during the periodProvision for impairment of tenement	1,580,459	453,784777,022
Sub total		2,052,594	1,519,167
	(d) Employee benefits expense
	Salaries and wages	353,910	158,554
	Superannuation	17,975	38,263
		371,885	196,817
		2,424,479	1,715,984
NOTE 4	INCOME TAX
	The major components of income tax expenses are:
	Income Statement
	Current Income Tax
	Current income tax charge	251,755	281,993
	Current income benefit not recognised	(251, 755)	(281, 993)
	Deferred Income Tax
	Relating to origination and reversal of temporary
differences	Deferred income tax charge not recognised	(29, 286)29,286	(141, 203)141,203

	Income tax expense reported in the income
statement

		Notes	2006	2005
			$($ $)	$($)$
NOTE 4	INCOME TAX (cont'd)

A reconciliation between tax expense and the product of accounting profit before income tax multiplied by the Company's applicable income tax rate is as follows:

Accounting loss before tax from continuingoperations			(2,343,249)	(1,589,085)
Loss before tax from discontinued operationsAccounting loss before income tax			(2, 343, 249)	(1,589,085)
At the Company's statutory income tax rate of 30%			(702, 975)	(476, 726)
Foreign exploration expenditure not deductible			474,138	136,135
Provision for tenement dimunition				233,107
Other non-deductible expenses			12,394	10,120
Other			(6,026)	(43, 426)
Tax losses not brought to account			222,469	140,790
Income tax expense reported in the incomestatement
	BALANCE SHEET		INCOME STATEMENT
	2006(5)	2005$($ $)	2006(3)	2005$($ $)
Deferred income taxDeferred income tax at 30 June relatesto the following:
Deferred tax liabilities
Prepayments	(304)	(348)	44	(348)
Plant & equipmentExploration tenements	(548)(550, 297)	(926)(550, 297)	378	1,471(164, 052)
Recognition of losses to
offset future taxable income	551,149	551,571

Deferred tax assets
Accrued audit feesShare issue costs	3,00096,866	1,50070,352	(1,500)	23,450
Provision for annual leave	4,658	2,964	(26, 514)(1,694)	(1, 724)
Revenue tax losses	961,156	709,401	(251, 755)	(281, 993)
Deferred tax assets not brought to
account as realisation is not
probable	(1,065,680)	(784, 217)
Current year losses not
recognised			251,755	281,993
Deferred tax (income)/expense			(29, 286)	(141, 203)

Notes
--------------

2006 $(5)$

2005

$(5)$

NOTE 4 INCOME TAX (cont'd)

Potential future income tax benefits attributable to tax losses carried forward have not been brought to account at 30 June 2006 because directors do not believe it is appropriate to regard realisation of the future tax benefit as probable. These benefits will only be obtained if:

the Company derives future assessable income of a nature and of an amount sufficient to enable the ${ii}$ benefit from the losses and deductions to be released;
the Company continues to comply with the conditions for deductibility imposed by the law; and $(ii)$
(iii) no changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the losses.

NOTE5 DIRECTOR AND EXECUTIVE DISCLOSURES

(a) Details of Key Management Personnel

Alistair Cowden	Non-executive Chairman, appointed 27 November 2003
an Mulholland.	Managing Director, appointed 27 November 2003
Michael Blakiston.	Non-executive Director, appointed 27 November 2003
Brett Dickson.	Company Secretary, appointed 27 November 2003

(b) Remuneration Philosophy

The performance of the Company depends upon the quality of its directors and executives. To prosper, the Company must attract, motivate and retain highly skilled directors and executives.

To this end, the Company embodies the following principles in its remuneration framework:

Provide competitive rewards to attract high calibre executives
Link executive rewards to shareholder value
Encouragement for directors to sacrifice a portion of their fees to acquire shares in the Company at market price

Remuneration Committee

Remuneration Structure

In accordance with best practice corporate governance, the structure of non-executive director and senior manager remuneration is separate and distinct.

NOTE 5 DIRECTOR AND EXECUTIVE DISCLOSURES (cont'd)

Non-Executive Director Remuneration

Objective

Structure

Each director receives a fee for being a director of the Company. No additional fees are paid for each board committee on which a director sits.

Non-executive directors have long been encouraged by the Board to hold shares in the Company (purchased by the director on market). It is considered good governance for directors to have a stake in the Company whose board he or she sits. In addition long term incentives in the form of options may be awarded to nonexecutive directors, subject to shareholder approval, in a manner which aligns this element of remuneration with the creation of shareholder wealth. At the date of this report no long term incentive options have been issued to non-executive directors.

The remuneration of non-executive directors for the year ending 30 June 2006 is detailed later in this report.

