SABRE RESOURCES LIMITED — Annual Report 2010

Sep 28, 2010

SBR

SABRE RESOURCES LTD

ACN: 003 043 570

ANNUAL REPORT

2010

SABRE RESOURCES LTD INDEX

Contents

		Page No.
•	Review of Operations	1
•	Directors' Report	24
•	Consolidated Statement of Comprehensive Income	29
•	Consolidated Statement of Financial Position	30
•	Consolidated Statement of Changes in Equity	31
•	Consolidated Statement of Cash Flows	32
•	Notes to the Financial Statements	33
•	Directors' Declaration	56
•	Independent Audit Report	57
•	Auditor’s Independence Declaration	60
•	Corporate Governance Statement	61
•	Shareholder Information	75

Index

Page No. i

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SABRE RESOURCES LTD COMPANY DIRECTORY

DIRECTORS

Alexander Clemen Jonathan Downes Michael Scivolo David Zukerman

COMPANY SECRETARY

Norman Grafton

REGISTERED OFFICE

1[st] Floor, 8 Parliament Place West Perth WA 6005

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

SOLICITORS

Blakiston & Crabb 1202 Hay Street West Perth WA 6005 PO Box 454 West Perth WA 6872 Telephone: (08) 9322-7644 Facsimile: (08) 9322 1506 Email: office@blakcrab.com.au

AUDITORS

Grant Thornton (WA) Partnership 10 Kings Park Road West Perth WA 6005

BANKERS

Westpac Bank 108 Stirling Highway Nedlands WA 6009

SHARE REGISTRY

Advanced Share Registry Limited 150 Stirling Highway Nedlands WA 6009

Telephone: (08) 9389 8033 Facsimile: (08) 9389 7871

SECURITIES EXCHANGE LISTING

The Company is listed on the Australian Securities Exchange and the Berlin and Frankfurt Stock Exchanges

Home Exchange: Perth, Western Australia

ASX code for shares: SBR

Company Directory

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SABRE RESOURCES LTD REVIEW OF OPERATIONS

ANNUAL REPORT 2010

REVIEW OF OPERATIONS ONGAVA POLYMETALLIC PROJECT, NAMIBIA

Sabre Resources’ Ongava Poly-Metallic Project is located in the Otavi Mountain Land of northern Namibia, southern Africa (Figure 1) The Otavi Mountain Land is a historic mining region and Sabre’s licence lies at the highly prospective centre of the region (Figure 2). Rail and sealed highways connect the region to the country’s capital city (Windhoek) and main port (Walvis Bay). Infrastructure is as good as, if not better than, most localities in Australia and, given that Namibia has a strong historic mining culture, there is a skilled professional and labour workforce.

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Figure 1 – Location of the Ongava Project, northern Namibia. Other base-metal projects are shown.

Prospective commodities

The Otavi Mountain Land has historically been a globally important producer of copper, lead, zinc, and vanadium (Table 1). Presently, there are no operational mines but the list of commodities produced provides an indication of the styles of deposits yet to be discovered.

• Copper was the principal commodity mined at Tsumeb and Kombat, and is common in other deposits throughout the region. Numerous small mines throughout the region were worked in early colonial days (late 19th Century).

• Lead and zinc typically occur together throughout the Otavi Mountain Land and were produced at Tsumeb, Berg Aukas, Khusib Springs, Abenab, as well as a series of smaller mines throughout the region.

• Silver occurred in high concentrations in the Khusib Springs mine, and was a valuable by-product of mining at Tsumeb.

• Vanadium occurs in secondary copper-lead-zinc vanadates at numerous deposits throughout the region, including Tsumeb, Berg Aukas, Khusib Springs and Abenab.

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• Other rarer metals such as germanium have been produced historically from the Tsumeb mine, though only small amounts were recovered.

Of the numerous prospects throughout the Ongava project area (Figure 2), most have one of three metal associations:

• Lead-zinc-silver (e.g., Border, Irvington, Driehoek).

• Copper-lead-zinc-vanadium (e.g. Kaskara, Lucas Post, Uitsab, Nosib H).

• Zambian Copperbelt-style copper (e.g. Gauss).

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Figure 2 – The Ongava Poly-Metallic Project area (EPL 3542). Major mines and prospects are labelled. Other prospects are represented by yellow dots (20km grid). The Pavian and Lucas Post Trends are shown in green.

Table 1 - Deposits of the Otavi Mountain Land

Deposit	Years mined	Status	Content
Tsumeb	1906-1995	Mined	24.9 Mt @ 5.5 % Cu, 11.5 % Pb, 4.0 % Zn, & 172 g/t Ag
Kombat	1911-1925, 1962-2007	Mined	8.7 Mt @ 3.1 % Cu, 1.1 % Pb, & 26 g/t Ag
Berg Aukas	1950-1978	Mined and in situ	3.25 Mt @ 16.9% Zn, 4.5 % Pb, and 0.76 % V2O5
Abenab	1922-1958	Mined	1.85 Mt (conc.) @ 17.04% V2O5
Khusib Springs	1996-2004?	Mined	0.5 Mt @ 10 % Cu, 1.8 % Pb, & 584 g/t Ag

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Kaskara and the Lucas Post Trend

The Kaskara–Lucas Post area is a highly prospective mineralised trend exceeding 3.6 km in length (Figure 3). Gossanous outcrops combined with secondary copper, lead and zinc mineralisation are exposed at numerous localities. Available records and on site investigations suggest that the last work performed in the area was in 1955, and access for exploration has been restricted since that time. Sabre's field work in the area commenced in September 2009 with the discovery of copper-lead-zinc-vanadium mineralisation at Kaskara. It is the first time in over half a century that this highly prospective, historically mined mineralised trend has been investigated.

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Figure 3 ‐ The Kaskara and Lucas Post trend, showing the results of soil geochemistry for copper.

Geology of the Kaskara-Lucas Post area

The Kaskara-Lucas Post area is dominated by the Uitsab Fault, an east-west-trending fault (Figure 3) that is interpreted to be a major discontinuity of the Otavi Mountainland. To the north, folded dolostones and limestones of the Tsumeb Subgroup of the Neoproterozoic Otavi Group are common, whereas to the south, folded dolostones and limestones of the lower Abenab Subgroup predominate.

Juxtaposition of the lower Abenab Subgroup with the upper Tsumeb Subgroup means that the Uitsab Fault most likely represents a south-dipping reverse fault (thrust). Local deformation shows dextral wrenching with ongoing compression, resulting in later-stage oblique movement on the fault. This movement sense is illustrated graphically in faults and drag folds adjacent to a mineralised fault zone in one of the adits to the Harasib III vanadium mine.

Between Kaskara and Lucas Post, the Uitsab Fault most likely lies in the east-west valley to the north of both prospects. More work is required to define the distribution of the fault zones in outcrop along strike. Ongoing mapping has identified extensive galena mineralisation further westward, at the new Ondjima prospect which lies to the north of the Uitsab Fault. The identification of Ondjima indicates that the Kaskara-Lucas Post corridor of mineralisation extends at least 3,600m in an east-west direction, parallel to the fault.

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Soil geochemistry data shows that there is continuity of anomalous lead and zinc values between Driehoek and Kaskara, and also near-continuity of copper anomalies. The distance between Driehoek and Kaskara is around 2.5km. This continuity suggests that there may be a genetic link between these styles of mineralisation.

The Kaskara prospect

Exceptional high-grade results from the initial phase of fieldwork at the Kaskara prospect show very high copper, lead, and zinc values in outcrop. Specialty metals gallium and germanium also show high values. Kaskara was formerly known as Harasib Claims and Harasib III and has not previously been explored for copper. It is located 16 km southwest of Sabre’s Border zinc-lead deposit and 2.6 km north of the Driehoek zinc-lead deposit.

Table 2 - Rock chip analyses from Kaskara1.

Northing	Easting	Cu	Pb	Zn	Ge	Ga			Northing	Easting	Cu	Pb	Zn
WGS84(33S)		(%)	(%)	(%)	(ppm)	(ppm)			WGS84(33S)		(%)	(%)	(%)
7.57 6.02 32.85 b.d. 406.59 2.04 9.79 3.53 b.d. b.d. 7834183 794567 8.96 0.23 0.07 54.21 b.d.									794429 7834130 15.98 28.66 3.47
									794426 7834122 7.54 25.76 9.02
									794260 7834219 4.05 23.71 11.69
11.26 12.35 11.16 7068.31 5840.07 7834194 794550 2.76 11.77 32.31 b.d. b.d.									794270 7834237 2.99 26.11 15.06
									794246 7834229 6.53 35.00* 27.42
13.26 9.74 34.41 1016.93 873.99 7834225 794498 5.35 2.36 2.91 b.d. 307.49									794215 7834255 0.14 1.80 1.11
									794203 7834253 4.99 29.70 13.79
2.03 5.02 1.05 b.d. b.d. 4.32 22.74 16.34 b.d. b.d. 4.51 13.54 4.28 b.d. b.d. 7834261 794362 1.19 4.26 1.22 b.d. b.d.									7.75 35.00 24.08 794201 7834248 8.13 35.00** 23.55
									794199 7834242 1.91 15.46 8.82
									794182 7834261 0.36 2.53 1.33
16.03 27.45 29.12 b.d. 2285.80 23.52 18.44 24.14 b.d. b.d. 7834262 794304 11.38 35.00* 19.98 b.d. 8066.71									794349 7834260 1.13 4.29 1.66
									794282 7834272 0.74 5.73 3.10
									794393 7834111 0.62 5.30 2.83
4.16 32.10 17.25 b.d. b.d. 2.51 16.66 9.86 b.d. b.d. 2.11 0.67 16.23 b.d. b.d. 5.21 35.00* 23.68 b.d. b.d. 7834251 794291 3.33 11.02 28.41 b.d. b.d.									794302 7834261 1.30 19.97 11.08
									794248 7834231 6.81 35.00* 23.62
									794248 7834230 3.15 19.32 10.26
									794249 7834231 2.59 15.52 8.07
									794293 7834239 5.94 27.78 10.04
17.01 21.28 32.01 b.d. 937.73 7.64 5.07 28.28 b.d. 9172.12 7.32 5.25 28.36 b.d. b.d. 7834261 794247 6.60 4.25 22.83 b.d. 937.73									794185 7834254 0.57 4.30 1.90
									794297 7834277 0.06 0.18 0.15
									794302 7834258 0.04 1.20 0.53
									794661 7834112 1.46 5.71 1.78
									794670 7833808 0.24 1.95 1.26
									794680 7834097 7.43 22.40 6.43
									794667 7834167 8.15 24.60 6.59
									794674 7834171 12.04 32.46 7.49
									794676 7834180 9.38 25.58 7.12

The copper-lead-zinc mineralising system at Kaskara covers an extensive area. Geological mapping shows that mineralisation at the Kaskara prospect extends over more than 900 m long by 450 m wide, and is part of a much larger system that extends over a strike length of 3.6 km. Sixteen (16) massive gossan units have been identified. Numerous zones containing high grades within these gossans can extend over tens of metres, and are linked together by zones containing lower and more moderate grades.

1 Several samples are top-cut to 35.0% Pb due to extremely high lead values. It is possible that these particular XRF results are inherently inaccurate at such high levels, hence their cut. Such analyses do, however, indicate very high contained lead values within those samples.

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Spot analyses were taken from rock chips using a Niton XLt592 portable XRF (x-ray fluorescence) analyser. The results are shown in Table 2. In summary, gossans at Kaskara show:

• Copper (Cu) values up to 23.5%.

• Lead (Pb) in excess of 35.0%.

• Zinc (Zn) values up to 34.4%.

• Germanium (Ge) to over 7,000 ppm (0.7%).

• Gallium (Ga) to over 9,000 ppm (0.9%).

Calibration of the XRF with certified high-grade standards means that these values provide a realistic firstpass estimate contained within the poly-metallic gossan at Kaskara. Sabre is confident in the veracity of these results and does not require laboratory analyses of these samples. It is to be expected that future bulk sampling of the gossan will yield results lower than the highest values obtained by this first-pass spot sampling.

Tsumeb-style mineralisation

Of importance at the Kaskara copper-lead-zinc prospect is the high concentration of gallium and germanium in the samples. Arsenic and vanadium values are also high. This metal association is very similar to that of the world-class Tsumeb deposit 40 km to the north. In effect, this means that at least some of the processes that formed the mineralisation at the Tsumeb Mine have also occurred at Kaskara.

Tsumeb was operational from 1906 to the mid-1990s. The total production at Tsumeb was around:

24.9 Mt @ 5.50% Cu, 11.82% Pb, 4.19% Zn, and 171.3g/t Ag

(to 1991 – Source: Geological Survey of Namibia).

Additionally, a germanium-enriched concentrate was produced from 1954 to 1963, assaying 0.2% to 0.5% Ge .

Sabre will focus on a Tsumeb-style model for mineralisation at Kaskara. Early indications are that mineralisation in the Kaskara area shows many analogies to the Tsumeb mine.

History

The Kaskara area hosts a number of mine workings on the farm “Harasib Block 648” or "Tierkloof". It is reported in the Minerals of Namibia Handbook that a series of lead-zinc-vanadium prospects known as Harasib III and Harasib Claims were worked during the 1940s. No known record of metal production exists. Inspection of the site shows extensive underground mine workings on multiple levels, with several adits and at least 4 shafts and 3 headframes.

No evidence of modern exploration could be found in the archives of the Namibian Ministry of Mines and Energy, nor was evidence of any modern work detected on the ground. The most recent work is a series of trenches labelled with metallic pegs inscribed with the year 1955. Access to the area for the purposes of exploration has been restricted since that time until recently, so Sabre will be the first company in over half a century to access this area for exploration.

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Figure 4 – Contact of a thick massive poly-metallic gossan with the adjacent dolomite sequence.

Surface mineralisation

The gossans are hosted within a broad south-dipping alteration zone located within pale dolomites of the Abenab Formation. A listing of economically interesting minerals identified to date at Kaskara are listed in Table 3.

Most of the copper, lead, and zinc is in the form of secondary vanadium-rich minerals (vanadates). The main minerals present include vanadinite, mottramite, cuprian descloizite, and descloizite. Silicified zones adjacent to the gossans have preserved chalcocite, bornite, and willemite, whilst malachite has been noted at several localities. These are secondary minerals derived from the oxidation of sphalerite, galena and chalcopyrite and, in sufficient quantities, can form oxide ores in their own right. As most oxidised ores are not responsive to electrical geophysical investigation, detailed rockchipping and mapping of the trend is being undertaken to define the full extent of this mineralisation.

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Table 3 - Listing of minerals identified at Kaskara.

