SABRE RESOURCES LIMITED — Annual Report 2003

Sep 24, 2003

SABRE RESOURCES LTD.

ABN: 68 003 043 570

ANNUAL REPORT 2003

SBR Annual Report 2003.Doc

SABRE RESOURCES LTD CORPORATE DIRECTORY

Page No.
----------	--

Corporate Directory	1
Directors' Report	$\overline{2}$
Statement of Financial Performance	5
Statement of Financial Position	6
Statement of Cash Flows	7
Notes to the Financial Statements	8
Directors' Declaration	18
Independent Audit Report	19
Shareholder Information	21
Corporate Governance Statement	23

DIRECTORS

Robert John COLLINS - Resigned 18/08/2003

Alexander CLEMEN

Bruce R McCULLAGH

David Nathan ZUKERMAN - Appointed 18/08/2003

AUDITORS Stanton Partners 1 Havelock Street West Perth WA 6005

BANKERS National Australia Bank Kewdale Road Kewdale WA 6105

COMPANY SECRETARY Bruce R McCullagh

REGISTERED OFFICE 1st Floor, 8 Parliament Place West Perth WA 6005

Telephone:	(08) 9481 7833
Facsimile:	(08) 9481 7835
Email:	sabre@sabresources.com
Website:	www.sabresources.com

SHARE REGISTRY

Computershare Investor Services Level 2 Reserve Bank Building 45 St. Georges Terrace Perth WA 6000 GPO Box D182 Perth WA 6840 Investor Enquiries (08) 9323 2059 Telephone: $(08)$ 9323 2000 Facsimile: $(08)$ 9323 2096 perth.services@computershare.com.au

ASX code for shares: SBR

The Directors present their report of Sabre Resources Ltd ("the Company") for the year ended 30 June 2003.

DIRECTORS

The Directors of the Company during or since the end of the financial year are:-

Robert John Collins - resigned August 18 2003 Alexander Clemen Bruce Russell McCullagh David Nathan Zukerman - appointed August 18 2003

Shares of Sabre Resources Ltd held by Directors at June 30 2003:

B R McCullagh	20
R J Collins	20

PRINCIPAL ACTIVITIES

The principal activity of the Company is mineral exploration.

RESULTS

The operating loss for the financial year after providing for income tax amounted to $ 360,325 (2002: $729,276).

DIVIDENDS

Since the end of the previous financial year, no dividend has been declared or paid by the Company. The Directors do not recommend the payment of a dividend.

LIKELY DEVELOPMENTS

At the Annual General Meeting on 29 November 2001 shareholders approved the following resolution:-

"That the Directors of the Company be authorised and directed to seek opportunities and investments for the Company in industrial and technology sectors in addition to the resources sector."

The Board is now actively seeking suitable acquisitions to augment its current activities.

INFORMATION ON DIRECTORS

• $(a)$ Qualifications, experience and special responsibilities:-
  • Robert John COLLINS Dp.Acc $(i)$

Mr Collins was principal in his own accounting practice in Perth for over 20 years and has had extensive experience in financial and general commercial matters. In 1990, he retired from practice. He has held board positions in listed companies for over 20 years.

$(ii)$ Alexander CLEMEN B.Sc (Hons), M.Aus.I.M.M.

Mr Clemen is a qualified geologist with over 20 years experience practising in this field. He has worked for several large, international mining companies in various parts of the world and has gained experience in exploring for gold, base metals, industrial minerals and diamonds.

$(iii)$ Bruce Russell McCULLAGH CPA, ACIS

Mr McCullagh has wide experience in accounting, company secretarial and management in the petroleum and mineral industries in Australia, Libyan Arab Republic, the Arabian Gulf, United Kingdom and USA. He is a member of the Australian Society of Certified Practising Accountants and of the Chartered Institute of Secretaries.

$(iv)$ David Nathan Zukerman

Mr Zukerman has an accounting and finance background. He has held a number of public company directorships in Australia and Asia during the past 25 years.

EMOLUMENTS OF BOARD MEMBERS

The level of fees paid to Directors, detailed below, is influenced by comparing fees paid to directors in other companies within the exploration industry, and then set at a level to attract qualified people to accept the responsibilities of Directorship.

