ST GEORGE MINING LIMITED - Annual Report 2013

ASX / MEDIA RELEASE

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16 August 2013

ST GEORGE MINING LIMITED (ASX: SGQ) - 30 JUNE 2013 ANNUAL REPORT

On behalf of the Board of Directors, I am pleased to present the Annual Report of St George Mining Limited for the financial year ended 30 June 2013, a copy of which is attached.

The year was full of important accomplishments and the Company is now well positioned for near term exploration success.

The East Laverton Property was virtually unexplored before St George Mining commenced its regional exploration program nearly three years ago. Our continued systematic approach to exploration has identified several mineral systems and we have generated a portfolio of priority targets in various stages in the pipeline.

Our nickel projects were the focus of our field work during the year, and we achieved material milestones that substantially advanced these exciting exploration projects. The East Laverton Property remains on track to emerge as a significant new nickel camp in Western Australia.

In October 2012, we announced drill results from the 2012 reconnaissance drilling at Project Dragon. The drilling along the Stella Range Belt in 2012 identified disseminated nickel sulphides, confirming for the first time the fertility of the high MgO komatiite sequences of the Stella Range.

In May 2013, our Partner at Project Dragon exercised its right to proceed to Stage One of the farm‐in arrangement. Exploration by our Partner on the farmin tenements along the Stella Range Belt as well as the two other ultramafic belts within the East Laverton Property – the Central Belt and the Narnoo Belt – is continuing.

At our 100% owned Cambridge Nickel Project, drilling in 2012 and 2013 identified highly prospective ultramafic lithologies. The prospectivity of the large ultramafic dunite body at Cambridge was substantially increased when it was shown to be geologically consistent with the other ultramafic rocks along the Stella Range, where nickel sulphide mineralisation has already being discovered.

The Company was granted an additional 3 tenements in strategically important areas along the Stella Range Belt, increasing its 100% owned coverage of the Belt to over 30 km.

With a large, highly prospective tenement package and sophisticated exploration over three ultramafic trends, we are well advanced in establishing Western Australia’s next big nickel story.

John Prineas Executive Chairman

St George Mining Limited

(+61) 411 421 253 [email protected] www.stgeorgemining.com.au

St George Mining Limited ACN 139 308 973 Level 1, 115 Cambridge Street, PO Box 1305, West Leederville WA 6007 Phone + 61 8 9322 6600 Facsimile + 61 8 9322 6610

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ACN 139 308 973

ANNUAL REPORT 2013

CORPORATE DIRECTORY/CONTENTS PAGE

CORPORATE DIRECTORY

Board of Directors

John Prineas - Executive Chairman Tim Hronsky - Executive Director Marcus Michael - Non-Executive Director

Company Secretary Sarah Shipway

Registered and Principal Office

Level 1, 115 Cambridge Street WEST LEEDERVILLE WA 6007

Tel: + 61 8 9322 6600 Fax: + 61 8 9322 6610 Website: www.stgeorgemining.com.au Email: [email protected]

Australian Business Number

ABN 21 139 308 973

Share Register

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

Tel: 1300 557 010 Int: +61 8 9323 2000 Fax: + 61 8 9323 2033

Stock Exchange Code

SGQ – Ordinary Shares SGQO – Listed Options

Solicitors

Steinepreis Paganin

Auditors

Stantons International

Bankers

Commonwealth Bank

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CONTENTS	PAGE
Chairman’s Letter	3
Review of Operations	5
Directors’ Report	14
Consolidated Statement of Profit or
Loss and Other Comprehensive Income	21
Consolidated Statement
of Financial Position	22
Consolidated Statement
of Changes in Equity	23
Consolidated Statement
of Cash Flows	24
Notes to the Financial Statements	25
Directors’ Declaration	51
Auditor’s Independence Declaration	52
Independent Auditor’s Report	53
Corporate Governance Statement	55
Shareholder Information	63
Schedule of Tenements	65

St George Mining Limited – Annual Report 2013

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CHAIRMAN’S LETTER

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Drilling at the Cambridge Nickel Project in May 2013

St George Mining Limited – Annual Report 2013

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CHAIRMAN’S LETTER

Dear Fellow Shareholders,

On behalf of the Board of Directors, I am pleased to present the Annual Report of St George Mining Limited for the financial year ended 30 June 2013.

The year was full of important accomplishments and your Company is now well positioned for near term exploration success.

In May 2013, our Partner at Project Dragon exercised its right to proceed to Stage One of the farm-in arrangement. Exploration by our Partner on the farmin tenements along the Stella Range Belt as well as the two other ultramafic belts within the East Laverton Property – the Central Belt and the Narnoo Belt – is continuing.

The Company was granted an additional 3 tenements in strategically important areas along the Stella Range Belt, increasing its 100% owned coverage of the Belt to over 30 km.

With a large, highly prospective tenement package and sophisticated exploration over three ultramafic trends, we are well advanced in establishing Western Australia’s next big nickel story.

John Prineas Executive Chairman St George Mining Limited

St George Mining Limited – Annual Report 2013

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REVIEW OF OPERATIONS

CAMBRIDGE NICKEL PROJECT (100% ST GEORGE)

The Company achieved a major exploration breakthrough at its Cambridge Nickel Project following the completion of the first phase of the 2013 drilling programme. Ten holes were completed for a total of 2,295 metres, including 7 holes that form a traverse across the strike of the Cambridge ultramafic body.

Drill results suggest that the central part of the ultramafic body appears to be more prospective for nickel mineralisation than the margins, indicating a significant structural modification of the original flat laying komatiitic (ultramafic) volcanics.

Assays showed that the magnesium-oxide content within ultramafic areas of Cambridge is very high (>35% MgO) and indicative of olivine mesocumulate-adcumulate layers, the main targets for nickel sulphide mineralisation.

These findings imply that the ultramafic body at Cambridge is geologically consistent with other komatiites along the remainder of the highly prospective Stella Range Belt, which has already been shown to contain high MgO zones and disseminated nickel sulphide mineralisation.

This represents a major increase in the potential for Cambridge to host high grade nickel sulphides.

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Figure 1 - Drill section across the Cambridge ultramafic body shows the highest Ni values (green lines) and MgO values (blue lines) in the central zone. CAMRC-011 appears to have encountered the top of an olivine adcumulate zone.

This phase of exploration has generated an exciting new drill target at Cambridge. The best nickel intercept was located in the central zone of the body. CAMRC-011 intersected 42m @ 0.26%Ni within a zone exceeding 40 % MgO at the base of the drill-hole (see Figure 1). This appears to be consistent with the intersection of the top of an olivine adcumulate zone that may host nickel sulphides at depth.

St George Mining Limited – Annual Report 2013

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REVIEW OF OPERATIONS

The Company increased its strategic landholding on the Stella Range Belt with the grant of E39/1722. This new exploration licence is contiguous with the northern boundary of the Company’s existing tenements and extends St George’s dominant and continuous coverage of the Stella Range Belt by a further 12 kilometres (see Figure 2).

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Figure 2 – the tenements along the Stella Range Belt that comprise the Cambridge Nickel Project. See Figure 3 for a property scale illustration of the East Laverton Property.

With the inclusion of the new tenement, over 60 strike-kilometres of the promising Stella Range ultramafic belt are now within the East Laverton Property with about half of this falling within the Company’s 100% Cambridge Nickel Project.

E39/1722, as well as E39/1667 and E39/1666, are largely unexplored and offer an outstanding opportunity for a nickel sulphide discovery .

The East Laverton Property hosts three ultramafic belts that are prospective for nickel sulphide mineralisation. Disseminated nickel sulphides were discovered along the Stella Range Belt in 2012, confirming the presence of fertile high MgO komatiites.

Drilling at the other two belts – the Central Belt and the Minigwal (Narnoo) Belt – intersected significant thicknesses of high MgO ultramafic and sulphide rich sediments, a setting which is highly prospective for nickel sulphide mineralisation. Figure 3 highlights the three principal faults that are within the Esat Laverton Property and with which these ultramafic belts are associated with.

The Company is assessing the areas of interest along the Central Belt and Minigwal Belt and expects to generate new, exciting nickel prospects in the near term.

St George Mining Limited – Annual Report 2013

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REVIEW OF OPERATIONS

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Figure 3 – The above map illustrates the new tenement (E39/1722) as well as the three principal faults within the East Laverton Property. The broad ultramafic belts are associated with these structural trends.

St George Mining Limited – Annual Report 2013

REVIEW OF OPERATIONS

NICKEL EXPLORATION – PROJECT DRAGON

A reconnaissance RC drilling programme was completed by BHP Billiton Nickel West Pty Limited (“the Partner”) between April and July 2012.

Drilling confirmed the presence of three ultramafic sequences - the Stella Range Belt, the Central Belt and the Narnoo Belt. Primary nickel sulphide mineralisation was identified on the Stella Range Belt, establishing this as a nickel sulphide bearing high MgO komatiite sequence.

The program tested 7 nickel target areas on core tenements covered by the Project Dragon farm-in arrangement. A total of 8,560m were drilled for 35 holes. Assay results were announced on 23 and 25 October 2012.

The location of the drillholes and the prospects targeted in the drill program is shown in Figure 3.

Two drill holes on the Stella Range horizon, DRAC 35 and DRAC 38, intersected disseminated nickel sulphide mineralisation (e.g. 18m @ 0.40% Ni from 100m at DRAC 35, see Table 1).

In addition to the two intersections of disseminated nickel sulphides, there were anomalous nickel intersections in numerous drill holes. These included DRAC 33 with 36 m @ 0.25% Ni from 178m to 214 m, and DRAC 26 with 20 m @ 0.28% Ni from 194m to 214 m. These nickel values are not economically significant, but are favourable indications of the fertility of the komatiite magmas that form the ultramafic horizons at the East Laverton Property.

On 29 May 2013, the Partner exercised the option to earn a Stage One interest in the nickel rights attaching to seven tenements at the East Laverton Property.

The Partner has the right to earn a 51% interest in the nickel rights of the Farmin Tenements (“the Stage One interest”) by completing the exploration expenditure requirements of Stage One.

For further details of the Project Dragon farm-in arrangement see the ASX Release dated 6 April 2011 issued by St George Mining and on our website at www.stgm.com.au/project-dragon.

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Table 1 - Significant intersections from the reconnaissance RC drill program at Project Dragon.

St George Mining Limited – Annual Report 2013

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REVIEW OF OPERATIONS

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Figure 4 - Prospect locations and significant intersections from the RC program at Project Dragon.

St George Mining Limited – Annual Report 2013

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REVIEW OF OPERATIONS

EAST LAVERTON - GOLD EXPLORATION

The East Laverton Property is located on the eastern margin of the gold prolific Yilgarn Craton, between two major goldfields with landmark deposits - Sunrise Dam and Tropicana (see Figure 5). The Property is situated on a terrane boundary, a setting where major mineral events are known to occur.

The East Laverton Property hosts three regional NW shears cross-cut by a series of easterly faults (informally known as the ‘Tropicana Trend’). This is a typical structural setting for shear-hosted greenstone gold deposits in the NE Goldfields. The regional Minigwal Fault is of specific interest as it is interpreted as a fundamental (translithospheric) structure that has controlled the architecture and deposition of the associated Narnoo greenstone belt, and was an important district-scale control for gold mineralisation.

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Figure 5 – the East Laverton Property and the Lake Minigwal Project with major projects in the region.

St George Mining Limited – Annual Report 2013

REVIEW OF OPERATIONS

The Company has generated a portfolio of attractive gold prospects across the large area of the East Laverton Property (see Figure 6), with priority prospects being:

Balmoral : a unique Au-Mo target with a zoned alteration system extending over 9 km strike
Desert Dragon : an extensive 2 km ultramafic hosted Au-Ag-Cu trend
Athena : Au-Ag anomaly with 1 km strike between two granites
Golden Dragon : conceptual Au target within underexplored eastern domain

In addition, there are a number of earlier stage gold targets being evaluated by the Company, any of which could prove to be significant. The Athena and Desert Dragon prospects were drilled during the year. The holes at both prospects encountered zones of intense potassium feldspar + silica + biotite alteration which is consistent with the presence of oxidized and alkaline hydrothermal fluids. The laboratory assays did not detect any significant intersections of gold in these completed holes and a technical review of these prospects is ongoing aimed at understanding the significance of the alteration and mineralogy encountered in these holes.

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Figure 6 – key prospects at the East Laverton Property with major fault lines highlighted

St George Mining Limited – Annual Report 2013

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REVIEW OF OPERATIONS

EAST LAVERTON – RARE EARTHS

The Red Dragon Prospect is a large Paleoproterozoic carbonatite-REE mineral system that was identified by regional soil geochemical surveys. The current geochemical footprint extends over 66 sq km and remains open to the north and west.

The inaugural drilling at Red Dragon was undertaken in May 2013, with the intention of demonstrating a third dimension (i.e. existence at depth) to this large and unique mineral system. Two RC drill-holes were completed at the Red Dragon REE Prospect for a total of 488 metres.

Drill assays show consistent and geochemically anomalous levels of heavy (HREE) and light (LREE) rare earth elements, meeting the primary objective for this drilling programme. Establishing “proof of concept” is an important milestone in the exploration process at Red Dragon, and validates Red Dragon as an attractive and large REE prospect.

The 2013 drill program at Red Dragon was assisted by a grant received by St George Mining under the West Australian Government’s “Innovative Drilling Program” that forms part of its Exploration Incentive Scheme (EIS).

LAKE MINIGWAL PROJECT

The Lake Minigwal Project covers a large area of concealed greenstone that appears to extend from the known Minigwal and Wongatha greenstone belts located to the south of the East Laverton Property (see Figure 4). No modern exploration is known over this area and is likely due to the cover sequence.

The Company is continuing to review the Fugro multi-client aeromagnetic data for the area covered by its Lake Minigwal Project. The data has been processed and modelled for the Company by Southern Geoscience Consultants.

Interim findings show a strong correlation between the favourable structural setting and the large gold anomalies previously identified through a regional geochemical program conducted by the West Australian Geological Survey of Western Australia (GSWA).

In addition to strong merit as a large gold project, the greenstones present in the project area are thought to include ultramafic sequences that may have the potential for komatiite hosted nickel sulphide mineralisation. The Company will employ the local knowledge gained at its East Laverton Property in further evaluating the project area for nickel sulphide potential.