Senior Manager and Executive Director Remuneration

Objective

The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and so as to:

reward executives for company and individual performance against targets set by reference to ٠ appropriate benchmarks;
align the interests of executives with those of shareholders;
link reward with the strategic goals and performance of the Company; and
ensure total remuneration is competitive by market standards.

NOTE 5 DIRECTOR AND EXECUTIVE DISCLOSURES (cont'd)

Structure

Remuneration consists of the following key elements:

Fixed Remuneration
Variable Remuneration Long Term Incentive ("LTI")

Fixed Remuneration

Objective

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

Structure

The fixed remuneration component of the most highly remunerated senior managers is detailed later in this report.

Variable Remuneration - Long Term Incentive ("LTI")

Objective

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

As such LTI grants are only made to executives who are able to influence the generation of shareholder wealth and thus have a direct impact on the Company's performance.

Structure

LTI grants to executives are delivered in the form of options.

NOTE5 DIRECTOR AND EXECUTIVE DISCLOSURES (cont'd)

Employment Contracts

Mr Mulholland may resign from his position and thus terminate this contract by giving three months written notice.
The Company may terminate this employment agreement by providing three months' written notice. On termination on notice by the Company, the Company will pay Mr Mulholland an amount equal to the fixed component of his remuneration for the remainder of the term of the contract.
The Company may terminate the contract at any time without notice if serious misconduct has occurred. Where termination with causes occurs the MD is only entitled to that portion of remuneration which is fixed, and only up to the date of termination. On termination with cause any unvested options will immediately be forfeited.

(c) Key Management Personnel Compensation

Compensation Policy

The Board assesses the appropriateness of the nature and amount of emoluments of officers on a periodic basis by reference to the relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team.

	Short-TermSalary & Fees		Short-Term	Other $^2$		Post EmploymentSuperannuation	Payments	Share-Based	Total
	2006	2005			2006	2005			2006	2005
DIRECTORS
M Blakiston 1	22,500	30,000		$\overline{r}$	10,200	2,700	۰	۰	32,700	32,700
A Cowden	35,000	35,000			3,150	3.150	$\mathbf{r}$		38.150	38,150
Mulholland	183,480	183,480			16.513	16,513		$\overline{r}$	199,993	199.993
EXECUTIVES
B Dickson 2			90,000	90.000			$\overline{\phantom{a}}$		90.000	90,000
TOTAL	240,980	248.480	90,000	90.000	29.863	22.363			360,843	360.843

$\overline{a}$ Compensation of Key Management Personnel by Defail

NOTE5 DIRECTOR AND EXECUTIVE DISCLOSURES (cont'd)

1. Chatsworth Stirling Pty Ltd and Emerald Corporation Pty Ltd trading as Black Swan Consulting, companies in which Mr Blakiston is a shareholder and director, received fees totalling $8,000 and $16,000 respectively for corporate advice. In addition Blakiston & Crabb, an entity of which Mr Blakiston is a partner, received fees totalling $38,294 for legal advice.
1. Mr Dickson did not receive any executive remuneration. Coolform Investments Pty Ltd, a company in which Mr Dickson is a director and shareholder, received fees totalling $90,000 for the provision of services.
- $(ii)$ Compensation of Key Management Personnel by Category

2006S	20055
330,980	338,480
29,863	22,363
$\blacksquare$	$\blacksquare$
360,843	360,843

(d) Share holdings of Key Management Personnel

	Balance at 1 July2005	Granted asRemuneration	Purchased	Net ChangeOther	Balance at 30June 2006
A Cowden	2,570,000	$\sim$	50,000		2,620,000
M Blakiston	1,197,857	$\blacksquare$	$\blacksquare$	$\blacksquare$	1,197,857
I Mulholland	1,400,000	$\blacksquare$	$\mathbf{m}$		1,400,000
B Dickson	1,505,000	$\blacksquare$	$\blacksquare$		1,505,000
	6,672,857	$\blacksquare$	50,000		6,722,857

	Balance at 1 July2004	Granted asRemuneration	Purchased	Net ChangeOther	Balance at 30June 2005
A Cowden	2,470,000	$\sim$	100,000	$\overline{ }$	2,570,000
M Blakiston	1,197,857	$\blacksquare$			1,197,857
I Mulholland	1,350,000	$\blacksquare$	50,000		1,400,000
B Dickson	1,480,000	$\blacksquare$	25,000	$\blacksquare$	1,505,000
	6,497,857	$\blacksquare$	175,000		6,672,857