Names	Director's Fees	Superannuation	Consulting Fees	TotalS.
R J Collins	12,000	1.080	24.925	38,005
B R McCullagh	12.000	1.080	22.610	35,690
A Clemen	12,000	٠		12,000
TOTAL	36,000	2.160	47.535	85.695

The Company does not have any officers or senior executives, other than the Directors.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company's Directors held during the year ended 30 June 2003, and the number of meetings attended by each Director.

Name∶	Eligible to attend:	Attended:
R J Collins	્ર	З
A Clemen	3
B R McCullagh	ર

RETIREMENT, ELECTION AND CONTINUATION OF OFFICE OF DIRECTORS

Mr Robert Collins retired by rotation as a Director at the Annual General Meeting on November 28, 2002 and offered himself for re-election and was re-elected.

At the forthcoming Annual General Meeting, to be held on 27 November 2003, Alex Clemen retires by rotation as a Director and offers himself for re-election. David Nathan Zukerman who was appointed as a Director on 18th August 2003, retires and offers himself for re-election by shareholders. Mr Collins resigned as a Director effective 18th August 2003.

ENVIRONMENTAL ISSUES

The Company's objective is to ensure that a high standard of environmental care is achieved and maintained on all properties. There are no known environmental issues outstanding. SHARE OPTIONS

There are 7,500,000 share options outstanding at 30 June 2003 exercisable at 10 cents per share on or before June 30th 2006. No options were issued during the year. No option holder has any right under the options to participate in any other issue of the Company, or any other entity.

No shares have been issued through the exercise of options during or since the end of the financial year.

No options have been granted since the end of the financial year.

REVIEW OF OPERATIONS

South-West Mineral Field, WA:

Broad spaced reconnaissance soil sampling, with limited follow-up sampling, was completed on the Company's three exploration licences at Jitarning Northwest (E70/2381), Jitarning Southeast (E70/2382) and Neendaling (E70/2383).

Elevated gold and chromium geochemistry at Jitarning indicates that previously unrecognized greenstone belts underlie the project area, and are composed of prospective mafic-ultramafic lithologies. The margins of these north-westerly striking greenstones are marked by major crustal faults and flanked by gneissic complexes; these greenstones are analogous to those observed in the Eastern Goldfields.

The project is currently the subject of a detailed review, so as to effectively target exploration for the coming vear.

Eastern Goldfields - Yandal Greenstone Belt:

The tenements at Scottie Well (E53/573 and M53/877) were surrendered. The Longreach Well (ELA53/970) tenement is yet to be granted, however initial studies show that little work has been undertaken within the tenement area, by previous explorers.

SUBSEQUENT EVENTS

On 25th August, the company sold it's share investments for $54,000.

This report is made in accordance with a resolution of the Directors of the Board and Section 298(2) of the Corporations Act 2001.

D N Zukerman DIRECTOR

Dated this 8th day of September 2003. Perth. Western Australia

SABRE RESOURCES LTD STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2003

			Consolidated		Parent Entity
	Note	2003$	2002$	2003$	2002S
Revenue from ordinary activities	2	13,019	12,387	13,019	12,387
DepreciationExploration expenditure written offProvision against investment		4.06888,127500	4,068477,852	4,06812,130500	4,068193,989193,999
Provision for doubtful debtManagement feeDirectors' fees and services		97,72285,695	95,83470,535	75,99797,72285,695	89,86495,83470,535
Other expenses from ordinary activitiesOccupancy costs		56,90740,325	72,04221,332----------------	56,90740,325-----------------	72,04221,332-------------------
Expenses from ordinary activities	3	373,344	741.663	373,344	741.663
Loss from ordinary activities		(360, 325)	(729,276)	(360, 325)	(729, 276)
Income tax expense	4
Loss from ordinary activitiesafter income tax expense	19	(360.325)	(729.276)	(360.325)	(729.276)

	2003Cents
16	(2.4)	(7.2)