Mineral	Appearance		Formula	Forms
bornite	Copper-red, tarnishing to	an	Cu5FeS4	Important copper ore. Typically found as
	iridescent purplish surface.			massive metallic material, it has a copper-red
				colour on fresh exposures which quickly
				tarnishes to an iridescent purple after
				exposure to air and moisture.
chalcocite	Blue black, grey, black, black		Cu2S	A secondary mineral in or near the oxidized
	grey, or steel grey			zone of copper sulphide deposits.
chalcopyrite	Brass yellow, often with	an	CuFeS2	A major primary ore of copper. Common in
	iridescent tarnish.			sulphide deposits.
descloizite	Brownish red, red-orange,		Pb(Zn,Cu)2(VO4)(OH)	A secondary mineral often found in the
	reddish brown to blackish			oxidation zones of base metal deposits.
	brown, nearly black
galena	Lead-grey. The crystals	are	PbS	Galena is the primary ore mineral of lead.
	cubic and are bright when fresh
	but often receive a dull tarnish
	after exposure to air.
malachite	Bright green, with crystals		Cu2CO3.(OH)2	Malachite is a green secondary mineral often
	deeper shades of green, even			found in the oxidation zones of copper
	vary dark to nearly black; green			deposits.
	to yellowish green	in
	transmitted light.
mottramite	Grass-green, olive-green,		PbCu(VO4)(OH)	A secondary mineral frequently found
	yellow-green, siskin-green,			principally in the oxidized zones of base metal
	blackish brown, nearly black			deposits.
sphalerite	Yellow, light to dark brown,		ZnS	Sphalerite is the major primary ore of zinc.
	black, red-brown, colourless,
	light blue.
vanadinite	Orange-red, red-brown, brown,		Pb5(VO4)3Cl	Vanadinite is a secondary lead
	bright red, yellow, whitish; pale			chlorovanadate. It is almost always found in
	straw-yellow; colourless	or		the oxidation zone of lead deposits in arid
	weakly tinted in transmitted			climates resulting from the alteration of
	light.			vanadiferous sulphides and silicates.
willemite	Colourless, white, varying	to	Zn2SiO4	A relatively common secondary zinc silicate in
	many colours depending	on		many deposits which contain or contained
	impurities.			sphalerite, from which it is commonly formed
				upon oxidation in a siliceous environment.

Successful targeting method

Consultant Douglas Haynes of Douglas Haynes Discovery Pty Ltd, who was instrumental in the discovery of the giant Olympic Dam deposit at Roxby Downs in South Australia, was contracted to assess the exploration potential of the Ongava Project. Based on numerous geological criteria, he identified the Kaskara–Lucas Post area as having a strong potential for extensive copper mineralisation. The company’s discovery of copper-rich gossans at Kaskara is confirmation of Dr Haynes’ hypothesis.

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Figure 5 – Ferruginous gossan exposed at Kaskara

Mineralisation styles

Mineralisation at Kaskara is concentrated in what appears to be secondary fault zones that dip moderately (45°) to the south. Massive poly-metallic gossans (Figures 4 & 5) are comprised of iron oxides (mostly hematite) and quartz, with rare to common copper-lead-zinc vanadate minerals (Figure 6). Collapsed and reworked boxwork textures within the gossans indicate that the oxides are most likely after sulphide mineralisation (Figure 7). Individual massive gossans range up to 150 m long and 6 m thick, and they are arranged in a stepwise pattern (Figure 8). The highest grades recorded at Kaskara are found in the massive poly-metallic gossans, as well as the vein and gossan networks.

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Figure 6 – Mottramite clots within the massive gossan.

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Figure 7 – Laminated tabular clasts of blue hematite most likely represent collapsed boxwork structure after massive sulphides.

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The most extensive style of mineralisation at Kaskara is the vein and gossan network that surrounds and extends along strike from the massive poly-metallic gossans (Figure 8). The intensity of mineralisation in the vein and gossan networks varies markedly, as do textures within the mineralised rocks. Some of the most common textures include iron oxide breccia zones (Figure 9), selective replacement of rocks by copper vanadates and iron oxides, copper vanadate vein networks (Figure 10) and fracture infill, and irregular gossan zones.

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Figure 9 – Dolomitic breccia with gossanous hematite as groundmass.

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Figure 10 – Mottramite & copper-descloizite vein as part of a vein network.

Outcropping sulphides are limited to the south-easternmost area investigated to date (Figure 8). A line of coarse-grained galena trends approximately east-west and is surrounded by extensive oxidation (Figure 11). Iron oxides adjacent to galena show boxwork texture typical of gossans, and are probably after copper and zinc sulphides. The full extent of the outcropping sulphides has not yet been determined.

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Figure 11 – Outcropping coarse-grained galena (blueygrey) surrounded by various iron oxides after other sulphides.

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Figure 12 – Oxidation of dolomites on joint surfaces.

Zones of extensive oxidation surround all other styles of mineralisation at Kaskara (Figure 8). Oxidation takes the form of pervasive alteration of the host rocks through to iron oxide coatings on joint surfaces (Figure 12). Extensive oxidation zones represent the outermost expression of mineralisation at Kaskara and show strong base metal anomalism. These areas are likely to indicate adjacent mineralisation, either along strike at surface or down-dip at depth.

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The Lucas Post prospect

The gazetted Lucas Post prospect is similar in style to Kaskara, with gossans as well as base metal sulphides and vanadates exposed over a strike length of over 400 metres. Several historic workings have exploited copper-lead-zinc vanadate mineralisation but do not appear to have intercepted primary sulphides.

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Figure 13 – Geology of the Lucas Post prospect, showing spot copper values.

There are two distinct mineralised zones at Lucas Post (Figure 13). The northern zone is up to 10 metres thick. It comprises common base metal vanadate minerals (copper-descloizite, mottramite) within a siliceous and iron-rich gossanous zone of strong faulting. This is the zone that has been partially mined.

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Figure 14 – Strongly mineralised rock from Lucas Post, showing pervasive oxidation. Darker patches are rich in copper, lead and zinc, whilst brown zones are highly anomalous in the base metals.

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Figure 15– Extensive oxidation and mineralisation in historic excavations at Lucas Post.

The southern zone is 50 to 80 metres wide and comprises intense brecciation and alteration, with base metal sulphides, silicification, and iron oxides (Figure 14). A number of gossans similar to those at Kaskara are also located within this zone and are rich in descloizite. Both zones are surrounded by a halo of extensive oxidation, as at Kaskara (Figure 15).

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Spot analyses of mineralised gossans at Lucas Post record variable values peaking at 9.37% copper, 34.38% lead, and over 35% zinc. The highest copper grades occur in dolomitic and siliceous rocks with intense mottramite mineralisation in the northern zone. Higher zinc and lead grades are found in the gossanous southern zone.

The two zones have been mapped out over a strike length of over 400 metres. Detection of mineralisation at Lucas Post is limited to the east and west by soil cover.

The Lucas Post East prospect

The Lucas Post East prospect is located on the next hill east of the Lucas Post prospect. A number of discontinuous gossans are hosted within a brecciated zone of alteration and mineralisation (Figure 16), as they are at Lucas Post prospect. Minor historic trenches and a small shaft are present.

Limited rock chip sampling has recorded values up to 2.4% copper, 9.9% lead and 3.6% zinc.

The lateral extent of the Lucas Post East prospect is only around 50 metres, but mapping is required to determine its full extent. It is separated from the Lucas Post prospect to the west by around 100 metres of soil and colluvial cover. If this prospect is part of the Lucas Post system, then the system is over 550 metres in length.

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Figure 16 – Gossan outcrop and strong oxidation at Lucas Post East. Copper descloizite and mottramite are irregularly disseminated throughout the red coloured gossan and adjacent rocks.

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Figure 17 – Mottramite (dark olive green) and iron oxides (dark brown) in 20cm thick veins at Kaskara West. Pervasive and fracture controlled oxidation is observed around Kaskara West.

The Kaskara West prospect

The Kaskara West prospect is located over 400 metres west along strike from Kaskara. It comprises a network of strong green mottramite-bearing veins closely associated with a 2 metre wide east-west-trending shear zone with strong iron oxide concentrations (Figure 17).

A number of spot samples were assayed at Kaskara West. Values within mineralised and altered rock types are variable, but are as high as 9.15% copper, over 35% lead, and 21.90% zinc .

The mineralisation is exposed over a strike length of around 50 metres with further strike extent obscured by colluvial material and soils. Mineralisation is inferred in the 400 metre gap in exposure between Kaskara and Kaskara West by the presence of very high copper, lead and zinc values in the overlying soils.

It appears that Kaskara West may mark the western extension of the Kaskara mineralised system. If so, Kaskara would be at least 1,400 metres long and open to the east and west.

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The Ondjima prospect

Geological mapping has identified outcropping galena (lead sulphide) and malachite (copper carbonate) mineralisation to the northwest of Lucas Post, on the northern side of the valley (Figure 3). Mineralisation at the newly defined “Ondjima” prospect appears to be continuous for at least 400 m of strike. Mineralisation appears to be fold-controlled, and extends beneath soil cover to the east. Assessment of this prospect is ongoing.

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Figure 18 – The extent of the geophysical survey at and around Kaskara, showing the extent of known surface minearlisation.

Results of the geophysical surveys along the Lucas Post trend

The geophysical programme along the Lucas Post trend, from Lucas Post prospect to east of Kaskara, utilised the induced polarisation technique to define targets at and around the Kaskara copper-lead-zinc prospect (Figure 18). The programme has resulted in the identification of numerous anomalies, some of which directly correlate with outcropping oxidised mineralisation at Kaskara, Kaskara West, Lucas Post and Lucas Post East prospects.

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5.65.55.45.35.25.15.04.94.84.74.64.54.44.34.24.14.03.93.83.73.63.53.43.33.23.13.02.92.8 550 LEGEND Receiver .....Zonge GDP32IITransmitter .Zonge GGT10Array ........Pole-dipole, 50mStations.....n=.5,1,1.5,2,...6Surveyed from north to south.Inverted using Zonges TS2DIP v4.60cCAUTION: Anomalies near the line endsmay have positions distorted by theinversion process. Svyd GSG/GSS/MB Feb,March 2010 550 550 550 550 550 550 550 550 550 45040015035030055050025020010050 R2 250350100505505000150300200400450 200030015040035055025010050500450 350250100300505004504000550200150 R2 150200505503502501004003000500450 550035050250100500400300150450200 350450400500100502003001502500550 200250150550500450500400350300100 400350300502502000550150100450500 450400500300250010035020015050 R2 10040030025015050200550500350450 550400300350500150450200100250 50100450350300550200400250150500
(log)ohm-m RES
792400 792600 792800 793000 793200 793400 793600 793800 794000 794200 794400 794600 794800 795000 795200
792400 792600 792800 793000 793200 793400 793600 793800 794000 794200 794400 794600 794800 795000 795200
f
1500 1500 1500 1500 1500 1500 1500 1500 1500 1500
1450 1450 1450 1450 1450 1450 1450 1450 1450 1450 Powerline
1400 1400 1400 1400 1400 1400 1400 1400 1400 1400
1350 1350 1350 1350 1350 1350 1350 1350 1350 1350
13001250 13001250 12501300 12501300 13001250 12501300 13001250 13001250 12501300 R7 13001250
1200 1200 1200 1200 1200 1200 1200 1200 1200 1200
1150 1150 1150 1150 1150 1150 1150 1150 1150 1150
10501100 11001050 R6 10501100 11001050 10501100 10501100 11001050 11001050 11001050 11001050 Fence
9501000900 9501000900 9501000900 1000900950 9501000900 9001000950 R7a 9501000900 9001000950 9001000950 1000950900 1000950900 9509001000 9501000900 1000950900 1000950900 1000900950 1000900950 9501000900 9501000900 f 1000950900 1000950900 1000950900 9001000950
850 850 850 850 850 850 850 850 850 850 850 850 850 850 850 850 850 850 850 850 850 850 850
800750 750800 750800 800750 800750 750800 750800 800750 800750 800750 750800 800750 750800 R1 750800 800750 750800 750800 800750 800750 800750 800750 800750 750800
700 700 700 700 700 700 700 700 700 700 700 700 700 700 700 700 700 700 700 700 700 700 700
650 650 650 f 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650
600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600
5.65.55.45.35.25.15.04.94.84.74.64.54.44.34.24.14.03.93.83.73.63.53.43.33.23.13.02.92.8 550 LEGEND Receiver .....Zonge GDP32IITransmitter .Zonge GGT10Array ........Pole-dipole, 50mStations.....n=.5,1,1.5,2,...6Surveyed from north to south.Inverted using Zonges TS2DIP v4.60cCAUTION: Anomalies near the line endsmay have positions distorted by theinversion process. Svyd GSG/GSS/MB Feb,March 2010 550 550 550 550 550 550 550 550 550 45040015035030055050025020010050 R9 250350100500550500150300200400450 200030015040035025010050550500450 35025010050030050 R2 4504005500200150 f 150550200503502504001003005000450 550050350100250150500400300450200 350450400500100502003001502505500 200250550500150450500400350300100 400350300250200500550150100450500 450400050030025010035020015050 R1 R8 10040030025015050550500200350450 550400300500150350450200100250 50100450350300550200400250150500
(log)ohm-m RES
792400 792600 792800 793000 793200 793400 793600 793800 794000 794200 794400 794600 794800 795000 795200
1 0 0 0 0
1 0 0 0 0
1 0 0 0 0
1 0 0 0 0
1 0 0 0 0
1 0 0 0 0
1 0 0 0 0
1 0 0 0 0
1 0 0 0 0
1 0 0 0 0
1 0 0 0 0
1 0 0 00
10 0 00
1000
10000
10000
10000
10000
10000
1000
4400 E 4500 E 4600 E
4400 E 4500 E 4600 E
4400 E
4400 E
4200 E
4200 E
4200 E 4500 E 4600 E
4200 E 4500 E 4600 E
4100 E
4100 E
4100 E
4100 E
4000 E
4000 E
4000 E
4000 E
2300 E 2500 E 2600 E 2700 E 2800 E 3700 E
7835000 7835000
7834800 7834800
7834600 7834600
3800 E 4700 E 5100 E
7834400 7834400
7834200 7834200
7834000 2300 E 2500 E 2600 E 2700 E 2800 E 3700 E 7834000
7833800 7833800
7833600 7833600
5100 E
3800 E
4700 E
7833400 7833400
2300 E 2500 E 2600 E 2700 E 2800 E 3700 E
7835000 7835000
7834800 7834800
7834600 7834600
3800 E 4700 E 5100 E
7834400 7834400
7834200 7834200
7834000 2300 E 2500 E 2600 E 2700 E 2800 E 3700 E 7834000
7833800 7833800
7833600 7833600
5100 E
3800 E
4700 E
7833400 7833400
2900 E
4300 E
2900 E
4300 E
2900 E
4300 E
2900 E
4300 E
3100 E 3300 E 3500 E
4900 E 5300 E
3100 E 3300 E 3500 E
4900 E 5300 E
3100 E 3300 E 3500 E
4900 E 5300 E
3100 E 3300 E 3500 E
4900 E 5300 E
3900 E
3900 E
3900 E
3900 E
00001
00001
01000
00001
00001
0001
0 000 1
0 0 001
00 0 0 1
0 0 0 1
0 0 0 0 1
0 0 0 0 1
0 0 0 1
0 0 0 0 1
0 0 0 0 1
0 0 0 0 1
0 0 0 0 1
0 0 0 1
----- End of picture text -----

Figure 19 – Plan view depth slices from 50m depth slice below datum (top) and 150m depth slice below datum (bottom)of the low resistivity anomalies at and around Kaskara. Accounting for topographic irregularity, these images show continuous geophysical anomalism for the entire breadth of the survey.