(e) Options holdings of Key Management Personnel

	Balance at 1 July2005	Granted asRemuneration	OptionsExercised	Net ChangeOther	Balance at 30June 2006
A Cowden	1,250,000	$\sim$	$\mathbf{m}$	$\mathbf{m}$	1,250,000
M Blakiston	1,000,000	$\mathbf{r}$	$\blacksquare$	$\blacksquare$	1,000,000
I Mulholland	3,000,000	$\sim$	$\blacksquare$	$\blacksquare$	3,000,000
B Dickson	750,000	$\overline{\phantom{a}}$	$\blacksquare$	$\blacksquare$	750,000
	6,000,000		$\sim$		6,000,000

NOTE5 DIRECTOR AND EXECUTIVE DISCLOSURES (cont'd)

	Balance at 1 July2004	Granted asRemuneration	OptionsExercised	Net ChangeOther	Balance at 30June 2005
A Cowden	1,250,000	$\overline{a}$	$\blacksquare$	$\blacksquare$	1,250,000
M Blakiston	1,000,000	$\mathbf{r}$	$\blacksquare$	$\blacksquare$	1,000,000
I Mulholland	3,000,000	$\blacksquare$	$\blacksquare$	$\blacksquare$	3,000,000
B Dickson	750,000	$\blacksquare$	$\blacksquare$	$\blacksquare$	750,000
	6,000,000	$\blacksquare$	$\overline{\phantom{a}}$	$\sim$	6,000,000

All options held by key management personnel are fully vested and may be exercised any time until expiry. being 31 January 2009 for Directors and 30 April 2007 for Executives. No options held by key management personnel were granted, exercised, vested or lapsed during the year.

Other director related transactions $(f)$

The Company leases office facilities from Vulcan Resources Limited, a company which Dr Cowden and Mr Blakiston are directors. During the financial period an amount of $78,000 was paid for those facilities.

The above transaction was entered into on normal commercial terms

NOTE 6	AUDITOR'S REMUNERATION	2006$($ $)	2005$($ $)
	Remuneration of the auditor of the Company, Ernst &Young (Australia) for:
	Auditing and reviewing the financial report	31,725	13,750
	Taxation services	7,947	2,189
		39,672	15,939
NOTE 7	LOSS PER SHARE
share	The following reflects the income and share data usedin the calculation of basic and diluted earnings per
Net loss		(2,343,249)	(1,589,085)
Adjustments:- Nil
	- Earnings used in calculating basic and diluted
	earnings per share	(2,343,249)	(1,589,085)
	Weighted average number of ordinary shares used in
	calculating basic earnings per share	38,662,438	32,272,000
	Effective of dilutive securities:
- Share options (i)
	Adjusted weighted average number of ordinary shares
	used in calculating diluted earnings per share	38,662,438	32,272,000

(i) Share options are not dilutive as their exercise would have the impact of decreasing loss per share.

NOTE7 LOSS PER SHARE (cont'd)

Conversion, calls, subscriptions or issues after 30 June 2006

Since the end of the financial year no ordinary shares have been issued pursuant to the exercise of options.

On 5 July 2006 the Company issued 6,933,333 shares at $0.35 each to raise $2,426,667 and on 12 July 2006 the Company issued 2,500,000 options exercisable at $0.675 each which expire on 12 July 2009 as part consideration for support in capital raising.

There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of this financial report.

	NOTE 8CASH AND CASH EQUIVALENTS	2006(3)	2005$($ $)
(a)	Cash and cash equivalents	4,294,432	1,891,384
	Cash at bank earns interest at floating rates based on daily deposit rates
(b)	Reconciliation of net loss after income tax to netcash flow from operations:
	Net loss after Income Tax	2,343,249	1,589,085
	Adjustments for non-cash expense items
	Depreciation$\blacksquare$	(7,380)	(6, 875)
	Provision for employee benefits	(5,645)	(5,746)
	Provision for impairment of tenement		(777, 022)
	Changes in assets and liabilities
	Increase (decrease) in prepayments	(146)	1,159
	Increase in capitalised exploration$\blacksquare$	14,610	539,173
	Increase in receivables	7,442	7,997
	Increase in payables$\blacksquare$	(87, 442)	(47, 837)
	Cash out-flow from operations	2,264,688	1,299,934

(c) Non Cash Financing and Investing Activities During the year the Company issued 770,000 fully paid ordinary shares and 4,000,000 options exercisable at 20 cents by 30 June 2007 to purchase mineral tenements. Further information is provided in notes 15 and 16. There were no other non cash financing and investing activities during the year.

(d) The Company does not have any credit standby arrangements, used or unused loan facilities.

NOTE 9 TRADE AND OTHER RECEIVABLES

Trade Debtors

7.442

Terms and Conditions

Trade debtors are non-interest bearing and generally on 30 day terms.