The accompanying notes form part of these financial statements

SABRE RESOURCES LTD STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2003

Note	2003$	2002$	2003$	Parent Entity2002$
				445,825
				8,474----------------
	66,620	456,865-------------	61,588	454,299
7.				9,154
				2,565
23	37,000		37,000	$\overline{1}$
	42,086.	9.154	47,118	11,720
	108,706	--------------	108,706--------------	466,019
10	7,068	4,056	7,068	4,056
	-------------
	7,068	4,056	7,068	4,056
	7,068-------------	4,056-------------	7,068------------	4,056-----------
	--------	--------	101,638----------	461,963========
19
	101,638	461,963	101,638	461,963-------------
	2120208.TOTAL NON-CURRENT ASSETS	55,48711,133---------------5,086$11 -$	Consolidated445,82511,040-------------9,154466,019101,638461,963---------=========	55,4876,101--------------5,0865,032-------------$\begin{array}{cccc} 14,417,457 & 14,417,457 & 14,417,457 & 14,417,457 \ (14,315,819) & (13,955,494) & (14,315,819) & (13,955,494) \end{array}$--------------------------------------

The accompanying notes form part of these financial statements

SABRE RESOURCES LTD STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2003

			Consolidated		Parent Entity
	Note	2003$	2002$	2003$	2002$
Cashflow from operating activities
Payments:Suppliers and employeesInterest received		(277,785)13,074**************	(268, 730)13,605**************	(275, 319)13,074***************	(266, 228)13,605--------------
Net cash outflow from operating activities	15.	(264, 711)---------------	(255, 125)---------------	(262, 245)----------------	(252, 623)--------------
Cashflow from investing activities
Investment in listed entityLoan to subsidiaryExploration expenditure	229	(37, 500)(88, 127)	(114, 830)	(37,500)(78, 463)(12, 130)	(69, 351)(47,981)
Net cash outflow from investing activities		--------------(125, 627)---------------	**************(114, 830)---------------	--------------(128,093)--------------	(117, 332)-------------
Cashflow from financing activities
Proceeds from issue of sharesPlacement fee	1111		487,500(20.312)		487,500(20, 312)
Net cash inflow from financing activities			---------------467.188		467.188
Net (decrease)/increase in cash held		(390, 338)	97,233	(390, 338)	97,233
Cash at the beginning of the financial year		445,825	348,592	445,825	348,592
Cash at end of the financial year	21	,,,,,,,,, ,,,,, ,,55,487--------	**************445.825-------	***************55,487=======	****************445.825=======

The accompanying notes form part of these financial statements

$\mathbf{1}$ . Statement of Significant Accounting Policies

The financial report is a general purpose financial report that has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report covers the economic entity of Sabre Resources Limited and controlled entities, and Sabre Resources Limited as an individual parent entity. Sabre Resources Limited is a listed public company, incorporated and domiciled in Australia.

The financial report has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.

The ability of the company to continue as a going concern is dependent on the company obtaining adequate funding for existing commitments and new ongoing business activities.

The following is a summary of the material accounting policies by the economic entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

Principles of Consolidation $(a)$

A controlled entity is any entity controlled by Sabre Resources Limited. Control exists where Sabre Resources Limited has the capacity to dominate the decision making in relation to the financial and operating policies of another entity so that the other entity operates with Sabre Resources Limited to achieve the objectives of Sabre Resources Limited. A list of controlled entities is contained in Note 20 to the financial statements.

All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation.

Where controlled entities have entered or left the economic entity during the year, their operating results have been included from the date control was obtained or until the date control ceased.

Outside interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

Income Tax $(b)$

The company adopts the liability method of tax-effect accounting whereby the income tax expense shown in the statement of financial performance is based on the operating profit before income tax. adjusted for any permanent differences.

Timing differences which arise due to the different accounting periods in which items of revenue and expenses are included in the determination of operating profit before income tax and taxable income are brought to account as either a provision for deferred income tax or an asset described as future income tax benefit at the rate of income tax applicable to the period in which the benefit will be received or the liability will become payable.

Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits in relation to tax losses are not brought to account unless there is virtual certainty of realisation of the benefit.

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

Deferred Exploration, Evaluation and Development Expenditure $(c)$

Exploration, evaluation and development costs are accumulated in respect of each separate area of interest. These costs are carried forward where they are expected to be recouped through the sale of successful development and exploitation of the area of interest: or where activities in the area of interest have not reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in respect of that area are written off in the year the decision is made. Each area of interest is also reviewed annually and accumulated costs written off to the extent that they will not be recoverable in the future.

Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. If production commences, carried forward exploration, evaluation and development costs are amortised on a units of production basis over the life of the economically recoverable reserves, for the period of production.

Plant and Equipment $(d)$

Any items of plant and equipment are stated at cost and are depreciated on a straight line basis over their estimated useful lives to the company commencing from the time the assets held are ready for use. Representative rates are: Automobiles 25%.

$(e)$ Cash

For the purpose of the statement of cash flows, cash includes cash on hand and at call, deposits with banks or financial institutions, and bank bills, net of bank overdrafts.

$(f)$ Interests in Joint Ventures

The company's share of the assets, liabilties, revenue and expense of joint ventures are included in the appropriate items of the statement of financial position and statement of financial performance.

Leases $\langle 0 \rangle$

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to entities in the economic entity are classified as finance leases. Finance leases are capitalised, recording an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual values. Leased assets are amortised on a straight line basis over their estimated useful lives where it is likely that the company will obtain ownership of the asset or over the term of the lease. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

$(h)$ Recoverable Amount of Non-Current Assets

The carrying amounts of all non-current assets are reviewed at least annually to determine whether they are in excess of their recoverable amount. If the carrying amount of a non-current asset exceeds the recoverable amount, then the asset is written down to the lower value. In assessing recoverable amounts the relevant cash flows have not been discounted to their present value.

$(i)$ Comparative Figures

Where required by Accounting Standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.

$(i)$ Receivables

Receivables are recorded at amounts due less any provisoin for doubtful debts.

$(k)$ Payables

Trade payables and other accounts payable are recognised when the company becomes obliged to make future payment resulting from the purchase of goods and services.

$(1)$ Borrowings

Bank loans and other loans are recorded at an amount equal to the net proceeds received. Interest expense is recognised on an accruals basis.

$(m)$ Revenue Recognition

Revenue from the sale of goods and disposal of other assets is recognised when control of the goods or other assets passes to the buyer.

Interest income is recognised on an accruals basis.

			Consolidated		Parent Entity
		Note	2003$	2002$	2003$	2002$
2.	Revenue from OrdinaryActivities
	Other Revenue:Interest received		13,019	12,387	13,019	12,387

		Consolidated		Parent Entity
	Note	2003	2002	2003	2002
		S	$	$	$
3.	Investment
	PurchaseProvision for writedown	37,500(500)		37,500(500)
		**************37,000-------	------------	37,000=======
	The market value of the listed investment is $54,000 at August 25, 2003.
4.	Income Tax
	Reconciliation of prima facie incometax benefit on loss from ordinaryactivities to income tax as providedin the financial statements
	Loss from ordinary activities	(360, 325)---------------------------------------	(729, 276)www.www.ww	(360, 325)mmmmmmmm	(729, 276)- 11 11 11 11 11 11 11 11 11 11 11 11 11
	Prima facie income tax benefitthereon at 30%	(108,097)	(218,783)	(108, 097)	(218, 783)
	Adjusted for the tax effect of:
	Permanent differences
	Exploration expenditure written offProvision for non recovery of loans		50,707	22,799	43,80326,959
	Provision for diminution in investmentOther items	165	794	150	58,200794
	Timing differences and tax losses notbrought to account as future incometax benefit	107,932	167,282	85,148	89,026
	Income tax expense			****************
	The directors estimate that the potential future incometax benefits at 30% at year end not brought to accountshould be:
	Tax loss benefit	1,593,000---------	1,485,987 22 22 22 22 22 22 22 22 22	1,544,000---------------------------------------	1,459,028

The benefits will only be obtained if:-

• The Companies derive future assessable income of a nature and of an amount sufficient to $(i)$ enable the benefit from the deduction for the losses to be realised;
• $(ii)$ The Companies continue to comply with the conditions for deductibility imposed by the Law; and
• No changes in tax legislation adversely affect the Companies in realising the benefits from $(iii)$ the deductions for the losses.