PINE CREEK PROPERTY - EXPLORATION ACTIVITIES

The Company is continuing to review exploration results at the Pine Creek Property to determine future exploration work.

CORPORATE

During the year, the Company completed two capital raisings. On 12 October 2012, the Company completed a placement of ordinary shares to sophisticated investors to raise a total of $735,000 through the issue of 3,500,000 shares at $0.21 each.

On 30 April 2013, the Company completed a further placement of ordinary shares to sophisticated investors to raise a total of $800,000 through the issue of 5,000,000 shares at $0.16 each.

Following the placement in April 2013, the Company had 71,981,000 ordinary shares on issue.

St George Mining Limited – Annual Report 2013

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REVIEW OF OPERATIONS

Capital Structure

As at 30 June 2013, the capital structure of the Company was:

Fully Paid Ordinary Shares(SGQ)	71,981,000
Listed Options(SGQO)	48,508,000
Unlisted Options
Class A Options	450,000
Class B Options	450,000
Class C Options	600,000
Performance Shares	100

The Company is a junior exploration company and has no internally generated cashflow at the operating level. The continuation of exploration activities will, at some stage in the future, require access to new funding.

The exploration activities to be carried out in the future and the Company’s planned discretionary expenditure may vary significantly due to a variety of factors, including the results of recent exploration activities and the funds available at the time. The Company has the ability to substantially reduce or defer actual exploration expenditure if required to better match the funds available to the Company at any point in time.

The auditors have issued an emphasis of matter opinion on the inherent uncertainty regarding the going concern of the Group.

The directors have prepared the financial statement on a going concern basis which contemplates the continuity of normal business activities. The Directors have determined that future equity raisings or debt financing arrangements are likely to be required to provide funding for the Group's activities and to meet the Group’s objectives.

The Company has projects which the Board believes are highly prospective for a major discovery, particularly the Cambridge Nickel Project (100% St George) and the Project Dragon farm-in arrangement with a major mining company. Exploration results to date strongly justify further exploration at these projects. The Board believes that the potential of these projects is very attractive and will support initiatives to raise moneys to fund ongoing operations.

The Company has a highly experienced Board with expertise in corporate and financial management and a proven track record in raising moneys to fund the Company’s ongoing activities.

The Board is confident that the Group will have sufficient funds to finance its operations in the 2013/2014 Financial Year.

St George Mining Limited – Annual Report 2013

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DIRECTORS’ REPORT

The Directors of St George Mining Limited submit herewith the annual financial report of St George Mining Limited from the 1 July 2012 to 30 June 2013. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

DIRECTORS

The names and particulars of the directors of the Company as at 30 June 2013, and at the date of this report, are as follows. Directors were in office for the entire period unless otherwise stated.

JOHN PRINEAS B.EC LL.B F FIN Executive Chairman Appointed 19 October 2009

John has over 26 years experience in the banking and legal sectors, including a period as the head of a financial institution in Australia. He commenced his career as a lawyer at Allen, Allen & Hemsley, gaining extensive experience in commercial transactions and corporate advice in both Australia and Asia-Pacific.

In 1994, he joined Dresdner Bank AG in Sydney and over the next 10 years occupied the roles of General Counsel, Chief Operating Officer and Country Head with a focus on project and acquisition finance for resources and infrastructure projects as well as associated capital markets and treasury products, including commodities trading.

John has a diverse range of high level experience in finance, mining and corporate governance.

During the past 3 years he has held no other listed company directorships.

TIM HRONSKY B.ENG (Geology) MAUSIMM, MSEG Executive Director

Appointed 25 November 2009

Tim is a geologist with over 23 years international experience in the mineral exploration and mining industry, including 15 years with Placer Dome Inc. After graduating from the West Australian School of Mines, Tim began his career in a number of operational roles before shifting to exploration where he was the Exploration Manager (Asia) for Placer Dome.

Subsequently he undertook a number of corporate roles related to business improvement, risk management and assurance. More recently, he has been providing consulting services to a range of clients in the global exploration and mining industry.

During the past 3 years he has held no other listed company directorships.

MARCUS MICHAEL CA, B.Bus

Non-Executive Director Appointed 19 October 2009

Marcus Michael is a Chartered Accountant with over 23 years industry experience. He has provided consulting services to a broad range of public and private entities.

Marcus Michael has been involved with private equity consulting, capital and debt funding and corporate reconstruction since 1990 and is a Director of Marshall Michael Pty Ltd, Chartered Accountants.

Marcus Michael graduated from Curtin University in 1990 with a Bachelor of Business and has been a member of the Institute of Chartered Accountants since 1994.

St George Mining Limited – Annual Report 2013

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DIRECTORS’ REPORT

During the past 3 years he has also served as a director of the following listed companies;

Company	Date of Appointment	Date of Resignation
Argent Minerals Limited	4 April 2007	Not applicable
Beacon Minerals Limited	19 March 2012	Not applicable
Cardinal Resources Limited	28 December 2012	Not applicable

COMPANY SECRETARY

Sarah Shipway was appointed Company Secretary of St George Mining on 22 March 2012. Sarah has a Bachelor of Commerce from the Murdoch University and is a member of the Institute of Chartered Accountants.

DIRECTORS’ INTERESTS

At the date of this report the Directors held the following interests in St George Mining.

Name	Ordinary	Listed	Class A	Class B	Class C	Performance
	Shares	Options	Unlisted	Unlisted	Unlisted	Shares
			Options	Options	Options
John Prineas	10,214,221	7,658,167	-	-	-	30
Tim Hronsky	1,062,500	531,250	300,000	300,000	400,000	10
Marcus Michael	2,810,668	2,108,006	-	-	-	15

John Prineas has had no interest, whether directly or indirectly, in a contract or proposed contract with St George Mining Limited during the financial year end. Marshall Michael Pty Ltd Chartered Accountants, of which Marcus Michael is a Director, provides accounting, bookkeeping, corporate secretarial and general administrative services to the Company and Tim Hronsky through Essential Risk Solutions Ltd, of which Tim Hronsky is a Director, provides technical consulting services to the Company.

PRINCIPAL ACTIVITIES

The principal activity of the Group is mineral exploration in Australia.

RESULTS AND REVIEW OF OPERATIONS

The results of the consolidated entity for the financial year from 1 July 2012 to 30 June 2013 after income tax was a loss of $1,494,460 (2012: $2,402,771).

A review of operations of the consolidated entity during the year ended 30 June 2013 is provided in the “Review of the Operations” immediately preceding this Directors’ Report.

LIKELY DEVELOPMENTS

The Group’s focus over the next financial year will be to continue exploration on its key projects at the East Laverton Property. Further commentary on planned activities over the forthcoming year is provided in the “Review of Operations”.

The Board will continue to focus on creating value from the Company’s existing resource assets, as well as considering new opportunities in the resources sector to complement the Company’s current projects.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

There has not been any significant changes in the state of affairs of the Group during the financial year, other than as noted in this financial report.

St George Mining Limited – Annual Report 2013

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DIRECTORS’ REPORT

ENVIRONMENTAL ISSUES

The Group is aware of its environmental obligations with regards to its exploration activities and ensures that it complies with all applicable regulations when carrying out exploration work.

DIVIDENDS PAID OR RECOMMENDED

The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report.

DIRECTORS’ MEETINGS

The following table sets out the number of meetings held during the year ended 30 June 2013 and the number of meetings attended by each director.

Name	Eligible to attend	Attended
J Prineas	9	9
T Hronsky	9	8
M Michael	9	9

REMUNERATION REPORT – AUDITED

Remuneration policy

The remuneration policy of St George Mining Limited has been designed to align directors’ objectives with shareholder and business objectives by providing a fixed remuneration component, which is assessed on an annual basis in line with market rates. The Board of St George Mining Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best directors to run and manage the Company.

The Board’s policy for determining the nature and amount of remuneration for Board members is as follows:

The remuneration policy and setting the terms and conditions for the Executive directors and other senior staff members is developed and approved by the Board based on local and international trends among comparative companies and industry generally. It examines terms and conditions for employee incentive schemes, benefit plans and share plans. Independent advice is obtained when considered necessary to confirm that executive remuneration is in line with market practice and is reasonable within Australian executive reward practices.
All executives receive a base salary (which is based on factors such as length of service and experience) and superannuation.

St George Mining Limited – Annual Report 2013

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DIRECTORS’ REPORT

The Group is an exploration entity, and therefore speculative in terms of performance. Consistent with attracting and retaining talented executives, directors and senior executives are paid market rates associated with individuals in similar positions within the same industry. Options and performance incentives may be issued particularly as the entity moves from an exploration to a producing entity and key performance indicators such as profit and production and reserves growth can be used as measurements for assessing executive performance.
The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Executive Directors, in consultation with independent advisors, determine payments to the non-executives and review their remuneration annually, based on market practice, duties and accountability. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting and is currently $150,000 per annum. Fees for independent non-executive directors are not linked to the performance of the Group. To align Directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company.

Details of directors and executives

Directors	Title	Date of Appointment	Date of Retirement
J Prineas	Executive Chairman	19 October 2009	Not Applicable
T Hronsky	Executive Director	25 November 2009	Not Applicable
M Michael	Non-Executive Director	19 October 2009	Not Applicable

The Company does not have any executives that are not Directors.

Executive Directors’ remuneration and other terms of employment are reviewed annually by the non-executive director(s) having regard to performance against goals set at the start of the year, relative comparable information and independent expert advice.

Except as detailed in the Director’s Report, no director has received or become entitled to receive, during or since the financial year end, a benefit because of a contract made by the Group or a related body corporate with a director, a firm of which a director is a member or an entity in which a director has a substantial financial interest. This statement excludes a benefit included in the aggregate amount of emoluments received or due and receivable by directors and shown in the Remuneration Report, prepared in accordance with the Corporations regulations, or the fixed salary of a full time employee of the Group.

St George Mining Limited – Annual Report 2013

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DIRECTORS’ REPORT

Remuneration of directors and executives

Remuneration for the financial year ended 30 June 2013.

	Short – Term	Short – Term	Post	Long	Equity
	Benefits		Employment	Term	Settled
			Benefits	Benefits	Share-Based
					Payments
Directors	Salary, Fees and	Non	Superannuation	Long	Shares/Options	Total
	Leave	Monetary		Service
				Leave
		(i)			(ii)
	$	$	$	$	$	$
J Prineas
2013	180,000	4,384	16,200	-	-	200,584
2012	185,221	3,856	16,200	-	-	205,277
T Hronsky
2013	180,000	4,022	-	-	-	184,022
2012	180,000	4,260	-	-	36,728	220,998
M Michael
2013	40,000	974	3,600	-	-	44,574
2012	73,000	1,564	6,570	-	-	81,134
Total
2013	400,000	9,380	19,800	-	-	429,180
2012	438,221	9,680	22,770	-	36,728	507,399

(i) Non monetary benefits are for directors’ and officers’ liability and legal expense insurance premiums.

(ii) The terms and conditions in relation to options granted as remuneration during the year to Directors are detailed below.

Remuneration Options

No remuneration options have been granted, exercised or lapsed during the year.

Details of existing options granted as remuneration to those directors and executives listed in remuneration table are as follows:

Grant Date	Issuer	Entitlement to	Date exercisable	Exercise	Value per	Amount
		Exercise		price	options at	paid/payable
				$	grant date	by recipient
					(i)
30 November	St George	1:1 Ordinary	From grant date to
2011	Mining Limited	share in St	28 November 2013	$0.20	$0.035	NIL
		George Mining
30 November	St George	1:1 Ordinary	From grant date to
2011	Mining Limited	share in St	28 November 2014	$0.25	$0.039	NIL
		George Mining
30 November	St George	1:1 Ordinary	From grant date to
2011	Mining Limited	share in St	28 November 2015	$0.40	$0.036	NIL
		George Mining

(i) Options value at grant date was determined using the Black-Scholes method.

St George Mining Limited – Annual Report 2013

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DIRECTORS’ REPORT

Employment contracts of directors and executives

The terms and conditions under which key management personnel and executives are engaged by the Company are formalised in contracts between the Company and those individuals.

The Company has entered into an executive services agreement with Mr John Prineas whereby Mr Prineas receives remuneration of $180,000 per annum plus statutory superannuation. Mr Prineas may terminate the agreement by giving 3 months notice. The executive services agreement is reviewed and renewed monthly.

The Company has entered into a service agreement with Mr Marcus Michael whereby Mr Michael receives remuneration of $40,000 per annum plus statutory superannuation.

The Company has entered into a consultancy contract with ERS and Mr Hronsky whereby a base service fee of $15,000 per month is payable, $180,000 per annum. Up to 4 economy class trips between Perth and Vancouver may be paid by the Company on behalf of Mr Hronsky in each calendar year. ERS may terminate the Agreement by giving 3 months notice. The consultancy contract with ERS is reviewed and renewed monthly.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

In accordance with the constitution, except as may be prohibited by the Corporations Act 2001, every Officer or agent of the Company shall be indemnified out of the property of the entity against any liability incurred by him in his capacity as Officer or agent of the Company or any related corporation in respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.

During the year the Company agreed to pay an annual insurance premium of $9,380 (2012: $9,680) in respect of directors’ and officers’ liability and legal expenses’ insurance contracts, for directors, officers and employees of the Company. The insurance premium relates to:

Costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal, and whatever the outcome.
Other liabilities that may arise from their position, with the exception of conduct involving a willful breach of duty.

END OF REMUNERATION REPORT

SHARE OPTIONS

Unissued shares

At the date of this report the Company had on issue 48,508,000 listed options, exercisable at $0.20 on or before 28 November 2014. During the financial year ended 30 June 2013 and at the date of this report 33,000 share options had been converted into fully paid ordinary shares.

On the 22 December 2011 the Company issued the below unlisted options;

Options Class	Number of Options	Exercise Price$	Expiry Date
Class A Options	450,000	$0.20	On or before 28 November 2013
Class B Options	450,000	$0.25	On or before 28 November 2014
Class C Options	600,000	$0.40	On or before 28 November 2015

During the financial year ended 30 June 2013 none of these unlisted options were converted into fully paid ordinary shares.

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DIRECTORS’ REPORT

Option holders do not have any rights to participate in any issues of shares of other interests in the Company or any other entity.

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.

EVENTS SUBSEQUENT TO BALANCE DATE

No matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of the affairs of the Group in future financial years.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration for the year ended 30 June 2013 has been received and can be found on page 52 of the financial report.