		Notes	2006$($ $)	2005(3)
	NOTE 10 PLANT AND EQUIPMENT
	Equipment cost		26,748	23,485
	Accumulated depreciation		(14, 453)	(7,073)
		10(a)	12,295	16,412
(a)	Movements in plant and equipment
	At 1 July, net of accumulated depreciation$\blacksquare$		16,412	17,196
	Additions$\blacksquare$		3,263	6,591
	Disposals÷			(500)
	Depreciation÷		(7,380)	(6, 875)
	At 30 June, net of accumulated depreciation		12,295	16,412

NOTE 11 OTHER FINANCIAL ASSETS

Security deposits	104,500	104,500

Cash security deposits have been placed with the Company's bank to secure guarantees required to be put in place to cover environmental bonds placed with the Western Australia Department of Industry and Resources. The deposits are interest bearing with interest maturing each 180 days.

NOTE 12 EXPLORATION AND EVALUATION

Exploration expenditure
Areas of interest in exploration and evaluation phases
Balance at beginning of period	1,057,347	1,287,483
Acquired during the year	266,278	57.347
Expenditure incurred during the period	65,591	489,539
Expenditure reimbursement	(50,000)
Provisions for impairment		(777, 022)
	1,339,216	1,057,347

Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful development and commercial exploitation or, alternatively, sale of the respective areas.

NOTE 13 TRADE AND OTHER PAYABLES

Trade creditors and accruals (a)	176.534	88.111
Advance payments for share subscription	1.000.000	$\sim$
	1.176.534	88.111

Terms and Conditions $(a)$

Creditors, including related parties, are non-interest bearing and generally on 30 day terms.

	Notes	2006	2005
NOTE 14 PROVISIONS		(3)	$($ $)
Employee benefits	14(a)	15,525	9,880
Movements in Employee Benefits(a)
At 1 July		9,880	4,134
Additions		5,645	5,746
At 30 June		15,525	9,880
NOTE 15 CONTRIBUTED EQUITY AND RESERVES
(i) Contributed Equity
(a) Issued and paid up capital
Ordinary shares fully paid		8,439,777	4,626,327
(b) Movement in shares on issue
Issued and paid up capital - Ordinary shares fully paid
Ordinary shares at beginning of period - 32,272,000		4,626,327	4,626,327
Issue of 10,000,000 shares at $0.10 per share (net of
issue costs)		935,000
Issue of 770,000 shares at $0.185 to purchase mineral
tenements		142,450
Issue of 6,400,000 shares at $0.45 per share (net of
issue costs)		2,736,000
At reporting date: 49,442,000 ordinary shares		8,439,777	4,626,327

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

(c) Share Options

During the year 4,000,000 options exercisable at $0.20 and which expire on 30 June 2007 were issued as part consideration for the purchase of projects prospective for diamonds. Refer note 16B.

No other options were issued during the year and no options have been exercised at the date of this financial report. During the year 400,000 options lapsed.

At the end of the financial year there were 10,050,000 (2005: 6,450,000) unissued ordinary shares in respect of which options were outstanding.

(d) Terms and Conditions of Contributed Equity

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.

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

NOTE 15 CONTRIBUTED EQUITY AND RESERVES(cont'd)	2006(3)	2005$\left( \text{$}\right)$
(ii) Reserves
Reserves	123,828	123,828
(a) Share Option ReserveMovementsBalance at beginning of yearOptions issued - project acquisitionBalance at end of year	123,828123,828

Nature and Purpose of Reserves

Share Option Reserve

This reserve is used to record the value of equity benefits provided to unrelated parties for the acquisition of mineral exploration projects. Refer to note 16B for further details.

NOTE 16 SHARE BASED PAYMENTS

A. Directors and Employees

Employee Share Incentive Scheme $(i)$

An Employee Share Scheme (ESS) has been established where Rox Resources Limited may, at the discretion of directors, grant options over the ordinary shares of Rox Resources Limited to directors, executives and employees of the Company. The options, issued for nil consideration, are granted in accordance with performance quidelines established by the directors. The following illustrates the number, exercise prices and movements of share options issued pursuant to the ESS.

	2006		2005
	Number	ExercisePrice	Number	ExercisePrice
Outstanding at beginning of the year	1.200.000	0.20	1,200,000	0.20
Granted during the year	$\sim$
Exercised during the year			$\blacksquare$
Lapsed during the year	400,000	0.20	$\blacksquare$
Outstanding at the end of the year	800.000	0.20	1,200,000	0.20

All options are listed and expire on 30 April 2007 unless exercised earlier.

(ii) Other Share Options

Directors have been granted options in prior periods on terms and conditions disclosed in the Company's Prospectus dated 23 February 2004. No other options have been issued to directors and employees since that date other than those issued pursuant to the Company's ESS. The following illustrates the options issued to directors and employees other than through the ESS.