			Consolidated			Parent Entity
		Note	2003	2002		2002
			$	$	$	$
5.		Auditors' Remuneration
		Amounts received or due and receivableby the Company's auditors for:-
		Auditing the Company's financialstatements	5,047	3,767	5,047	3,767
		Other services to the Company	1,850	3,325	1,850	3,325
			6,897	7,092	6,897	7.092
			---------	---------	---------	=======
					2003$	2002$
6.		Remuneration and Retirement Benefits
	a)	Directors' RemunerationIncome paid or payable to all directors of thecompany, directly or indirectly, by the companyor by any related parties.				70,535
		Number of company directors whose income fromthe company was within the following bands:
		$10,000-$19,999$20,000-$29,999$30,000-$39,999			12	1$\mathbf{1}$1
		No director or executive received more than $100,000during the year.
		The name of directors who have held office duringthe financial year were:
		Robert John CollinsBruce Russell McCullagh

Alex Clemen

b) Related Party Transactions

A company under the control of Mr R J Collins, received fees for the provision of consulting services during the year. The aggregate amount charged for such services was $24,925 (2002: $19,070).

A company under the control of Mr B R McCullagh, received fees for the provision of services during the year. The aggregate amount charged for such services was $22,610 (2002; $13,545).

			Consolidated		Parent Entity
		Note	2003S	2002$	2003$	2002$
7.	Plant and Equipment
	Plant and Equipment, at costLess: accumulated depreciation		16,273(11, 187)	16,273(7, 119)***************	16,273(11, 187)***************	16,273(7, 119)
			5,086--------	9,154--------------------------------------	5.086----------	9.154كعصكت كالتنا
	Movement:
	Opening written down value		9.154	13,222	9.154	13,222
	Depreciation		(4,068)	(4,068)	(4,068)	(4,068)
	Closing written down value		***************5.086---------------------------------------	9,154 22 22 22 22 22 22 22 22	****************5,086--------	9.154--------------
8.	Investments - Non - Current
	Investment in subsidiary, at cost				194,000	194,000
	Less: provision for diminution				(194,000)	(193, 999)
			---------	---------	------------	=======
9.	Exploration and Evaluation
	Opening Balance			363,022		146,008
	Exploration expenditure			88,127 114,830	12,130	47,981
	Exploration expenditure written off		(88, 127)	(477, 852)	(12, 130)	(193,989)
			=======	--------------	-----------------	=======

The ultimate recovery of the capitalised exploration costs carried forward is dependent upon the successful development and commercial exploitation, or realisation by disposal of the mining tenements at an amount equal to at least the carrying value.

The company's exploration properties may be subject to claim(s) under native title, or contain sacred sites or sites of significance to Aboriginal people. As a result exploration properties or areas within the tenement may be subject to exploration and/or mining restrictions or incur a liability for compensation. It is not possible to quantify these restrictions and liabilities at this time.

			Consolidated		Parent Entity
10.	Payables	2003$	2002$	2003$	2002$
	Current
	Payables	7.068	4.056	7.068	4,056

Issued Capital $11.$

Movement in ordinary share capital of the Company during the last two years.

Date	Details	Number ofShares	IssuePrice(cents)	Amount$
30 June 2001	Balance	7,594,851		13,950,269
28 February 2002	Issue ordinary sharesLess: Placement fee	7,500,000	6.5	487,500(20, 312)
30 June 2002	Balance	15,094,851		14,417,457
30 June 2003	Balance	15,094,851		14,417,457

Options

There are 7,500,000 listed options exercisable at 10 cents per share on or before June 30, 2006.

Commitments $12.$

$(i)$ Mining Tenements

As part of ongoing activities, the Company is required either directly or via joint venture partners to commit to minimum expenditures to retain its interest in mining tenements. At 30 June 2003 these commitments amounted to $93,800 (2002: $104,700).

(ii) Management Agreement

The Company has an agreement with a management service company for the provision of services at $90,000 per annum plus CPI. Charges are at commercial terms in accordance with the agreement entered into on 1 June 2000 for a five year term.

$13.$ Contingent Liabilities

No contingent liability exists for termination benefits under service agreements with directors or persons who take part in the management of the company.

$14.$ Segment Reporting

The company operates in Western Australia and is involved in the resources industry.