Non Audit Services

The Company’s auditor, Stantons International, did not provide any non-audit services to the Company during the financial year ended 30 June 2013.

Signed in accordance with a resolution of the directors made pursuant to s 298(2) of the Corporations Act 2001.

On behalf of the directors

JOHN PRINEAS Executive Chairman Dated 15 August 2013

St George Mining Limited – Annual Report 2013

P 20

FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

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

Australian Dollar ($) Note REVENUE 3 EXPENDITURE Administration expenses 4 Exploration expenditure written off LOSS BEFORE INCOME TAX Income tax refund (payable) 5(a) NET LOSS ATTRIBUTABLE TO MEMBERS OF THE COMPANY Other comprehensive income TOTAL COMPREHENSIVE INCOME (LOSS) TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO MEMBERS OF THE COMPANY LOSS PER SHARE Basic and diluted – cents per share 13	30 JUNE 2013 $ 170,535 (601,627) (1,858,352) (2,289,444) 794,984 (1,494,460) - (1,494,460) (1,494,460) (2.25)		30 JUNE 2012 $ 54,675
			(688,758) (2,412,444)
			(3,046,527)
			643,756
			(2,402,771)
			-
			(2,402,771)
			(2,402,771) (3.93)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

St George Mining Limited – Annual Report 2013

P 21

FINANCIAL REPORT AS AT 30 JUNE 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013

Australian Dollar ($) Note CURRENT ASSETS Cash and cash equivalents 14(a) Trade and other receivables 8(a) Other assets 8(b) TOTAL CURRENT ASSETS NON CURRENT ASSETS Security bond Exploration and evaluation expenditure 9 TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 10 Provisions 10 TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 11(a) Reserves 11(b) Accumulated losses 12 TOTAL EQUITY	30 JUNE 2013 $ 877,156 76,688 10,459 964,303 1,000 482,581 483,581 1,447,884 522,693 18,333 541,026 541,026 906,858 7,439,139 413,335 (6,945,616) 906,858	30 JUNE 2012 $ 766,420 3,548 -
		769,968
		1,000 342,571
		343,571

		1,113,539
		217,575 13,846
		231,421
		231,421
		882,118
		5,920,439 412,835 (5,451,156)
		882,118

The above consolidated statement of financial position should be read in conjunction with the accompanying notes

St George Mining Limited – Annual Report 2013

P 22

FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

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

Australian ($) BALANCE AT 1 JULY 2012 Comprehensive loss for the year Other comprehensive income Total comprehensive loss Shares and options issued during the year Options exercised during the year Share issue expenses BALANCE AT 30 JUNE 2013 BALANCE AT 1 JULY 2011 Comprehensive loss for the year Other comprehensive income Total comprehensive loss Shares issued during the year Remuneration options issued during the year Loyalty options issued during the year Share issue expenses BALANCE AT 30 JUNE 2012	SHARE CAPITAL $ ACCUMULATED LOSSES $ SHARE OPTION RESERVE $ TOTAL EQUITY $
	5,920,439 (5,451,156) 412,835 882,118
	- (1,494,460) - (1,494,460) - - - -
	- (1,494,460) - (1,494,460)
	1,613,000 - 500 1,613,500 6,600 - - 6,600 (100,900) - - (100,900)
	7,439,139 (6,945,616) 413,335 906,858

	4,447,795 (3,048,385) 49,840 1,449,250
	- (2,402,771) - (2,402,771) - - - -
	- (2,402,771) - (2,402,771)
	1,578,600 - - 1,578,600 - - 55,146 55,146 - - 315,090 315,090 (105,956) - (7,241) (113,197)
	5,920,439 (5,451,156) 412,835 882,118

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

St George Mining Limited – Annual Report 2013

P 23

FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

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

Australian Dollar ($) Note CASH FLOWS FROM OPERATING ACTIVITIES Expenditure on mining interests Payments to suppliers and employees Interest received Other – GST Income tax (paid)/refunded Net cash outflow from operating activities 14(b) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of tenements Net cash outflow from investing activities CASH FLOW FROM FINANCING ACTIVITIES Issue of shares and options net of capital raising costs Net cash flows from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 14(a)	30 JUNE 2013 $ (1,374,458) (632,839) 23,661 (71,802) 794,984 (1,260,454) (70,010) (70,010) 1,441,200 1,441,200 110,736 766,420 877,156	30 JUNE 2012 $ (2,237,441) (661,174) 54,675 72,623 643,756
		(2,127,561)
		-
		-
		1,780,493
		1,780,493
		(347,068)
		1,113,488
		766,420

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes

St George Mining Limited – Annual Report 2013

P 24

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

1 CORPORATE INFORMATION

The financial report of St George Mining Limited (”St George Mining” or “the Company”) for the year ended 30 June 2013 was authorised for issue in accordance with a resolution of the directors on 15 August 2013.

St George Mining Limited is a company limited by shares, incorporated in Australia on 19 October 2009. The consolidated financial statements of the Company for year ended 30 June 2013 comprise of the Company and its subsidiaries together referred to as the Group or consolidated entity.

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

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation of the Financial Report

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the law. The financial report also complies with the International Financial Reporting Standards. The financial report has also been prepared on a historical cost basis.

The financial report is presented in Australian dollars. The following accounting policies have been adopted by the consolidated entity.

Going Concern

The directors have prepared the financial statements on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business.

The Consolidated Entity has recorded a net accounting loss of $1,494,460 and net operating cash outflows of $1,260,454 for the year ended 30 June 2013.

The Directors have determined that future equity raisings or debt financing arrangements will be required to assist funding of the Company’s activities to meet the Company’s objectives. The Directors are investigating a number of options in respect of equity and debt financing arrangements. There is no certainty that these will be successfully completed to provide adequate working capital for the Company.

The Board is confident that the Group will have sufficient funds to finance its operations in the 2013/2014 Financial Year.

(b) Principles of Consolidation

The consolidated financial statements incorporate assets, liabilities and results of entities controlled by St George Mining Limited at the end of the reporting period. A controlled entity is any entity over which St George Mining has the power to govern the financial and operating policies so as to obtain the benefits from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.

When controlled entities have entered or left the Group during the year, the financial performance of those entities are included only for the period of year that they were controlled. A list of controlled entities is contained in note 22 to the financial statements.

St George Mining Limited – Annual Report 2013

P 25

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the equity section of the consolidated Statement of Financial Position and Statement of Comprehensive Income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

(c) Business combinations

Business combinations occur where an acquirer obtains control over one or more businesses and results in the consolidation of its assets and liabilities.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The acquisition method requires that for each business combination one of the combining entities must be identified as the acquirer (i.e. parent entity). The business combination will be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to certain limited exceptions, the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be reliably measured.

The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted for the measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised in the acquiree where less than 100% ownership interest is held in the acquiree.

The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.

Fair value uplifts in the value of pre-existing holdings are taken to the statement of comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss.

Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or a liability is remeasured each reporting period to fair value through the statement of comprehensive income unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.

(d) Adoption of new and revised standards

None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2012 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future periods. However, amendments made to AASB 101 Presentation of Financial Statements effective 1 July 2012 now require the statement of comprehensive income to show the

St George Mining Limited – Annual Report 2013

P 26

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

items of comprehensive income grouped into those that are not permitted to be reclassified to profit or loss in a future period and those that may have to be reclassified if certain conditions are met.

(e) Statement of compliance

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

(f) Income Tax

Current income tax refunded/(expensed) charged to profit or loss is tax refundable/(payable). Those amounts recognised are expected to be recovered from/(paid to) the relevant taxation authority.

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

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

except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither that 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 will not reverse in the foreseeable future.

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

except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and,
in respect of deductible temporary differences with investments in subsidiaries, associates and interest in joint ventures, deferred tax assets 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 is reviewed at each balance sheet date and reduced to the extent that 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 balance sheet date.

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

(g) Exploration, evaluation and development expenditure

Exploration and evaluation expenditure on areas of interest are expensed as incurred. Costs of acquisition will normally be expensed but will be assessed on a case by case basis and may be capitalised to areas of interest

St George Mining Limited – Annual Report 2013

P 27

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

and carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial period the decision is made. Each area of interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future. Where projects have advanced to the stage that directors have made a decision to mine, they are classified as development properties. When further development expenditure is incurred in respect of a development property, such expenditure is carried forward as part of the cost of that development property only when substantial future economic benefits are established. Otherwise such expenditure is classified as part of the cost of production or written off where production has not commenced.

(h) 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:

Interest

Interest revenue is recognised using the effective interest method.

(i) Cash and cash equivalents

Cash and short-term deposits in the consolidated 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 consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(j) Employee benefits

Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits expected to be settled within one year together with entitlements arising from wages and salaries and annual leave which will be settled after one year, have measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Other employee benefits payable later than one year have been measured at the present value of the estimated cash outflows to be made to those benefits.

Contributions are made by the Group to employee superannuation funds and are charged as expenses when incurred.

(k) Impairment of assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value; less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit

St George Mining Limited – Annual Report 2013

P 28

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and it is written down to its recoverable amount.

In assessing the 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. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).

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

(l) Earnings per share

Basic earnings per share is calculated as net loss attributable to members of the Company, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

(m) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (“ATO”). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the consolidated Statement of Financial Position are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Consolidated Statement of Financial Position.

Cash Flows are included in the Consolidated Statement of Cash Flows net of GST. The GST components of cash flows arising from investing and financial activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(n) Investments

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

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

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

St George Mining Limited – Annual Report 2013

P 29

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

(o) Financial assets

Financial assets and financial liabilities are recognised in the Consolidated Statement of Financial Position when the Group becomes party to the contractual provisions of the financial instrument. A financial asset is derecognised when the contractual rights to the Consolidated Statement of Cash Flows from the financial assets expire or are transferred and no longer controlled by the entity. A financial liability is removed from the Consolidated Statement of Financial Position when the obligation specified in the contract is discharged or cancelled or expires.

Financial assets and financial liabilities classified as held for trading are measured at fair value through the profit or loss.

Upon initial recognition a financial asset or financial liability is designated as at fair value through the profit or loss when:

(a) an entire contract containing one or more embedded derivatives is designated as a financial asset or financial liability at fair value through the profit or loss;
(b) doing so results in more relevant information, because either:
(i) it eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognizing gains or losses on them on different bases; or
(ii) a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to key management personnel.

Investments in equity instruments that do not have a quoted market price in an active market, and whose fair value cannot be reliably measured are not designated as at fair value through the profit or loss.

A gain or loss arising from a change in the fair value of a financial asset or financial liability classified as at fair value through the profit or loss is recognised in the profit or loss.

Financial assets not measured at fair value comprise:

(a) loans and receivables being non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These are measured at amortised cost using the effective interest rate method;
(b) held-to-maturity investments being non-derivative financial assets with fixed or determinable payments and fixed maturity that will be held to maturity. These are measured at amortised cost using the effective interest method; and
(c) investments in equity instruments that do not have a quoted market price in an active market and the fair value of which cannot be reliably measured. These are measured at cost together with derivatives that are linked to and must be settled by the delivery of such investments.

Available-for-sale financial assets are non-derivative financial assets, which are designated as available-for-sale or that are not classified as loans and receivables, held-to-maturity investments or financial assets as at fair value through the profit and loss.

A gain or loss arising from a change in the fair value of an available-for-sale financial asset is recognised directly in equity, through the Consolidated Statement of Changes in Equity (except for impairment losses and foreign exchange gains or losses) until the financial asset is derecognised at which time the cumulative gain or loss previously recognised in equity is recognised in the profit or loss.

St George Mining Limited – Annual Report 2013

P 30

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

Regular way purchases of financial assets are accounted for as follows:

financial assets held for trading – at trade date
held-to-maturity investments – at trade date
loans and receivables – at trade date
available-for-sale financial assets – at trade date

Except for the following all financial liabilities are measured at amortised cost using the effective interest rate method:

(a) financial liabilities at fair value through the profit and loss and derivatives that are liabilities measured at fair value;
(b) financial liabilities that arise when a transfer of financial asset does not qualify for de-recognition or are accounted for using the continuing involvement approach.

The amortised cost of a financial asset or a financial liability is the amount initially recognised minus principal repayments, plus or minus cumulative amortisation of any difference between the initial amount and maturity amount and minus any write-down for impairment or un-collectability.

(p) Contributed equity

Ordinary shares and options are classified as contributed 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.

(q) Significant accounting estimates and judgements

The carrying amount of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Deferred taxation

The potential deferred tax asset arising from the tax losses and temporary differences have not been recognised as an asset because recovery of the tax losses is not yet considered probable (refer note 5).

Subsidiary Loans

Provision has been made for all unsecured loans with subsidiaries as it is uncertain if and when the loans will be recovered.

Capitalised exploration costs

The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement in determining whether it is likely that future economic benefits are likely, either from future exploration or sale, or where activities have not reached a stage which permits reasonable assessment.

(r) Comparative information

Comparative information is amended where appropriate to ensure consistency in presentation with the current year.

St George Mining Limited – Annual Report 2013

P 31

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

3 REVENUE

Other income Interest income Reimbursed expenses 4 EXPENSES Administration expenses include the following expenses: Employee benefit expense Wages and salaries Accrued annual leave Employee share based payments Defined contribution superannuation expense Other administration costs Accounting fees Indirect tax consulting fees Administrative fees Company secretarial fees Legal fees Publications and subscriptions	CONSOLIDATED 30 JUNE 2013 $ 24,999 145,536 170,535 CONSOLIDATED 30 JUNE 2013 $ 220,000 4,486 - 19,800 244,286 13,380 75,000 21,154 36,000 7,581 32,485 185,600	CONSOLIDATED 30 JUNE 2012 $ 54,675 -
		54,675
		CONSOLIDATED 30 JUNE 2012 $ 253,000 13,846 36,728 22,770
		326,344
		67,865 96,563 23,998 4,500 29,456 7,438
		229,820

5 INCOME TAX

(a) Prima facie income tax benefit at 30% on loss from ordinary activities is reconciled to the income tax provided in the financial statements

provided in the financial statements
Loss before income tax Income tax calculated at 30% Tax effect of;- Expenses not allowed Sundry – temporary differences Section 40-880 deduction Research and Development rebate (i) Future income tax benefit not brought to account Income tax benefit attributable to operating losses	CONSOLIDATED 30 JUNE 2013 $ (1,494,460) (448,338) - 11,581 (35,478) 794,984 472,235 794,984	CONSOLIDATED 30 JUNE 2012 $ (2,402,771)
		(720,831) 286 5,493 (29,424) 643,756 744,476
		643,756

(i) The Research and Development rebate is in relation to the year ended 30 June 2012.