NOTE 16 SHARE BASED PAYMENTS (Cont'd)

	2006		2005
	Number	ExercisePrice	Number	ExercisePrice
Outstanding at beginning of the year	5.250.000	0.20	5,250,000	0.20
Granted during the year
Exercised during the year
Lapsed during the year	$\overline{\phantom{a}}$		$\sim$
Outstanding at the end of the year	5,250,000	0.20	5,250,000	0.20

All options are unlisted and expire on 30 June 2007 unless exercised earlier.

B. Unrelated Parties

Share options totalling 4,000,000 were granted to unrelated parties during the financial year as part consideration for the acquisition of projects in South Africa prospective for diamond exploration. The options have a number of preconditions to be met before they can be exercised. No other share options were issued during the year. The following table illustrates the number, exercise prices and movements in share options to unrelated parties during the year.

Outstanding at beginning of the year	$\overline{\phantom{a}}$		$\mathbf{r}$
Granted during the year	4,000,000	0.20	$\mathbf{m}$
Exercised during the year	$\overline{\phantom{a}}$		$\overline{\phantom{a}}$
Lapsed during the year	$\overline{\phantom{a}}$		$\blacksquare$
Outstanding at the end of the year	4,000,000	0.20	$\mathbf{m}$

All options are unlisted and expire on 30 June 2007 unless exercised earlier.

The fair value of the options granted during the year was $0.031. The fair value of these options is estimated at grant using the Black-Scholes methodology taking into account the terms and conditions upon which the options were granted.

The following table lists the inputs to the model used for the years ended 30 June 2005 and 30 June 2006.

	2006	2005
Expected Volatility (%)	95.6
Risk-free interest rate (%)	5.75
Expected life of options (days)	504
Option exercise price (cents)	20
Share price at date of grant (cents)	11

The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome. The expected life of the options is estimated to be to the last day on which the options may be exercised and may also not necessarily be the actual outcome.

NOTE 17 ACCUMULATED LOSSES	2006	2005
	(5)	$($ $)
Balance at beginning of year	1,653,516	64.431
Net loss attributable to members of Rox Resources Limited	2.343.249	1,589.085
Balance at end of year	3.996.765	1,653,516

No dividends were paid during or since the financial year. The amount of franking credits available are nil $(2005: nil)$

NOTE 18 EXPENDITURE COMMITMENTS

During the 2005/06 financial year, the Company had entered into certain obligations to perform minimum work on mineral tenements held. The Company was required to meet tenement lease rentals and Department of Petroleum and Minerals minimum expenditure requirements which for the 2005/06 financial year amount to $349,865. As a result of the sale of the Company's Menzies project, the Company no longer has any commitments in this area.

NOTE 19 CONTINGENT LIABILITIES

Rehabilitation

The Company has placed mining bonds with the Western Australia Department of Industry and Resources totalling $104,500 to secure the Company's obligation to complete rehabilitation on certain mining leases. These bonds will be released upon the completion of all rehabilitation requirements in regard to the mining tenements at Menzies or by the sale by the Company of the project. The exact cost of rehabilitation is not known at this stage but may equal the total of the bonds put in place.

NOTE 20 EVENTS SUBSEQUENT TO REPORTING DATE

On 5 July 2006 the Company issued 6,933,333 shares at $0.35 each to raise $2,426,667 and on 12 July 2006 the Company issued 2,500,000 options exercisable at $0,675 each which expire on 12 July 2009 as part consideration for support in capital raising.

On 11 August 2006 the Company completed the sale of its Menzies project to Regal Resources Limited. Consideration received for this sale was $350,000 payable immediately, $200,000 payable by 11 February 2007 and 3,000,000 shares in Regal Resources Limited with a fair value of $600,000. The estimated financial effect of this transaction will be to:

Increase investments by $600,000, Increase cash by $550,000, Increase profits by $77,000, and Decrease capitalised exploration expenditure by $1,073,000

On 15 August 2006 the Company reached agreement to sell its South African diamond projects to Paramount Mining Corporation. Consideration for this transaction will be $30,000 cash payment plus up to 6 million Paramount Mining Corporation shares. The ultimate number of Paramount Mining Corporation shares to be issued is dependent upon a number of preconditions and until those are or are not met the ultimate financial effect of this transaction cannot be estimated.

There has been no other event or circumstance since balance date which may have an effect on this financial report.

NOTE 21 RELATED PARTY TRANSACTIONS

Other Director Related Transactions

Chatsworth Stirling Pty Ltd and Emerald Corporation Pty Ltd trading as Black Swan Consulting, companies in which Mr Blakiston is a shareholder and director, received fees totalling $8,000 and $16,000 respectively for

NOTE 21 RELATED PARTY TRANSACTIONS (cont'd)

corporate advice. In addition Blakiston & Crabb, an entity of which Mr Blakiston is a partner, received fees totalling $38,294 for legal advice.