			Consolidated		Parent Entity
	Note	2003$	2002$	2003$	2002$
15.	Cashflow Information
	Operating loss after income tax	(360, 325)	(729, 276)	(360, 325)	(729, 276)
	Depreciation of plant and equipmentExploration expenditureProvision for non recovery of	4,06888.127	4.068	4,06812.130	4,068
	exploration expenditure		477.852		193,989
	Provision against investmentsProvision for doubtful debtsChange in assets and liabilities:	500		50075.997	193,99989,864
	(Increase) Decrease in receivablesIncrease (Decrease) in creditors	(93)3,012	(4, 433)(3,336)	2.3733,012	(1,931)(3,336)
	Net cash used by operating activities	(264,711)	(255.125)	(262.245)	(252,623)

16.	Earnings per share	2003	2002
		Number	Number
	Weighted average number of shares on issue
	during the financial year used in the calculation	15.094.851	10.120.088
	of basic earnings per share

Options to purchase ordinary shares not exercised at June 30, 2003 have not been included in the determination of basic earnings per share. Diluted loss per share has not been disclosed, as it does not show a position which is inferior to basic earnings per share.

$17.$ Events Subsequent to Balance Date

On 25th August, the company sold it's share investments for $54,000.

18 Financial Instruments

$(a)$ Interest Rate Risk

The consolidated entity'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 those financial assets and financial liabilities, is as follows:

	Floating Interest Rate$(4% - 6%)$		Non-Interest Bearing
	2003	2002	2003	2002
Financial Assets	S
Cash	(4.609)	38.550
Short Term Deposits	60.096	407.275
Receivables			11.133	11.040
Investment	37,000
Total Financial Assets	92.487	445,825
Financial Liabilities
Liabilities - Creditors			(7,068)	(4.056)
Net Financial Assets	92.487	445.825	4.065	6.984

Reconciliation of Financial Assets to Net Assets

	Consolidated
	2003$	2002S
Net financial assetsFixed assets	96,5525.086	452.8099,154
	--------------------------------------101,638w ww. ww. ww. ww.	461,963

$(b)$ 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 of those assets, net of any provision for doubtful debts, as disclosed in the statement of financial position and notes to the financial report.

The consolidated entity does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the consolidated entity.

Net Fair Values $(c)$

The carrying amount of financial assets and financial liabilities recorded in the financial statements represent their respective net fair values determined in accordance with the accounting policies disclosed in Note 1 to the financial statements.

		Consolidated		Parent Entity
		2003$	2002S	2003$	2002$
19.	Accumulated Losses
	Accumulated losses at the
	beginning of the year	(13,955,494)	(13,226,218)	(13,955,494)	(13, 226, 218)
	Losses for year	(360, 325)	(729, 276)	(360, 325)	(729, 276)
	Accumulated losses at the	-------------			-----------
	end of the financial year	(14, 315, 819)	(13, 955, 494)	(14, 315, 819)	(13, 955, 494)
20.	Receivables - Non Current
	Loan to subsidiary			170,891	92,429
	Provision for non recovery of loan			(165, 859)	(89, 864)
				5.032	2.565
				---------------------------------------	-------

The Company has advanced $170,891 to Raslot Pty Ltd, a wholly owned subsidiary of Sabre Resources Ltd. The loan is at call and interest free and is not subject to be repaid in the next 12 months.

Receivables Current

$21.$

Other debtors	11.133	11.040	6.101	8.474
	=======	---------------------------------------	------
Cash
Represented by
Cash at bank and on deposit	55.487	445.825-----	55.487_____	445.825

The Directors of the Company declare that:

• $\mathbf{1}$ . the financial statements and notes, as set out on pages 5 to 17 are in accordance with the Corporations Act 2001:
  • comply with Accounting Standards and the Corporations Regulations 2001; and $(a)$
  • $(b)$ give a true and fair view of the financial position as at 30 June 2003 and of the performance for the year ended on that date of the company and economic entity;
• $21$ In the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

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

ا بن سے بنایاتمناسب

D N Zukerman DIRECTOR

Dated this 8th day of September 2003 Perth, Western Australia

SABRE RESOURCES LTD INDEPENDENT AUDIT REPORT

STANTON PART $\lambda$ - ave. $\partial\Omega$ street West Penin suce

WERTHER ALISTEN IN .1818-1904 - 1909 - 1913 - 1920

Faceirale: 081 862 : 1204

Email: aussiskaktskanton.com.ac.

