STREAMPLAY STUDIO LIMITED — Annual Report 2012

Sep 27, 2012

Gippsland Limited and its Controlled Entities

ABN 31 004 766 376

Annual Financial Report

30 June 2012

	DIRECTORS' REPORT 1
	AUDITOR'S INDEPENDENCE DECLARATION 11
	STATEMENT OF COMPREHENSIVE INCOME 12
	STATEMENT OF FINANCIAL POSITION 13
	STATEMENT OF CASH FLOWS 14
	STATEMENT OF CHANGES IN EQUITY 15
	NOTES TO THE FINANCIAL STATEMENTS 16
1	CORPORATE INFORMATION 16
2	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 16
3	REVENUES, OTHER INCOME AND EXPENSES 28
4	INCOME TAX 28
5	EARNINGS PER SHARE 29
6	CASH AND CASH EQUIVALENTS 30
7	TRADE AND OTHER RECEIVABLES (CURRENT) 31
8	INVENTORIES 32
9	OTHER ASSETS 32
10	OTHER FINANCIAL ASSETS (NON‐CURRENT) 32
11	PROPERTY, PLANT AND EQUIPMENT 33
12	EXPLORATION AND EVALUATION EXPENDITURE 34
13	MINE PROPERTIES 34
14	TRADE AND OTHER PAYABLES (CURRENT) 35
15	PROVISIONS (CURRENT) 35
16	LOANS AND BORROWINGS (CURRENT) 35
17	CONTRIBUTED EQUITY 35
18	RESERVES AND ACCUMULATED LOSSES 36
19	INTERESTS IN CONTROLLED ENTITIES 37
20	INTERESTS IN JOINT VENTURE OPERATIONS AND BUSINESS UNDERTAKINGS 38
21	EXPENDITURE COMMITMENTS 38
22	SHARE BASED PAYMENT PLANS 39
23	CONTINGENT LIABILITIES AND CONTINGENT ASSETS 41
24	SUBSEQUENT EVENTS 41
25	REMUNERATION OF AUDITORS 42
26	RELATED PARTY DISCLOSURE 42
27	KEY MANAGEMENT PERSONNEL 44
28	SEGMENT INFORMATION 46
29	FINANCIAL INSTRUMENTS 48
30	PARENT ENTITY INFORMATION 54
	DIRECTORS' DECLARATION 55
	INDEPENDENT AUDITOR'S REPORT 56ASX ADDITIONAL INFORMATION 58

Your Directors present their report with respect to the results of Gippsland Limited ("Gippsland" or "the Company") and its controlled entities ("the Group") for the year ended 30 June 2012 ("the Balance Date") and the state of affairs of the Company and the Group at Balance Date.

DIRECTORS

The names of the Directors in office at any time during or since the end of the year are as below. Directors were in office for this entire period unless otherwise stated.

Mr Ian Jeffrey Gandel Mr Jon Starink Mr John Damian Kenny Mr John Stuart Ferguson Dunlop (resigned 12 July 2012)

Names, qualifications, experience and special responsibilities

Ian Jeffrey Gandel ‐ Chairman (Non‐executive) LLB, BEc, FCPA, FAICD

Mr Gandel was appointed Director and non‐executive chairman on 24 June 2009. He is also a member of the Company's Remuneration Committee and Audit Committee.

Mr Gandel is a Melbourne businessman with extensive experience in retail management and retail property. He has had an involvement in the construction and leasing of Gandel shopping centres and has been a director of Gandel Retail Trust. He has previously been involved in the Priceline retail chain and the CEO chain of serviced offices.

Mr Gandel has been an investor in the mining industry since 1994, and is currently a substantial shareholder of a number of publicly listed Australian companies and is involved in exploration in his own right in Victoria, New South Wales and Western Australia.

During the past three years Mr Gandel has served as a Director of the following listed companies: Alliance Resources Limited* – Appointed 15 October 2003 Alkane Resources Ltd* – Appointed 25 July 2006 Octagonal Resources Ltd* ‐ Appointed 10 November 2010

Jon Starink – Director (Executive) BSC (Hons), BChemE(Hons), MApplSc, FAusIMM, FIEAust, FIChemE, MRACI, MTMS, CPEng, CChem, CSci

Mr Starink was appointed Director on 8 May 2007.

Based in London, Mr Starink is a Chartered Professional Engineer, a Chartered Scientist and a Chartered Industrial Chemist, a Fellow of the Institution of Engineers Australia, a Fellow of the Australasian Institute of Mining and Metallurgy, a Fellow of the Institution of Chemical Engineers, a Member of The Metallurgical Society and a Member of the Royal Australian Chemical Institute.

Mr Starink has over 30 years experience in the mining industry in the role of both Executive and Non‐Executive Director. His extensive practical and operational experience includes engineering design and project management; mining exploration management; science and engineering research & development and process innovation & development.

Mr Starink served in senior technical and engineering roles with the Sons of Gwalia Ltd Greenbushes tantalum‐tin project for 10 years where he was directly responsible for process development, project design and construction management for the tin smelter and tantalum extraction projects.

During the past three years Mr Starink has served as a Director of the following listed company: MacArthur Minerals Limited* – Appointed 28 June 2011

John Damian Kenny – Director (Non‐executive) B Com (Hons), LLB

Mr Kenny was appointed Director on 2 September 1999. He is also a member of the Company's Remuneration Committee and is Chairman of the Company's Audit Committee.

Mr Kenny is a corporate and resources lawyer with a specialised interest in venture capital, initial public offerings and mergers and acquisitions. He has extensive experience in public equity fundraisings and the pricing of equity, debt and derivative securities.

During the past three years Mr Kenny has served as a Director of the following listed company: The ARK Fund Limited* ‐ Appointed 18 June 2003 Indus Coal Limited* ‐ Appointed 13 September 2011 Sun Resources Limited* ‐ Appointed 1 March 2012

John Stuart Ferguson Dunlop – Director (Executive) (resigned 12 July 2012) BE, M Eng Sc, P Cert Arb, CP, FAusIMM, FIMMM, MSME, MCIMM, MMICA

Mr Dunlop was appointed Director on 1 July 2005 and resigned on 12 July 2012.

Mr Dunlop is a certified Mine Manager having approximately 40 years of international surface and underground mining experience in a variety of base metals, industrial and precious metals production.

During the past three years Mr Dunlop has served as a Director of the following listed companies: Alliance Resources Limited* – Appointed 30 November 1994 Alkane Resources Ltd* – Appointed 4 July 2006 Copper Strike Ltd* – Appointed 9 November 2009 Drummond Gold Ltd – Appointed 1 August 2007; Resigned 15 July 2010

* denotes current directorship

Interest in Shares and Options of the Company and related bodies corporate

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

	Number of OrdinaryShares	Number of Optionsover Ordinary Shares	Exercise Price ofOptions	Expiry date ofOptions
IJ Gandel	469,430,560	‐	‐	‐
JD Kenny	4,132,655	‐	‐	‐
J Starink	3,085,715	‐	‐	‐

OPTIONS

At the date of this report, the unissued ordinary shares of Gippsland Limited under option are as follows:

Grant Date	Date of Expiry	Exercise Price	Number under Option
25 November 2011	31 December 2012	$0.04	600,000
25 November 2011	31 December 2013	$0.06	600,000

COMPANY SECRETARY

The following person held the position of company secretary at the end of the financial year:

Rowan St John Caren BCom, CA

Mr Caren was appointed Company Secretary on 15 August 2006.

Mr Caren was employed by the chartered accountancy firm PricewaterhouseCoopers in Australia and overseas for six years and has been directly involved in the minerals exploration industry for a further 15 years. He also provides company secretarial and corporate advisory services to several exploration companies and is a member of the Institute of Chartered Accountants in Australia.