Coolform Investments Pty Ltd, a company in which Mr Dickson is a director and shareholder, received fees totalling $90,000 for the provision of services.

The above transactions were entered into on normal commercial terms.

NOTE 22 FINANCIAL RISK MANAGEMENT AND OBJECTIVES

The Company's principal financial instruments comprise cash and cash management funds. The purpose of these instruments is to provide finance for the Company's exploration, administration and other operations. The Company has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.

Interest Rate Risk

The Company's exposure to the risk of changes in market interest rates relates primarily to the returns on its funds surplus cash which is invested on floating interest rates. At the current time the Company monitors its cash management accounts to ensure competitive market rates are paid.

Commodity Price Risk

The Company's exposure to price risk is minimal.

Credit Risk

The Company trades only with recognised, creditworthy third parties. There are no significant concentrations of credit risk within the Company.

Liquidity Risk

The Company's objective is to maintain a balance between continuing funding and flexibility through the use of resided capital.

NOTE 23 FINANCIAL INSTRUMENTS DISCLOSURE

(a) Interest Rate Risk

The Company's exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and liability, is as follows:

	2006
	Floating InterestRate	Non InterestBearing	Total	Weighted AverageInterest Rate
Financial Assets
Cash	4.292,907	1,525	4,294,432	5.3%
Trade and Other Receivables	$\overline{\phantom{a}}$	7.442	7,442	$\overline{\phantom{a}}$
Other Financial Assets	104,500	$\overline{\phantom{a}}$	104,500	4.9%
Total Financial Assets	4.397.407	8,967	4,406,374	5.3%
Financial Liabilities
Pavables	٠	1,176,534	1,176,534	$\overline{\phantom{a}}$
Total Financial Liabilities	$\bullet$	1,176,534	1,176,534	$\mathbf{u}$

NOTE 23 FINANCIAL INSTRUMENTS DISCLOSURE (cont'd)

	2005
	Floating InterestRate	Non InterestBearing	Total	Weighted AverageInterest Rate
Financial Assets
Cash	1,902,894	(11, 510)	1.891.384	4.5%
Trade and Other Receivables	$\overline{\phantom{a}}$	$\bullet$		$\overline{\phantom{a}}$
Other Financial Assets	104.500	$\omega$	104.500	5.3%
Total Financial Assets	2.007.394	(11, 510)	1,995,884	4.6%
Financial Liabilities
Payables		88.111	88,111
Total Financial Liabilities	$\overline{\phantom{a}}$	88.111	88,111

(b) Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount, net of any provisions for doubtful debts of those assets, as disclosed in the Balance Sheet and Notes to the Financial Statements. The Company does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the Company.

(c) Net Fair Values

For financial assets and liabilities the net fair value approximates their carrying value because of their short term to maturity.

No financial assets and financial liabilities are readily traded on organised markets in standardised form.

NOTE 24 IMPACT OF ADOPTING AASB EQUIVALENTS TO IFRS STANDARDS

For all periods up to and including the year ended 30 June 2005, the Company prepared its financial statements in accordance with Australian generally accepted accounting practice (AGAAP). These financial statements for the year ended 30 June 2006 are the first the Company is required to prepare in accordance with Australian equivalents to International Financial Reporting Standards (AIFRS).

Accordingly, the Company has prepared financial statements that comply with AIFRS applicable for periods beginning on or after 1 January 2005 and the significant accounting policies meeting those requirements are described in note 1. In preparing these financial statements, the Company has started from an opening balance sheet as at 1 July 2004, the Company's date of transition to AIFRS, and made those changes in accounting policies and other restatements required by AASB 1 First-time adoption of AIFRS.

This note explains the principal adjustments made by the Company in restating its AGAAP balance sheet as at 1 July 2004 and its previously published AGAAP financial statements for the year ended 30 June 2005.

Exemptions applied

AASB 1 allows first-time adopters certain exemptions from the general requirement to apply AIFRS retrospectively.

The Company has taken the following exemptions:

Comparative information for financial instruments is prepared in accordance with AGAAP and the Company has adopted AASB 132: Financial Instruments: Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and Measurement from 1 July 2005.

NOTE 24 IMPACT OF ADOPTING AASB EQUIVALENTS TO IFRS STANDARDS (cont'd)

AASB 3 Business Combinations has not been applied to acquisitions of subsidiaries or of interests in associates and joint ventures that occurred before 1 July 2004.
Cumulative currency translation differences for all foreign operations are deemed to be zero as at 1 July 2004.
AASB 2 Share-based Payment has not been applied to any equity instruments that were granted on or before 7 November 2002, nor has it been applied to equity instruments granted after 7 November 2002 that vested before 1 January 2005.

Explanation of material adjustments

There are no material differences between the Balance Sheet or the Income Statement under AIFRS and those presented under previous AGAAP.