IMDEPENDENT AIDIT REPORT

TO THE MEMBERS OF SABRE RESOURCES LTD

NCOPE

We have audited the financial report of Sabre Resources Ltd (the Company) for the financial year ended 30 June 2003 as set out on pages 5 to 18. The Company's directors are responsible for the financial report, which includes the financial statements of the Company and the consolidated financial statements of the consolidated entity comprising the Company and the entities it controlled at the end of or during the financial year. We have conducted an independent audit of this financial report in order to express an opinion on it to the members. of the Conspany.

Our audit has been conducted in accordance with Australian Auditing Standards to provide. reasonable assurance as to whether the financial report is free of material misstatement. Our procedures included examination, on a test hasis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion as to whether, in all material respects, the financial report is presented fairly in accordance. with Accomping Standards and other mandatory professional reporting requirements in Australia and the Corporations Act 2001 so as to present a view which is consistent with our understanding of the Company's and the consolidated entity's financial position, and performance as represented by the results of their operations and their cash flows.

The andii connium expressed in this report has been formed on the above basis,

SABRE RESOURCES LTD INDEPENDENT AUDIT REPORT

AUDIT OPINION

b)

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

the Corporations Act 2001 including: 'aik

(i) giving a true and tair view of the Company's and consolidated entity's financial position as at 30 June 2003 and of their performance for the frameful year ended on that date; and

(ii) complying with Accounting Standards and the Corporations Regulations 2001; and

• other mandakery professional reporting requirements in Australia.

Inherent Uncertainty Regarding Non Current Assets and Continuation as a Going Concern.

Without qualification to the assis opinion expressed above, attention is drawn to the following middlers.

The ability of the Company and of its advidinges to continue as going concerns and meet their planned exploration, administration, and other commitments is dependent upon the Company and its subsidiaries raising further working capital, and/or commencing profitable operations. In the event that the Company cannot raise further equity, the Company may not be able to meet its liabilities as they fall due and the realizable value of the Company's and conselldated entity's non-current useds may be significantly less than book values.

STANTON PARTNERS Maria

J P Van Dieren. Partner®

Perth, Western Australia 9 September 2003

An Compilar Children Alt (selec.

Annual Report 2003.Doc

$20$

$11$ Distribution of Shareholders

As at 19 September 2003 the distribution of members and their shareholdings were:- $(a)$

Range of Holding			Holders	Shares Held	Percent
1	$\blacksquare$	1.000	300	127,729	0.85
1.001		5,000	352	936,656	6.20
5.001		10.000	80	641,125	4.25
10,001	٠	100,000	62	1,929,097	12.78
100,001		and over	10	11,460,244	75.92
			804	15,094.851	100.00

$(b)$ There exists 657 shareholders with unmarketable parcels of shares.

$2.$ Voting Rights

There were 804 holders of fully paid ordinary shares who on a poll have one vote for each share held.

The twenty largest shareholders as at 19 September 2003 which represents 80.87% of the paid up capital were as follows :

Name of Holder	Number	%
Bow Lane Nominees Pty Ltd	7,550,000	50.02
James John del Piano	970,020	6.43
Perth Glass Distribution Pty Ltd	750.000	4.97
Chesilton Pty Ltd	600,000	3.97
Piat Corp Pty Ltd	500,000	3.31
Kalgoorlie Mine Management Pty Ltd	300,000	1.99
Intercorp Pty Ltd	255.224	1.69
Mark William Swan	205,000	1.36
Hales & Co Pty Ltd	200,000	1.32
Simon Nominees Pty Ltd	130,000	0.86
Souness Consulting Pty Ltd	100.000	0.66
Geraldine Susan Adams	80,000	0.53
Leslie Vincent Johnson	79,800	0.53
M & K Korkidas Pty Ltd	70.000	0.46
Betty Lorraine Ashworth	60,000	0.40
Harvey James Heil	51.849	0.34
J & E Kerr Investments Pty Ltd	51,200	0.34
BB Nominees Pty Ltd	50,000	0.33
Burnal Pty Ltd	50,000	0.33
Timothy Phillip Coleman & Maria Marciniak	50.000	0.33
		--------
Total	12,103,093	80.17
	========	$=$ $=$ $=$ $=$

Optionholders exercisable at 10 cents each on or before 30th June 2006.