MEETINGS OF DIRECTORS

During the financial year, 10 meetings of directors were held. Attendances by each director during the year were as follows:

	Directors' Meetings		Audit Committee		Remuneration Committee
	Held	Attended	Held	Attended	Held	Attended
IJ Gandel	10	10	2	2	2	2
JD Kenny	10	9	2	2	2	1
J Starink	10	8	‐	‐	‐	‐
JSF Dunlop	10	8	2	1	2	2

PRINCIPAL ACTIVITIES

The principal activities of the entities within the Group during the year were exploration and development of commercially and economically viable mineral resources. There were no significant changes in the nature of the Group's principal activity during the year.

CONSOLIDATED RESULTS

The consolidated operating profit of the Group after providing for income tax amounted to $799,359 (2011: loss of $2,630,645).

Review of Operations

During the year the Company continued to focus on the development of the Abu Dabbab tin/tantalum/feldspar project and commencement of production at the Alluvial Tin Project in Egypt. The following activities were undertaken in relation to the Abu Dabbab tin/tantalum project and the Abu Dabbab Alluvial Tin Project:

• Completion of work on the Free Zone.
• Preparation of revised drawings for the seawater intake and jetty structure.
• Completion of the Environmental Social Impact Assessment by the Company's environmental consultants, Environics, and submission to the Shore Protection Agency and Ministry of Water and Irrigation for approval.
• Completion of alluvial tin trial mining activities.
• Completion of a comprehensive engineering study and economic evaluation of the Abu Dabbab Alluvial Tin Project and approval to proceed with mining operations in relation to this project.
• Purchase and implementation of the plant and equipment to process the high grade alluvial material from Wadi Quaria.
• Commencement of mining operations at the Alluvial Tin Project.
• Entering into a concentrate sales contract with Malaysia Smelting Corporation Bhd.
• First shipment despatched from Alluvial Tin Project.
• Completion of independent calculation of project economics in relation to the Abu Dabbab Tin‐Tantalum‐Feldspar Project.

• Satellite image acquisition, map compilation and processing a small parcel of cassiterite bearing alluvials in relation to the Nuweibi Project.

In addition, the Company's operations included:

• exploration activities in Eritrea in relation to two Exploration Licences granted to a 100% owned subsidiary of the Company. Exploration activities included completion of a Versatile Time Domain Electro Magnetic system ('VTEM') survey, completion of follow‐up gravity surveys and preparation for a 5,000 metre reconnaissance reverse circulation drilling programme in relation to the Adobha and Gerasi South project areas.
• successful placements of shares during the year to raise a total of $7,501,617 before costs.
• divestment of the Company's 40% interest in the Heemskirk Tin Project to the Company's joint venture partner for 43,528,743 shares in Stellar Resources Ltd and a royalty.

Financial Position

The net assets of the Group have increased by $7,833,950 to $12,210,943 at 30 June 2012. The increase has largely resulted from the following factors:

• proceeds from the issue of shares raising a total during the year of $7,501,617 before costs;
• sale of the Company's interest in the Heemskirk Tin Project for a royalty and shares in Stellar Resources Ltd with a market value at 30 June 2012 of $3,264,656; and
• capital and development expenditure and inventories in relation to the Abu Dabbab Alluvial Tin Project.

As at Reporting Date the group had a working capital surplus of $1,037,935.

DIVIDENDS

No dividends were declared or paid during the financial year.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

The following significant changes in the state of affairs of the Company occurred during the financial year:

• a) The Company's 100% owned subsidiary Adobha Resources (Eritrea) Pty Ltd was granted a 100km2 Exploration Licence in addition to its existing 2,100km2 (total 2,200 km2 ), in the highly prospective Adobha region of The State of Eritrea;
• b) Completed the issue and allotment of 187,540,415 shares at a placement price of $0.027 to raise $5,063,591 (before costs) on 18 August 2011;
• c) Completed the issue and allotment of 162,535,026 shares at a placement price of $0.015 to raise $2,438,026 (before costs) on 20 March 2012;
• d) The Company's 50% owned subsidiary, Tantalum Egypt JSC, commenced production at the Abu Dabbab Alluvial Project in Egypt; and
• e) The Company executed a sale and purchase agreement with Stellar Resources Ltd whereby Stellar Resources Ltd acquired the Company's 40% interest in the Heemskirk Tin Project for 43,528,743 shares in Stellar Resources Ltd and a royalty.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

On 12 July 2012, Mr John Dunlop resigned as a Director of the Company.

During July to September 2012, the Company commenced and completed a non‐renounceable rights issue to raise $1,384,105 before costs.

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

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

Information as to likely developments in the operations of the Company and the Group and the expected results of those operations in future financial years has not been included in this report because, in the opinion of the Directors, it would prejudice the interests of the Company and the Group.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Group's operations are not currently subject to any significant environmental regulations under either Australian, Eritrean or Egyptian legislation. However, the board is committed to achieving a high standard of environmental performance, and regular monitoring of potential environmental exposures is undertaken by management. The board considers that the Group has adequate systems in place for the management of its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the Group.

An environmental and social impact assessment was updated during the previous financial year for the Abu Dabbab project in Egypt.

The Group is required to carry out its activities in accordance with the Mining Laws and regulations in the areas in which it undertakes its exploration activities.

INDEMNITY AND INSURANCE OF OFFICERS

During or since the end of the financial year the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay an insurance premium as follows:

The Company has paid premiums to insure any director or officer of Gippsland Limited against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the Company. The amount of the premium is $14,103 (2011: $14,053). The Company has entered into "Deeds of Indemnity, Access and Insurance" with directors and officers in which the Company agrees to indemnify the directors and officers in respect of certain liabilities incurred by the director or officer while acting in their capacity for the Company and to insure the director or officer against certain risks they are exposed to as a director or officer of the Company.

PROCEEDINGS ON BEHALF OF COMPANY

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave 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. No proceedings have been brought or intervened in or on behalf of the Company with leave of the court under section 237 of the Corporations Act 2001.

NON‐AUDIT SERVICES

No non‐audit services were provided by the Company's current auditor, Deloitte Touche Tomatsu ("Deloitte").

AUDITORS INDEPENDENCE DECLARATION

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 for the year ended 30 June 2012 has been received and can be found on page 11 of the directors' report.

REMUNERATION REPORT (Audited)

This report details the nature and amount of remuneration for each director of Gippsland Limited, and for the executives receiving the highest remuneration.

Remuneration Policy

The remuneration policy of Gippsland Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long‐term incentives. The board of Gippsland Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Group, as well as create goal congruence between directors, executives and shareholders.

The board's policy for determining the nature and amount of remuneration for board members and senior executives of the Group is as follows:

• The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, is developed and approved by the board after seeking professional advice from independent external consultants as required. In the years presented, no external consultants have been used.
• All executives receive a base salary (which is based on factors such as length of service and experience).
• The board reviews executive packages annually by reference to the Group's performance, executive performance and comparable information from industry sectors.

The board policy is to remunerate non‐executive directors at market rates for time, commitment and responsibilities. The board determines payments to the non‐executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non‐executive directors is currently fixed at $250,000 with any change in this amount subject to approval by shareholders at the Annual General Meeting. Fees for non‐executive directors are not linked to the performance of the Group. However, to align directors' interests with shareholder interests, the directors are encouraged to hold shares in the Company and are able to participate in the option plan.

No relationship exists between the remuneration policy and the Company's performance.

At the Company's most recent Annual General Meeting, the remuneration report for the year ended 30 June 2011 was passed with a greater than 75% vote in favour.