St George Mining Limited – Annual Report 2013

P 32

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

(b) Deferred tax assets

The potential deferred tax asset arising from the tax losses and temporary differences have not been recognised as an asset because recovery of tax losses is not yet probable.

Australian accumulated tax losses Provisions - net of prepayments Exploration and evaluation expenditure Section 40-880 deduction Unrecognised deferred tax assets relating to the above temporary differences	CONSOLIDATED 30 JUNE 2013 $ 1,319,010 32,569 (144,774) 88,169 1,294,974	CONSOLIDATED 30 JUNE 2012 $ 846,775 20,854 (102,771) 93,377
		858,235

The benefits will only be obtained if:

(i) The Group derives 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 Group continues to comply with the conditions in deductibility imposed by the Law; and
(iii) No change in tax legislation adversely affect the Group in realising the benefits from the deductions or the losses.

6 AUDITOR’S REMUNERATION

6 AUDITOR’S REMUNERATION
Auditing and review of the Company’s financial statements	CONSOLIDATED 30 JUNE 2013 $ 20,851 20,851	CONSOLIDATED 30 JUNE 2012 $ 29,989
		29,989

7 KEY MANAGEMENT PERSONNEL

(a) Details of key management personnel

Directors

John Prineas Timothy Hronsky Marcus Michael

Executive

John Prineas – Executive Chairman Timothy Hronsky – Executive Director

(b) Compensation of key management personnel

Salaries, fees and leave Non-monetary Post employment benefits – superannuation Equity settled share-based payments – shares and options	CONSOLIDATED 30 JUNE 2013 $ 400,000 9,380 19,800 - 429,180	CONSOLIDATED 30 JUNE 2012 $ 438,221 9,680 22,770 36,728
		507,399

St George Mining Limited – Annual Report 2013

P 33

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

(c) Shareholdings of key management personnel

Directors	Balance at	Granted as		Net other change	Balance at
	1 July 2012	remuneration		(i)	30 June 2013
John Prineas	10,194,221		-	20,000	10,214,221
Timothy Hronsky	1,062,500		-	-	1,062,500
Marcus Michael	2,810,668		-	-	2,810,668
Total	14,067,389		-	20,000	14,067,389

Directors	Balance at	Granted as		Net other change	Balance at
	1 July 2011	remuneration			30 June 2012
John Prineas	8,103,517		-	2,090,704	10,194,221
Timothy Hronsky	1,062,500		-	-	1,062,500
Marcus Michael	2,342,222		-	468,446	2,810,668
Total	11,508,239		-	2,559,150	14,067,389

(i) On market transactions for cash consideration.

(d) Listed Option holdings of key management personnel

Directors	Balance at	Granted as		Net other change	Balance at
	1 July 2012	remuneration		(i)	30 June 2013
John Prineas	7,458,167		-	200,000	7,658,167
Timothy Hronsky	531,250		-	-	531,250
Marcus Michael	2,108,006		-	-	2,108,006
Total	10,097,423		-	200,000	10,297,423

Directors	Balance at	Granted as		Net other change	Balance at
	1 July 2011	remuneration			30 June 2012
John Prineas	-		-	7,458,167	7,458,167
Timothy Hronsky	-		-	531,250	531,250
Marcus Michael	-		-	2,108,006	2,108,006
Total	-		-	10,097,423	10,097,423

(i) On market transactions for cash consideration.

(e) Class A Unlisted Option holdings of key management personnel

Directors	Balance at	Granted as	Net other change		Balance at
	1 July 2012	remuneration			30 June 2013
John Prineas	-	-		-	-
Timothy Hronsky	300,000	-		-	300,000
Marcus Michael	-	-		-	-
Total	300,000			-	300,000

Directors	Balance at	Granted as	Net other change		Balance at
	1 July 2011	remuneration			30 June 2012
		(i)
John Prineas	-	-		-	-
Timothy Hronsky	-	300,000		-	300,000
Marcus Michael	-	-		-	-
Total	-	300,000		-	300,000

St George Mining Limited – Annual Report 2013

P 34

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

(i) The Company agreed and approved at the Company’s Annual General Meeting to allot and issue Options (Related Party Options) to Mr Timothy Hronsky.

(f) Class B Unlisted Option holdings of key management personnel

Directors	Balance at	Granted as	Net other change		Balance at
	1 July 2012	remuneration			30 June 2013
John Prineas	-	-		-	-
Timothy Hronsky	300,000	-		-	300,000
Marcus Michael	-	-		-	-
Total	300,000	-		-	300,000

Directors	Balance at	Granted as	Net other change		Balance at
	1 July 2011	remuneration			30 June 2012
		(ii)
John Prineas	-	-		-	-
Timothy Hronsky	-	300,000		-	300,000
Marcus Michael	-	-		-	-
Total	-	300,000		-	300,000

(ii) The Company agreed and approved at the Company’s Annual General Meeting to allot and issue Options (Related Party Options) to Mr Timothy Hronsky.

(g) Class C Unlisted Option holdings of key management personnel

Directors	Balance at	Granted as	Net other change		Balance at
	1 July 2012	remuneration			30 June 2013
John Prineas	-	-		-	-
Timothy Hronsky	400,000	-		-	400,000
Marcus Michael	-	-		-	-
Total	400,000	-		-	400,000

Directors	Balance at	Granted as	Net other change		Balance at
	1 July 2011	remuneration			30 June 2012
		(iii)
John Prineas	-	-		-	-
Timothy Hronsky	-	400,000		-	400,000
Marcus Michael	-	-		-	-
Total	-	400,000		-	400,000

(iii) The Company agreed and approved at the Company’s Annual General Meeting to allot and issue Options (Related Party Options) to Mr Timothy Hronsky.

(h) Performance Shareholdings of key management personnel

Directors	Balance at		Granted as			Balance at
	1 July 2012		remuneration			30 June 2013
						(i)
John Prineas		30		-	-	30
Timothy Hronsky		10		-	-	10
Marcus Michael		15		-	-	15
Total		55		-	-	55

St George Mining Limited – Annual Report 2013

P 35

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

Directors	Balance at		Granted as			Balance at
	1 July 2011		remuneration			30 June 2012
						(i)
John Prineas		30		-	-	30
Timothy Hronsky		10		-	-	10
Marcus Michael		15		-	-	15
Total		55		-	-	55

(i) On satisfaction of certain milestone events, each Performance Share converts into 100,000 ordinary shares (refer to Directors’ Report and note 11 (a)) in which case John Prineas would become entitled to a further 3,000,000 ordinary shares, Timothy Hronsky a further 1,000,000 ordinary shares and Marcus Michael a further 1,500,000 ordinary shares.

(i) Other key management personnel transactions

Accounting, bookkeeping, corporate secretarial and general administrative service fees of $70,534 (2012: $105,999) were paid or payable on ordinary commercial terms during the year to Marshall Michael Pty Ltd, a company in which Mr Michael is a director and has a beneficial interest.

8 CURRENT ASSETS

(a) Trade and Other Receivables

(a) Trade and Other Receivables
Current	CONSOLIDATED 30 JUNE 2013 $ 76,688 76,688	CONSOLIDATED 30 JUNE 2012 $ 3,548
		3,548

Other receivables include amounts outstanding for goods and services tax (GST) of $75,350 (2012: $3,548) and interest receivable of $1,338 (2012: Nil). GST amounts are non-interest bearing and have repayment terms applicable under the relevant government authorities. No trade and other receivables are impaired or past due.

(b) Other Assets

Prepayments	CONSOLIDATED 30 JUNE 2013 $ 10,459 10,459	CONSOLIDATED 30 JUNE 2012 $ -
		-

9 EXPLORATION, EVALUATION AND ACQUISITION EXPENDITURE

The Group has capitalised acquisition expenditure on the basis that either the expenditure is expected to be recouped through future successful development (or alternatively sale) of the areas of interest concerned or on the basis that it is not yet possible to assess whether it will be recouped.

Balance at the beginning of the year Additions Amount reversed from prior year	CONSOLIDATED 30 JUNE 2013 $ 342,571 140,010 - 482,581	CONSOLIDATED 30 JUNE 2012 $ 412,411 - (69,840)
		342,571

St George Mining Limited – Annual Report 2013

P 36

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

10 CURRENT LIABILITIES CONSOLIDATED 30 JUNE 2013 $ Trade and other payables 522,693 Provisions – employee entitlement 18,333 541,026 11 ISSUED CAPITAL Australian Dollar $ CONSOLIDATED 30 JUNE 2013 $ (a) Issued and paid up capital At the beginning of the reporting period 5,920,439 September 2011: 10,500,000 shares were issued $0.15 per share - September 2011: 18,000 options were exercised at $0.20 per share - October 2012: 3,500,000 shares were issued at $0.21 per share 735,000 November 2012: 80,000 shares were issued at $0.10 per share 8,000 November 2012: 33,000 options were exercised at $0.20 per share 6,600 January 2013: 350,000 shares were issued at $0.20 per share 70,000 May 2013: 5,000,000 shares were issued at $0.16 per share 800,000 Transactions costs arising from issue of shares (100,900) At reporting date 71,981,000 (30 June 2012: 63,018,000) fully paid ordinary shares 7,439,139 Movements in Ordinary Shares Number At the beginning of the reporting period 63,018,000 Shares issued during the year 8,930,000 Options exercised during the year 33,000 At reporting date 71,981,000 Movements in Performance Shares Number At the beginning of the reporting period 100 Changes to performance shares issued during the year - At reporting date 100	CONSOLIDATED 30 JUNE 2012 $ 217,575 13,846 231,421 CONSOLIDATED 30 JUNE 2012 $ 4,447,795 1,575,000 3,600 - - - - - (105,956) 5,920,439 Number 52,500,000 10,500,000 18,000 63,018,000 Number 100 - 100	CONSOLIDATED 30 JUNE 2012 $ 217,575 13,846 231,421 CONSOLIDATED 30 JUNE 2012 $ 4,447,795 1,575,000 3,600 - - - - - (105,956) 5,920,439 Number 52,500,000 10,500,000 18,000 63,018,000 Number 100 - 100


		5,920,439
		Number 52,500,000 10,500,000 18,000
		63,018,000
		Number 100 -
		100

There are 100 Performance Shares (convertible into a maximum of 10,000,000 Shares) on issue at 30 June 2013, having the terms and conditions set out below:

General terms attaching to the Performance Shares are set out below:

(a) Performance Shares: Each Performance Share is a share in the capital of the Company.
(b) General Meetings: The Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to shareholders. Holders have the right to attend general meetings of shareholders of the Company.
(c) No Voting Rights: The Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of the Company, subject to any voting rights under the Corporations Act or the ASX Listing Rules where such rights cannot be excluded by these terms.

St George Mining Limited – Annual Report 2013

P 37

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

(d) No Dividend Rights: The Performance Shares do not entitle the Holder to any dividends.
(e) Rights on Winding Up: Upon winding up of the Company, the Performance Shares may participate in the surplus profits or assets of the Company only to the extent, and on the basis that each Performance Share has converted into one (1) Share.
(f) Transfer of Performance Shares: Prior to the Company being admitted to the Official List of the ASX, the Performance Shares are transferable. In the event the Company is admitted to the Official List of the ASX, the Performance Shares will no longer be transferable.
(g) Reorganisation of Capital: In the event that the Company is admitted to the Official List of the ASX and the issued capital of the Company is subsequently reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the ASX Listing Rules at the time of reorganisation.
(h) Application to ASX: The Performance Shares will not be quoted on ASX. In the event that the Company is admitted to the Official List of the ASX, upon conversion of the Performance Shares into Shares in accordance with these terms, the Company must within seven (7) days after the conversion, apply for the official quotation on ASX of the Shares arising from the conversion.
(i) Participation in Entitlements and Bonus Issues: Holders of Performance Shares will not be entitled to participate in new issues of capital offered to holders of the Shares such as bonus issues and entitlement issues.
(j) Amendments required by ASX: The terms of the Performance Shares may be amended as necessary by the directors of the Company in order to comply with the ASX Listing Rules, or any directions of ASX regarding the terms.
(k) No Other Rights: The Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

Conversion of the Performance Shares

(a) Conversion of Performance Shares: Each Performance Share will convert into 100,000 Shares upon the first to occur of the following events (each a Milestone):
(i) a Company Project attains a measured JORC Code compliant inferred resource of at least 1,000,000 ounces of Gold;
(ii) a Company Project attains a measured JORC Code compliant inferred resource of at least 50,000 tonnes contained Nickel;
(iii) the market capitalisation of the Company is greater than $50 million for a minimum of 30 consecutive trading days, based upon the volume weighted average price of Shares quoted on the ASX;
(iv) a Company Project (or any part of it) is sold for a value of at least $25 million (in cash and/or assets of equivalent value); or
(v) a joint venture arrangement is entered into for a Company Project and payments of at least $25 million (in cash and/or assets of equivalent value) are paid to Company as part of that arrangement. For these purposes, a “Company Project” means: “any project in which the Company has an ownership interest (or an option to acquire an ownership interest) as at the date the Company is admitted to the Official List of the ASX.”

St George Mining Limited – Annual Report 2013

P 38

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

(b) Conversion if Milestone not Achieved: If a Milestone is not achieved on or prior to the date which is 5 years after the date the Company is admitted to the Official List of the ASX being 12 November 2010 (Performance Share Expiry Date), then each Performance Share will automatically convert into one (1) Share.
(c) After Conversion: The Shares issued on conversion of the Performance Shares will, as and from 5.00pm (WST) on the date of allotment, rank equally with and confer rights identical with all other Shares then on issue and application will be made by the Company to ASX for official quotation of the Shares issued upon conversion.
(d) Conversion Procedure: The Company will issue the Holder with a new holding statement for the Shares as soon as practicable following the conversion of the Performance Shares into the Shares.
(e) Ranking of Shares: The Shares into which the Performance Shares will convert will rank pari passu in all respects with the Shares on issue at the date of conversion. 55 Performance shares are held by entities associated with the Directors. The remaining Performance shares are held by foundation shareholders, whose interest in the Company at the date the performance shares were issue, being 16 November 2010 are as follows:

Foundation Shareholder	Shares	Performance Shares(i)
Impulzive Pty Ltd	6,962,491	30

St Barnabas Investments Pty Ltd <St	2,222,222	15
Barnabas Superannuation Fund>

(i) On satisfaction of certain milestones events set out above, each Performance Share converts into 100,000 shares in which case Impulzive Pty Ltd would become entitled to 3,000,000 further shares and St Barnabas Investments Pty Ltd 1,500,000 further shares.