Review of the geophysical data has shown that the surveys have been very effective to depths of 50 to 100m below surface. Below these depths, the data is less reliable. The carbonate sequences that host mineralisation at and around Kaskara are resistive to electrical input and have therefore limited the effective depth of the geophysical response. It has shown, though, that the iron-rich gossanous material at Kaskara, Lucas Post and other prospects has a one-for-one correlation with distinct anomalies at each prospect. Furthermore, similar anomalies extend the entire length of the survey area (Figure 19), both in areas of poor exposure (colluvial slopes) and no exposure (alluvial plains).

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The consistency of anomalism to depth suggests that the gossans continue down-dip, meaning that weathering is likely to extend to depth in areas of mineralisation. This, combined with the identification of oxidised copper, lead, and zinc minerals at surface, suggests that any targeting at Kaskara will involve delineation of oxide resources above sulphides at depth.

Drilling at Kaskara is due to commence during the third quarter of 2010.

Low resistivity anomalies

Low resistivity anomalies extend the length of the survey area (2.8 km, Figures 5 & 6). In many cases these anomalies correspond to outcropping secondary mineralisation as they do at Kaskara. In areas of cover, these anomalies must be tested by drilling to determine their nature.

At Kaskara, the R1 target (Figure 20) is a resistivity low that corresponds exactly to, and extends down-dip of the outcropping gossans. R1 seems to indicate continuity of gossan development to depth. The R2 target, which is located approximately 500 m south of R1, corresponds to outcropping sulphide mineralisation.

At Lucas Post, one-for-one correlation of the outcropping mineralisation is observed with the shallow R3 anomaly (Figure 21). This anomaly amalgamates with the R4 anomaly along strike to form a shallow sheeted anomaly, but also extends to the deeper R6 anomaly. Similarly, at Lucas Post East, correlation of outcropping mineralisation is observed with the shallow R5 anomaly, with extension to depth in the R7A anomaly.

==> picture [394 x 231] intentionally omitted <==

Figure 20 – Resistivity section at Kaskara, showing the R1 and R2 “resistivity low” targets. The R1 target corresponds exactly to the gossan outcrops (“G” and grey line at top). The R2 target has a very similar character but the area has not yet been mapped.

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==> picture [402 x 192] intentionally omitted <==

----- Start of picture text -----

Inversion Model Resistivity (ohm-m)
1800
1775
1750
1725
R3 1700 1675 5.6
R4 1650 5.4
1625 5.2
5.0
1600 4.8
R6 1575 4.6
1550 4.4
4.2
1525
4.0
1500 3.8
1475 3.6
1450 3.4
1425 3.2
3.0
1400 2.8
1375 Rho
1350 ohm/m (Log)
1 9 9 5 3 .
2 5 1 1 9 . 1 9 9 5 .
1 2 5 8 9 . 1 5 8 4 9 .
19953 .
15849 .
12589 .
10000
7943 .
1585.
6310.
5012.
6310 .
794 .
2 .
01
5 00
10
39
81.
81 .
9
3
62 .
1
3
9.
5
12
2 .
51
2
1
2
5
9.
3
1
6.2
5.
8
5
1
1 .
3
6
5.
9
91
1
85
5.
5.
9
91
52
1
.2
550 600 650 700 750 800 850 900 950 1000 1050 1100 1150 1200 1250 1300 1350 1400 1450 1500
Elevation (m)
----- End of picture text -----

Figure 21 – Resistivity model for Line 2500mE, over the Lucas Post prospect, showing anomalism which correlates directly with outcropping mineralisation. Anomalies below 100m depthmust be considered speculative.

Chargeability anomalies

Chargeability targets are present at, and west along strike from, Kaskara (e.g. Figures 22 & 23), and along the trend of mineralisation to the southeast. Some of these anomalies are located at depth down-dip of the resistivity anomalies and the gossans. Whether these represent deep-seated mineralisation must be tested by drilling.

The D1 and D2 chargeability targets are located at depth beneath Kaskara. They roughly correspond with the R1 and R2 anomalies, though are located adjacent to these targets rather than representing the same feature. A third conductivity target, D3, is located in the westernmost section line only, in the north beneath the soil plains.

==> picture [418 x 177] intentionally omitted <==

----- Start of picture text -----

Inversion Model IP (mrad)
South North
1725 28.7
1700 27.1
1675 25.6
24.0
1650 22.5
IP1 1625 1600 20.919.4
IP1 1575 17.8
16.3
IP1 1550 1525 14.713.2
1500 11.6
1475 10.1
8.5
1450 7.0
1425 5.4
1400 3.9
1375 2.3
0.8
1350
IP
1325 mrad
2 0
4 0
2 5
5
20
20
5
15
10
5
5 10 10
5
15
10 0
3
0
1 5
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 950 1000
Elevation (m)
----- End of picture text -----

Figure 22 – Induced polarisation model for Line 4000mE, which runs the length of the north-south valley to the west of Kaskara. Anomalies below 100m depth must be considered speculative.

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Figure 23 – Conductivity anomalies D1 and D2 in section at Kaskara.

A mineralisation model for the area

A preliminary model for mineralisation at and around Kaskara has been developed to aid exploration of the area. In the model, south-over-north thrusting controls the distribution of mineralisation at Kaskara (Figure 24). Outcropping gossans are shown to be mineralised fault zones. These minor faults are splays of the major thrust fault nearby.

==> picture [380 x 260] intentionally omitted <==

Figure 24 - Conceptual genetic model for mineralisation at Kaskara and Driehoek. See text for explanation.

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Propagation of Cu-Pb-Zn fluids up the major fault does not result in significant mineralisation, but entrapment of fluids in dead-end splays has resulted in extensive mineralisation at Kaskara and Lucas Post. Zonation of the copper content of mineralisation is dependent on proximity to source, with more copper-rich zones being closer to the fault zones. Mineralisation distal to the faults is more lead- and zinc-rich.

Infiltration of the evolved lead-zinc-rich fluids into strata (particular gaping bedding in antiforms) results in the development of stratabound Driehoek-style mineralisation. The correlation of the Driehoek and Kaskara styles of mineralisation opens the possibility of stratiform mineralisation at Kaskara and fault-controlled mineralisation at Driehoek (shown at depth at each prospect - Figure 24).

Border deposit and the Pavian Trend

The Pavian Trend is a 15 kilometre base metal mineralised lineament. Intense copper, zinc and lead concentrations in soils correspond to extensive outcropping lead sulphides and zinc and copper carbonates.

The trend (Figure 25) incorporates the Border deposit, and the Irvington, Pavian, Nosib H and South Ridge prospects. Of the total 15 kilometre length of the Pavian Trend, more than 13 kilometres of it lies within Sabre’s EPL3542 exploration licence (Figure 8). It is likely that the trend extends another 5 km west to the Harasib deposit (Figure 25).

The Border deposit

The Border lead-zinc-silver deposit is located approximately 35 kilometres southeast of Tsumeb (around 30 minutes drive) and is accessible by sealed highways and farm access tracks. Mineralisation occurs over 2.5 km of strike, is up to 100 m thick, and dips at around 60° to the north-northwest, with the most intense mineralisation at Border Main extending over 1,400 m.

Historically, Border has undergone two main phases of exploration, firstly by Etosha Petroleum Company Pty Ltd in the 1970s, then by Goldfields Namibia Limited in the mid 1990s. Based on drilling of around 30 diamond drillholes and a strike length limited to 650m at Border, Goldfields Namibia defined several ‘resource’ calculations that do not conform to the JORC code. Sabre has adopted one of the lower calculated figures as our exploration target:

12-15 Mt @ 5-6% Lead + Zinc[2] .

This represents a conservative tonnage that is substantially lower than estimates published by the Namibian Ministry of Mines and Energy.

Sabre’s first drilling programme at Border and Irvington was completed in the 2008-2009 year. This programme comprised 38 drill holes for a total of 4,261 m of RC and diamond drilling. It targeted the shallow, weathered, upper parts of the Border deposit within 100 m of surface, with some exploratory holes into the previously untested Irvington prospect.

A second phase of drilling was commenced earlier this year. The programme was aimed at extending known mineralisation down-dip and down-plunge.

2 At this stage, the potential quantity and grade of the Border zinc-lead deposit is conceptual in nature, as Sabre has determined that insufficient work has been undertaken to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource. The ‘exploration target’ size was based upon deposit calculations undertaken by Etosha Petroleum Ltd (Border).

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==> picture [448 x 194] intentionally omitted <==

Figure 25 ‐ The Pavian Trend, showing the extent of the trend (green), deposits and prospects along the trend, the licence boundary (black) and the possible extension of the trend towards Harasib in the west. These features are superimposed over lead plus zinc in soils data. The Toggenburg Plains are located between Border and South Ridge.

Geology of the Border deposit

The Border Pb-Zn deposit is located immediately adjacent to the tectonised contact of the T4 and T5 units of the Elandshoek Formation of the Tsumeb Subgroup in the upper part of the Neoproterozoic Otavi Group. The deposit lies on the southern (north-dipping) limb of the Olifantshoek Syncline. The host Elandshoek Formation comprises massive to bedded dolomitic siltstones, mudstones and sandstones that dip towards the NNW at around 60°.

Border is a structurally-controlled hydrothermal deposit with intense networks of breccia- and vein-hosted mineralisation. It shows many characteristics of Mississippi Valley-Type (MVT) deposits, which are a major source of the world's lead and zinc supply. Concentrations of vein- and breccia-hosted mineralisation define mineralised lodes that trend subparallel to the faulted T4/T5 contact. Assigning separate generations to the veins and breccias within these networks in a systematic manner is impossible, as vein sets and breccias show mutually overprinting relationships. The main vein and breccia orientations, as well as the trend of the mineralised lodes, are a function of the ambient stress regime during mineralisation.

Galena and sphalerite are the two major sulphides present at Border (Figure 26). Generally, galena occurs as clots or concentrations in veins, whereas sphalerite is typically present along and lining veins (Figure 27). Higher grades of mineralisation correspond to greater intensity of mineralised veins and/or breccias.

==> picture [395 x 132] intentionally omitted <==

Figure 26 – Galena and sphalerite mineralisation from BD049, 112m.

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Mineralisation is structurally controlled, with zinc and lead sulphides hosted by veining and brecciation. Siliceous unites at the T4/T5 contact were historically identified as cherts but are now known to have a tectonic origin. Unequivocal evidence for tectonic reactivation of the T4 and T5 contacts of the Elandshoek Formation is defined by local drag folding and S-C fabrics which indicate reverse oblique movement on the structure. Silicification and shearing (to mylonitisation) are noted along the contact for several kilometres along strike, and in drill core.

The distinction between mineralised veins and breccias is somewhat arbitrary. A range of vein types has been documented. As well as typical planar veins, partial veins, whereby a planar vein is truncated or is redirected, are very common, and the morphology of these veins commonly grades into breccia. Also apparent are bounding veins (Figure 27) which form a planar limit to the extent of breccia-hosted mineralisation. Breccia textures vary significantly, from incipient proto-breccia textures, through jigsaw-fit textures, to milled textures. Breccia clasts are almost invariably comprised of the host dolomitic sequence which is usually massive and contains generally weak silicic or carbonate alteration. Like veining, the composition of the breccia matrix material is variable, but commonly comprises dolomite, calcite, quartz, sphalerite, and galena.

==> picture [392 x 142] intentionally omitted <==

Figure 27 – BD032 71.1-71.6 m, a mineralised partial vein acts as a bounding vein to breccia-style mineralisation.

Geophysics

Extensive geophysical anomalies at Border were detected by induced polarisation surveys early in 2010. Strong IP responses were recorded that correspond to previously drilled mineralisation along the full extent of the survey. Drilling of these anomalies at depth has confirmed that the geophysical response was in fact the down-dip extension of mineralisation.

Other strong anomalies 200 m south of the Border mineralisation were also identified. Small parts of these anomalies were drilled tested. They correspond with moderate to intense alteration and minor copper, lead and zinc mineralisation. The mineralisation intercepted to date is not of ore grade, but forms part of an extensive alteration system. Investigations are continuing into this newly discovered zone.

Drilling results

The first batch of assay results received from Sabre Resources’ Phase 2 diamond drilling programme show the following:

• the deposit’s highest grade broad intercepts to date (10m @ 5.30% Pb+Zn).

• the deposit's highest-grade individual metre assay to date (17.85% Pb+Zn and 64g/t Ag, BD049, 113m).

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• extension of mineralisation identified at Border deposit, indicating possible further prospectivity at depth.

==> picture [416 x 286] intentionally omitted <==

Figure 28 - "Grade x metre" plot for drillholes at Border, showing the distribution of lead-zinc mineralisation. The deposit is open to the north and northeast. Values in excess of 80 (red) correspond to the main mineralised zone. Holes awaiting assay results are shown as black squares. Note - some historic holes did not penetrate the entire mineralised zone and therefore give misleading results, so are therefore not included.

These results serve to strengthen the Company’s understanding and definition of the Border deposit, and confirm that the model for mineralisation at Border is successful in predicting the overall trend of the deposit. As expected, mineralisation plunges towards the east-northeast, and remains open to the northeast. This new drilling shows that the mineralisation continues as a broad zone of lower-grade mineralisation encapsulating higher-grade zones, as recognised during previous drilling.

Application of the model has resulted in the interception of mineralisation at depth to the northeast. Hole BD057 intercepted moderate mineralisation at depth 400 m east of previously known intercepts. It is likely that this intercept is located up-dip of the main part of the deposit.

The deposit is open to the north and northeast, and the remainder of the samples from the remaining 6 drillholes are presently with the laboratory. We will announce the results as they come to hand.

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Border mineralisation model

Veining in the mineralised zones at Border initially appears to be chaotic, but structural analysis shows that conjugate sets of veins are present along cleavage and shear structures. Palaeostress field analysis shows that veining and therefore mineralisation occurred during dextral transpression of the region. In the Olifantshoek Syncline, this resulted in oblique backthrusting of the well-bedded T5 unit over the massive T4 unit of the Elandshoek Formation. Given the rheologically competent nature of the massive T4 dolomites (and their contrast to the incompetent nature of the overlying T5 dolomitic siltstones), faulting, fracturing, veining and brecciation dominated over folding and shearing. It was at this time that zinc and lead sulphides were mobilised into their present positions.

Vein intersections and fold plunges combine to provide a shallow east-northeasterly plunge to mineralisation. This direction is subparallel to the plunge of the Olifantshoek Syncline. A second subsidiary plunge is oriented almost directly down-dip along the semi-planar mineralised lodes and is defined by vein intersections.

==> picture [190 x 221] intentionally omitted <==

Figure 29 ‐ Conceptual cross section of mineralisation at the Border deposit (looking east), showing gross geometries.

Potential of the Pavian Trend

The entire southern limb of the Olifantshoek Syncline is considered to be prospective for zinc-lead and possibly copper mineralisation. Border is just one of a series of prospects present over the 15 km extent of the Pavian Trend. The definition of structural controls on mineralisation at Border also means that other similarly structurally complex sites throughout the region may be prospective for base metal mineralisation.

Sabre aims to assess the entire Pavian Trend for the possible development of a string of high-tonnage, moderate-grade mines. The drilling of the Border deposit is only the first stage of a programme that will assess the other outcropping prospects along the trend, as well as conceptual targets beneath the Toggenburg Plains east of Border.