The tables below set out summary information about the consolidated entity's earnings and movements in shareholder wealth for the five years to 30 June 2012:

				30 June 2008
$	$	$	$	$
90,820	82,938	64,440	17,303	80,880
799,359	(2,630,645)	(2,894,769)	(2,751,352)	(2,520,874)
799,359	(2,630,645)	(2,894,769)	(2,751,352)	(2,520,874)
	30 June 2012	30 June 2011	30 June 2010	30 June 2009

	30 June 2012	30 June 2011	30 June 2010	30 June 2009	30 June 2008
Share price at start of year	$0.032	$0.030	$0.044	$0.099	$0.120
Share price at end of year	$0.009	$0.032	$0.030	$0.044	$0.099
Basic/diluted earnings/(loss) per share	0.10 cps	(0.43) cps	(0.58) cps	(0.86) cps	(0.91) cps

Details of key management personnel

(i) Directors

IJ Gandel	‐ Chairman (Non‐Executive)
J Starink	‐ Executive Director
J Kenny	‐ Non‐Executive Director
JSF Dunlop	‐ Executive Director (resigned 12 July 2012)

(ii) Executives

JM Chisholm	‐ Chief Geologist
A Ayyash	‐ Regional Manager ‐ Middle East and North Africa
RS Caren	‐ Company Secretary
GA Hawkins	‐ Chief Financial Officer

Non‐Executive Director Remuneration

IJ Gandel ‐ Chairman (Non‐Executive)

• Remuneration: $80,000 per annum.
• Details of remuneration entitlement on termination: Payment of fees up to the date of termination.

J Kenny ‐ Non‐Executive Director

• Remuneration: $40,000 per annum.
• Details of remuneration entitlement on termination: Payment of fees up to the date of termination.

Employment Contracts

J Starink ‐ Executive Director

• Term of agreement: 8 May 2007 until terminated in accordance with the agreement.
• Remuneration: $150,000 per annum.
• Period of notice for termination/resignation: Three months written notice by either party.
• Details of remuneration entitlement on termination: Payment of consulting fees up to the date of termination or payment of three months salary in lieu of notice.

JM Chisholm ‐ Chief Geologist

• Remuneration: $175 per hour.
• Period of notice for termination/resignation: Three months written notice by either party.
• Details of remuneration entitlement on termination: Payment of consulting fees up to the date of termination or payment of three months salary in lieu of notice.

A Ayyash ‐ Regional Manager ‐ Middle East and North Africa

• Term of agreement: 1 October 2010 until terminated in accordance with the agreement.
• Remuneration: $188,600 salary and allowances per annum.
• Period of notice for termination/resignation: Two months written notice by the Company or three months written notice by the Executive.
• Details of remuneration entitlement on termination: Payment of salary and employee entitlements up to the date of termination and one month's salary for each year worked by the Executive.

RS Caren ‐ Company Secretary

• Term of agreement: 15 August 2006 until terminated in accordance with the agreement.
• Remuneration: $6,500 per month.
• Period of notice for termination/resignation: One month written notice by either party.
• Details of remuneration entitlement on termination: Payment of consulting fees up to the date of termination.

GA Hawkins ‐ Chief Financial Officer

• Term of agreement: 1 September 2010 until terminated in accordance with the agreement.
• Remuneration: $170,000 per annum.
• Period of notice for termination/resignation: Two months written notice by the Company or three months written notice by the Executive.
• Details of remuneration entitlement on termination: Payment of salary and employee entitlements up to the date of termination.

JSF Dunlop ‐ Executive Director (resigned 12 July 2012)

• Remuneration: $115,000 per annum.
• Period of notice for termination/resignation: None.
• Details of remuneration entitlement on termination: Payment of fees up to the date of termination.

Remuneration of key management personnel

Table 1: Remuneration for the year ended 30 June 2012

Key Management	Short‐term	Share‐based	Post‐	Total	Remuneration
Personnel	Benefits	Payment	employment		consisting of
	Cash, salary andcommissions	Shares	BenefitsSuperannuation		options for theyear
	$	$	$	$	%
Non‐Executive Directors
Mr IJ Gandel	80,000	‐	‐	80,000	0.00%
Mr JD Kenny	40,000	‐	‐	40,000	0.00%
Sub‐total	120,000	‐	‐	120,000
Executive Directors
Mr J Starink	200,000	‐	‐	200,000	0.00%
Mr JSF Dunlop (resigned 12
July 2012)	113,417	‐	1,583	115,000	0.00%
Sub‐total	313,417	‐	1,583	315,000
Other key management
personnel
Mr A Ayyash	198,508	‐	‐	198,508	0.00%
Mr RS Caren	76,507	‐	‐	76,507	0.00%
Dr JM Chisholm	244,693	‐	‐	244,693	0.00%
Mr GA Hawkins	153,670	3,550	13,830	171,050	2.08%
Sub‐total	673,378	3,550	13,830	690,758
Total	1,106,795	3,550	15,413	1,125,758

Table 2: Remuneration for the year ended 30 June 2011

Key ManagementPersonnel	Short‐termBenefitsCash, salary andcommissions	Share‐basedPaymentShares	Post‐employmentBenefitsSuperannuation	Total	Remunerationconsisting ofoptions for theyear
	$	$	$	$	%
Non‐Executive Directors
Mr IJ Gandel	88,188	‐	‐	88,188	0.00%
Mr JD Kenny	36,808	‐	‐	36,808	0.00%
Sub‐total	124,996	‐	‐	124,996
Executive Directors
Mr J Starink	135,000	‐	‐	135,000	0.00%
Mr JSF Dunlop	74,800	‐	‐	74,800	0.00%
Mr RJ Telford (terminated 26	166,667	‐	‐	166,667
November 2010)					0.00%
Sub‐total	376,467	‐	‐	376,467
Other key management
personnel
Mr A Ayyash	191,870	22,500	‐	214,370	10.50%
Mr RS Caren	79,775	‐	‐	79,775	0.00%
Dr JM Chisholm *	94,238	‐	‐	94,238	0.00%
Mr GA Hawkins	122,324	‐	11,009	133,333	0.00%
Sub‐total	488,207	22,500	11,009	521,716
Total	989,670	22,500	11,009	1,023,179

* In addition to these fees paid by Gippsland, during the year ended 30 June 2011, Dr Chisholm was also paid $37,500 from Adobha Resources Ltd, which was intended to be the listing vehicle for the Eritrean exploration assets through a proposed Initial Public Offering. The proposed Initial Public Offering was cancelled and during the year ended 30 June 2012, these fees of $37,500 were brought to account in Gippsland's subsidiary, Adobha Resources (Eritrea) Pty Ltd, in order for the fees to contribute towards the Company's exploration expenditure commitments in Eritrea.

Table 3: Compensation Options: Granted and vested during the year (consolidated)

The following are grants of share‐based payment compensation to directors and senior management:

30 June 2012			Terms & Conditions for Each Grant			Vesting date
			Fair Value per	Exercise
			Option atGrant Date ($)	Price peroption ($)
	Granted No.	Grant Date	(note 22)	(note 22)	Expiry Date
Mr GA Hawkins	500,000	25 Nov 2011	$0.0032	$0.04	31 Dec 2012	25 Nov 2011
Mr GA Hawkins	500,000	25 Nov 2011	$0.0039	$0.06	31 Dec 2013	25 Nov 2011

Table 4: Shares issued on exercise of compensation options (consolidated)

30 June 2012

	Shares issued	Paid per share	Unpaid per share
	No.	$	$
Directors
Nil	‐	‐	‐
30 June 2011
	Shares issued	Paid per share	Unpaid per share
	No.	$	$
Directors
Nil	‐	‐	‐

Table 5: Share‐based payment arrangements in existence

During the financial year, the following share‐based payment arrangements were in existence in relation to directors and senior management.