(b) Option Reserve

Movements in options reserve At the beginning of the year Options granted but yet to be issued Options granted and issued Options issued during the year (i) Unlisted options Transaction costs arising from the issue of options At reporting date	CONSOLIDATED 30 JUNE 2013 $ 412,835 - - 500 - - 413,335	CONSOLIDATED 30 JUNE 2012 $ 49,840 (49,840) 49,840 315,090 55,146 (7,241)
		412,835

(i) On 2 November 2012 500,000 options exercisable at $0.20 on or before 28 November 2014 were issued for $0.001 per option. The options were issued as part of the consideration due under an Agreement with Geotech International Pty Ltd (“Geotech”) whereby Geotech with provide advisory services in relation to the Lake Minigwal Project.

St George Mining Limited – Annual Report 2013

P 39

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

(ii) A summary of the outstanding options at 30 June 2013 in the Group is list below:

Class Number of Options Exercise Price	Class Number of Options Exercise Price	Expiry Date
Listed Options 48,508,000	$0.20	28 November 2014
Class A Unlisted Options 450,000	$0.20	28 November 2013
Class B Unlisted Options 450,000	$0.25	28 November 2014
Class C Unlisted Options 600,000	$0.40	28 November 2015
	CONSOLIDATED 30 JUNE 2013 $ (5,451,156) (1,494,460) (6,945,616) CONSOLIDATED 30 JUNE 2013 $ (2.25) (2.25) 2013 Number 66,449,532 66,449,532	CONSOLIDATED 30 JUNE 2012 $ (3,048,385) (2,402,771) (5,451,156) CONSOLIDATED 30 JUNE 2012 $ (3.93) (3.93) 2012 Number 61,172,048 61,172,048

14 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

(a) Reconciliation of cash and cash equivalents

For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash at bank and in hand and short-term deposits with an original maturity of three months or less, net of outstanding bank overdrafts.

Current – cash at bank	CONSOLIDATED 30 JUNE 2013 $ 877,156 877,156	CONSOLIDATED 30 JUNE 2012 $ 766,420 766,420

St George Mining Limited – Annual Report 2013

P 40

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

(b) Reconciliation of loss after tax to net cash flows from operations

Loss after income tax Share based payments Capitalised exploration, evaluation and acquisition expenditure (Increase)/decrease in assets Trade and other receivables Prepayments Increase/(decrease) in liabilities Trade and other payables Provisions	CONSOLIDATED 30 JUNE 2013 $ (1,494,460) 8,000 - (73,140) (10,459) 305,118 4,487 (1,260,454)	CONSOLIDATED 30 JUNE 2012 $ (2,402,771)
		55,146 69,840 72,624 13,001 59,378 5,221
		(2,127,561)

(c) Non cash financing and investing activities

On 10 January 2013 350,000 ordinary shares issued at $0.20 per share were issued to White Cliff Minerals Limited (“White Cliff”) as part consideration under the Letter of Agreement dated 10 January 2013.

Under the Letter of Agreement, St George secured first ranking priority for its exploration licence application E39/1722, comprising of 12 graticular sub-blocks contiguous to the Company’s East Laverton Property.

Total consideration payable by St George to White Cliff under the Letter of Agreement comprises of 350,000 ordinary shares and $70,000 cash.

On 2 November 2012 80,000 ordinary shares issued at $0.10 per share were issued to as part of the consideration due under the Deed of Termination of Royalty dated 26 October 2012.

15 SHARE BASED PAYMENTS

(i) On the 2 November 2012 500,000 options exercisable at $0.20 on or before 28 November 2014 were issued for $0.001 per option. The options were issued as part of the consideration due under an Agreement with Geotech International Pty Ltd (“Geotech”) whereby Geotech will provide advisory services in relation to the Lake Minigwal Project.
(ii) On 2 November 2012 80,000 ordinary shares issued at $0.10 per share were issued as part consideration due under the Deed of Termination of Royalty dated 26 October 2012.
(iii) On 10 January 2013 350,000 ordinary shares issued at $0.20 per share were issued to White Cliff Minerals Limited (“White Cliff”) as part consideration under the Letter of Agreement dated 10 January 2013.

Total consideration payable to St George to White Cliff under the Letter of Agreement comprises of 350,000 ordinary shares and $70,000 cash.

(iv) As outlined on the Solicitors Report on Tenements contained in the IPO Prospectus, the Company agreed to issue 800,000 Options as part consideration for the acquisition of an 80% interest in the Pine Creek Property. The Options were issued on 8 September 2011.

St George Mining Limited – Annual Report 2013

P 41

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

(v) The Company agreed and approved at the Company’s Annual General Meeting to allot and issue a total of 1,500,000 Options (Related Party Options) to Mr Timothy Hronsky and Mr Andrew Hawker. The terms and conditions of the options are detailed in the Notice of Annual General Meeting dated 26 October 2011. Using the Black & Scholes option model and based on the assumption below, The Class A, B and C Options were ascribed the following value:

Class of	Number	Valuation	Market	Exercise	Expiry Date	Risk Free	Volatility	Indicative
Options	Options	Date	Price of	Price		Interest	(discount)	Value per
			Shares			Rate		Option
								(discounted
								at 20%)
Class A	450,000	30	14.5 cents	20 cents	28	3.185%	70%	3.532 cents
Options		November			November
		2011			2013
Class B	450,000	30	14.5 cents	25 cents	28	3.650%	70%	3.928 cents
Options		November			November
		2011			2014
Class C	600,000	30	14.5 cents	40 cents	28	3.800%	70%	3.596 cents
Options		November			November
		2011			2015

Of the above options granted, the following were issued to Mr Timothy Hronsky (key management personnel):

Grant Date	Class	Number
30 November 2011	Class A Unlisted Options	300,000
30 November 2011	Class B Unlisted Options	300,000
30 November 2011	Class C Unlisted Options	400,000

(vi) A summary of the movements of all the Company options issued is as follows:

	Number	Weighted
		Average Exercise
		Price$
Options outstanding as at 1 July 2011	-	-
Granted	2,300,000	0.262
Forfeited	-	-
Exercised	-	-
Expired	-	-
Options outstanding as at 1 July 2012	2,300,000	0.262
Granted	500,000	0.200
Forfeited	-	-
Exercised	-	-
Expired	-	-
Options outstanding as at 30 June 2013	2,800,000	0.250
Options exercisable as at 30 June 2013	-	-
Options exercisable as at 30 June 2012	-	-

The weighted average remaining contractual life of options outstanding at the year-end was 1.47 years (2012: 2.48 years). The exercise price of outstanding shares at the end of the report period was $0.250 (2012: $0.26).

St George Mining Limited – Annual Report 2013

P 42

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

16 COMMITMENTS AND CONTINGENCIES

(a) Commitment

Mineral exploration commitment

The Group has the following discretionary exploration expenditure requirements in connection with its exploration tenements.

Not later than one year Later than one year but not later than two years	2013 $ 1,131,180 428,428 1,559,608	2012 $ 1,150,000 1,350,000 2,500,000

(b) Contingent liabilities and commitments

The Group fully owns two subsidiaries, Desert Fox Resources Pty Ltd and Blue Thunder Resources Pty Ltd, the main activities of which are exploration. The effect of these subsidiaries is to make the St George Mining owned subsidiaries contractually responsible for any transactions undertaken by the subsidiary. The parent entity has provided certain guarantees to third parties whereby certain liabilities of the subsidiary are guaranteed. The Group has the following contingent liabilities and commitments at 30 June 2012 and 30 June 2013.

Options fee/tenement acquisition costs (i) Bonus cash payment upon tenement grant (ii)	CONSOLIDATED 30 JUNE 2013 $ 560,000 - 560,000	CONSOLIDATED 30 JUNE 2012 $ 560,000 50,000
		610,000

(i) On 23 June 2010, the Company entered into an option agreement with Geotech International and Mr James Stewart (together, the Vendors) pursuant to which the Company has been granted by the Vendors the option to acquire an 80% interest in NT Tenement EL27732 (Option) (Option Agreement).

Exercise of Option: Under the Option Agreement, the Company is required to pay $500,000 to the Vendors to exercise the option to acquire an 80% interest in EL27732.

Extension of Option: The initial option period is 12 months from the grant of the EL27732, being 25 November 2010. The Company has the right to extend the Option for up to three (3) further 12 month periods, each for a fee of $60,000. Extension fees were paid in November 2011 and in November 2012.

Termination: The Company is entitled to withdraw from the Option Agreement at any time during the option period. However, withdrawal will not be permitted within 2 months of an anniversary date of EL27732 until the minimum annual expenditure payment has been made by the Company.

(ii) On 20 February 2012 the Company entered into an Agreement with Geotech International Pty Ltd (“Geotech”) whereby Geotech will provide advisory services in relation to the Lake Minigwal Project. Under the Agreement, the Company was required to pay a grant fee of $50,000 upon successful grant of the Lake Minigwal Project tenements (E39/1677 and E39/1678) to the Company. This fee was paid on 25 October 2012, and no further cash fees are payable in connection with this transaction.

St George Mining Limited – Annual Report 2013

P 43

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

The Company was also required to offer 500,000 options (ASX: SGQO) to Geotech on successful grant of the tenements. These options were issued on 2 November 2012 in consideration of the payment of $500.00.

17 EVENTS SUBSEQUENT TO BALANCE DATE

No matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group in future financial years.

18 FINANCIAL INSTRUMENTS

(a) Interest Rate Risk

The Group’s exposure to interest rate risk, which is the risk that the 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:

2013	Note	Floating	Fixed	Non-	Total	Weighted
		interest	interest	interest		average
		rate	rate	bearing		interest
						rate
		$	$	$	$	%
Financial assets
Cash and cash equivalents	14(a)	853,407	-	23,749	877,156	3.54%
Trade and other receivables	8(a)		-	76,688	76,688	Nil
		853,407	-	100,437	953,844
Financial liabilities
Trade and otherpayables	10	-	-	522,693	522,693	Nil
		-	-	522,693	522,693

2012	Note	Floating	Fixed	Non-	Total	Weighted
		interest	interest	interest		average
		rate	rate	bearing		interest
						rate
		$	$	$	$	%
Financial assets
Cash and cash equivalents	14(a)	760,034	-	6,386	766,420	5.27
Trade and other receivables	8(a)	-	-	3,548	3,548	Nil
		760,034	-	9,934	769,968
Financial liabilities
Trade and otherpayables	10	-	-	217,575	217,575	Nil
		-	-	217,575	217,575

Based on the balances at 30 June 2013 a 1% movement in interest rates would increase/decrease the loss for the year before taxation by $19,077 (2012: $15,200).

St George Mining Limited – Annual Report 2013

P 44

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

(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 allowance for doubtful debts, as disclosed in the statement of financial position and notes to the financial report.

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

(c) Net Fair Values

The carrying amount of financial assets and financial liabilities recorded in the financial statements represent their respective net fair value and is 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, investment in bank bills up to 90 days, accounts receivable and accounts payable. 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 is through its financial instruments is the depository banking institution itself, holding the funds, and interest rates. The Group's credit risk is minimal as being an exploration Company, it has no significant financial assets other than cash and term deposits.

(e) Foreign Currency Risk

The Group is not exposed to any foreign currency risk as at 30 June 2013.

(f) Market Price Risk

The Group is not exposed to market price risk as it does not have any investments other than an interest in the subsidiaries.

19 RELATED PARTIES

The Group has no related parties other than the 100% owned subsidiaries disclosed in note 22. At 30 June 2013 balances due from the subsidiaries were:

Australian Dollar ($) Blue Thunder Resources Pty Ltd Desert Fox Resources Pty Ltd	30 JUNE 2013 $ 1,110,017 5,862,412 6,972,429	30 JUNE 2012 $ 946,994 4,159,879
		5,106,873

These amounts comprise of funds provided by the parent company for exploration activities.

20 SEGMENT REPORTING

For management purposes, the Group is organised into one main operating segment, which involves the exploration of minerals in Australia. All of the Group’s activities are interrelated, and discrete financial information is reported to the Board as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment.

St George Mining Limited – Annual Report 2013

P 45

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

The financial results from this segment are equivalent to the financial statements of the Group as a whole.

The accounting policies applied for internal reporting purposes are consistent with those applied in the preparation of these financial statements.

21 JOINT VENTURES

The Group recognises that joint ventures are a key mechanism for sharing of risk on individual exploration projects. Where appropriate for a particular project, the Group will consider a joint venture with a suitable party in order to share the exploration risk. Those funds otherwise set aside for the project will be employed to advance another project.

Pine Creek Property: The Group, through its wholly owned subsidiary, Blue Thunder Resources Pty Ltd, has entered into an Option Agreement with James Ian Stewart and Geotech International Pty Ltd (jointly, the “Vendor”) whereby the Group acquired an option to purchase an 80% interest in the tenement application EL27732 which has been made by the Vendor. If the option is exercised, the tenement will be subject to a joint venture between Blue Thunder Resources Pty Ltd (which will have an 80% interest in the joint venture) and the Vendor (which will have a 20% interest in the joint venture) (the “Pine Creek Joint Venture”). The joint venture agreement has not yet been entered into. The Option Agreement outlines some of the key terms for the joint venture agreement.

The Group, through Blue Thunder Resources Pty Ltd, has been granted six additional tenements at Pine Creek. A 20% interest in these six tenements will be held for the benefit of the Vendor. There is no assurance that the option would be exercised, or the joint venture entered into.

Project Dragon: St George Mining, through its wholly own subsidiary Desert Fox Resources Pty Ltd, has entered into a Farm-in Agreement with BHP Billiton Nickel West Pty Ltd (“the Partner”) in regard to the nickel rights at certain of the tenements at the East Laverton Property.