Work throughout the Ongava licence area.

Sabre's ongoing work throughout the Ongava Polymetallic Project licence area aims to assess known prospects, deposits, and mineral occurrences, and to formulate conceptual exploration models for mineralisation beneath cover. Systematic appraisal of known sites of mineralisation has resulted in identification of several previously unknown occurrences that will be assessed in due course. Sabre is building up its knowledge base of the region in order to prioritise a staggered workflow that will progress projects at various stages throughout all steps of the exploration process in the coming years. To do this, regional data sets, are being acquired, and Sabre is constantly reviewing opportunities elsewhere throughout this highly prospective region.

Regional magnetic and radiometric survey

Sabre recently commissioned the collection of regional high resolution magnetic and radiometric data from the entire Ongava licence area using low level (30 m height) helicopter-borne sensors.

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North-south lines were spaced at 100 m intervals over the entire 600 km[2] licence area and its periphery. Sensor height was at 30 m above ground on a boom attached to the base of the helicopter. These parameters have provided some of the highest quality data commercially available (Figure 30).

==> picture [381 x 221] intentionally omitted <==

Figure 30 ‐ Recently acquired magnetic intensity (analytical signal) data for the Ongava Polymetallic Project.

This dataset will be instrumental in Sabre’s ongoing exploration of the Ongava Polymetallic Project. As well as assisting with exploration at and around Border and Kaskara, it will be used to evaluate other known deposits and prospects, such as the Driehoek Zn-Pb deposit and the Rooikat Cu prospect. The data will also be used to generate additional targets for mineralisation throughout the Ongava Polymetallic Project area.

Presently the data is being processed using a number of algorithms that will enhance the effectiveness of the data for ongoing analysis during exploration.

Licence renewal

Sabre’s Exclusive Prospecting Licence EPL3542 has been renewed by the Namibian Ministry of Mines and Energy.

Sabre submitted the renewal on 9 August 2009, more than two months prior to the expiry date of 11 October 2009. With severe processing backlogs in the Ministry, the Mining Commissioner signed the renewal in June 2010. The licence was renewed for the statutory two year period.

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SABRE RESOURCES LTD DIRECTORS’ REPORT

The Directors present their report on Sabre Resources Ltd ("the Company") and its controlled entities for the year ended 30 June 2010.

DIRECTORS

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

Alexander Clemen Jonathan Downes Michael Scivolo David Zukerman

Shares and options of Sabre Resources Ltd held by Directors at the date of this report:

Director	Shares	Options
Alexander Clemen	10	-
Jonathan Downes	-	-
Michael Scivolo	-	-
David Zukerman	10	-

PRINCIPAL ACTIVITIES

The principal activity of the Company and its controlled entities is mineral exploration.

RESULTS

The operating loss for the financial year after providing for income tax amounted to $725,113 (2009: $783,299).

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.

INFORMATION ON DIRECTORS AND COMPANY SECRETARY

• (a) All of the Directors were in office for the entire period. Their qualifications, experience and special responsibilities are as follows:-

• (i) Alexander Clemen B.Sc (Hons), FAusIMM

Mr Clemen is a qualified geologist with over thirty years experience in this field. He has worked for several large, international mining companies in various parts of the world and is experienced in exploring for gold, base metals, uranium, industrial minerals and diamonds. For the past three years he has also served as a Director of Metals Australia Ltd and Golden Deeps Ltd.

• (ii) Jonathan Downes B.Sc (Geol), MAIG

Mr Downes has over fifteen years experience in the minerals industry, and has worked in various geological and corporate capacities. He has experience in nickel, gold and base metals, and has been intimately involved with numerous private and public capital raisings. Mr Downes is currently the Managing Director of Ironbark Zinc Ltd and a non-Executive Director of Wolf Minerals Ltd, Corazon Mining Ltd and Waratah Gold Ltd.

• (iii) David Zukerman

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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, and for the past three years he has served as a Director of Metals Australia Ltd and Golden Deeps Ltd, and, formerly, Tiger Resources Ltd.

• (iv) Michael Scivolo B. Comm, FCPA

Mr Scivolo has extensive experience in the fields of accounting and taxation in both corporate and non-corporate entities. He is also a Director of Victory West Moly Ltd, Blaze International Ltd, Prime Minerals Ltd and Power Resources Ltd, and was formerly a Director of Tiger Resources Ltd.

• (b) The Company Secretary was in office for the entire period and his qualifications and experience are as follows:-

Norman Grafton FCIS – Company Secretary

Mr Grafton has extensive experience in both Australian and international commerce, having previously been based in Singapore, Indonesia, Papua New Guinea and Jamaica. Prior to returning to Australia, he was Director of Finance and Company Secretary of the largest agroindustrial operation in Jamaica, on secondment from a major UK firm of corporate managers. During the last three years, he held a Directorship in Orchid Capital Limited.

REMUNERATION REPORT (AUDITED)

2010

Key Management Personnel A Clemen J Downes M Scivolo D Zukerman N Grafton	Short-term Benefits Share-based Payment Directors Fees Consulting Fees Options Total $ $ $ $ 12,000 78,000 - 90,000 13,080 - - 13,080 13,080 - - 13,080 - 16,486 - 16,486 - 38,604 - 38,604
	38,160 133,090 - 171,250

2009

Key Management Personnel A Clemen J Downes M Scivolo D Zukerman N Grafton	Short-term Benefits Share-based Payment Directors Fees Consulting Fees Options Total $ $ $ $ 12,000 39,650 - 51,650 13,080 - - 13,080 13,080 - - 13,080 - 25,003 - 25,003 - 54,500 - 54,500
	38,160 119,153 - 157,313

Directors’ Report

Page No. 25 .

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SABRE RESOURCES LTD DIRECTORS’ REPORT

No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of any other body corporate.

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

Non-executive Directors receive a fixed fee, with Executive Directors being remunerated for any professional services conducted for the Company.

Directors received no benefits in the form of share-based payments during the year ended 30 June 2010.

There are no retirement schemes for any Directors or any loans or any other type of compensation.

Board policy on the remuneration for this exploration company 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. No Director, executive or employee has an employment contract.

Being an exploration company with no earnings, a relationship is yet to be established between an emolument policy and the company’s performance.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company's Directors held during the year ended 30 June 2010, and the number of meetings attended by each Director.

Name	Eligible to attend	Attended
Alexander Clemen	6	6
Jonathan Downes	6	6
Michael Scivolo	6	6
David Zukerman	6	6

RETIREMENT, ELECTION AND CONTINUATION OF OFFICE OF DIRECTORS

Mr Zukerman retired by rotation as a Director at the Annual General Meeting on 27 November 2009 and was re-elected.

Mr Clemen, who is retiring by rotation, will offer himself for re-election at the forthcoming Annual General Meeting.

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. AFTER REPORTING DATE EVENTS

No matters or circumstances have arisen since the end of the financial year, which significantly affect or may significantly affect the operations of the economic entity, the results of these operations, or the state of affairs of the economic entity in the subsequent financial years.

INDEMNIFYING OFFICERS OR AUDITOR

No indemnities have been given, or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of the entity.

SHARE OPTIONS

As at the date of this report, the following options have been granted over unissued ordinary shares in the Company:

Directors’ Report

Page No. 26 .

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SABRE RESOURCES LTD DIRECTORS’ REPORT

• (a) 23,000,000 unlisted options, each exercisable for one ordinary share on or before 31 December 2012 at an exercise price of 10 cents each, and

• (b) 250,000 unlisted options, each exercisable for one ordinary share on or before 1 November 2010 at an exercise price of 30 cents each, and

• (c) 250,000 unlisted options, each exercisable for one ordinary share on or before 1 November 2010 at an exercise price of 40 cents each, and

• (d) 8,750,000 unlisted options, each exercisable for one ordinary share on or before 30 November 2011 at an exercise price of 25 cents each.

No option holder has any right under the options to participate in any other issue of the Company, or any other entity.

13,368,146 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.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

There have not been any significant changes in the state of affairs of the Company and its controlled entities during the financial year, other than as noted in this financial report.

PROCEEDINGS ON BEHALF OF THE COMPANY

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

The Company was not a party to any such proceedings during the year.

AUDIT COMMITTEE

No Audit Committee has been formed as the Directors believe that the Company is not of a size to justify having a separate Audit Committee. Given the small size of the Board, the Directors believe an Audit Committee structure to be inefficient.

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the independent auditor’s declaration as required by section 307c of the Corporations Act 2001 , is set out on page 60.

NON AUDIT SERVICES

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

• All non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and

• The nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

Directors’ Report

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SABRE RESOURCES LTD DIRECTORS’ REPORT

During the year under review, Grant Thornton also provided services in relation to taxation matters. Details of the amounts paid and payable to the auditor of the company, Grant Thornton (WA) Partnership for audit and non-audit services provided during the year are set out in Note 6 to the Financial Statements.

.

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

D N Zukerman DIRECTOR

Dated this twenty eighth day of September 2010. Perth, Western Australia

Directors’ Report

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SABRE RESOURCES LTD CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2010

Note Revenue 5 Expenditure Depreciation Loss/(gain) on sale of fixed assets Management fees Directors’ fees and services Other expenses Occupancy costs (Loss) before income tax Income tax 4 (Loss) after income tax 16 Other comprehensive Income/(Loss): Exchange differences on translating foreign controlled entities Total Comprehensive (Loss) for the year Earnings per share Basic Earnings per share 18	Consolidated 2010 2009 $ $ 159,440 49,629 21,530 16,906 (6,817) 777 232,530 208,416 54,646 63,163 257,740 147,962 324,924 395,704 884,553 832,928 (725,113) (783,299) - - (725,113) (783,299) (159,289) 138,249 (884,402) (645,050) Cents Cents (0.8) (1.1)	Consolidated 2010 2009 $ $ 159,440 49,629 21,530 16,906 (6,817) 777 232,530 208,416 54,646 63,163 257,740 147,962 324,924 395,704 884,553 832,928 (725,113) (783,299) - - (725,113) (783,299) (159,289) 138,249 (884,402) (645,050) Cents Cents (0.8) (1.1)
		832,928
		(783,299) -
		(783,299)
		138,249
		(645,050)
		Cents (1.1)

Diluted earnings per share has no effect as compared to the Basic earnings per share.

The accompanying notes form part of these financial statements

Consolidated Statement of Comprehensive Income

Page No. 29 .

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SABRE RESOURCES LTD CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2010

Note CURRENT ASSETS Cash and cash equivalents 8 Trade and other receivables 9 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment 10 Exploration and Evaluation Expenditure 11 Other financial assets 12 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 13 TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 14 Share option reserve 15 Foreign currency translation reserve Accumulated losses 16 TOTAL EQUITY	Consolidated 2010 2009 $ $ 5,120,154 395,169 81,518 32,788 5,201,672 427,957 138,145 40,496 10,794,008 9,809,484 - - 10,932,153 9,849,980 16,133,825 10,277,937 201,105 227,415 201,105 227,415 201,105 227,415 15,932,720 10,050,522 34,461,808 27,703,957 652,716 643,966 (81,642) 77,648 (19,100,162) (18,375,049) 15,932,720 10,050,522	Consolidated 2010 2009 $ $ 5,120,154 395,169 81,518 32,788 5,201,672 427,957 138,145 40,496 10,794,008 9,809,484 - - 10,932,153 9,849,980 16,133,825 10,277,937 201,105 227,415 201,105 227,415 201,105 227,415 15,932,720 10,050,522 34,461,808 27,703,957 652,716 643,966 (81,642) 77,648 (19,100,162) (18,375,049) 15,932,720 10,050,522
		427,957
		40,496 9,809,484 -
		9,849,980
		10,277,937
		227,415
		227,415
		227,415
		10,050,522
		27,703,957 643,966 77,648 (18,375,049)
		10,050,522

The accompanying notes form part of these financial statements

Consolidated Statement of Financial Position

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SABRE RESOURCES LTD CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2010

CONSOLIDATED ENTITY

Balance as at 1 July 2008 Total other comprehensive income for the period Loss attributable to members of parent entity Balance as at 30 June 2009 Total other comprehensive (loss) for the period Shares & options issued Capital raising costs Loss attributable to members of parent entity Balance as at 30 June 2010	Issued Capital $ Option Reserve $ Foreign Currency Translation Reserve $ (Accumulated Losses) $ Total $ 27,703,957 643,966 (60,601) (17,591,750) 10,695,572 - - 138,249 - 138,249 - - - (783,299) (783,299)
	27,703,957 643,966 77,648 (18,375,049) 10,050,522 - - (159,290) - (159,290) 6,878,851 8,750 - - 6,887,601 (121,000) - - - (121,000) - - - (725,113) (725,113)
	34,461,808 652,716 (81,642) (19,100,162) 15,932,720

The accompanying notes form part of these financial statements

Consolidated Statement of Changes in Equity

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SABRE RESOURCES LTD CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2010

Note Cash flow from operating activities Payments to suppliers Interest received Sundry Income Net cash (outflow) from operating activities 17 Cash flow from investing activities Purchase of Property, plant and equipment Exploration and evaluation expenditure Net cash (outflow) from investing activities Cash flow from financing activities Share issue costs Proceeds from issue of shares Proceeds from exercise of options Proceeds from issue of options Net cash inflow from financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at the beginning of the financial year Effect of exchange rates on cash holdings in foreign currencies Cash and cash equivalents at the end of the financial year 8	Consolidated 2010 2009 $ $ (927,360) (674,104) 140,601 49,424 1,320 - (785,439) (624,680) (112,364) (26,199) (992,889) (1,016,796) (1,105,253) (1,042,995) (121,000) - 6,855,751 - 23,100 - 8,750 - 6,766,601 - 4,875,909 (1,667,675) 395,169 1,928,213 (150,924) 134,631 5,120,154 395,169	Consolidated 2010 2009 $ $ (927,360) (674,104) 140,601 49,424 1,320 - (785,439) (624,680) (112,364) (26,199) (992,889) (1,016,796) (1,105,253) (1,042,995) (121,000) - 6,855,751 - 23,100 - 8,750 - 6,766,601 - 4,875,909 (1,667,675) 395,169 1,928,213 (150,924) 134,631 5,120,154 395,169
		(624,680)
		(26,199) (1,016,796)
		(1,042,995)
		- - - -
		-
		(1,667,675) 1,928,213 134,631
		395,169

The accompanying notes form part of these financial statements

Consolidated Statement of Cash Flows

Page No . 32

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SABRE RESOURCES LTD NOTES TO THE FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

The financial report of Sabre Resources Ltd (the Company) for the year ended 30 June 2010 was authorised for issue in accordance with a resolution of the directors on 28 September 2010.

Sabre Resources Ltd is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange and the Berlin and Frankfurt Stock Exchanges.

The nature of the operations and principal activity of the Group is mineral exploration.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards and complies with other requirements of the law. The financial report has also been prepared on an accruals basis and on a historical cost basis, except for financial assets and liabilities, which have been measured at fair value.

The financial report is presented in Australian Dollars.

The financial statements of the Company and Group have been prepared on a going concern basis which anticipates the ability of the Company and Group to meet its obligations in the normal course of the business.

(b) Statement of compliance

The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS).