Name of Holder	Number	%
Bow Lane Nominees Pty Ltd	6,250,000	83.35
Perth Glass Distribution Pty Ltd	750,000	10.00
Kalgoorlie Mine Management Pty Ltd	300,000	4.00
Simon Nominees Pty Ltd	130,000	1.74
Alexis Pty Ltd	10.000	0.13
Kipto Pty Ltd	10.000	0.13
Debra Majteles	10.000	0.13
Lisa Maiteles	10.000	0.13
Simon Majteles	10.000	0.13
Solomon Majteles	10.000	0.13
Simon Nominees Pty Ltd	10.000	0.13
		---------
Total	7.500.000	100.00
	========	=====

This statement outlines the main Corporate Governance practices that were in place throughout the financial year unless otherwise stated. These practices are dealt with under the following headings: Board of Directors, Auditors, Internal Control Framework, Ethical Standards, Environment, Business Risks and the Role of Shareholders

BOARD OF DIRECTORS

The Board is responsible for the overall Corporate Governance of the company including its strategic direction, establishing goals for management and monitoring the achievement of these goals. The company is not currently considered to be of a size, nor are its affairs of such complexity to justify the establishment of separate committees and accordingly all matters which may be capable of delegation to a committee are dealt with by the full board.

The Board meets regularly in order to retain full and effective control over the company and monitor the executive management. The Board has established a framework for the management of the company including a system of internal control, a business risk management process and the establishment of appropriate ethical standards.

Each director has the right to seek independent professional advice on matters relating to his position as a director of the company at the company's expense, subject to prior approval of the chairman which shall not be unreasonably withheld.

Composition of the Board

The names of the directors of the company, together with details of their relevant qualifications and experience are set out in the directors' report in this annual report.

The procedures for election and retirement of directors are governed by the company's Constitution and the Listing Rules of Australian Stock Exchange Limited (ASX).

The composition of the Board is determined using the following principles:-

• The Board shall comprise directors with a range of expertise encompassing the current and proposed activities of the company.
• Where a vacancy is considered to exist, the Board selects an appropriate candidate through consultation with external parties, consideration of the needs of the shareholder base and consideration of the needs of the company. Such appointments are referred to shareholders at the next available opportunity for re-election in general meeting.

AUDITORS

Whilst the company does not have a formally constituted audit committee, the Board reviews the performance of the external auditors on an annual basis and meets with them:

• to review the results and findings of the audit, the adequacy of accounting and financial controls and $\bullet$ to obtain feedback on the implementation of recommendations made; and
• to review the draft financial statements and audit or review reports at year end and half year.

The board monitors the need to form an audit committee on a periodic basis.

INTERNAL CONTROL FRAMEWORK

The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors or irregularities. To assist in discharging this responsibility, the Board has instigated an internal control framework that can be described under the following headings:-

Financial Reporting

Projects requiring funding are evaluated and considered and budgeted by the board. Actual results are reported to the board. Procedures are in place to ensure that price sensitive information is reported to the Australian Stock Exchange in accordance with Continuous Disclosure Requirements.

Quality and Integrity of Personnel

The company conducts a comprehensive review of the ability and experience of potential employees prior to appointment.

Operational reporting

The Company has a management agreement with a management services company for the provision of services and the directors are in contact with its senior geologist on an informal basis.

ETHICAL STANDARDS

Sabre Resources Ltd recognises the need for directors and employees to observe the highest standards of behaviour and business ethics in conducting its business and intends to maintain a reputation of integrity.

ENVIRONMENT

The company aims to ensure a high standard of environmental care is achieved.

BUSINESS RISKS

The Board adopts practices designed to identify significant areas of business risk and to effectively manage those risks in accordance with the company's risk profile. Where necessary, the Board draws on the expertise of appropriate external consultants to assist in dealing with or mitigating risk.

The company's main areas of risk include:-

• exploration and development
• fluctuating commodity prices and exchange rates
• political and economic climate in its areas of operation
• continuous disclosure obligations.

Regular consideration is given to all these matters by the board.

THE ROLE OF SHAREHOLDERS

The Board of Directors ensure that shareholders are informed of all major developments affecting the company's state of affairs.