The key terms of the Farm-in Agreement include:

The Partner has a 2 year option over the nickel rights at 9 tenements at the East Laverton Property (the ‘Core Tenements’).
The Partner has an obligation to spend $600,000 on exploration during the option period and maintain the Core Tenements in good standing.
On exercise of the option, the Partner has the right to earn a 51% interest in the nickel rights in the tenements selected to be governed by the Farm-in Agreement by spending $3m over 3 years.
On exercise of the option, the Partner has a right to select any or all of an additional 7 tenements, to also be included in the Farm-in Agreement.
A right for the Partner to subsequently increase its interest to 70% by sole funding a bankable feasibility study (BFS), in which case St George Mining is free carried for its 30% interest up to completion of the BFS.

St George Mining Limited – Annual Report 2013

P 46

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

22 SUBSIDIARIES

The parent entity, St George Mining Limited, has 100% interest in Desert Fox Resources Pty Ltd and Blue Thunder Resources Pty Ltd. St George Mining is required to make all the financial and operating policy decisions of these subsidiaries.

Subsidiaries of St George Mining Limited Country of incorporation Percentage owned % 2013 2012 Desert Fox Resources Pty Ltd Australia 100% 100% Blue Thunder Resources PtyLtd Australia 100% 100% 23 PARENT COMPANY DISCLOSURE (a) Financial Position for the year ended 30 June 2013 Australian Dollar ($) 30 JUNE 2013 $ 30 JUNE 2012 $ Assets Current assets 964,300 769,967 Non-current assets 6,972,431 5,106,874 Total assets 7,936,731 5,876,841 Liabilities Current liabilities 541,026 231,421 Non-current liabilities 6,972,428 5,106,872 Total liabilities 7,513,454 5,338,293 Net assets 423,277 538,548 Equity Issued capital 7,439,139 5,920,439 Reserves 413,335 412,835 Accumulated losses (7,429,197) (5,794,726) Total equity 423,277 538,548 (b) Financial Performance for the year ended 30 June 2013 Australian Dollar $ 30 JUNE 2013 30 JUNE 2012 $ $ Profit (loss) for the year (1,634,471) (2,332,978) Other comprehensive income - - Total comprehensive income (loss) (1,634,471) (2,332,978) (c) Guarantees entered into by the Parent Entity 30 JUNE 2013 $ 30 JUNE 2012 $ Option fee/tenement acquisition costs 560,000 500,000 560,000 500,000	Subsidiaries of St George Mining Limited Country of incorporation Percentage owned % 2013 2012 Desert Fox Resources Pty Ltd Australia 100% 100% Blue Thunder Resources PtyLtd Australia 100% 100% 23 PARENT COMPANY DISCLOSURE (a) Financial Position for the year ended 30 June 2013 Australian Dollar ($) 30 JUNE 2013 $ 30 JUNE 2012 $ Assets Current assets 964,300 769,967 Non-current assets 6,972,431 5,106,874 Total assets 7,936,731 5,876,841 Liabilities Current liabilities 541,026 231,421 Non-current liabilities 6,972,428 5,106,872 Total liabilities 7,513,454 5,338,293 Net assets 423,277 538,548 Equity Issued capital 7,439,139 5,920,439 Reserves 413,335 412,835 Accumulated losses (7,429,197) (5,794,726) Total equity 423,277 538,548 (b) Financial Performance for the year ended 30 June 2013 Australian Dollar $ 30 JUNE 2013 30 JUNE 2012 $ $ Profit (loss) for the year (1,634,471) (2,332,978) Other comprehensive income - - Total comprehensive income (loss) (1,634,471) (2,332,978) (c) Guarantees entered into by the Parent Entity 30 JUNE 2013 $ 30 JUNE 2012 $ Option fee/tenement acquisition costs 560,000 500,000 560,000 500,000	Subsidiaries of St George Mining Limited Country of incorporation Percentage owned % 2013 2012 Desert Fox Resources Pty Ltd Australia 100% 100% Blue Thunder Resources PtyLtd Australia 100% 100% 23 PARENT COMPANY DISCLOSURE (a) Financial Position for the year ended 30 June 2013 Australian Dollar ($) 30 JUNE 2013 $ 30 JUNE 2012 $ Assets Current assets 964,300 769,967 Non-current assets 6,972,431 5,106,874 Total assets 7,936,731 5,876,841 Liabilities Current liabilities 541,026 231,421 Non-current liabilities 6,972,428 5,106,872 Total liabilities 7,513,454 5,338,293 Net assets 423,277 538,548 Equity Issued capital 7,439,139 5,920,439 Reserves 413,335 412,835 Accumulated losses (7,429,197) (5,794,726) Total equity 423,277 538,548 (b) Financial Performance for the year ended 30 June 2013 Australian Dollar $ 30 JUNE 2013 30 JUNE 2012 $ $ Profit (loss) for the year (1,634,471) (2,332,978) Other comprehensive income - - Total comprehensive income (loss) (1,634,471) (2,332,978) (c) Guarantees entered into by the Parent Entity 30 JUNE 2013 $ 30 JUNE 2012 $ Option fee/tenement acquisition costs 560,000 500,000 560,000 500,000

	2013
Desert Fox Resources Pty Ltd Australia	100%
Blue Thunder Resources PtyLtd Australia	100%
23 PARENT COMPANY DISCLOSURE (a) Financial Position for the year ended 30 June 2013 Australian Dollar ($) 30 JUNE 2013 $ Assets Current assets 964,300 Non-current assets 6,972,431 Total assets 7,936,731 Liabilities Current liabilities 541,026 Non-current liabilities 6,972,428 Total liabilities 7,513,454 Net assets 423,277 Equity Issued capital 7,439,139 Reserves 413,335 Accumulated losses (7,429,197) Total equity 423,277 (b) Financial Performance for the year ended 30 June 2013 Australian Dollar $ 30 JUNE 2013 $ Profit (loss) for the year (1,634,471) Other comprehensive income - Total comprehensive income (loss) (1,634,471) (c) Guarantees entered into by the Parent Entity 30 JUNE 2013 $ Option fee/tenement acquisition costs 560,000 560,000
		5,876,841
		231,421 5,106,872
		5,338,293
		538,548
		5,920,439 412,835 (5,794,726)
		538,548
		30 JUNE 2012 $ (2,332,978) -
		(2,332,978)
		30 JUNE 2012 $ 500,000
		500,000

The parent entity has provided guarantees to third parties in relation to the option agreement with Geotech International and Mr James Stewart. Further details regarding this transaction can be found at note 16(b).

St George Mining Limited – Annual Report 2013

P 47

NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

24 NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS

The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods, some of which are relevant to the Group.

At the date of the authorization of the financial statements, the standards and Interpretations listed below were in issue but not yet effective.

	Effective for	Expected to
	annual reporting	be initially
	periods	applied in the
	beginning on or	financial year
Standard/Interpretation	after	ending
AASB 9 ‘Financial Instruments’, AASB 2010-7 ‘Amendments to	1 January 2015	30 June 2016
Australian Accounting Standards arising from AASB 9 (December
2010)’, and AASB 2012-6 ‘Amendments to Australian Accounting
Standards-Mandatory Effective date of AASB 9 and Transition
Disclosures’
AASB 10 ‘Consolidated Financial Statements’	1 January 2013	30 June 2014
AASB 11 ‘Joint Arrangements’	1 January 2013	30 June 2014
AASB 12 ‘Disclosure of Interests in Other Entities’	1 January 2013	30 June 2014
AASB 13 ‘Fair Value Measurement’ and AASB 2011-8 ‘Amendments	1 January 2013	30 June 2014
to Australian Accounting Standards arising from AASB 13’
AASB 119 ‘Employee Benefits’ (2011) and AASB 2011-10	1 January 2013	30 June 2014
‘Amendments to Australian Accounting Standards arising from
AASB 19 (2011)’
AASB 127 ‘Separate Financial Statements (2011), AASB 2011-7	1 January 2013	30 June 2014
‘Amendments to Australian Accounting Standards arising from the
Consolidation and Joint Arrangements standards’
AASB 128 ‘Investments in Associates and Joint Ventures’ (2011),	1 January 2013	30 June 2014
AASB 2011-7 ‘Amendments to Australian Accounting Standards
arising from the Consolidation and Joint Arrangements standards’
AASB 2011-4 ‘Amendments to Australian Accounting Standards to	1 July 2013	30 June 2014
Remove Individual Key Management Personnel Disclosure
Requirements’
AASB 2011-7 ‘Amendments to Australian Accounting Standards	1 January 2013	30 June 2014
arising from the Consolidation and Joint Arrangements standards’
AASB 2012-2 ‘Amendments to Australian Accounting Standards-	1 January 2013	30 June 2014
Disclosures-Offsetting Financial Assets and Liabilities’
(Amendments to AASB 7)
AASB 2012-3 ‘Amendments to Australian Accounting Standards-	1 January 2014	30 June 2015
Disclosures-Offsetting Financial Assets and Liabilities’
(Amendments to AASB 132)

St George Mining Limited – Annual Report 2013

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NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

AASB 2012-5 ‘Amendments to Australian Accounting Standards	1 January 2013	30 June 2014
arising from Annual Improvements cycle’
AASB 2012-6 ‘Amendments to Australian Accounting Standards-	1 January 2013	30 June 2014
Mandatory Effective date of AASB 9 and Transition Disclosures’
Interpretation 20 ‘Stripping Costs in the Production Phase of a	1 January 2013	30 June 2014
Surface Mine’ and AASB 2011-12 ‘Amendments to Australian
Accounting Standards arising from Interpretation 20’.

The Group has decided not to early adopt any of the new and amended pronouncements. Of the above new and amended Standards and Interpretations the Group's assessment of those new and amended pronouncements that are relevant to the Group but applicable in future reporting periods is set out below:

AASB 9: Financial Instruments (December 2010) and AASB 2010-7 and AASB 2012-6: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010). These Standards are applicable retrospectively and include revised requirements for the classification and measurement of financial instruments, as well as recognition and derecognition requirements for financial instruments.

The key changes made to accounting requirements include:

simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost;
allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument
requiring financial assets to be reclassified where there is a change in an entity's business model as they are initially classified based on: (a) the objective of the entity's business model for managing the financial assets; and (b) the characteristics of the contractual cash flows; and
requiring an entity that chooses to measure a financial liability at fair value to present the portion of the change in its fair value due to changes in the entity's own credit risk in other comprehensive income, except when that would create an accounting mismatch. If such a mismatch would be created or enlarged, the entity is required to present all changes in fair value (including the effects of changes in the credit risk of the liability) in profit or loss.

The Group has not yet been able to reasonably estimate the impact of these pronouncements on its financial statements.

AASB 10: Consolidated Financial Statements, AASB 11: Joint Arrangements, AASB 12: Disclosure of Interests in Other Entities, AASB 127: Separate Financial Statements (August 2011), AASB 128: Investments in Associates and Joint Ventures (August 2011) and AASB 2011-7: Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards (applicable for annual reporting periods commencing on or after 1 January 2013).

AASB 10 replaces parts of AASB 127: Consolidated and Separate Financial Statements (March 2008, as amended) and Interpretation 112: Consolidation - Special Purpose Entities. AASB 10 provides a revised definition of control and additional application guidance so that a single control model will apply to all investees. The Group has not yet been able to reasonably estimate the impact of this Standard on its financial statements.

St George Mining Limited – Annual Report 2013

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NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

AASB 11 replaces AASB 131: Interests in Joint Ventures (July 2004, as amended). AASB 11 requires joint arrangements to be classified as either "joint operations" (whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities) or 'joint ventures" (where the parties that have joint control of the arrangement have rights to the net assets of the arrangement). Joint ventures are required to adopt the equity method of accounting (proportionate consolidation is no longer allowed).

AASB 12 contains the disclosure requirements applicable to entities that hold an interest in a subsidiary, joint venture, joint operation or associate. AASB 12 also introduces the concept of a "structured entity", replacing the 'special purpose entity" concept currently used in Interpretation 112, and requires specific disclosures in respect of any investments in unconsolidated structured entities. This Standard will only affect disclosures and is not expected to significantly impact the Group.

To facilitate the application of AASBs 10, 11 and 12, revised versions of AASB 127 and AASB 128 have also been issued. These Standards are not expected to significantly impact the Group.

AASB 13: Fair Value Measurement and AASB 2011-8: Amendments to Australian Accounting Standards arising from AASB 13 (applicable for annual reporting periods commencing on or after 1 January 2013).

AASB 13 defines fair value, sets out in a single Standard a framework for measuring fair value, and requires disclosures about fair value measurements.

AASB 13 requires:

inputs to all fair value measurements to be categorised in accordance with a fair value hierarchy; and
enhanced disclosures regarding all assets and liabilities (including, but not limited to, financial assets and financial liabilities) measured at fair value.

These Standards are not expected to significantly impact the Group.

AASB 2011-4: Amendments to Australian Accounting Standards to remove the individual ley management Personnel Disclosure Requirements (applicable for annual reporting periods commencing on or after 1 January 2013).

This standard makes amendments to AASB 124; Related Party Disclosures to remove the individual key management personnel disclosure requirements (including paras Aus 29.1 to Aus 29.9.3). These amendments serve a number of purposes, including furthering the trans-Tasman conversion, removing differences from IFRSs, and avoiding any potential confusion with the equivalent Corporations Act 2001 disclosure requirements.

AASB 119 (September 2011) includes changes to the accounting for termination benefits.

This standard is not expected to significantly impact the Group’s financial report as a whole.

AASB 2012-2 ‘Amendments to Australian Accounting Standards-Disclosures-Offsetting Financial Assets and Liabilities’ (Amendments to AASB 7); AASB 2012-3 ‘Amendments to Australian Accounting StandardsDisclosures-Offsetting Financial Assets and Liabilities’ (Amendments to AASB 132); AASB 2012-5 ‘Amendments to Australian Accounting Standards arising from Annual Improvements cycle’; AASB 2012-6 ‘Amendments to Australian Accounting Standards-Mandatory Effective date of AASB 9 and Transition Disclosures’; and Interpretation 20 ‘Stripping Costs in the Production Phase of a Surface Mine’ and AASB 2011-12 ‘Amendments to Australian Accounting Standards arising from Interpretation 20’.

These standards are not expected to impact the Group.

St George Mining Limited – Annual Report 2013

P 50

DIRECTOR’S DECLARATION

In the opinion of the Directors of St George Mining Limited (“the Company”)

(a) The financial statements and the notes and the additional disclosures included in the directors’ report designated as audited of the Group are in accordance with the Corporations Act 2001, including:
(i) Giving a true and fair view of the Group’s financial position as at 30 June 2013 and of its performance for the year ended that date; and
(ii) Complying with Accounting Standards and Corporations Regulations 2001, and:
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
(c) The financial statements and notes comply with International Financial Reporting Standards as disclosed in note 2.