(c) Adoption of New and Revised Accounting Standards

During the current year the Group adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory.

The adoption of these standards has impacted the recognition, measurement and disclosure of certain transactions. The following is an explanation of the impact the adoption of these standards and interpretations has had on the financial statements of Metals Australia Limited.

AASB 8: Operating Segments

In February 2007 the Australian Accounting Standards Board issued AASB 8 which replaced AASB 114: Segment Reporting. As a result, some of the required operating segment disclosures have changed with the addition of a possible impact on the impairment testing of goodwill allocated to the cash generating units (CGUs) of the entity. Below is an overview of the key changes and the impact on the Group’s financial statements.

Measurement impact

Identification and measurement of segments — AASB 8 requires the ‘management approach’ to the identification measurement and disclosure of operating segments. The ‘management approach’ requires that operating segments be identified on the basis of internal reports that are regularly reviewed by the entity’s chief operating decision maker, for the purpose of allocating resources and assessing performance. This could also include the identification of operating segments which sell primarily or exclusively to other internal operating segments. Under AASB 114, segments were identified by business and geographical areas, and only segments deriving revenue from external sources were considered.

The adoption of the ‘management approach’ to segment reporting has resulted in the identification of reportable segments largely consistent with the prior year.

Notes to the Financial Statements

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SABRE RESOURCES LTD NOTES TO THE FINANCIAL STATEMENTS

Under AASB 8, operating segments are determined based on management reports using the ‘management approach’, whereas under AASB 114 financial results of such segments were recognised and measured in accordance with Australian Accounting Standards. This has resulted in changes to the presentation of segment results, with inter-segment sales and expenses such as depreciation and impairment now being reported for each segment rather than in aggregate for total group operations, as this is how they are reviewed by the chief operating decision maker.

Impairment testing of the segment’s goodwill

AASB 136: Impairment of Assets, para 80 requires that goodwill acquired in a business combination shall be allocated to each of the acquirer’s CGUs, or group of CGUs that are expected to benefit from the synergies of the combination. Each cash generating unit (CGU) which the goodwill is allocated to must represent the lowest level within the entity at which goodwill is monitored, however it cannot be larger than an operating segment. Therefore, due to the changes in the identification of segments, there is a risk that goodwill previously allocated to a CGU which was part of a larger segment could now be allocated across multiple segments if a segment had to be split as a result of changes to AASB 8.

Management have considered the requirements of AASB 136 and determined the implementation of AASB 8 has not impacted the CGUs of each operating segment.

Disclosure impact

AASB 8 requires a number of additional quantitative and qualitative disclosures, not previously required under AASB 114, where such information is utilised by the chief operating decision maker. This information is now disclosed as part of the financial statements.

AASB 101: Presentation of Financial Statements

In September 2007 the Australian Accounting Standards Board revised AASB 101 and as a result, there have been changes to the presentation and disclosure of certain information within the financial statements. Below is an overview of the key changes and the impact on the Group’s financial statements.

Disclosure impact

Terminology changes — the revised version of AASB 101 contains a number of terminology changes, including the amendment of the names of the primary financial statements.

Reporting changes in equity — the revised AASB 101 requires all changes in equity arising from transactions with owners, in their capacity as owners, to be presented separately from non-owner changes in equity. Owner changes in equity are to be presented in the statement of changes in equity, with nonowner changes in equity presented in the statement of comprehensive income. The previous version of AASB 101 required that owner changes in equity and other comprehensive income be presented in the statement of changes in equity.

Statement of comprehensive income — the revised AASB 101 requires all income and expenses to be presented in either one statement, the statement of comprehensive income, or two statements, a separate income statement and a statement of comprehensive income. The previous version of AASB 101 required only the presentation of a single income statement.

The Group’s financial statements now contain a statement of comprehensive income.

— Other comprehensive income The revised version of AASB 101 introduces the concept of ‘other comprehensive income’ which comprises of income and expenses that are not recognised in profit or loss as required by other Australian Accounting Standards. Items of other comprehensive income are to be disclosed in the statement of comprehensive income. Entities are required to disclose the income tax relating to each component of other comprehensive income. The previous version of AASB 101 did not contain an equivalent concept.

(d) New Accounting Standards for Application in Future Periods

The AASB has issued new, revised and amended standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against early adoption of these standards. A discussion of those future requirements and their impact on the Group follows:

Notes to the Financial Statements

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SABRE RESOURCES LTD NOTES TO THE FINANCIAL STATEMENTS

New / revised	Superseded	Explanation of	Effective date	Example disclosure of	Related	Likely
pronouncement	pronouncement	amendments	(i.e. annual	impact of new standard	pronouncemen	impact
			reporting	on the financial report (if	t which must
			periods ending	standard is not early	be early
			on or after)	adopted)	adopted if this
					standard is
					early adopted
Accounting Standards
AASB 9	AASB 139	AASB 9 introduces	31 December	AASB 9 amends the	IFRS 9	Depending
Financial	Financial	new requirements for	2013	classification and		on assets
Instruments	Instruments:	the classification and		measurement of financial		held, there
	Recognition and	measurement of		assets; the effect on the		may be
AASB 2009-11 Amendments to Australian Accounting	Measurement (part)	financial assets. AASB 9 uses a single approach to determine whether a financial asset is measured at		entity will be that more assets are held at fair value and the need for impairment testing has been limited to assets held		significant movement of assets between fair value
Standards arising from AASB 9		amortised cost or fair value, replacing the many different rules in		at amortised cost only.		and cost categories and
		AASB 139 and				ceasing of
		removes the				impairment
		impairment				testing on
		requirement for				available
		financial assets held at				for sale
		fair value.				assets.
AASB 2009-5	N/a	Makes various	31 December	Given the number of	Related	Varies
Further		amendments to a	2010	standards amended by	standard	depending
Amendments to		number of standards		AASB 2009-5, an example	where	on
Australian		and interpretations in		disclosure is not included.	applicable	relevance,
Accounting		line with the IASB				however
Standards arising from the Annual		annual improvements project.		Entities assess the impact of each of the amendments		impact is unlikely to be
Improvements				on their organisation.		significant.
Project [AASB
5, 8, 101, 107,
117, 118, 136 &
139]
AASB 2009-9	AASB 1 First	AASB 2009-9 makes	31 December	As this is not the first year	AASB 1	No impact
Amendments to	Time adoption	amendments to	2010	of adoption of IFRSs, these		for entities
Australian	of Australian	ensure that entities		amendments will not have		who are
Accounting	Equivalents to	applying Australian		any impact on the entity’s		applying
Standards –	International	Accounting Standards		financial report		IFRS.
Additional	Financial	for the first time will
Exemptions for	Reporting	not face undue cost or
First-time	Standards (June	effort in the transition
Adopters	2007)	process in particular
		situations.
AASB 2009-10	AASB 132	AASB 2009-10 makes	31 January	As the entity does not have	AASB 132	Potentially
Amendments to	Financial	amendments which	2011	any rights, options or		significant
Australian	Instruments:	clarify that rights,		warrants to acquire their		if rights
Accounting	Presentation	options or warrants to		own equity instruments,		issues
Standards –		acquire a fixed		these amendments will not		have been
Classification of		number of an entity’s		have any impact on the		offered and
Rights Issues		own equity		entity’s financial report.		denominat
		instruments for a fixed				ed in
		amount in any				foreign
		currency are equity				currency.
		instruments if the
		entity offers the rights,
		options or warrants
		pro rata to all existing
		owners of the same
		class of its non-
		derivative equity

Notes to the Financial Statements

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SABRE RESOURCES LTD NOTES TO THE FINANCIAL STATEMENTS

New / revised	Superseded	Explanation of	Effective date	Example disclosure of	Related	Likely
pronouncement	pronouncement	amendments	(i.e. annual	impact of new standard	pronouncemen	impact
			reporting	on the financial report (if	t which must
			periods ending	standard is not early	be early
			on or after)	adopted)	adopted if this
					standard is
					early adopted
		instruments.
AASB 2009-13	Interpretation 19	This standard amends	30 June 2011	As the entity is not a first-	None	Unlikely to
Amendments to AASB 1 arising from Interpretation 19		AASB 1 to allow a first-time adopter to use the transitional provisions in Interpretation 19.		time adopter of IFRS, this standard will not have any impact.		have significant impact.
AASB 2010-01		These amendments	30 June 2011	As the entity is not a first-	None	Reduced
Limited exemption from comparative AASB 7 disclosures for first time adopters (Amendments to AASB 1 and AASB 7)	AASB 1: First- time adoption of Australian Accounting Standards AASB 7 Financial instruments: Disclosures	principally give effect to extending the transition provisions of AASB 2009-2 Amendments to Australian Accounting Standards – Improving Disclosures about Financial Instruments to first-time adopters of Australian		time adopter of IFRS, this standard will not have any impact.		disclosures for first- time adopters.
		Accounting Standards.
IFRS Annual	Various	Makes various	Application	Given the number of	None	Varies
Improvements		amendments to a	dates either 30	standards amended by the		depending
2010		number of standards	June 2011 or	Annual Improvements, an		on
(May 2010)		and interpretations.	31 December	example disclosure is not		relevance;
		.	2011.	included.		however
						impact is
				Entities should assess the		unlikely to be
				impact of each amendment on their organisation.		significant.

The Group does not anticipate early adoption of any of the above reporting requirements and does not expect these requirements to have any material effect on the Group’s financial Statements.

(e) Basis of consolidation

The consolidated financial statements comprise the financial statements of Sabre Resources Limited and its subsidiaries ('the Group').

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.

Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which Sabre Resources Limited has control.

Minority interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately for the Group’s equity therein. Minority interests consist of the amount of those interests at the date of the

Notes to the Financial Statements

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SABRE RESOURCES LTD

NOTES TO THE FINANCIAL STATEMENTS

original business combination and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make additional investments to cover the losses.

(f) Interest in joint venture operation

The Group’s interest in any joint venture operation is accounted for by recognising the Group's assets and liabilities from the joint venture, as well as expenses incurred by the Group and the Group's share of income earned from the joint venture, in the consolidated financial statements.

(g) Foreign currency translation

The functional and presentation currency of Sabre Resources Ltd and Link National Pty Ltd is Australian Dollars (A$), and the functional and presentation of Sabre Resources Namibia (Pty) Ltd is Namibian Dollars (N$).

Cash remittances from the parent entity to the Namibian subsidiary are converted by the remitting bank into Rand and then converted to Namibian dollars using the same rate of exchange. That is, once the A$ is translated to Rand by the bank, which then converts it to the same balance in Namibian dollars. As such, foreign currency transactions are initially recorded in the functional currency at the date of the transaction using the Rand. Monetary assets and liabilities denominated in the foreign currencies are retranslated at the rate of exchange at the reporting date.

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date.

All differences in the consolidated financial report are taken to the statement of comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

As at the reporting date the assets and liabilities of any overseas subsidiaries would be translated into the presentation currency of Sabre Resources Limited at the rate of exchange ruling at the statement of financial position date and the statement of comprehensive income are translated at the weighted average exchange rates for the period.

The exchange differences arising on the retranslation are taken directly to a separate component of equity.

On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the statement of comprehensive income.

(h) Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

Plant and equipment – over 3 to 5 years

Impairment

Notes to the Financial Statements

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SABRE RESOURCES LTD NOTES TO THE FINANCIAL STATEMENTS

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their 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.

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 statement of comprehensive income in the period the item is derecognised.

(i) Goodwill

Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Goodwill is not amortised.

Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination’s synergies.

Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates.

Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation.

Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

(j) Impairment of non-financial assets

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

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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 pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(k) Investments and other financial assets

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.

All regular way purchases and sales of financial assets are recognised on the trade date, i.e. that date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or conversion in the market place.

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

Financial assets classified as held for trading are included in the category “financial assets at fair value through profit or loss”. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term with the intention of making a profit. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss.

(ii) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.

(iii) Loans and receivables

Loans and receivables, including loan notes and loans to key management personnel are nonderivative financial assets with fixed or determinable payment that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

(iv) Available-for-sale-investments

Available-for-sale-investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition, available-for-sale investments are measured at fair value with gains or losses being recognised as a separate economic component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

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

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investments with no active market, fair values are determined using valuation techniques. Such techniques include: using recent arm’s length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models making as much use of available and supportable market data as possible and keeping judgemental inputs to a minimum .

Fair value

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

Impairment

At the end of each reporting period, the Group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the statement of comprehensive income.

(l) Exploration and Evaluation Expenditure

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable through the successful development, or sale, of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

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

Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on a discounted basis.

Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site.

(m) Trade and other receivables

Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.

An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

(n) Cash and cash equivalents

Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purposes of the Statement of cash flows, cash and cash equivalents consist of cash and cash

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equivalents as defined above, net of outstanding bank overdrafts.

(o) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(p) Share-based payment transactions

(i) Equity settled transactions:

In the year under review, the Group did not provide benefits to management personnel and consultants of the Group in the form of share-based payments whereby personnel render services in exchange for shares, although this type of benefit was provided in previous years.

The cost of these equity-settled transactions with management personnel and consultants was measured by reference to the fair value of the equity instruments at the date on which they were granted. The fair value was determined using the Black-Scholes formula.

In valuing equity-settled transactions, no account was taken of any performance conditions, other than conditions linked to the price of the shares of Sabre Resources Ltd (market conditions). The cost of equity-settled transactions was recognised, together with the corresponding increase in equity, on the date of grant of the options.

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

(ii) Cash settled transactions:

The Group does not provide benefits to employees in the form of cash-settled share based payments.

Any cash-settled transactions would be measured initially at fair value at the grant date using the Black-Scholes formula taking into account the terms and conditions upon which the instruments were granted. This fair value is expensed over the period until vesting with recognition of a corresponding liability. The liability is remeasured to fair value at each reporting date up to and including the settlement date with changes in fair value recognised in profit or loss.

(q) Revenue

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

Sale of goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the

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buyer at the time of delivery of the goods to the customer.

Interest

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.

Dividends

Revenue is recognised when the shareholders’ right to receive the payment is established.

(r) Income tax

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

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

• except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, 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 credits 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,

• in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each reporting 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.

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 reporting date.

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

(s) Other taxes

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

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• 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 statement of financial position.

Cash flows are included in the Statement of Cash Flows 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.

(t) Trade and other payables

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

(u) Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(v) Earnings per share

Basic earnings per share is calculated as net loss attributable to members of the parent, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net loss attributable to members of the parent, adjusted for:

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(w) Comparatives

Comparatives are reclassified where necessary to be consistent with the current year’s disclosures.

3. Significant Accounting Judgments, Estimates and Assumptions

In applying the Group’s accounting policies, management continually evaluates judgments, estimates and assumptions based on experience and other factors, including expectations of future events that may have an impact on the Group. All judgments, estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to management. Actual results may differ from the judgments, estimates and assumptions. Significant judgments, estimates and assumptions made by management in the preparation of these financial statements are outlined below:

• (i) Significant accounting judgments include:

• (a) Provision for investments in and loans to subsidiaries

Investments in, and loans to, subsidiaries are fully provided for until such time as subsidiaries are in a position to repay loans.

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• (b) Exploration expenditure

The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. While there are certain areas of interest from which no reserves have been extracted, the directors are of the continued belief that such expenditure should not be written off since feasibility studies in such areas have not yet concluded. Such capitalised expenditure is carried at the end of the reporting period at $10,794,008.