There are no material differences between the Cash Flow statement presented under AIFRS and the Cash Flow statement presented under previous AGAAP.

In accordance with a resolution of the Directors of Rox Resources Limited. I state that:

In the opinion of the Directors: $\mathbf{1}$ .
- (a) The financial statements and notes of the Company are in accordance with the Corporations Act 2001, including:
  - giving a true and fair view of the Company's financial position as at 30 June 2006 and its $(i)$ performance for the year ended on that date; and
  - $(ii)$ complying with Accounting Standards and Corporations Regulations 2001; and
- there are reasonable grounds to believe that the Company will be able to pay its debts as and when $(b)$ they become due and payable.
This declaration is made after receiving the declarations required to be made to the directors in 2. accordance with section 295A of the Corporations Act 2001 for the financial period ending 30 June 2006.

On behalf of the Board

CLUB

Alistair Cowden Perth, 29 September 2006

INDEPENDENT AUDIT REPORT TO THE MEMBERS OF ROX RESOURCES LIMITED

ELLENSTRY YOU INC.

B The Frist & Young Beilding 11 Mounts Bay RoadPerth, WA 6000 Amalia

羅 Yell 61-8 9429-2222 Fax: 61 8 9429 24 B

GPO Box 84839 Peath WA 6843

Independent andit report to members of Rox Resources Limited

Scone

The financial report and directors' responsibility

The financial report comprises the balance sheet, income statement, statement of changes in equity, cash flow statement, accompanying notes to the financial statements, and the directors' declaration for Rox Resources Limited (the company), for the year ended 30 June 2006.

The directors of the company are responsible for preparing a financial report that gives a true and fair view of the financial position and performance of the company, and that complies with Accounting Standards in Australia, in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach

We conducted an independent audit of the financial report in order to express an opinion to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards in Australia, and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's financial position, and of its performance as represented by the results of its operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

We performed procedures to assess whether the substance of business transactions was accurately reflected in the financial report and the remuneration disclosures. These and our other procedures did not include consideration or judgement of the appropriateness or reasonableness of the business plans or strategies adopted by the directors and management of the company.

Independence

We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001. We have given to the directors of the company a written Auditor's independence Declaration a copy of which is included in the directors' report.

Liability limited by a scheme annroyed under Professional Standards Legislation

INDEPENDENT AUDIT REPORT TO THE MEMBERS OF ROX RESOURCES LIMITED

ELERNSTR YOU INC.

Audit opinion

In our opinion, the financial report of Rox Resources Ltd is in accordance with:

the Corporations Act 2001, including: $(a)$
- giving a true and fair view of the financial position of Rox Resources Ltd at 30 June 2006 and of $(i)$ its performance for the year ended on that date; and
- complying with Accounting Standards in Australia and the Corporations Regulations 2001; and $(ii)$

$(b)$ other mandatory financial reporting requirements in Australia.

$\epsilon_{\text{max}}$ + $\epsilon_{\text{max}}$

Ernst & Young

$7.74$

V W Tidy Partner Perth 29 September 2006

South African Diamond Projects

PROJECT	FARM	INTEREST	FILE NUMBER
Annex Klipfontein	AK 48	Alluvial Diamonds	NC 30/5/1/1/2/145 PR
Bulpan	Bulpan 51	Diamond General	NC 30/5/1/1/2/454 PR
	Witpan 52
	Smithsrust 53
Droogfontein	Droogfontein 62 Re	Diamond General	NC 30/5/1/1/2/455 PR
	Droogfontein 62 Ptn 13
Langleg	Langleg 55 RE and Ptn 1	Diamond General	NC 30/5/1/1/2/436 PR
Lendale	Lendale Farm 193	Diamond General	NC 30/5/1/1/2/1019 PR
	Lendale Farm 196
Pampoene Pan	Pampoene Pan 159	Diamond General	NC 30/5/1/1/2/088 PR
	Pampoene Pan 35
	Holpan 36
Vlakfontein	Vlakfontein 1173	Alluvial Diamonds	FS 30/5/1/1/2/15 PR
Williamstown	Farm 225 Re	Alluvial andKimberlite	NC 30/5/1/1/2/159 PR
		Diamonds
Zoutpansfontein	Zoutpansfontein 34 Re	Diamond General	NC 30/5/1/1/2/437 PR
	Slypklip 33
	Hanskopfontein 40
	Zoutpansfontein 34 Ptn24
Zoutpansfontein South	Zoutpansfontein 34 Pns11, 12, 13 & 17	Diamond General	NC 30/5/1/1/2/456 PR
	Zoutpansfontein 28
	Zoutpansfontein 34(?residual)
Harrisdale	Harrisdale 226 Re	Option forKimberliteDiamonds	NC 30/5/1/1/2/033 PR
Smithsdale	Zoutpansfontein 34 Ptn 2	Option forKimberliteDiamonds	MP 125/2003

Note that the Company has reached agreement to sell these tenements to Paramount Mining Corporation Limited

The following information was applicable as at 27 September 2006.