Options series	Grant date	Expiry date	Number of options	Grant date fairvalue	Vesting date
(1) Issued 25November 2011	25 Nov 2011	31 Dec 2012	500,000	$0.0032	25 Nov 2011
(2) Issued 25November 2011	25 Nov 2011	31 Dec 2013	500,000	$0.0039	25 Nov 2011

There are no further service or performance criteria that need to be met in relation to options granted under series (1) or (2) before the beneficial interest vests in the recipient.

During the financial year:

• 1,000,000 options were issued to Mr Geoffrey Hawkins. All options vested on grant date. The options were issued for nil consideration and have a fair value at grant date of $3,550 (2011: Nil). There were no other grants of share‐ based payment compensation to directors or senior management.
• No directors or senior management exercised options that were granted to them as part of their compensation.
• 17,000,000 options held by directors and senior management lapsed. Of these 17,000,000 options, 10,000,000 options were held by current directors and senior management and 7,000,000 options were held by former directors and senior management. The 17,000,000 lapsed options had a value at their grant date of $17,000.

[END OF REMUNERATION REPORT]

Signed in accordance with a resolution of the Board of Directors.

J STARINK Director

Dated this 28th day of September 2012.

Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 8 9365 7000 Fax: +61 8 9365 7001

www.deloitte.com.au The Board of Directors Gippsland Limited 207 Stirling Highway CLAREMONT WA 6010

28 September 2012

Dear Board Members

Gippsland 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 Gippsland Limited

As lead audit partner for the audit of the financial statements of Gippsland Limited for the financial year ended 30 June 2012, 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

DELOITTE TOUCHE TOHMATSU

Neil Smith Partner Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
		$	$
Finance revenue	3(a)	81,037	82,348
Other Income	3(b)	9,783	590
Total Income		90,820	82,938
Other gains and losses	3(c)	3,264,656	‐
Administration expense	3(d)	(1,013,251)	(1,113,588)
Employee benefits expense	3(e)	(1,407,394)	(1,221,526)
Foreign exchange gain/(losses)		(21,610)	1,125
Share based payment expense		(4,260)	(22,500)
Exploration expense		‐	(39,318)
Project evaluation expense		‐	(33,165)
Impairment of loans to other entities		‐	(239,596)
Depreciation and amortisation expense		(65,505)	(39,222)
Impairment of exploration and evaluation expenditure		(44,097)	(5,793)
Profit/(loss) before income tax		799,359	(2,630,645)
Income tax expense	4	‐	‐
Profit/(loss) after income tax		799,359	(2,630,645)
Other comprehensive income
Exchange rate differences on translating foreign operations		87,665	(899,448)
Total other comprehensive income		87,665	(899,448)
Total comprehensive income/(loss) for the period		887,024	(3,530,093)
Profit/(loss) is attributable to:Members of the parent		799,359	(2,630,645)
Non‐controlling interest		‐	‐
		799,359	(2,630,645)
Total comprehensive income/(loss) is attributable to:
Members of the parent		887,024	(3,530,093)
Non‐controlling interest		‐887,024	‐(3,530,093)
Basic earnings/(loss) per share (cents per share)	5	0.10	(0.43)
Diluted earnings/(loss) per share (cents per share)	5	0.10	(0.43)

The accompanying notes form an integral part of this Consolidated Statement of Comprehensive Income.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2012

	Note	2012	2011
		$	$
ASSETS
Current Assets
Cash and cash equivalents	6	1,169,582	806,397
Trade and other receivables	7	25,902	98,480
Inventories	8	706,078	‐
Other assets	9	203,374	80,524
Total Current Assets		2,104,936	985,401
Non‐Current Assets
Other financial assets	10	3,264,656	‐
Property, plant and equipment	11	1,192,111	284,429
Exploration and evaluation	12	6,458,211	4,316,624
Mine properties	13	258,030	‐
Total Non‐Current assets		11,173,008	4,601,053
TOTAL ASSETS		13,277,944	5,586,454
LIABILITIES
Current Liabilities
Trade and other payables	14	993,262	1,010,327
Provisions	15	73,739	10,177
Loans and Borrowings	16	‐	188,957
Total Current Liabilities		1,067,001	1,209,461
TOTAL LIABILITIES		1,067,001	1,209,461
NET ASSETS		12,210,943	4,376,993
EQUITY
Equity attributable to equity holders of the parent
Contributed Equity	17(a)	45,530,847	38,588,181
Reserves	18	(185,026)	(276,951)
Accumulated losses	18	(33,134,878)	(33,934,237)
TOTAL EQUITY		12,210,943	4,376,993

The accompanying notes form an integral part of this Consolidated Statement of Financial Position.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
Cash flows from operating activities
Payments to suppliers and employees		(2,908,766)	(2,376,324)
Interest received		81,151	82,902
Finance costs		(592)	‐
Other receipts		7,561	590
Net cash flows (used in) operating activities	6	(2,820,646)	(2,292,832)
Cash flows from investing activities
Payments for exploration and evaluation		(2,631,215)	(816,812)
Payments for property, plant and equipment		(868,429)	(214,310)
Net cash flows (used in) investing activities		(3,499,644)	(1,031,122)
Cash flows from financing activities
Proceeds from issue of fully paid shares	17(b)	7,501,617	3,200,000
Payment of transaction costs	17(b)	(558,951)	(216,034)
Loans to other entities		(66,746)	(50,639)
Proceeds from borrowings		400,000	‐
Repayment of borrowing		(560,000)	‐
Net cash flows from financing activities		6,715,920	2,933,327
Net increase/(decrease) in cash held		395,630	(390,627)
Net foreign exchange differences		(32,444)	(26,098)
Cash and cash equivalents at beginning of period		806,396	1,223,122
Cash and cash equivalents at end of period	6	1,169,582	806,397

The accompanying notes form an integral part of this Consolidated Statement of Cash Flows.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2012

	Issuedcapital	Accumulatedlosses	Optionreserve	Foreigncurrencytranslationreserve	Totalequity
	$	$	$	$	$
At 1 July 2010	35,581,715	(31,303,592)	530,402	92,095	4,900,620
Currency translation differences	‐	‐		(899,448)	(899,448)
Loss for the year	‐	(2,630,645)	‐	‐	(2,630,645)
Total comprehensive income for the year	‐	(2,630,645)	‐	(899,448)	(3,530,093)
Transactions with owners in their capacityas owners
Issue of share capital	3,200,000	‐	‐	‐	3,200,000
Transaction costs	(216,034)	‐	‐	‐	(216,034)
Cost of share‐based payments	22,500	‐	‐	‐	22,500
At 30 June 2011	38,588,181	(33,934,237)	530,402	(807,353)	4,376,993
Currency translation differences	‐	‐		87,665	87,665
Profit for the year	‐	799,359	‐	‐	799,359
Total comprehensive income for the year	‐	799,359	‐	87,665	(887,024)
Transactions with owners in their capacityas owners
Issue of share capital	7,501,617	‐	‐	‐	7,501,617
Transaction costs	(558,951)	‐	‐	‐	(558,951)
Cost of share‐based payments		‐	4,260	‐	4,260
At 30 June 2012	45,530,847	(33,134,878)	534,662	(719,688)	12,210,943

The accompanying notes form an integral part of this Consolidated Statement of Changes in Equity.

FOR THE YEAR ENDED 30 JUNE 2012

1 CORPORATE INFORMATION

The financial report of Gippsland Limited for the year ended 30 June 2012 was authorised for issue in accordance with a resolution of the directors on 28 September 2012.

Gippsland Limited which is the ultimate parent company, is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.

The nature of the operations and principal activities of the Group is exploration and mine development.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and applicable Australian Accounting Standards.

The financial report has also been prepared on a historical cost basis, except where stated.

The financial report is presented in Australian dollars and all values are in whole dollars.

For the purpose of preparing the financial statements, the consolidated entity is a for‐profit entity.