This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2013.

Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act 2001.

On behalf of the Board

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John Prineas Executive Chairman

Dated 15 August 2013 Perth, Western Australia

St George Mining Limited – Annual Report 2013

P 51

Stantons International Audit and Consulting Pty Ltd trading as

PO Box 1908 West Perth WA 6872 Australia

Chartered Accountants and Consultants

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Level 2, 1 Walker Avenue West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204

15 August 2013

ABN: 84 144 581 519 www.stantons.com.au

Board of Directors ST George Mining Limited Level 1 115 Cambridge Street WEST LEEDERVILLE WA 6007

Dear Directors

RE: ST GEORGE MINING LIMITED

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of ST George Mining Limited.

As Audit Director for the audit of the financial statements of ST George Mining Limited for the year ended 30 June 2013, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (Trading as Stantons International) (An Authorised Audit Company)

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J P Van Dieren Director

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Liability limited by a scheme approved under Professional Standards Legislation

Stantons International Audit and Consulting Pty Ltd trading as

PO Box 1908 West Perth WA 6872 Australia

Chartered Accountants and Consultants

==> picture [181 x 24] intentionally omitted <==

Level 2, 1 Walker Avenue West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204

ABN: 84 144 581 519 www.stantons.com.au

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ST GEORGE MINING LIMITED

Report on the Financial Report

We have audited the accompanying financial report of ST George Mining Limited, which comprises the consolidated statement of financial position as at 30 June 2013, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of 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 of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In note 2(a), the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor’s responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’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.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

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 .

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Liability limited by a scheme approved under Professional Standards Legislation

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Opinion

In our opinion:

(a) the financial report of ST George Mining 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 2013 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) the consolidated financial report also complies with International Financial Reporting Standards as disclosed in note 2(a).

Inherent Uncertainty Regarding Going Concern

Without qualification to the opinion expressed above, attention is drawn to the following matter:

As referred to in Note 2(a) to the financial statements, the financial statements have been prepared on the going concern basis. The consolidated entity comprising the Company and its subsidiaries has incurred a loss of $1,494,460 for the year ended 30 June 2013 and had a net operating cash outflows of $1,260,454 for the year ended 30 June 2013. The working capital as at 30 June 2013 is $423,277. The ability of the consolidated entity to continue as a going concern and meet its planned exploration, administration and other commitments is dependent upon the consolidated entity raising further working capital and/or successfully exploring its mineral assets. In the event that the consolidated entity is not successful in raising further equity or successfully exploiting its mineral assets, the consolidated entity may not be able to meet its liabilities as and when they fall due and the realisable value of the consolidated entity’s current and non-current assets may be significantly less than book values.

Report on the Remuneration Report

We have audited the remuneration report included in pages 16 to 19 of the directors’ report for the year ended 30 June 2013. The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards

Opinion

In our opinion the remuneration report of ST George Mining Limited for the year ended 30 June 2013 complies with section 300A of the Corporations Act 2001.

STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD

(Trading as Stantons International) (An Authorised Audit Company)

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John P Van Dieren

Director

West Perth, Western Australia 15 August 2013

CORPORATE GOVERNANCE STATEMENT

This Corporate Governance Statement sets out the Company’s current compliance with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations ( Principles and Recommendations ). The Principles and Recommendations are not mandatory. However, the Company will be required to provide a statement in its future annual reports disclosing the extent to which the Company has followed the Principles and Recommendations.

The Board of the Company currently has in place a Corporate Governance Plan which has been posted in a dedicated corporate governance information section of the Company’s website at www.stgeorgemining.com.au .

PRINCIPLES AND RECOMMENDATIONS

1. Lay solid foundations for management and oversight

1.1 Companies should establish the functions reserved to the Board and those delegated to senior executives and disclose those functions. Compliant: Yes.

The Directors monitor the business affairs of the Company on behalf of Shareholders and have adopted a Corporate Governance Plan which is designed to encourage Directors to focus their attention on accountability, risk management and ethical conduct. The Company’s Corporate Governance Plan includes a Board Charter, which discloses the specific responsibilities of the Board.

The Company’s Corporate Governance Plan is available on the Company’s website at www.stgeorgemining.com.au .

1.2 Companies should disclose the process for evaluating the performance of senior executives. Compliant: Yes.

Due to the Company’s stage of development, it does not yet have any senior executives apart from the Board. However, if the Company appoints senior executives in the future, the Board will monitor the performance of those senior executives including measuring actual performance of senior executives against planned performance.

The Board has adopted a policy to assist in evaluating the performance of senior executives, which is contained in Schedule 6 of its Corporate Governance Plan (Disclosure - Performance Evaluation).

Given the current size and structure of the Board, the Board has not established a separate nomination committee to oversee the performance evaluation of the senior executives.

Until a nomination committee is established, the Board will undertake the obligations of the nomination committee in connection with evaluating the performance of senior executives in accordance with Schedule 6 of its Corporate Governance Plan.

1.3 Companies should provide the information indicated in the Guide to reporting on Principle 1. Compliant: Yes.

The Company will explain any departures from Principles and Recommendations 1.1 and 1.2 (if any) in its future annual reports, including whether a performance evaluation for senior executives (if any exist at that time) has taken place in the reporting period and whether it was in accordance with the process disclosed.

The Company has not undertaken any performance evaluation of any senior executive in the last reporting period.

St George Mining Limited – Annual Report 2013

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CORPORATE GOVERNANCE STATEMENT

The Company has adopted a Board Charter, which discloses the specific responsibilities of the Board and provides that the Board may delegate responsibility for the day-to-day operations and administration of the Company to the chief executive officer/ managing director (if appointed).

The Board Charter is contained in Schedule 1 of the Company’s Corporate Governance Plan and the Nomination Committee Charter is contained in Schedule 5 of the Company’s Corporate Governance Plan.

2. Structure the Board to add value

2.1 A majority of the Board should be independent directors. Compliant: No

Currently the Company has no independent Directors.

The Company’s Corporate Governance Plan outlines that the majority of the Board will be comprised of non-executive directors, and where practical, at least 50% of the Board will be independent. However, the Board considers that the Company is not currently of a size, nor are its affairs of such complexity, to justify the expense of an appointment of a majority of independent directors. The current Board structure presently consists of an executive chairman, an executive director and one non-executive director.

The Board believes that each of the Directors can make, and do make, quality and independent judgements in the best interests of the Company. Any Director who has a conflict of interest in relation to a particular item of business must declare their conflict and abstain from voting or participating in Board deliberations to which a conflict of interest relates.

2.2 The chair should be an independent director. Compliant: No.

Mr John Prineas is the Executive Chairman and is a not an Independent Director.

The Company’s Corporate Governance Plan provides that the Chairman, where practical, should be a non-executive Director.

The Board considers that the Company is not currently of a size, nor are its affairs of such complexity, to require an independent Chairman. This will be reviewed as the Company develops.

2.3 The roles of chair and chief executive officer should not be exercised by the same individual. Compliant: No.

The Company has not appointed a chief executive officer. The Executive Chairman is Mr John Prineas. The Company intends to seek out and appoint a chief executive officer, separate from the role of chairman, in the future. However, due to the current limited size of the Company’s operations it may not be appropriate to appoint a separate chief executive officer for some time.

The Company’s Corporate Governance Plan provides, where practical, that the chief executive officer should not be the Chairman of the Company during his term as chief executive officer or in the future.

2.4 The Board should establish a nomination committee. Compliant: No.

Given that the Company is in its early stages of development and given the current size and structure of the Board, the Board has not established a separate nomination committee.

Matters typically dealt with by such a committee are dealt with by the Board. The Board may also seek independent advice to assist with the identification process.

St George Mining Limited – Annual Report 2013

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CORPORATE GOVERNANCE STATEMENT

2.5 Companies should disclose the process for evaluating the performance of the Board, its committees and individual directors. Compliant: No.

The Company will put a formal process in place as and when the Company’s level of operations justifies it. Currently, the Board undertakes the obligations of the nomination committee in connection with evaluating the performance of the Board, its committees and individual directors, and will continue to do so until a nomination committee is established.

2.6 Companies should provide the information indicated in the Guide to reporting on Principle 2. Compliant: Yes

A description of the skills and experience of each of the current Directors is included on the Company’s website at www.stgeorgemining.com.au .

Given that the Company is in its early stages of development and given the current size and structure of the Board, the Company has not fully complied with Principle 2 of ASX Corporate Governance Council Principles and Recommendations. However, it will seek to do so as it develops and the Board grows.

The Board Charter includes a statement that the Board may seek independent professional advice at the Company’s expense.

The Board has not established a nomination committee and its functions are carried out by the Board.

The Company will provide details of any new director, such as their skills, experience and expertise relevant to their position, together with an explanation of any departures from Corporate Governance Principles and Recommendations 2.1, 2.2, 2.3, 2.4 and 2.5 in its future annual reports.

3. Promote ethical and responsible decision-making

3.1 Companies should establish a code of conduct and disclose the code or a summary of the code as to:
the practices necessary to maintain confidence in the company’s integrity;
the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders; and,
the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

Compliant: Yes

The Company’s Code of Conduct, which is included in Schedule 2 of the Company’s Corporate Governance Plan, aims to encourage the appropriate standards of conduct and behaviour of the directors, officers and employees of the Company.

3.2 Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the Board to establish measureable objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress in achieving them.

Compliant: Yes

The Company’s Diversity Policy, which is included in Schedule 10 of the Company’s Corporate Governance Plan, recognises the benefits arising from employee and Board diversity, including a broader pool of high quality employees, improving employee retention, accessing different perspectives and ideas and benefiting from all available talent. Diversity includes, but is not limited to, gender, age, ethnicity and cultural background.

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CORPORATE GOVERNANCE STATEMENT

The Board is responsible for developing measurable objectives and strategies to meet the Objectives of the Diversity Policy (Measureable Objectives) and monitoring the progress of the Measureable Objectives through monitoring, evaluation and reporting mechanisms listed below.

The Board may also set Measurable Objectives for achieving gender diversity and monitor their achievement.

The Board will conduct all Board appointment processes in a manner that promotes gender diversity, including establishing a structured approach for identifying a pool of candidates, using external experts where necessary.

Due to the small scale of the Company’s operations and the limited number of employees, the Company has not yet set Measurable Objectives for achieving gender diversity. The Company will consider establishing measurable objectives as it develops.

3.3 Companies should disclose in each annual report the measureable objectives for achieving set by the Board in accordance with the diversity policy and progress in achieving them. Compliant: No

Due to the small scale of the Company’s operations and the limited number of employees, the Company has not yet set measurable objectives for achieving gender diversity. The Company will consider establishing measurable objectives as it develops.

3.4 Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the Board. Compliant: Yes

	2013	Percentage
Women on the Board	-	0%
Women in Senior Management Roles	1	100%
Women Employees	1	25%

3.5 Companies should provide the information indicated in the Guide to reporting on Principle 3. Compliant: Yes.

The Board will include in the Annual Report each year:

measurable objectives (if any) set by the Board;
progress against the objectives; and,
the proportion of women employees in the whole organisation at senior management and at Board level.

The Company will explain any departures from Corporate Governance Principles and Recommendations 3.1, 3.2, 3.3 and 3.4 in the Corporate Governance Statement and its future annual reports.

4. Safeguard integrity in financial reporting

4.1 The Board should establish an audit committee. Compliant: No.

A formal Audit and Risk Committee Charter has been adopted by the Company, which is contained in Schedule 3 of the Company’s Corporate Governance Plan.

The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation of separate or special committees at this time. The Board as a whole is able to address the governance aspects of the full scope of the Company’s activities and to ensure that it adheres to appropriate ethical standards. In particular, the full Board considers those matters that would usually be the responsibility of an audit committee and a nomination committee. The Board

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CORPORATE GOVERNANCE STATEMENT

considers that, at this stage, no efficiencies or other benefits would be gained by establishing a separate audit committee or a separate nomination committee.

4.2 The audit committee should be structured so that it:
consists only of non-executive directors;
consists of a majority of independent directors;
is chaired by an independent chair, who is not chair of the Board; and,
has at least three members.

Compliant: No

Refer to 4.1 above.

4.3 The audit committee should have a formal charter. Compliant:Yes

A formal Audit and Risk Committee Charter has been adopted by the Company, which is contained in Schedule 3 of the Company’s Corporate Governance Plan.

4.4 Companies should provide the information indicated in the Guide to reporting on Principle 4. Compliant: Yes.

The Company does not have an audit committee. The Board carries out the duties of the audit committee.

The Company will explain any departures from the Corporate Governance Principles and Recommendations 4.1, 4.2 and 4.3 (if any) in its future annual reports.

5. Make timely and balanced disclosure

5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies. Compliant: Yes

The Company’s Continuous Disclosure Policy, which is contained in Schedule 7 of the Company’s Corporate Governance Plan, is designed to ensure the compliance with ASX Listing Rule disclosure and to ensure accountability at a senior executive level for compliance and factual presentation of the Company’s financial position.

The Company Secretary has been nominated as the person responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and overseeing and co-ordinating information disclosure to the ASX, analysts, brokers, shareholders, the media and the public.

5.2 Companies should provide the information indicated in Guide to Reporting on Principle 5. Compliant: Yes

The Company will provide an explanation of any departures from Corporate Governance Principle and Recommendation 5.1 in its future annual reports.

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CORPORATE GOVERNANCE STATEMENT

6. Respect the rights of shareholders

6.1 Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy. Compliant: Yes

The Company has adopted a Shareholder Communications Strategy, contained in Schedule 11 of the Company’s Corporate Governance Plan, which aims to ensure that the shareholders of the Company are informed of all major developments affecting the Company’s state of affairs.

The strategy provides that information will be communicated to shareholders through:

a) the Annual Report delivered by post or email (on request) which is also placed on the Company’s website;
b) the half yearly report which is placed on the Company’s website;
c) the quarterly reports which are placed on the Company’s website;
d) disclosures and announcements made to the ASX copies of which are placed on the Company’s website;
e) notices and explanatory memoranda of Annual General Meetings (AGM) and Extraordinary General Meetings (EGM), copies of which are placed on the Company’s website;
f) the Chairman’s address and the Managing Director’s address made at the AGMs and the EGMs, copies of which are placed on the Company’s website;
g) the Company’s website on which the Company posts all announcements which it makes to the ASX; and,
h) the auditor’s lead engagement partner being present at the AGM to answer questions from shareholders about the conduct of the audit and the preparation and content of the auditor’s report.
6.2 Companies should provide the information indicated in the Guide to reporting on Principle 6. Compliant: Yes

The Company will provide an explanation of any departures from Corporate Governance Principle and Recommendation 6.1 (if any) in its future annual reports.