1. Shareholding

$(d)$

Distribution of Shareholders Number $(a)$

Category (size of Holding)	Number
1 - 1.000	5
1,001 - 5,000	122
5,001 - 10,000	161
10,001 - 100,000	417
100,001 and over	87

$(b)$ The number of shareholdings held in less than marketable parcel is twenty four.

$(c)$ Substantial Shareholder Notices have been provided by:

	Name	Number ofShares	% of IssuedShare Capital
	Deep Yellow Limited	2,000,000	3.54
	Top 20 shareholders
		Number of	% of Issued
	Name	Shares	Share Capital
1	Drumfrochar Pty Ltd	2,620,000	4.65
2	Bell Potter Nominees Ltd	2,021,400	3.59
3	Mr Hughes & Mr Munday (Deep Yellow Creds A/C)	2,000,000	3.55
4	RBC Dexia Investor Services Australia Nominees P/L	1,805,700	3.20
5	Mr Robert Anthony Healy	1,570,000	2.78
6	Elphi Pty Ltd	1407,321	2.50
7	Mr Ian Robert Mulholland	1,400,000	2.48
8	Mr Richard Fish	1,200,000	2.13
9	Residuum Nominees Pty Ltd	1,197,857	2.12
10	A & P White	1,185,400	2.10
11	Mr John Damian Kenny	1,131,545	2.01
12 2	Dyspo Pty Ltd	1,000,000	1.77
13	Fadmoor Pty Ltd	990,000	1.76
14	Invia Custodian Pty Ltd	885,000	1.57
15	Jasforce Pty Ltd	885,000	1.57
16	Valser Holdings Pty Ltd	769,541	1.37
17	Mr Brett Dickson (Family Account)	725,000	1.29
18	Capital Pro International Inc	724,587	1.29
19	Rocky Beach Pty Ltd	700,000	1.24
20	Georgina Dickson	692,279	1.23
		24,910,630	44.19

There is a total of 56,375,333 fully paid ordinary shares on issue, all of which are listed on the ASX. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Restricted Securities $(e)$

There are no restricted securities

AI assistant

ROX RESOURCES LIMITED — Annual Report 2006

65741_rns_2006-09-28_360c954f-ee73-49cb-a75d-7f66ae8a17db.pdf

ROX RESOURCES LIMITED ABN 53 107 202 602

ANNUAL REPORT

2006

CONTENTS

CORPORATE DIRECTORY

Directors:

Company Secretary:

Bankers:

Auditor:

Solicitor:

Stock Exchange:

Issued Capital:

Investor Relations:

Share Registry:

Principal & Registered Office:

HIGHLIGHTS

ACHIEVEMENTS FOR 2006

LAOS-LEAD & ZINC

SOUTH AFRICA - DIAMONDS

MENZIES - GOLD

CAPITAL RAISINGS

INCREASE IN MARKET CAPITALISATION

CHAIRMAN'S REVIEW

INTRODUCTION

EXPLORATION RESULTS

Rock Sampling

Soil Sampling

Geology

DRILLING RESULTS

Nam Yen Drill Plan

WORK PLANS

DIRECTORS

Names, Qualifications, Experience and Special Responsibilities

Mr Michael Blakiston (appointed Non-Executive Director 27/11/2003) - B.Juris. LLB

COMPANY SECRETARY

Mr Brett Dickson - B.Bus, CPA

Interest in the Share and Options of the Company

LOSS PER SHARE

DIVIDENDS

CORPORATE INFORMATION

Corporate Structure

Nature of Operations and Principal Activities

Results from Operations

Employees

Review of Operations

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

ENVIRONMENTAL ISSUES

REMUNERATION REPORT

Remuneration Philosophy

Remuneration Committee

Remuneration Structure

Non-Executive Director Remuneration

Objective

Structure

Senior Manager and Executive Director Remuneration

Objective

Structure

Fixed Remuneration

Objective

Structure

Variable Remuneration - Long Term Incentive ("LTI")

Objective

Structure

Employment Contracts

Relationship of rewards to performance

Directors and Executive Remuneration for the Year Ended 30 June 2006

DIRECTORS' MEETINGS

Committee Membership

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

SHARE OPTIONS

AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES

AUDITORS INDEPENDENCE DECLARATION

ELLERNST & YOUNG

Auditor's Independence Declaration to the Directors of Rox Resources Limited

CORPORATE GOVERNANCE

ROX RESOURCES LIMITED Annual Report 2006