(b) Going Concern

The consolidated entity has incurred a net profit after income tax of $799,359 (2011: Loss of $2,630,645) and experienced net cash outflows from operations of $2,820,646 (2011: $2,292,832) and net cash outflows from investing activities of $3,499,644 (2011: $1,031,122) for the year ended 30 June 2012.

The ability of the consolidated entity and the company to continue as going concerns is principally dependent upon raising additional capital and / or debt finance to fund exploration and project development, the Abu Dabbab project, other commitments, other principal activities and provide additional working capital, the sale of non‐core assets and the ramp‐up in production of its Alluvial Tin project.

These conditions indicate a material uncertainty that may cast significant doubt about the consolidated entity's and the company's ability to continue as going concerns.

During September 2012, the Company completed a non‐renounceable rights issue to raise $1,384,105 before costs.

The directors have prepared a cash flow forecast for the period ending 30 September 2013 which indicates that the current cash resources will not meet expected cash outgoings without additional capital and / or debt funding. The directors anticipate that this funding will be obtained through a combination of some or all of the following:

• Short‐term funding of $800,000 to be obtained from Ian Gandel or his related party by way of loan funds to be provided by December 2012;
• Realisation of non‐core assets by March/April 2013 at amounts equivalent to the carrying value of those assets at 30 June 2012;
• Successful ramp‐up of the Alluvial Tin Project, increasing revenue and cash receipts from March 2013 due to a planned upgrade of its plant facility in December 2012; and/or
• Further capital raisings and / or debt funding.

The directors are satisfied that they will achieve the matters set out above and therefore the going concern basis of preparation is appropriate. The financial report has therefore been prepared on the going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

Should the consolidated entity and the company be unable to achieve the matters referred to above, there is a material uncertainty whether the consolidated entity and the company will be able to continue as going concerns and, therefore,

whether they will realise their assets and discharge their liabilities in the normal course of business and at amounts stated in the financial report.

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

(c) Statement of Compliance

Compliance with Australian Accounting Standards ensures the financial report, the financial statements and notes comply with International Financial Reporting Standards ("IFRS").

(d) New standards and Interpretations Adopted

The consolidated entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to their operations and are effective for the current financial reporting period beginning 1 July 2011.

Significant new and revised standards and interpretations effective for the current financial reporting period that are relevant to the consolidated entity are:

• AASB 124 Related Party Disclosures (2009), AASB 2009‐12 Amendments to Australian Accounting Standards;
• AASB 1054 Australian Additional Disclosures and AASB 2011‐1 Amendments to Australian Accounting Standards arising from Trans‐Tasman Convergence Project;
• AASB 2010‐4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project;
• AASB 2010‐5 Amendments to Australian Accounting Standards; and
• AASB 2010‐6 Amendments to Australian Accounting Standards Disclosures on Transfers of Financial Assets.

The adoption of these standards has not had an impact on the consolidated entity.

Accounting Standards and Interpretations issued but not yet effective

The following Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and have not been adopted by the consolidated entity for the year ended 30 June 2011.

Standard / Interpretation	Effective for annualreporting periodsbeginning/ending on orafter	Expected to beapplied beconsolidated entity
AASB 9 Financial Instruments, AASB 2009‐11Amendments to Australian Accounting Standardsarising from AASB 9 and AASB 2010‐7Amendments to Australian Accounting Standardsarising from AASB 9 (December 2010)	1 January 2015	30 June 2016
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 127 Separate Financial Statements (2011)	1 January 2013	30 June 2014
AASB 128 Investments in Associates and JointVentures (2011)	1 January 2013	30 June 2014

FOR THE YEAR ENDED 30 JUNE 2012

Standard / Interpretation	Effective for annualreporting periodsbeginning/ending on orafter	Expected to beapplied beconsolidated entity
AASB 13 Fair Value Measurement and AASB 2011‐8 Amendments to Australian AccountingStandards arising from AASB 13	1 January 2013	30 June 2014
AASB 119 Employee Benefits (2011) and AASB2011‐10 Amendments to Australian AccountingStandards arising from AASB 119 (2011)	1 January 2013	30 June 2014
AASB 2011‐4 Amendments to AustralianAccounting Standards to Remove Individual KeyManagement Personnel Disclosure Requirements	1 July 2013	30 June 2014
AASB 2011‐7 Amendments to AustralianAccounting Standards arising from theConsolidation and Joint Arrangements standards	1 January 2013	30 June 2014
AASB 2011‐9 Amendments to AustralianAccounting Standards – Presentation of Items ofOther Comprehensive Income	1 July 2012	30 June 2013
Interpretation 20 Stripping Costs in the ProductionPhase of a Surface Mine and AASB 2011‐12Amendments to Australian Accounting Standardsarising from Interpretation 20	1 January 2013	30 June 2014
AASB 2012‐2 Amendments to AustralianAccounting Standards ‐ Disclosures – OffsettingFinancial Assets and Financial Liabilities(Amendments to AASB 7)	1 January 2013	30 June 2014
AASB 2012‐3 Amendments to AustralianAccounting Standards ‐ Offsetting Financial Assetsand Financial Liabilities (Amendments to AASB132)	1 January 2014	30 June 2015
AASB 2012‐5 Amendments to AustralianAccounting Standards arising from AnnualImprovements 2009‐2011 Cycle	1 January 2013	30 June 2014

At the date of authorisation of the financial report, the following Standards and Interpretations issued by the IASB/IFRIC where an equivalent Australian Standard or Interpretation has not been made by the AASB, were in issue but not yet effective:

Standard / Interpretation	Effective for annualreporting periodsbeginning/ending on orafter	Expected to beapplied beconsolidated entity
Consolidated Financial Statements, JointArrangements and Disclosure of Interests in OtherEntities: Transition Guidance (Amendments to IFRS10, IFRS 11 and IFRS 12)	1 January 2013	30 June 2014

FOR THE YEAR ENDED 30 JUNE 2012

The impact of these recently issued or amended Standards and Interpretation have not been determined as yet by the consolidated entity.

(e) Basis of consolidation

The consolidated financial statements comprise the financial statements of Gippsland Limited and entities (including special purpose entities) controlled by Gippsland Limited (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

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

Adjustments are made to bring into line any dissimilar accounting policies that may exist.

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

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

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

(f) Interests in joint ventures

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

(g) Foreign currency translation

Both the functional and presentation currency of Gippsland Limited and its Australian subsidiaries is Australian dollars ($AU).

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

All differences in the consolidated financial report are taken to the statement of comprehensive income with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in the statement of comprehensive income.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.

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

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

The functional currency of the overseas subsidiaries Tantalum Egypt JSC, Nubian Resources JSC and Nubian Resources PLC is Egyptian pounds (EGP).

FOR THE YEAR ENDED 30 JUNE 2012

As at the reporting date the assets and liabilities of these overseas subsidiaries are translated into the presentation currency of Gippsland Limited at the rate of exchange ruling at the statement of financial position date and the statements of comprehensive income are translated at the weighted average exchange rates for the year.

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

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

(h) Cash and cash equivalents

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

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(i) Trade and other receivables

Trade receivables, which generally have 30 day terms, are recognised and carried at original invoice amount which represents fair value at that date less an allowance for any doubtful debts. An allowance of doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

(j) Inventories

Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first‐in‐ first‐out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Categories of inventory include:

• (i) spare parts and stores;
• (ii) work in progress stockpiles of ore containing cassiterite awaiting processing where future economic benefits are expected to flow to the Group;
• (iii) finished goods final cassiterite product on site awaiting shipment; and
• (iv) finished goods in transit final cassiterite product in transit to the smelter.

(k) Other financial assets

Other financial assets in the parent company represent investments in subsidiaries held at cost less any impairment.

(l) Property, plant and equipment

Leasehold improvements, buildings and plant and equipment are stated at cost less accumulated depreciation and any impairment losses recognised.