7. Recognise and manage risk

7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies. Compliant: Yes and No

Given that the Company is in its early stages of development, and given the current size and structure of the Board, the Board has not established a separate audit and risk committee. However the Audit and Risk Committee Charter contained in the Company’s Corporate Governance Plan sets out the Company’s policies for the oversight and management of material business risks.

The Board will carry out the duties of the audit committee in accordance with the formal terms of reference set out in the Company’s Corporate Governance Plan.

The Board will carry out the duties of the audit and risk committee. The Board is responsible for determining the Company’s “risk profile” and is responsible for overseeing and approving risk management strategy and policies, internal compliance and internal control.

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CORPORATE GOVERNANCE STATEMENT

7.2 The Board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks. Compliant: Yes

The Board’s collective experience will enable accurate identification of the principal risks that may affect the Company’s business in addition to those identified by the Audit and Risk Committee (once established). Key operational risks and their management will be recurring items for deliberation at Board Meetings.

7.3 The Board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks. Compliant: Yes.

The Board will seek the relevant assurance from the chief executive officer and chief financial officer (or their equivalents) at the relevant time.

7.4 Companies should provide the information indicated in Guide to Reporting on Principle 7. Compliant: Yes

The Company will provide an explanation of any departures from Corporate Governance Principles and Recommendations 7.1, 7.2 and 7.3 (if any) in its future annual reports.

8. Remunerate fairly and responsibly

8.1 The Board should establish a remuneration committee. Compliant: No

A formal Remuneration Committee Charter has been adopted by the Company, which is contained in Schedule 4 of the Company’s Corporate Governance Plan. However, given that the Company is in its early stages of development and given the current size and structure of the Board, the Board has not established a separate remuneration committee.

This will be reviewed as the Company’s circumstances change.

Until a Remuneration Committee is established, the Board will carry out the duties of the Remuneration Committee in accordance with the formal terms of reference of the Remuneration set out in the Company’s Corporate Governance Plan.

8.2 The remuneration committee should be structured so that it:
consists of a majority of independent directors;
is chaired by an independent director; and,
has at least three members.
Compliant: No

Refer to 8.1 above.

8.3 Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives. Compliant: Yes and No

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CORPORATE GOVERNANCE STATEMENT

Executive Directors remuneration packages may comprise of:

fixed salary;
performance based bonuses;
participation in any share/option scheme; and,
statutory superannuation.

Independent non-executive directors receive fixed directors fees only, and do not participate in any performance-based remuneration. Fixed director’s fees may be paid in the form of cash, share options or a combination of both. Share options are issued on similar terms to previous issues by the entity and are considered to be in lieu of cash, not based on performance of the entity.

Full remuneration disclosure, including superannuation entitlements has been included in the Director’s Report and will be provided by the Company in its future annual reports.

8.4 Companies should provide the information indicated in the Guide to reporting on Principle 8. Compliant: Yes.

The Company will provide an explanation of any departures from Corporate Governance Principles and Recommendations 8.1, 8.2 and 8.3 (if any) in its future annual reports.

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SHAREHOLDER INFORMATION

1 Distribution of holders

As at 15 August 2013 the distribution of shareholders was as follows:

Ordinary shares

Size of holding	Number of holders
1 – 1,000	24
1,001 –5,000	37
5,001 – 10,000	78
10,001 – 100,000	266
100,001 and over	93
Total	498

2 Voting rights

There are no restrictions to voting rights attached to the ordinary shares. On a show of hands every member present in person will have one vote and upon a poll, every member present or by proxy will have one vote each share held.

3 Substantial shareholders

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

Shareholder	Shares held	Percentage
		interest %
John Prineas	10,214,221	14.19
Impulzive Pty Ltd	8,354,990	13.26
Oceanic Capital PtyLtd	7,456,949	11.84

4 Top 20 shareholders

The names of the 20 largest shareholders on the share register as at 15 August 2013, who hold 61.49% of the ordinary shares of the Company, were as follows;

Shareholder	Number
John Prineas	8,355,021
Impulzive Pty Ltd	8,354,990
Oceanic Capital Pty Ltd	7,423,493
Yarandi Investments Pty Ltd	2,325,000
St Barnabas Investments Pty Ltd	2,222,222
AWD Consultants Pty Ltd	2,000,000
Riverfront Nominees Pty Ltd	1,453,334
Impulzive Pty Ltd	1,437,500
Osiris Capital Investments Pty Ltd	1,334,334
Mr Sean Muffet	1,325,000
ABN Amro Clearing Sydney Nominees Pty Ltd	1,111,152
Mr Timothy Matthew Shaun Hronsky	1,062,500
Dixtru Pty Limited	1,050,000
Mr Paul Sumade Lee	937,500
Mr John Prineas	744,000
Mr Bob Taleb	700,000
M&M Global Services Pty Ltd	657,500

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SHAREHOLDER INFORMATION

Mr Frank Hung	655,000
JP Morgan Nominees Australia Limited	564,000
Miss ZhenfengWang	550,000

5 Top 20 option holders

The names of the 20 largest option holders on the share register as at 15 August 2013, who hold 60.93% of the listed options of the Company, were as follows;

Shareholder	Number
John Prineas	6,226,267
Impulzive Pty Ltd	6,226,244
Oceanic Capital Pty Ltd	4,284,325
Yarandi Investments Pty Ltd	1,762,500
St Barnabas Investments Pty Ltd	1,445,466
Riverfront Nominees Pty Ltd	1,090,003
Dixtru Pty Limited	1,050,000
Osiris Capital Investments Pty Ltd	1,000,003
ABN Amro Clearing Sydney Nominees Pty Ltd	947,500
Mr Charles Prineas	612,500
Keo Projects Pty Limited	570,000
Mr Mark William Brycki & Mrs Nicola Jane Brycki <Brycki Pension Fund	550,000
A/C>
Mr Timothy Matthew Shaun Hronsky	531,250
Zeus Private Equity Pty Ltd	515,000
Clariden Capital Limited	500,000
Mr John Prineas	483,000
Geotech International Pty Ltd	455,000
JP Morgan Nominees Australia Limited	422,000
JBN Holdings Pty Limited	405,000
Bawden GroupPtyLimited	400,000

6 Consistency with business objectives

The Company has used its cash and assets in a form readily convertible to cash that it had at the time of listing in a way the consistent with its stated objectives.

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SCHEDULE OF TENEMENTS

St George Mining Limited mineral interest as at 15 August 2013

TENEMENT SCHEDULE – PINE CREEK PROPERTY

Tenement ID	Registered Holder	Equity	Status	Grant Date	Area

EL 27732	Geotech International Pty Ltd & James Stewart	50% each	Granted	25 Nov 2010	25 sub-blocks
EL 28016	Blue Thunder Resources Pty Ltd	100%	Granted	25 Nov 2010	78 sub-blocks
EL 28017	Blue Thunder Resources Pty Ltd	100%	Granted	25 Nov 2010	27 sub-blocks
EL 28232	Blue Thunder Resources Pty Ltd	100%	Granted	28 Mar 2011	5 sub-blocks
EL 28332	Blue Thunder Resources Pty Ltd	100%	Granted	25 Aug 2011	21 sub-blocks
EL 28463	Blue Thunder Resources Pty Ltd	100%	Granted	25 Aug 2011	26 sub-blocks
EL 28465	Blue Thunder Resources Pty Ltd	100%	Granted	25 Aug 2011	15 sub-blocks

Notes:

All tenements are in the Northern Territory. 2. EL = Exploration Licence
EL 27732 is subject to an Option Agreement with the registered holder whereby Blue Thunder Resources Pty Ltd can acquire an 80% interest in the tenement.
All other tenements are registered in the name of Blue Thunder Resources Pty Ltd which holds a 20% interest for the benefit of Geotech International Pty Ltd and James Stewart.

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SCHEDULE OF TENEMENTS

TENEMENT SCHEDULE – EAST LAVERTON PROPERTY

Tenement ID	Registered Holder	Status	Equity	Grant Date (Application Date)	Area Blocks

E39/0981	Desert Fox Resources Pty Ltd	Granted	100%	02 Aug 2004	18 BL
E39/0982	Desert Fox Resources Pty Ltd	Granted	100%	02 Aug 2004	18 BL
E39/0985	Desert Fox Resources PtyLtd	Granted	100%	02 Aug2004	13 BL
E39/1064	Desert Fox Resources PtyLtd	Granted	100%	02 Aug2004	18 BL
E39/1229	Desert Fox Resources PtyLtd	Granted	100%	09 Nov 2007	87 BL
E39/1472	Desert Fox Resources Pty Ltd	Granted	100%	14 Jan 2010	14 BL
E39/1473	Desert Fox Resources PtyLtd	Granted	100%	14 Jan 2010	1 BL
E39/1474	Desert Fox Resources PtyLtd	Granted	100%	14 Jan 2010	5 BL
E39/1475	Desert Fox Resources PtyLtd	Granted	100%	14 Jan 2010	2 BL
E39/1476	Desert Fox Resources PtyLtd	Granted	100%	14 Jan 2010	11 BL
E39/1467	Desert Fox Resources PtyLtd	Granted	100%	13 Jan 2010	11BL
E39/1492	Desert Fox Resources PtyLtd	Granted	100%	16 Apr 2010	8 BL
E39/1518	Desert Fox Resources PtyLtd	Granted	100%	23 June 2010	59 BL
E39/1519	Desert Fox Resources PtyLtd	Granted	100%	23 June 2010	1 BL
E39/1520	Desert Fox Resources PtyLtd	Granted	100%	23 June 2010	27 BL
E39/1521	Desert Fox Resources Pty Ltd	Granted	100%	23 June 2010	58 BL
E39/1549	Desert Fox Resources Pty Ltd	Granted	100%	4 Oct 2010	37 BL
E39/1565	Desert Fox Resources PtyLtd	Granted	100%	17 Dec 2010	66 BL
E39/1572	Desert Fox Resources PtyLtd	Granted	100%	20 Jan 2011	23 BL
E39/1601	Desert Fox Resources Pty Ltd	Granted	100%	12 May 2011	8 BL
E39/1608	Desert Fox Resources PtyLtd	Granted	100%	1 July2011	212 BL
E39/1655	Desert Fox Resources PtyLtd	Granted	100%	20 April 2012	30 BL
E39/1666	Desert Fox Resources PtyLtd	Granted	100%	25 June 2012	8 BL
E39/1667	Desert Fox Resources PtyLtd	Granted	100%	25 June 2012	16 BL
E39/1722	Desert Fox Resources PtyLtd	Granted	100%	12 July2013	12 BL

Notes:

All tenements are in Western Australia.
E = Exploration Licence

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SCHEDULE OF TENEMENTS

TENEMENT SCHEDULE – LAKE MINIGWAL PROPERTY

Tenement ID	Registered Holder	Status	Equity	Grant Date (Application Date)	Area Blocks

E39/1677	St George Mining Ltd	Granted	100%	7 Sept 2013	60 BL
E39/1678	St George Mining Ltd	Granted	100%	7 Sept 2013	70 BL

Notes:

All tenements are in Western Australia.
E = Exploration Licence

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St George Mining Limited ACN 139 308 973 Level 1, 115 Cambridge Street, PO Box 1305, West Leederville WA 6007 www.stgeorgemining.com.au P 08 9322 6600 F 08 9322 6610

ATE DIRECTORY/CONTENTS PAGE

AI assistant

ST GEORGE MINING LIMITED — Annual Report 2013

65782_rns_2013-08-15_ef439598-1d86-4dc4-b9cd-96d6ae7032d7.pdf

ASX / MEDIA RELEASE

ST GEORGE MINING LIMITED (ASX: SGQ) - 30 JUNE 2013 ANNUAL REPORT

CORPORATE DIRECTORY

Board of Directors

Registered and Principal Office

Australian Business Number

Share Register

Stock Exchange Code

Solicitors

Auditors

Bankers

Dear Fellow Shareholders,

CAMBRIDGE NICKEL PROJECT (100% ST GEORGE)

NICKEL EXPLORATION – PROJECT DRAGON

EAST LAVERTON - GOLD EXPLORATION

REVIEW OF OPERATIONS

EAST LAVERTON – RARE EARTHS

LAKE MINIGWAL PROJECT

PINE CREEK PROPERTY - EXPLORATION ACTIVITIES

CORPORATE

Capital Structure

DIRECTORS

MARCUS MICHAEL CA, B.Bus

COMPANY SECRETARY

DIRECTORS’ INTERESTS

PRINCIPAL ACTIVITIES

RESULTS AND REVIEW OF OPERATIONS

LIKELY DEVELOPMENTS

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

ENVIRONMENTAL ISSUES

DIVIDENDS PAID OR RECOMMENDED

DIRECTORS’ MEETINGS

REMUNERATION REPORT – AUDITED

Remuneration policy

DIRECTORS’ REPORT

Details of directors and executives

Remuneration of directors and executives

Remuneration Options

Employment contracts of directors and executives

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

END OF REMUNERATION REPORT

SHARE OPTIONS

Unissued shares

PROCEEDINGS ON BEHALF OF THE COMPANY

EVENTS SUBSEQUENT TO BALANCE DATE

AUDITOR’S INDEPENDENCE DECLARATION

Non Audit Services

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013

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

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

1 CORPORATE INFORMATION

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation of the Financial Report

Going Concern

(b) Principles of Consolidation

(c) Business combinations

(d) Adoption of new and revised standards

(e) Statement of compliance

(f) Income Tax

(g) Exploration, evaluation and development expenditure

(h) Revenue

Interest

(i) Cash and cash equivalents

(j) Employee benefits

(k) Impairment of assets

(l) Earnings per share

(m) Goods and services tax (GST)

(n) Investments

(o) Financial assets

(p) Contributed equity

(q) Significant accounting estimates and judgements

Deferred taxation

Subsidiary Loans

Capitalised exploration costs

(r) Comparative information

3 REVENUE

ST GEORGE MINING LIMITED Annual Report 2013