(ii) Significant accounting estimates and assumptions include:

• (a) Share-based payment transactions

The Group measured the cost of equity-settled transactions with management personnel and consultants in previous years by reference to the fair value of the equity instruments at the date at which they were granted. The fair value was determined using the BlackScholes model, with the assumptions detailed in note 7. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.

The Group measured the cost of cash settled share-based payments at fair value at the grant date using the Black-Scholes formula taking into account the terms and conditions under which the instruments were granted

• (b) Estimation of useful lives of assets

The estimation of the useful lives of assets has been based on historical experience as well as manufacturers’ warranties (for plant and equipment) and turnover policies (for motor vehicles). In addition, the condition of assets is assessed at least once per year and considered against the remaining useful life. Adjustments to useful life are made when considered necessary. Depreciation calculations are included in note 10.

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4. Income Tax

The prima facie tax on profit/(loss) from ordinary activities before income tax is reconciled to the income tax as follows: Prima facie tax on profit/(loss) from ordinary activities before income tax at 30% (2009: 30%) Consolidated Group Add: Tax effect of: Other non allowable items Other assessable items: Deferred tax asset not bought to account Less: Tax effect of: Effect of overseas tax rate Income tax attributable to entity Unrecognised Deferred Tax Assets - Tax losses: operating losses - Tax losses: capital losses - Temporary differences - Temporary differences equity - Foreign Unrecognised Deferred Tax Liabilities	Consolidated Group 2010 2009 $ $ (217,534) (234,990) 184,508 690 37,451 262,566 (4,425) (28,266)
	- -
	2,409,560 2,587,003 1,869,800 1,869,800 4,260 797,229 975 25,879 77,381 77,381
	4,361,976 4,361,976
	(15,092) (233)

(i) The companies derive future assessable income of a nature and of an amount sufficient to enable the benefit from the deduction for the losses to be realised;

(ii) The companies continue to comply with the conditions for deductibility purposes imposed by the Law; and

(iii) No changes in tax legislation adversely affect the companies in realising the benefits from the deductions for the losse

5. Revenue

Interest Earned

	Consolidated	Group
	2010	2009
	$	$
	159,440	49,629
	159,440	49,629

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6. Auditor’s Remuneration

Amounts received or due and receivable by the Company's auditors for:-

Remuneration of the auditor of the parent entity, Grant Thornton (WA) Partnership - auditing or reviewing of the financial report - taxation services provided by related practice of the auditor Remuneration of other auditors of subsidiaries for: - auditing or reviewing the financial reports of subsidiaries	Consolidated Group 2010 $ 2009 $ 22,200 38,783 7,000 6,140 9,109 8,706 38,309 53,629	Consolidated Group 2010 $ 2009 $ 22,200 38,783 7,000 6,140 9,109 8,706 38,309 53,629
		53,629

7. Interests of Key Management Personnel (KMP)

Refer to the Remuneration Report contained in the Directors’ Report for Details of the remuneration paid or payable to each member of the Group’s key management personnel for the year ended 30 June 2010.

The totals of remuneration paid to KMP during the year are as follows:

Short-term employee benefits Post-employment benefits Termination benefits Share-based payments	2010 $ 165,902 5,348 - - 171,250	2009 $ 150,653 6,660 - -
		157,313

KMP Options and Rights Holdings

	KMP Options and Rights Holdings	KMP Options and Rights Holdings
	The number of options over ordinary		shares held by each	KMP during	the financial year is as follows:
30	June 2010	Balance	Granted as	Options	Options Expired	Balance
		1 July 2009	Compensation	Exercised		30 June 2010
	A Clemen	-	-	-	-	-
	J Downes	-	-	-	-	-
	M Scivolo	-	-	-	-	-
	D Zukerman	-	-	-	-	-
	N Grafton	-	-	-	-	-
	Total	-	-	-	-	-

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KMP Options and Rights Holdings

	KMP Options and Rights Holdings	KMP Options and Rights Holdings
	The number of options over ordinary		shares held by each	KMP during	the financial year is as follows:
30	June 2009	Balance	Granted as	Options	Options Expired	Balance
		1 July 2008	Compensation	Exercised		30 June 2009
	A Clemen	300,000	-	-	(300,000)	-
	J Downes	-	-	-	-	-
	M Scivolo	300,000	-	-	(300,000)	-
	D Zukerman	300,000	-	-	(300,000)	-
	N Grafton	200,000	-	-	(200,000)
	Total	1,100,000	-	-	(1,100,000)	-

KMP Shareholdings

The number of ordinary shares in Sabre Resources Ltd held by each KMP during the financial year is as follows:

30 June 2010 A Clemen J Downes M Scivolo D Zukerman N Grafton Total	Balance 1 July 2009 Granted as Compensation Issued on exercise of options during the year Other changes during the year Balance 30 June 2010 10 - - - 10 - - - - - - - - - - 10 - - - 10 - - - - -
	20 - - - 20

KMP Shareholdings

The number of ordinary shares in Sabre Resources Ltd held by each KMP during the financial year is as follows:

30 June 2009 A Clemen J Downes M Scivolo D Zukerman N Grafton Total	Balance 1 July 2008 Granted as Compensation Issued on exercise of options during the year Other changes during the year Balance 30 June 2009 10 - - - 10 - - - - - - - - - - 10 - - - 10 - - - - -
	20 - - - 20

There are no retirement schemes for any Directors or any loans or any other type of compensation.

Directors’ fees are paid on a quarterly basis. Consulting fees for professional services are paid as events occur.

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8. Cash and Cash Equivalents

Represented by Cash at bank Bank deposits 9. Trade and Other Receivables Current Other debtors 10. Plant and Equipment Plant and Equipment, at cost Less: accumulated depreciation Opening written down value Additions Disposals Depreciation Closing written down value 11. Exploration and Evaluation Expenditure Opening balance Expenditure for the year Impairment of Exploration and evaluation expenditure	Consolidated Group 2010 $ 2009 $ 420,154 45,169 4,700,000 350,000 5,120,154 395,169 81,518 32,788 168,990 62,773 (30,845) (22,277) 138,145 40,496 40,496 31,980 127,285 26,373 (8,106) (951) (21,530) (16,906) 138,145 40,496 9,809,484 8,789,070 984,524 1,020,414 - - 10,794,008 9,809,484	Consolidated Group 2010 $ 2009 $ 420,154 45,169 4,700,000 350,000 5,120,154 395,169 81,518 32,788 168,990 62,773 (30,845) (22,277) 138,145 40,496 40,496 31,980 127,285 26,373 (8,106) (951) (21,530) (16,906) 138,145 40,496 9,809,484 8,789,070 984,524 1,020,414 - - 10,794,008 9,809,484
		395,169
		32,788
		62,773 (22,277)
		40,496
		31,980 26,373 (951) (16,906)
		40,496
		8,789,070 1,020,414 - 9,809,484

The mining tenement EPL 3542 in Namibia expired on 29 October 2009 and has now been renewed until 29 October 2011.

12. Other Financial Assets

Non-Current

Investment in subsidiary, at cost (Refer to Note 22) Loan to subsidiary Less: provision for non-recovery Investment in subsidiary at cost Less: provision for diminution 13. Trade and other Payables Current Payables	- - - - - - 201,105	- - - - - - 227,415

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14. Issued Capital

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

		Number	Issue	Amount
Date	Details	of	Price
		Shares	(cents)	$
1 July 2008	Balance	74,434,851		27,703,957
30 June 2009	Balance	74,434,851		27,703,957
December 2009	Shares issued by placement	11,000,000	10	1,039,500
December 2009	Shares issued under 15% rule	11,000,000	10	1,039,500
December 2009	Shares issued on exercise of options	66,000	35	23,100
February 2010	Shares issued on exercise of options	13,302,146	35	4,655,751
30 June 2010	Balance	109,802,977		34,461,808

The Company’s capital consists of Ordinary Shares. The Company do not have a limited amount of authorised share capital. The Shares have no par value and are entitled to participate in dividends and the proceeds on any winding up of the Company in proportion to the number of Shares held.

At shareholders’ meetings each fully paid ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Capital Management

Management controls the capital of the group in order to maintain a good debt to equity ratio and to ensure that the group can fund its operations and continue as a going concern.

The group’s debt and capital includes ordinary share capital, supported by financial assets.

There are no externally imposed capital requirements.

Management effectively manages the group’s capital by assessing the group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market.

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

15. Share Option Reserve

15. Share Option	Reserve
Date	Details	Number of Options	Issue Price (cents)	Amount $
1 July 2008	Balance	39,000,000		643,966
30 November 2008	Options expired	(1,500,000)		-
30 June 2009	Balance	37,500,000		643,966
10 December 2009	Options granted	8,750,000	0.1	8,750
December 2009	Options exercised	(66,000)		-
January 2010	Options exercised	(13,302,146)		-
27 January 2010	Options expired	(631,854)		-
30 June 2010	Balance	32,250,000		652,716

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The weighted average remaining contractual life of options outstanding at year end was 2.17 years. The weighted average exercise price of outstanding shares at the end of the reporting period was 14.46 cents.

Summary of Options Granted

The following table sets out the number (N[o] .) and weighted average exercise price (WAEP) of, and movements in, share options granted during the year:

Outstanding at beginning of year Granted during the year Exercised during the year Expired during the year Forfeited during the year Outstanding at the end of the year	2010 2010 2009 2009 No. WAEP No. WAEP (cents) (cents) 37,500,000 19.67 39,000,000 18.72 8,750,000 - - (13,368,146 ) - (631,854) (1,500,000) - - -
	32,250,000 14.46 37,500,000 19.67

The outstanding balance as at 30 June 2010 was comprised of:

• (i) 23,000,000 options over ordinary shares exercisable at 10 cents each, at any time up to 31 December 2012;

• (ii) 250,000 options over ordinary shares exercisable at 30 cents each, at any time up to 1 November 2010;

• (iii) 250,000 options over ordinary shares exercisable at 40 cents each, at any time up to 1 November 2010;

• (iv) 8,750,000 options over ordinary shares exercisable at 25 cents each, at any time up to 30 November 2011.

The weighted average remaining contractual life for the share options outstanding as at 30 June 2010 was 2.17 years (2009: 2.38 years).

The range of exercise prices for options outstanding at the end of the year was 10 to 40 cents (2009: 10 to 40 cents).

The weighted average fair value of options granted during the year was 38 cents (2009: 0.00 cents).

16. Accumulated Losses

Accumulated losses at the beginning of the year (Loss) for year Accumulated losses at the end of the financial year	Consolidated Group 2010 $ 2009 $ (18,375,049) (17,591,750) (725,113) (783,299) (19,100,162) (18,375,049)	Consolidated Group 2010 $ 2009 $ (18,375,049) (17,591,750) (725,113) (783,299) (19,100,162) (18,375,049)
		(18,375,049)

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17. Cash flow Information

Reconciliation to Statement of Cash Flows

Note Operating (Loss) after income tax Non-cash flows in loss (Gain)/Loss on disposal of fixed asset Depreciation of plant and equipment 10 Decrease/(Increase) in receivables (Decrease)/Increase in trade and other payables Net cash flows (used in) operating activities	Consolidated 2010 $ (725,113) (6,817) 21,530 (48,730) (26,309) (785,439)	Group 2009 $ (783,299) 777 16,906 (4,490) 145,426
		(624,880)

18. Earnings per share

Weighted average number of shares on issue during the financial year used in the calculation of basic earnings per share	2010 2009 Number Number 91,916,464 74,434,851

Options to purchase ordinary shares not exercised at 30 June 2010 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.

Loss per share – cents	2010 2009 (0.8) (1.1)

19. 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:

Financial Assets Cash and cash equivalents Loans and Receivables Total Financial Assets Financial Liabilities (at amortised cost) Trade and other payables Net Financial Assets	Floating Interest Rate Non-Interest Bearing TOTAL 2010 2009 2010 2009 2010 2009 0.00% - 6.00% 0.00% - 7.53% $ $ $ $ $ $ 5,120,154 395,169 - - 5,120,154 395,169 - - 81,518 32,788 81,518 32,788
	5,120,154 395,169 81,518 32,788 5,201,672 427,957
	- - (201,105) (227,415) (201,105) (227,415)
	5,120,154 395,169 (119,587) (194,627) 5,000,567 200,542

Notes to the Financial Statements

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Reconciliation of Financial Assets to Net Assets

Net financial assets Exploration and Evaluation expenditure Fixed assets	Consolidated Group 2010 $ 2009 $ 5,000,567 200,542 10,794,008 9,809,484 138,145 40,496 15,932,720 10,050,522	Consolidated Group 2010 $ 2009 $ 5,000,567 200,542 10,794,008 9,809,484 138,145 40,496 15,932,720 10,050,522
		10,050,522

(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.

(c) Net Fair Values

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 2 to the financial statements.

(d) Financial Risk Management

The Group’s financial instruments consist mainly of deposits with recognised banks, investments in bank bills up to 90 days, accounts receivable and accounts payable, and loans to subsidiaries. Liquidity is managed, when sufficient funds are available, by holding sufficient funds in a current account to service current obligations and surplus funds invested in bank bills. The Directors analyse interest rate exposure and evaluate treasury management strategies in the context of the most recent economic conditions and forecasts. The main risks the Group is exposed to, through its financial instruments, are the depository banking institution itself, holding the funds, and interest rates. The Group’s active exposure to foreign currency is confined to services procured through the Namibian subsidiary. The Group’s credit risk is minimal as being an exploration company, no goods are sold, or services provided, for which consideration is claimed.

(e) Sensitivity Analysis

Interest Rate Risk, Foreign Currency Risk and Price Risk

The group has performed sensitivity analysis relating to its exposure to interest rate risk, foreign currency risk and price risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.

Notes to the Financial Statements

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Interest Rate Sensitivity Analysis

At 30 June 2010, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

		Consolidated	Group
		2010	2009
		$000	$000
Change in profit
-	Increase in interest rate by 2%	39	12
-	Decrease in interest rate by 2%	(39)	(12)
Change in Equity
-	Increase in interest rate by 2%	39	12
-	Decrease in interest rate by 2%	(39)	(12)

• (f) Liquidity Risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:

• Preparing forward looking cash flow analysis in relation to its operational, investing and financing activities

• Obtaining funding from a variety of sources

• Maintaining a reputable credit profile

• Managing credit risk related to financial assets

Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not reflect management’s expectations that banking facilities will be rolled forward.