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

Leasehold Improvements ‐ over 2 to 5 years Buildings – over 20 years Plant and equipment ‐ over 3 to 10 years

Impairment

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

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

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

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

Impairment losses are recognised in the statement of comprehensive income.

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

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

(m) Exploration and evaluation expenditure

Exploration and evaluation expenditure incurred is recognised as exploration and evaluation assets, measured on the cost basis. The expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

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

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

The Group assesses the stage of each mine under construction to determine when a mine moves into the production stage. The criteria used to assess the start date are determined based on the unique nature of each mine construction project, such as the complexity of a plant and its location. The Group considers various relevant criteria to assess when the mine and the processing plant is substantially complete and ready for its intended use. At this time, any costs capitalised to 'exploration and evaluation' are reclassified to 'mine properties'. Some of the criteria will include, but are not limited, to the following:

• ‐ Availability of the plant;
• ‐ Completion of a reasonable period of testing of the mine plant and equipment;
• ‐ Ability to produce metal in saleable form (within specifications); and
• ‐ Ability to sustain ongoing production of metal at commercial rates of production.

(n) Mine properties

When a mine construction project moves into the production stage, any costs capitalised to 'exploration and evaluation' are reclassified to 'mine properties'. Also at this time, the capitalisation of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for costs that qualify for capitalisation relating to mine asset additions or improvements, mine development or mineable reserve development. It is also at this point that depreciation / amortisation commences.

Mine properties are recorded at cost, less accumulated depreciation and amortisation and any impairment losses.

Amortisation is over the units of production of the economically recoverable reserves (that is, tonnes of ore).

(o) Recoverable amount of assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount

of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

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

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

(p) Trade and other payables

Trade and other payables are carried at amortised cost and due to their short term nature they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.

(q) Provisions

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

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

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

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

(r) Loans and borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received.

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement.

(s) Contributed equity

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

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

(t) Share‐based payment transactions

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

The cost of these equity‐settled transactions with employees is measured by reference to the fair value at the date at which they are granted. In valuing equity‐settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Gippsland Limited ('market conditions').

The cost of equity‐settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('vesting date').

The cumulative expense recognised for equity‐settled transactions at each reporting date until vesting date reflects ‐

• (i) the extent to which the vesting period has expired, and
• (ii) the number of awards that, in the opinion of the directors of the Group, will ultimately vest.

This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition.

Where the terms of an equity‐settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification.

Where an equity‐settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see note 5).

(u) Leases

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. All other leases are classified as finance leases. Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight‐line basis over the lease term. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight‐line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(v) Revenue

Interest revenue is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably. Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

(w) Income tax

In principle, deferred income tax is provided on all temporary differences at the statement of financial position date between the tax bases of assets and liabilities and their carrying amounts for the financial reporting purposes.

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

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

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

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

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

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

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

(x) Financial instruments

Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

Financial assets are classified into the following specified categories: financial assets 'at fair value through profit or loss' (FVTPL), 'held‐to‐maturity' investments, 'available‐for‐sale' (AFS) financial assets and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

Financial assets at FVTPL

Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.

A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of selling it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short‐term profit‐taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
• the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or
• it forms part of a contract containing one or more embedded derivatives, and AASB 139 'Financial Instruments: Recognition and Measurement' permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the 'other gains and losses' line item in the consolidated statement of comprehensive income. Fair value is determined in the manner described in note 29.

Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short‐term receivables when the recognition of interest would be immaterial.

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at

the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve.

(y) Other taxes

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

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

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

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

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

(z) Employee entitlements

Provision is made for the Company's liability for employee benefits arising from services rendered by employees at balance date. Employee benefits expected to be settled within one year, together with entitlements arising from wages and salaries, annual leave and sick leave, which will be settled within one year, have been measured at the amounts expected to be paid when the liability is settled, plus related on‐costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Contributions are made by the entity to employee superannuation funds and are charged as expenses when incurred.

(aa) Derecognition of financial instruments

The derecognition of a financial instrument takes place when the Group no longer controls the contractual rights that comprise the financial instrument, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party.

(bb) Segment information

Operating segments have been identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance. The chief operating decision maker has been identified as the board of directors of the Company.

(cc) Critical accounting judgements and key sources of estimation uncertainty

In the application of Australian Accounting Standards management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Judgments made by management that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, these relate to impairment of inter‐company loans and exploration and evaluation expenditure.

The criteria used by management in determining the impairment is as follows:

• Inter‐company loans are impaired by the lending company to the extent that there is uncertainty about the future recoverability of such loans from the borrowing company. Reversal of all or part of prior period impairment losses may be approved by management once a borrowing company has a capacity to repay all or part of such inter‐ company loans, and
• The ultimate recoupment of exploration and evaluation expenditure is dependent upon successful development and commercial exploitation or alternatively the sale of the respective areas of interest at an amount at least equal to book value. Therefore exploration and evaluation expenditure is impaired until such time as the aforementioned can be determined, normally by way of a Feasibility Study or some other event. Reversal of prior period impairment losses may be approved by management once the capacity to exploit or sell has been positively determined.
• The impairment of financial assets is accounted for by revaluing the financial asset to market value at the reporting date. The financial asset consists of shares in an ASX listed company and the market value is determined by using the closing price on the last business day of the reporting period. Any movement in the market value of the financial asset is brought to account in the Consolidated Statement of Comprehensive Income.

The Group assesses the stage of each mine under construction to determine when a mine moves into the production stage. The criteria used to assess the start date are determined based on the unique nature of each mine construction project, such as the complexity of a plant and its location. The Group considers various relevant criteria to assess when the mine and the processing plant is substantially complete, ready for its intended use and operating in the manner intended by management. When a mine construction project moves into the production stage, any costs capitalised to 'exploration and evaluation' are reclassified to 'mine properties'.

Mine properties are amortised over the units of production of the economically recoverable reserves.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

(dd) Financial risk management policy

Details of the Group's financial risk management policy are set out in Note 29.

(ee) Compound financial instruments

The Group evaluates the terms of any financial instrument to determine whether it contains both a liability and an equity component. The separate components of a financial instrument that create a financial liability and grant an option to the holder of the instrument to convert it into an equity instrument are recognised separately on the statement of financial position.

(ff) Comparative figures

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

FOR THE YEAR ENDED 30 JUNE 2012

3 REVENUES, OTHER INCOME AND EXPENSES

		2012	2011
		$	$
	Revenue and expenses from continuing operations
(a)	Revenue
	Finance revenue	81,037	82,348
		81,037	82,348
(b)	Other income
	Sundry income	9,783	590
		9,783	590
(c)	Other gains and losses
	Profit on sale of Heemskirk Joint Venture interest	4,635,811	‐
	Net gain/(loss) arising on financial assets	(1,371,155)	‐
		3,264,656	‐
(d)	Administration expenses
	Included in administrative expenses:
	Minimum lease payments ‐ operating lease	198,854	154,372
	Consultancy expenses	153,874	231,088
(e)	Employee benefits expenses
	Payroll cost	1,385,891	1,204,737
	Superannuation	21,503	16,789
	Employee benefits expense in Statement of Comprehensive
	Income	1,407,394	1,221,526
	Share‐based payments expense	4,260	22,500
	Total employee benefit expenses	1,411,654	1,244,026
4	INCOME TAX
	Statement of Comprehensive Income
		2012	2011
		$	$
(a)	The components of income tax expense for the years ended
	30 June 2012 and 2011 are:
	Statement of Comprehensive Income
	Current income tax
	Current income tax charge/(benefit)	‐	‐
	Deferred income tax
	Relating to origination and reversal of temporary differences	‐	‐
	Benefit from previously unrecognised tax loss used to reduce
	deferred tax expense	‐	‐
	Income tax expense/(benefit) reported in statement of
	comprehensive income	‐	‐
	Statement of changes in equity
	Income tax liability reported in equity	‐	‐