Consolidated Group Financial Liabilities - Due for Payment Trade and Other Payables Total Expected Outflows Financial Assets - Cash Flows Realisable Cash and Cash Equivalents Bank Deposit over 3 months Receivables Total anticipated Inflows Net (outflow)/inflow on financial instruments	Within 1 Year 1 to 5 Years Over 5 Years Total 2010 2009 2010 2009 2010 2009 2010 2009 201,105 227,415 - - - - 201,105 227,415
	201,105 227,415 - - - - 201,105 227,415 420,154 45,169 - - - - 420,154 45,169 4,700,000 350,000 - - - - 4,700,000 350,000 81,518 32,788 - - - - 81,518 32,788
	5,201,672 427,957 - - - - 5,201,672 427,957
	5,000,567 200,542 - - - - 5,000,567 200,542

Notes to the Financial Statements

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20. Investment in controlled entities

Name of Entity	Country of	Class	Equity	Equity	Book	Value	Contribution to	Contribution to
	Incorporation	of	Holding		of Investment		Consolidated
		Shares		%			Result
			2010	2009	2010	2009	2010	2009
			%	%	$	$	$	$
Link National Pty Ltd	Australia	Ordinary	100	100	8,000,000	8,000,000	-	(144)
Sabre
Resources Namibia (Pty)	Namibia	Ordinary	70	70	-	-	(88,500)	(41,162)
Ltd

21. Related Parties

Sabre Resources Namibia (Pty) Ltd, has been loaned $2,505,604 to date, to conduct exploration. The loan is interest free, with no fixed term of repayment.

All transactions with Directors are disclosed in Note 7.

22. Operating Segments

The Group has identified its operating segments based on the internal management reporting that is used by the executive management team (the chief operating decision maker) in assessing performance and allocating resources. The Group’s operating segments have been identified based on how the financial and operating results of the Group are monitored and presented internally to the executive management team. The reportable segments are based on aggregated operating segments determined by the similarity of the products sold, as these are the sources of the Group’s major risks and have the most effect on the performance of the Group.

The executive management team have aggregated the performance of all segments as they maintain similar economic characteristics of which includes the development and exploration of the Group’s minerals interests in Namibia.

Whilst the group has one segment, the non current assets are $8,826,351 for Australia and $2,105,802 for Namibia.

23. Commitments

• (i) Mining Tenements

The Company’s main focus is the highly prospective Ongava Project in Namibia. There are no formal exploration commitments specified by the Namibian Ministry of Mining and Energy.

• (ii) Management Agreement

The Company has an agreement with a management service company for the provision of services at $220,000 per annum plus CPI. Charges are at commercial terms in accordance with the agreement entered into on 20 November 2007 for a five year term.

Notes to the Financial Statements

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24. Parent Entity Information

The following details information related to the parent entity, Sabre Resources Ltd, at 30 June 2010. The information presented here has been prepared using consistent accounting policies as shown in Note 2.

ASSETS Current assets Non-current assets TOTAL ASSETS LIABILITIES Current liabilities Non-current liabilities TOTAL LIABILITIES EQUITY Issued capital Accumulated losses TOTAL EQUITY RESERVES Share option reserve TOTAL RESERVES FINANCIAL PERFORMANCE (Loss) for the year TOTAL COMPREHENSIVE (LOSS)	Parent Entity 2010 2009 $ $ 5,084,805 422,988 8,826,351 8,512,244 13,911,156 8,935,232 (191,657) (219,176) - - (191,657) (219,176) 34,461,808 27,703,957 (21,395,025) (19,631,867) 13,066,783 8,072,090 652,716 643,966 652,716 643,966 (1,763,158) (1,474,658) (1,763,158) (1,474,658)	Parent Entity 2010 2009 $ $ 5,084,805 422,988 8,826,351 8,512,244 13,911,156 8,935,232 (191,657) (219,176) - - (191,657) (219,176) 34,461,808 27,703,957 (21,395,025) (19,631,867) 13,066,783 8,072,090 652,716 643,966 652,716 643,966 (1,763,158) (1,474,658) (1,763,158) (1,474,658)
		8,935,232
		(219,176) -
		(219,176)
		27,703,957 (19,631,867)
		8,072,090
		643,966
		643,966
		(1,474,658)
		(1,474,658)

No guarantees have been entered into by the parent entity on behalf of its subsidiary.

No contingent liabilities exist.

No contractual commitments by the parent company exist.

25. 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. There are no contingent liabilities as at 30 June 2010.

26. Subsequent Events

No matters or circumstances have arisen since the end of the financial year which significantly affect, or may significantly affect, the operations of the economic entity, the results of these operations, or the state of affairs of the economic entity in the subsequent financial years.

Notes to the Financial Statements

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SABRE RESOURCES LTD DIRECTORS’ DECLARATION

1. In the opinion of the Directors of Sabre Resources Limited (the “Company”):

2. (a) the financial statements and notes set out on pages 29 to 55, and the Remuneration disclosures that are contained in pages 25 to 26 of the Remuneration Report in the Directors’ Report, are in accordance with the Corporations Act 2001 , including:

3. (i) giving a true and fair view of the Group’s financial position as at 30 June 2010 and of its performance, for the financial year ended on that date; and

4. (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

5. (iii) complying with International Financial Reporting Standards as disclosed in Note 2.

6. (b) the remuneration disclosures that are contained in page 25 to 26 of the Remuneration Report in the Directors’ Report comply with Australian Accounting Standard AASB 124 Related Party Disclosures and

7. (c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

8. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2010.

Signed in accordance with a resolution of the Directors:

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D N Zukerman DIRECTOR

Dated this twenty eighth day of September 2010 Perth, Western Australia

Directors’ Declaration

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Grant Thornton (WA) Partnership ABN 17 735 344 518

10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E admin@gtwa.com.au W www.grantthornton.com.au

Independent Auditor’s Report To the Members of Sabre Resources Limited

Report on the financial report

We have audited the accompanying financial report of Sabre Resources Limited (the “Company”), which comprises the consolidated statement of financial position as at 30 June 2010, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes to the financial report and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report

The directors of the Company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s responsibility

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

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Independence

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

Auditor’s opinion

In our opinion:

• a the financial report of Sabre Resources Limited is in accordance with the Corporations Act 2001, including:

• i giving a true and fair view of the consolidated entity’s financial position as at 30 June 2010 and of its performance for the year ended on that date; and

• ii complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

• b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements.

Report on the remuneration report

We have audited the Remuneration Report included in pages 25 to 26 of the directors’ report for the year ended 30 June 2010. The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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Auditor’s opinion on the remuneration report

In our opinion, the Remuneration Report of Sabre Resources Limited for the year ended 30 June 2010, complies with section 300A of the Corporations Act 2001.

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GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants

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P W Warr Partner

Perth, 28 September 2010

Page No. 59

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Grant Thornton (WA) Partnership ABN 17 735 344 518

10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E admin@gtwa.com.au W www.grantthornton.com.au

Auditor’s Independence Declaration To the Directors of Sabre Resources Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Sabre Resources Limited for the year ended 30 June 2010, I declare that, to the best of my knowledge and belief, there have been:

• a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• b no contraventions of any applicable code of professional conduct in relation to the audit.

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GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants

==> picture [114 x 50] intentionally omitted <==

P W Warr Partner

Perth, 28 September 2010

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

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SABRE RESOURCES LTD CORPORATE GOVERNANCE

INTRODUCTION

Sabre Resources Ltd ACN 003 043 570 ("the Company") has adopted systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised below.

Additional information about the Company's corporate governance practices is set out on the Company's website at www.sabresources.com :

– Principle 1 Lay solid foundations for management and oversight

Responsibilities of the Board

The Board is responsible for the following matters:

ensuring the Company’s conduct and activities are ethical and carried out for the benefit of all its stakeholders;

development of corporate strategy, implementation of business plans and performance objectives;

reviewing, ratifying and monitoring systems of risk management, codes of conduct, internal control system and legal and regulatory compliance;

the appointment of the Company’s Corporate Manager, Chief Financial Officer, Company Secretary and other senior executives;

monitoring senior executives’ performance and implementation of strategy;

determining appropriate remuneration policies;

allocating resources and ensuring appropriate resources are available to management;

approving and monitoring the annual budget, progress of major capital expenditure, capital management, and acquisitions and divestitures; and

approving and monitoring financial and other reporting.

Chairman

The Chairman is responsible for leadership of the Board and for the efficient organisation and conduct of the Board’s business. The Chairman should facilitate the effective contribution of all directors and promote constructive and respectful relations between directors and between the Board and management of the Company. The Chairman is responsible for briefing directors on issues arising at Board meetings and ultimately is responsible for communications with shareholders and arranging Board performance evaluation.

Corporate Governance

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Corporate Manager

The Corporate Manager, appointed by a contractual arrangement with the Company, is responsible for running the affairs of the Company under the supervision and direction of the Board. In carrying out its responsibilities the Corporate Manager must report to the Board in a timely manner and ensure all reports to the Board present a true and fair view of the Company’s financial condition and operational results.

Company Secretary

The Company Secretary is responsible for monitoring the extent that Board policy and procedures are followed, and coordinating the timely completion and despatch of Board agendas and briefing material. All directors are to have access to the Company Secretary.

Performance evaluation

The Chairman and/or the Corporate Manager are responsible for reviewing the performance of each executive at least once every calendar year with reference to the terms of their employment contract.

Reporting

The Company, will, in the corporate governance statement section of its Annual Report, include the recommended information set out in the ASX Corporate Governance Principles in relation to the Guide to reporting on Principle 1.

Principle 2 - Structure the Board to add value

Composition of the Board

The Company will ensure that the Board will be of a size and composition that is conducive to making appropriate decisions and be large enough to incorporate a variety of perspectives and skills, and to represent the best interests of the Company as a whole rather than of individual shareholders or interest groups. It will not, however, be so large that effective decision-making is hindered.

Independent directors

The Company will regularly review whether each non-executive director is independent and each non-executive director should provide to the Board all information that may be relevant to this assessment. If a director’s independence status changes this should be disclosed and explained to the market in a timely fashion.

The Company will endeavour to ensure that it has a majority of independent directors at all times, subject to the right of shareholders in general meeting to elect and remove directors.

Chairman

While the Chairman should be a non-executive director who is independent and who should not also be the chief executive officer of the Company, the Company has not formally appointed a Chairman, preferring to rely upon Mr Zukerman as its Executive Director to fulfil this role. Mr Zukerman does not satisfy the Independence Criteria. The Board believes that Mr Zukerman is the most appropriate person for the position of Chairman because of his extensive experience.

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Although the Board recognises the importance of the need for the division of responsibilities between the Chairman and the Managing Director, the existing structure, whereby Mr Zukerman carries out the duties of both roles, is considered appropriate to the Company’s present circumstances. It provides a unified structure, which the Board believes is important given the Company’s present stage of corporate development. Mr Zukerman has been a significant force in the current direction of the Company, and has provided strong and effective leadership to the Board.

The Chairman’s other positions should not be such that they are likely to hinder the effective performance of their role of Chairman of the Company.

Independent decision- making

All directors - whether independent or not - should bring an independent judgement to bear on Board decisions. Non-executive directors are encouraged to confer regularly without management present. Their discussions are to be facilitated by the Chairman, if he is independent or the deputy Chairman. Non-executive directors should inform the Chairman before accepting any new appointments as directors.

Independent advice

To facilitate independent decision making, the Board and any committees it convenes from time to time may seek advice from independent experts whenever it is considered appropriate. With the consent of the Chairman, individual directors may seek independent professional advice, at the expense of the Company, on any matter connected with the discharge of their responsibilities.

Procedure for selection of new directors

The Company believes it is not of a size to justify having a Nomination Committee. If any vacancies arise on the Board, all directors are involved in the search for, and recruitment of a replacement. The Board believes corporate performance is enhanced when the Board has an appropriate mix of skills and experience.

In support of their candidature for directorship or re-election, non-executive directors should provide the Board with details of other commitments and an indication of time available for the Company. Prior to appointment or being submitted for re-election non-executive directors should specifically acknowledge to the Company that they will have sufficient time to meet what is expected of them as a non-executive director. Re-appointment of directors is not automatic.

Induction and education

The Board will implement an induction program to enable new directors to gain an understanding of:

the Company’s financial, strategic, operational and risk management position;

the rights, duties and responsibilities of the directors;

the roles and responsibilities of senior executives; and

the role of any Board committees in operation.

Directors will have reasonable access to technical seminars or equivalent to update and enhance their skills and knowledge, including education concerning key developments in the Company and in the industries in which the Company’s business is involved.

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---

_

Access to information

The Board has the right to obtain all information from within the Company which it needs to effectively discharge its responsibilities.

Senior executives are required on request from the Board to supply the Board with information in a form and timeframe, and of a quality that enables the Board to discharge its duties effectively. Directors are entitled to request additional information where they consider such information necessary to make informed decisions.

Reporting

The Company will, in the corporate governance statement section of its Annual Report, include the recommended information set out in the ASX Corporate Governance Principles in relation to the Guide to reporting on Principle 2.

- Principle 3: Promote ethical and responsible decision making

Code of conduct

The Board has adopted the Code of Conduct set out at Appendix A to promote ethical and responsible decision making by directors, management and employees. The Code embraces the values of honesty, integrity, enterprise, excellence, accountability, justice, independence and equality of stakeholder opportunity.

The Board is responsible for ensuring that training on the Code of Conduct is provided to staff and officers of the Company.

The Board is responsible for making advisers, consultants and contractors aware of the Company’s expectations set out in the Code of Conduct.

Policy for trading in Company securities

The Board has adopted a policy on trading in the Company’s securities by directors, senior executives and employees set out in Appendix B.

The Board is responsible for ensuring that the policy is brought to the attention of all affected persons and for monitoring compliance with the policy.

Reporting

The Company, will, in the corporate governance statement section of its Annual Report, include the recommended information set out in the ASX Corporate Governance Principles in relation to the Guide to reporting on Principle 3.

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Principle 4: Safeguard integrity in financial reporting

Audit and Risk Management

The Company believes it is not of a size to justify having a separate Audit and Risk Management Committee. Ultimate responsibility for the integrity of the Company’s financial reporting rests with the full Board. Given the small size of the Board, the directors believe an Audit Committee structure to be inefficient. All directors share responsibility for ensuring the integrity of the Company’s financial reporting and appropriate Board processes must be implemented to perform the following audit and risk management functions:

• (1) external audit function:

• (a) review the overall conduct of the external audit process including the independence of all parties to the process;

• (b) review the performance of the external auditors;

• (c) consider the reappointment and proposed fees of the external auditor; and

• (d) where appropriate seek tenders for the audit and where a change of external auditor is recommended arrange submission to shareholders for shareholder approval;

• (2) reviewing the quality and accuracy of published financial reports;

• (3) reviewing the accounting function and ongoing application of appropriate accounting and business policies and procedures;

• (4) reviewing and imposing variations to the risk management and internal control policies designed and implemented by Company management; and

• (5) any other matters relevant to audit and risk management processes.

Reporting

The Company, will, in the corporate governance statement section of its Annual Report, include the recommended information set out in the ASX Corporate Governance Principles in relation to the Guide to reporting on Principle 4.

Principle 5: Make timely and balanced disclosure

Disclosure Policy

The Board has adopted a Disclosure Policy for ensuring timely and accurate disclosure of price-sensitive information to shareholders through the ASX set out in Appendix C.

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The Disclosure Policy ensures that:

all investors have equal and timely access to material information concerning the Company including its financial position, performance, ownership and governance; and

Company announcements are subjected to a vetting and authorisation process designed to ensure they:

• (a) are released in a timely manner;

• (b) are factual;

• (c) do not omit material information; and

• (d) are expressed in a clear and objective manner that allows investors to assess the impact of the information when making investment decisions.

Reporting

The Company will, in the corporate governance statement section of its Annual Report, include the recommended information set out in the ASX Corporate Governance Principles in relation to the Guide to reporting on Principle 5.

Principle 6: Respect the rights of shareholders

Communication with Shareholders

The Board is committed to open and accessible communication with holders of the Company’s shares and other securities. Disclosure of information and other communication will be made as appropriate by mail or email.

The Company’s website will also be used to provide additional relevant information to security holders. The Board considers the following to be appropriate features for the Company’s website:

• (a) placing the full text of notices of meeting and explanatory material on the website;

• (b) providing information about the last two years’ press releases or announcements plus at least three years of financial data on the website.

General Meetings

The Company is committed to improving shareholder participation in general meetings. In order to achieve that objective, the Company has adopted guidelines of the ASX Corporate Governance Council for improving shareholder participation through the design and content of notices and through the conduct of the meeting itself.

Reporting

The Company will, in the corporate governance statement section of its Annual Report, include the recommended information set out in the ASX Corporate Governance Principles in relation to the Guide to reporting on Principle 6.

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Principle 7: Recognise and manage risk

Creation and implementation of Company risk management policies

It is the responsibility of the Corporate Manager to create, maintain and implement risk management and internal control policies for the Company, subject to review by the Board.

The Corporate Manager must report to the Board annually regarding the design, implementation and progress of the risk management policies and internal control systems.

Audit and Risk Management

As referenced with respect to Principle 4, the Board has not established an Audit and Risk Management Committee for the reasons given above.

Review by the Board

The Board will review the effectiveness of implementation of the risk management system and internal control system at least annually.

When reviewing risk management policies and internal control system the Board should take into account the Company’s legal obligations and should also consider the reasonable expectations of the Company’s stakeholders, including security holders, employees, customers, suppliers, creditors, consumers and the community.

Corporate Manager

The Corporate Manager is required annually to state in writing to the Board that the Company has a sound system of risk management, that internal compliance and control systems are in place to ensure the implementation of Board policies, and that those systems are operating efficiently and effectively in all material respects.

Verification of financial reports

The chief executive officer and the Chief Financial Officer are required by the Company to state the following in writing prior to the Board making a solvency declaration pursuant to section 295(4) of the Corporations Act:

• (a) that the Company’s financial reports contain a true and fair view, in all material respects, of the financial condition and operating performance of the Company and comply with relevant accounting standards; and

• (b) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and that the system is operating effectively in all material respects in relation to financial reporting risks.

Reporting

The Company will, in the corporate governance statement section of its Annual Report, include the recommended information set out in the ASX Corporate Governance Principles in relation to the Guide to reporting on Principle 7.

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Principle 8: Remunerate fairly and responsibly

Director and senior executive remuneration policies

The Company’s remuneration policy is structured for the purpose of:

• (a) motivating senior executives to pursue the long-term growth and success of the Company; and

• (b) demonstrating a clear relationship between senior executives’ performance and remuneration.

The Board’s responsibility is to set the level and structure of remuneration for officers (including but not limited to directors and secretaries) and executives, for the purpose of balancing the Company’s competing interests of:

• (a) attracting and retaining senior executives and directors; and

• (b) not paying excessive remuneration.

Executive directors’ remuneration should be structured to reflect short and long-term performance objectives appropriate to the Company’s circumstances and goals.

Executive directors’ and senior executives’ remuneration packages should involve a balance between fixed and incentive-based pay, reflecting short and long-term performance objectives appropriate to the Company’s circumstances and goals.

Non-executive directors’ remuneration should be formulated with regard to the following guidelines:

• (a) non-executive directors should normally be remunerated by way of fees, in the form of cash, non-cash benefits, superannuation contributions or equity, usually without participating in schemes designed for the remuneration of executives;

• (b) non-executive directors should not be provided with retirement benefits other than superannuation.

No director may be involved in setting their own remuneration or terms and conditions and in such a case relevant directors are required to be absent from the full Board discussion.

Remuneration Committee

The Company believes it is not of a size to justify having a Remuneration Committee and that it has Board processes in place which raise the issues which would otherwise be considered by a committee.

Reporting

The Company, will, in the corporate governance statement section of its Annual Report, include the recommended information set out in the ASX Corporate Governance Principles in relation to the Guide to reporting on Principle 8.

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Appendix A – Code of Conduct

Introduction

• 1 This Code of Conduct sets out the standards which the Board, management and employees of the Company are encouraged to comply with when dealing with each other, the Company’s shareholders and the broader community.

Responsibilities to shareholders

• 2 The Company aims:

• 2.1 to increase shareholder value within an appropriate framework which safeguards the rights and interests of shareholders; and

  • 2.2 to comply with systems of control and accountability which the Company has in place as part of its corporate governance.

Responsibilities to clients, employees, suppliers, creditors, customers and consumers

• 3 The Company will comply with all legislative and common law requirements which affect its business.

Employment practices

• 4 The Company will employ the best available staff with skills required to carry out the role for which they are employed. The Company will ensure a safe workplace and maintain proper occupational health and safety practices.

Responsibility to the community

• 5 The Company will recognise, consider and respect environmental, native title and cultural heritage issues which arise in relation to the Company’s activities and comply with all applicable legal requirements.

Responsibility to the individual

• 6 The Company recognises and respects the rights of individuals and will comply with the applicable laws regarding privacy and confidential information.

Obligations relative to fair trading and dealing

• 7 The Company will deal with others in a way that is fair and will not engage in deceptive practices.

Business courtesies, bribes, facilitation payments, inducements and commissions

• 8 Corrupt practices are unacceptable to the Company. It is prohibited for the Company or its directors, managers or employees to directly or indirectly offer, pay, solicit or accept bribes or any other corrupt arrangements.

Conflicts of interest

• 9 The Board, management and employees must report any situations where there is a real or apparent conflict of interest between them as individuals and the interest of the Company. Where a real or apparent conflict of interest arises, the matter must be brought to the attention of the Chairman in the case of a Board member, the Corporate Manager or Chief Executive Officer (or equivalent) in the case of a member of management and a supervisor

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in the case of an employee, so that it may be considered and dealt with in an appropriate manner.

Compliance with the Code of Conduct

• 10 Any breach of compliance with this Code of Conduct is to be reported directly to the Chairman.

Periodic review of Code

• 11 The Company will monitor compliance with this Code of Conduct periodically by liaising with the Board, management and staff. Suggestions for improvements or amendments to this Code of Conduct may be made at any time to the Chairman.

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Appendix B – Policy for trading in Company securities

Introduction

• 1 The Company recognises and enforces legal and ethical restrictions on trading in its securities by relevant persons within and external to the Company. The terms of this securities dealing policy apply to the Company’s directors, senior executives, employees and consultants ( Relevant Persons ).

Communication

• 2 This policy will be communicated to all Relevant Persons and will be placed on the Company website.

Trading restrictions

• 3 Trading by Relevant Persons in the Company’s securities is subject to the following limitations:

• 3.1 No trading in Company securities shall take place during the seven days preceding release of each quarterly report, half-yearly financial report, and annual financial report of the Company.

• 3.2 No trading in the Company’s securities shall take place directly or indirectly where it is known, or ought reasonably to have been known by the person intending to trade, that information exists that has not been released to the ASX and where that information is of a type that reasonably could be expected to encourage buying or selling were that information known by others.

• 3.3 No trading shall take place in Company securities unless prior notice is given to the Chairman and approval is obtained from him.

Hardship

• 4 During a period specified in paragraph 3.1, Relevant Persons may, after obtaining the Chairman’s consent, trade the Company’s securities to the extent reasonably necessary to avoid or ameliorate documented hardship and suffering or as required by other extenuating circumstances.

Directors’ trading and disclosures

• 5 Within one day of a director being appointed to the Board, resigning or being removed from the Board, or trading in the Company’s securities, full details of the director’s notifiable interests in the Company’s securities and changes in such interest must be advised in writing to the Company Secretary so that a record is kept within the Company and so that necessary ASX notifications will occur.

• 6 All directors must notify the Company Secretary of any margin loan or similar funding arrangement entered into in relation to the Company’s securities and any variations to such arrangements, including the number of securities involved, the circumstances in which the lender can make margin calls, and the right of the lender to dispose of securities.

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Appendix C - Disclosure Policy

Disclosure requirements

• 1 The Company recognises its duties pursuant to the continuous disclosure rules of the ASX Listing Rules and Corporations Act to keep the market fully informed of information which may have a material affect on the price or value of the Company’s securities.

• 2 Subject to certain exceptions (in ASX Listing Rule 3.1A), the Company is required to immediately release to the market information that a reasonable person would expect to have a material effect on the price or value of the Company’s securities.

Responsibilities of directors, officers and employees

• 3 The Board as a whole is primarily responsible for ensuring that the Company complies with its disclosure obligations and for deciding what information will be disclosed. Subject to delegation, the Board is also responsible for authorising all ASX announcements and responses of the Company to ASX queries.

• 4 Every director, officer and employee of the Company is to be informed of the requirements of this policy and must advise the Corporate Manager, Chairman or Company Secretary as soon as possible (and prior to disclosure to anyone else) of matters which they believe may be required to be disclosed.

Authorised Disclosure Officer

• 5 The Board has delegated its primary responsibilities to communicate with ASX to the following Authorised Disclosure Officer:

• 5.1 the Company Secretary or

• 5.2 in the absence of the Company Secretary, a designated Executive Director, who is authorised to act in that capacity by the Board.

Responsibilities of Authorised Disclosure Officer

• 6 Subject to Board intervention on a particular matter, the Authorised Disclosure Officer is responsible for the following:

• 6.1 monitoring information required to be disclosed to ASX and coordinating the Company’s compliance with its disclosure obligations;

• 6.2 ASX communication on behalf of the Company, authorising Company announcements and lodging documents with ASX;

• 6.3 requesting a trading halt in order to prevent or correct a false market;

• 6.4 providing education on these disclosure policies to the Company’s directors, officers and employees; and

• 6.5 ensuring there are vetting and authorisation processes designed to ensure that Company announcements:

  • are made in a timely manner;

  • are factual;

  • do not omit material information;

  • are expressed in a clear and objective manner that allows investors to assess the impact of the information when making investment decisions.

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• 7 An Authorised Disclosure Officer must be available to communicate with the ASX at all reasonable times, and is responsible for providing contact details and other information to ASX to ensure such availability.

Measures to avoid a false market

• 8 In the event that ASX requests information from the Company in order to correct or prevent a false market in the Company’s securities, the Company will comply with that request. The extent of information to be provided by the Company will depend on the circumstances of the ASX request.

• 9 If the Company is unable to give sufficient information to the ASX to correct or prevent a false market, the Company will request a trading halt.

• 10 If the full Board is available to consider the decision of whether to call a trading halt, only they may authorise it, but otherwise, the Authorised Disclosure Officer may do so.

ASX Announcements

• 11 Company announcements of price-sensitive information are subjected to the following vetting and authorisation process to ensure their clarity, timely release, factual accuracy and inclusion of all material information:

• 11.1 The Authorised Disclosure Officer must prepare ASX announcements when required to fulfil the Company’s disclosure obligations.

• 11.2 Proposed announcements must be approved by the Chairman or in his absence, urgent announcements may be approved by such other person expressly authorised by the Board.

• 11.3 Announcements must first be released to the ASX Announcements Platform before being disclosed to any other private or public party (such as the media). after release of the announcement, it must be displayed on the Company’s website, following which the Company can then release such information to media and other information outlets.

• 11.4 Wherever practical, all announcements must be provided to the directors, Corporate Manager and Company Secretary prior to release to the market for approval and comment.

Confidentiality and unauthorised disclosure

• 12 The Company must safeguard the confidentiality of information which a reasonable person would expect to have a material effect on the price or value of the Company’s securities. If such information is inadvertently disclosed, the Authorised Disclosure Officer must be informed of the same and must refer it to the Chairman and Corporate Manager as soon as possible.

External communications and Media Relations

• 13 The Chairman, Company Secretary and such other person approved by the Board are authorised to communicate on behalf of the Company with the media, government and regulatory authorities, stock brokers, analysts and other interested parties or the public at large. No other person may do so unless specifically authorised by the Chairman, Company Secretary or such other approved person.

• 14 All requests for information from the Company must be referred to the Authorised Disclosure

• Officer who will provide them to the Chairman, Company Secretary or Corporate Manager.

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Breach of disclosure policy

• 15 Serious breaches of this disclosure policy may be treated with disciplinary action, including dismissal, at the discretion of the Board.

• 116 Where the breach is alleged against a member of the Board, that director will be excluded from the Board’s consideration of the breach and any disciplinary action for the Company to take.

Board Structure
Name of Director	Year	Executive	Non-	Independent	Seeking
	Appointed		Executive		re-election at
					2010 AGM
A Clemen - Director	1999	NO	YES	YES	YES
J Downes - Director	2007	NO	YES	YES	NO
M Scivolo - Director	2006	NO	YES	YES	NO
D Zukerman - Director	2003	YES	NO	NO	NO

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1. Distribution of Shareholders

(a) As at 21 September 2010 the distribution of members and their shareholdings were:-

Range of Holding 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over	Holders Shares Held Percent 246 97,776 0.09 316 909,687 0.83 139 1,166,463 1.06 351 13,839,740 12.60 127 93,789,331 85.42
	1,179 109,802,997 100.00

• (b) There exist 283 shareholders with unmarketable parcels of shares.

2. Substantial Shareholders

The names of the substantial shareholders who have notified the Company in accordance with Section 671B of the Corporation Act 2001 are:

Name	Number of	Percentage of
	Ordinary Shares	Issued Capital
Coniston Pty Ltd,	27,036,020	23.73%
Kalgoorlie Mine Management Pty Ltd
together with group member
James John del Piano

The twenty largest shareholders as at 21September 2010, representing 59.14% of the paid up capital were:

Name of Holder Coniston Pty Ltd Bow Lane Nominees Pty Ltd UBS Wealth Management Australia Nominees Pty Ltd Langoni Investments Pty Ltd Comprehensive Investments Pty Ltd Cangu Pty Ltd Corridor Nominees Pty Ltd Pylara Pty Ltd Kalgoorlie Mine Management Pty Ltd Serec Pty Ltd Queensway Investments Pty Ltd Coniston Pty Ltd Merrill Lynch (Australia) Nominees Pty Ltd ANZ Nominees Ltd MIL & SE Bassett Citcorp Nominees Pty Ltd Alban Hasslinger Bond Street Custodians Ltd James John del Piano Bluebase Pty

Number % 23,200,000 21.13 6,513,800 5.93 5,728,177 5.22 3,520,000 3.21 3,360,000 3.06 2,720,000 2.45 2,550,000 2.32 2,340,000 2.13 1,940,000 1.77 1,850,000 1.69 1,675,000 1.53 1,500,000 1.37 1,210,067 1.10 1,130,249 1.03 1,010,000 0.92 984,000 0.90 979,800 0.89 921,424 0.84 906,020 0.83 900,000 0.82

64,938,537 59.14

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• (f) Four classes of unlisted options have been granted:

• (i) 23,000,000 options exercisable at 10 cents each on or before 31 December 2012, (ii) 250,000 options exercisable at 30 cents each on or before 1 November 2010, (iii) 250,000 options exercisable at 40 cents each on or before 1 November 2010,

• (iv) 8,750,000 options exercisable at 25 cents each on or before 30 November 2011.

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