A reconciliation of income tax expense (benefit) applicable to accounting profit before income tax at the statutory income tax rate to income tax expense at the Group's effective income tax rate for the years ended 30 June 2012 and 2011 is as follows:

FOR THE YEAR ENDED 30 JUNE 2012

Statement of Comprehensive Income

	2012	2011
	$	$
Accounting profit (loss) before tax	799,359	(2,630,645)
At the statutory income tax rate of 30% (2011: 30%)	239,808	(789,194)
Non‐deductible expenses	466,503	79,398
Temporary differences and tax losses not recognised	(706,311)	709,796
Income tax expense recognised on profit or loss	‐	‐
	‐	‐
Effective income tax rate	0%	0%
Unrecognised deferred tax assets and liabilities
Deferred tax assets and liabilities have not been
recognised in respect of the following items:
	2012	2011
	$	$
Deferred tax liabilities
Other assets	(68)	(90)
Foreign exchange gain	‐	‐
	(68)	(90)
Deferred tax assets
Business related costs	76,099	57,446
Accrued superannuation	‐	‐
Accrued audit fees	9,817	8,482
Accrued expenses	54,118	11,384
Employee entitlements	11,828	1,703
Foreign exchange loss	4,951	466,470
Tax losses (domestic)	4,345,798	4,839,207
Trade and other receivables	‐	‐
	4,502,611	5,384,692
Unrecognised deferred tax assets	(4,502,543)	(5,384,602)
	68	90
Net deferred tax	‐	‐
Tax losses and temporary differences not recognised	4,502,543	5,384,602

The deductible temporary differences and tax losses do not expire under current legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Company and Group can utilise benefits.

5 EARNINGS PER SHARE

	2012	2011
	cents	cents
Basic earnings per share	0.10	(0.43)
Diluted earnings per share	0.10	(0.43)

The following reflects the income and share data used in the basic and diluted earnings per share computations:

FOR THE YEAR ENDED 30 JUNE 2012

(a) Reconciliation of earnings used in calculating earnings per share

Profit/(loss) attributable to ordinary equity holders of the
Company used in calculating basic and diluted earnings per	799,359	(2,630,645)
share

(b) Weighted average number of shares used in the denominator

	Shares	Shares
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share	833,820,398	604,762,113
Adjusted weighted average number of ordinary shares used
in calculating diluted earnings per share	833,820,398	604,762,113

There were 1,200,000 potential ordinary shares as at 30 June 2012 (56,000,000 for 30 June 2011).

The consolidated entity's options over ordinary shares could potentially dilute basic earnings per share in the future, however they have been excluded from the calculations of diluted earnings per share because they are anti‐dilutive and out of the money for the years presented.

6 CASH AND CASH EQUIVALENTS

	2012	2011
	$	$
Cash at bank and in hand	385,782	271,797
Short term deposits	783,800	534,600
	1,169,582	806,397

Cash at bank and in hand earns interest at floating rates based on daily bank rates.

Short‐term deposits are made for varying periods of between one day and one month depending on the immediate cash requirements of the Group, and earn interest at the respective short‐term deposit rates.

The fair value of cash and cash equivalents is $1,169,582 (2011: $806,397).

Reconciliation to statement of cash flows

For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise the following at 30 June:

Cash at bank and in hand	385,782	271,797
Short‐term deposits	783,800	534,600
	1,169,582	806,397

FOR THE YEAR ENDED 30 JUNE 2012

Reconciliation from the net profit/(loss) after tax to the net cash flows from

operations
Net Profit/(Loss) after income tax	799,359	(2,630,645)
Adjustments for:
Depreciation and amortisation	65,505	39,222
Impairment losses of exploration expenditure	44,387	247,227
Foreign exchange loss (gain)	(5,479)	167,901
Share options expensed	4,260	22,500
Exploration expenses	‐	9,616
Profit on sale of Heemskirk Joint Venture interest	(4,635,811)	‐
Net loss arising on financial asset designated as FVTPL	1,371,155	‐
Changes in assets and liabilities
(increase)/decrease in trade and other receivables	70,164	(55,821)
(increase)/decrease in other assets	(164,141)	(8,987)
(increase)/decrease in inventories	(706,078)	‐
(decrease)/increase in provisions	63,562	(7,059)
(decrease)/increase in trade and other payables	272,471	(76,786)
Net cash from operating activities	(2,820,646)	(2,292,832)

Non‐cash transactions

During the 2012 financial year, the Group entered into the following non‐cash investing and financing activities which are not reflected in the statement of cash flows:

• The issue of 1,200,000 options on 25 November 2011 for nil consideration to employees of Gippsland. 600,000 of the options had an exercise price of $0.04 and an expiry date of 31 December 2012, and the other 600,000 options had an exercise price of $0.06 and an expiry date of 31 December 2013; and
• Gippsland Ltd received 43,528,743 shares in Stellar Resources Ltd valued at $4,635,811 being the consideration from the sale of the Company's interest in the Heemskirk Tin Joint Venture. The value of the shares in Stellar Resources Ltd has been determined by multiplying the number of shares received by $0.1065, being the 5 day volume weighted average price for Stellar Resources Ltd shares for the 5 business days between 19 January and 25 January 2012.

During the 2011 financial year, the Group did not enter into any non‐cash investing or financing activities.

7 TRADE AND OTHER RECEIVABLES (CURRENT)

		2012$	2011$
Trade receivables	(i)	‐	‐
Other receivables	(ii)	25,902	98,480
Loan receivable from Adobha Resources Ltd	(iii)	239,885	239,596
Allowance for impairment of receivables	(iii)	(239,885)	(239,596)
		25,902	98,480

(i) Trade receivables are non‐interest bearing and are generally on 30‐day terms.

(ii) Other receivables relate to GST receivable from the Australian Taxation Office and a refund due from a supplier.

(iii) Gippsland loaned funds to Adobha Resources Ltd in relation to the proposed Initial Public Offering ("IPO") of Adobha Resources Ltd. The loan funds were used by Adobha Resources Ltd for establishment costs, IPO costs, working capital and on‐loaning funds to Adobha Resources (Eritrea) Pty Ltd for exploration costs. The proposed IPO was terminated in June 2011. The loan has been fully impaired.

FOR THE YEAR ENDED 30 JUNE 2012

8 INVENTORIES

	2012$	2011$
Spare parts and stores – at costs	53,851	‐
Work in progress – at cost	565,632	‐
Finished goods in transit – at cost	86,595	‐
	706,078	‐

The cost of inventories recognised as an expense during the year in respect of continuing operations was nil (2011: nil).

9 OTHER ASSETS

	2012	2011
	$	$
Prepayments	199,803	78,911
Rental deposits	3,262	1,189
Accrued revenue	309	424
	203,374	80,524

10 OTHER FINANCIAL ASSETS (NON‐CURRENT)

	2011$
	‐
	‐
3,264,6563,264,656

This investment consists of 43,528,743 shares in Stellar Resources Ltd and is subject to escrow pursuant to ASX rules until 31 January 2013.

FOR THE YEAR ENDED 30 JUNE 2012

11 PROPERTY, PLANT AND EQUIPMENT

	LeaseholdImprovements$	Buildings	Plant andequipment$	Total$
Year ended 30 June 2012
Balance at 30 June 2011	2,495		281,934	284,429
Additions	1,381	161,412	790,910	953,703
Disposals	‐	‐	(9,606)	(9,606)
Foreign Exchange
Adjustment	‐	(38)	29,128	29,090
Depreciation charge for
the year	(2,070)	(6,015)	(57,420)	(65,505)
Balance at 30 June 2012	1,806	155,359	1,034,946	1,192,111
At 1 July 2011
Cost	18,794	‐	479,039	497,833
Accumulated
depreciation and
impairment	(16,299)	‐	(197,105)	(213,404)
Net carrying amount	2,495	‐	281,934	284,429
At 30 June 2012
Cost	20,175	161,412	1,330,433	1,512,020
Accumulated
depreciation and
impairment	(18,369)	(6,053)	(295,487)	(319,909)
Net carrying amount	1,806	155,359	1,034,946	1,192,111
Year ended 30 June 2011
Balance at 30 June 2010	5,602	‐	128,244	133,846
Additions	543	‐	205,905	206,448
Disposals	‐	‐	‐	‐
Foreign Exchange
Adjustment	‐	‐	(18,303)	(18,303)
Depreciation charge for
the year	(3,650)	‐	(33,912)	(37,562)
Balance at 30 June 2011	2,495	‐	281,934	284,429
At 1 July 2010
Cost	18,251	‐	330,908	349,159
Accumulated
depreciation and
impairment	(12,649)	‐	(202,664)	(215,313)
Net carrying amount	5,602	‐	128,244	133,846
At 30 June 2011
Cost	18,794	‐	479,039	497,833
Accumulated
depreciation and
impairment	(16,299)	‐	(197,105)	(213,404)
Net carrying amount	2,495	‐	281,934	284,429

FOR THE YEAR ENDED 30 JUNE 2012

12 EXPLORATION AND EVALUATION EXPENDITURE

	2012	2011
	$	$
Exploration & evaluation expenditure (at cost)	9,842,616	7,565,055
Accumulated amortisation and impairment	(3,384,405)	(3,248,431)
	6,458,211	4,316,624
Movement:
Exploration & evaluation expenditure
Balance at beginning of year	4,316,624	4,384,999
Current year expenditure	2,690,645	972,786
Foreign exchange adjustment	(98,123)	(1,035,368)
Reclassification of expenditure as Property, Plant and Equipment	(118,798)	‐
Transfer to mine properties	(288,039)	‐
Impairment	(44,098)	(5,793)
Balance at end of year	6,458,211	4,316,624

The ultimate recoupment of exploration and evaluation expenditure is dependent upon successful development and commercial exploitation or alternatively the sale of the respective areas of interest at an amount at least equal to book value.

For the year ended 30 June 2012 and 30 June 2011, evaluation expenditure on the Abu Dabbab project was capitalised at cost, until such time production commences and costs are transferred to 'mine properties'. For the year ended 30 June 2012, exploration expenditure of $2,289 (2011: $5,793) on the Wadi Allaqi project was impaired.

For the year ended 30 June 2012, exploration expenditure in Eritrea in relation to expired Prospecting Licences (Hafta West and Romay) of $41,809 (2011: nil) was impaired. Exploration expenditure for the Adobha Exploration Licence and Gerasi South Exploration Licence was capitalised at cost.

13 MINE PROPERTIES

	2012	2011
	$	$
Mine properties (at cost)	288,039	‐
Accumulated amortisation and impairment	(30,009)	‐
	258,030	‐
Movement:
Mine properties
Balance at beginning of year	‐	‐
Transfer from exploration and evaluation expenditure	288,039	‐
Additions	‐	‐
Amortisation	(30,009)	‐
Balance at end of year	258,030	‐

This project cost will be amortised over the life of the Abu Dabbab operation from production commencement. Expenditure in relation to pre‐production activities on the Abu Dabbab Alluvial Tin Project was capitalised at cost and will be amortised based on tin production.

FOR THE YEAR ENDED 30 JUNE 2012

14 TRADE AND OTHER PAYABLES (CURRENT)

	2012	2011
	$	$
Trade payables and accruals (i)	993,262	1,010,327
	993,262	1,010,327

(i) Trade payables and accruals are non‐interest bearing and are normally settled on repayment terms between 7 and 30 days.

15 PROVISIONS (CURRENT)

	2012	2011
	$	$
Provision for annual leave	51,946	10,177
Provision for long service leave	21,793	‐
	73,739	10,177

16 LOANS AND BORROWINGS (CURRENT)

	2012	2011
	$	$
Loans – unsecured (i)	‐	188,957
	‐	188,957

(i) During 2011, the Company's 100% owned subsidiary Adobha Resources (Eritrea) Pty Ltd received loan funds from Adobha Resources Ltd. These loans were part of the proposed Initial Public Offering ("IPO") of Adobha Resources Ltd whereby Adobha Resources Ltd would loan funds to Adobha Resources (Eritrea) Pty Ltd to fund exploration expenditure in Eritrea. In June 2011, the proposed IPO of Adobha Resources Ltd was terminated. The loan was repaid during August 2011 following the rights issue by the Company. The loan was interest free and unsecured.

17 CONTRIBUTED EQUITY

	2012	2011
	$	$
(a) Ordinary Shares
Issued and fully paid	45,530,847	38,588,181

Fully paid ordinary shares carry one vote per share and carry the right to dividends. Issued capital has no par value.

FOR THE YEAR ENDED 30 JUNE 2012

		Number of
		shares	$
(b) Movement in ordinary share capital
At 30 June 2010		544,634,716	35,581,715
Share issue	(i)	80,000,000	3,200,000
Share issue	(ii)	500,000	22,500
Share issue costs			(216,034)
Subtotal (shares issued during year)		80,500,000	3,006,466
At 30 June 2011		625,134,716	38,588,181
Share issue	(iii)	187,540,415	5,063,591
Share issue	(iv)	162,535,026	2,438,026
Share issue costs			(558,951)
Subtotal (shares issued during year)		350,075,441	6,942,666
At 30 June 2012		975,210,157	45,530,847

(i) 80,000,000 shares issued on 1 October 2010 for cash at 4 cents each.

(ii) 500,000 shares issued on 30 November 2010 as remuneration to Mr Ayman Ayyash for nil consideration. The deemed value was determined as 4.5 cents per share.

(iii) 187,540,415 shares issued on 18 August 2011 for cash at 2.7 cents each.

(iv) 162,535,026 shares issued on 20 March 2012 for cash at 1.5 cents each.

The unissued ordinary shares of Gippsland Limited under option are as follows:

Grant Date	Date of Expiry	Exercise Price	Number under Option
25 November 2011	31 December 2012	$0.04	600,000
25 November 2011	31 December 2013	$0.06	600,000
Total			1,200,000

18 RESERVES AND ACCUMULATED LOSSES

	2012	2011
	$	$
(a) Reserves
Option issue reserve	534,662	530,402
Foreign currency translation reserve	(719,688)	(807,353)
	(185,026)	(276,951)

	Option issue reserve$	Foreign currencytranslationreserve$	Total$
Movements in reserves
At 30 June 2010	530,402	92,095	622,497
Share based payment	‐	‐	‐
Currency translation differences	‐	(899,448)	(899,448)
As at 30 June 2011	530,402	(807,353)	(276,951)
Share based payment	4,260	‐	4,260
Currency translation differences	‐	87,665	87,665
As at 30 June 2012	534,662	(719,688)	(185,026)

FOR THE YEAR ENDED 30 JUNE 2012

	2012$	2011$
(b) Accumulated losses
Movements in accumulated losses were as follows:
Balance 1 July	(33,934,237)	(31,303,592)
Net profit/(loss) for the year	799,359	(2,630,645)
Balance 30 June	(33,134,878)	(33,934,237)

(c) Nature and purpose of reserves

Option issue reserve

The option issue reserve is used to record items recognised as expenses on grant of share options.

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. It is also used to record the net investment hedged in these subsidiaries.

19 INTERESTS IN CONTROLLED ENTITIES

The consolidated financial statements include the financial statements of Gippsland Limited and the controlled entities listed in the following table:

	Country ofincorporation	Percentage of equity interestheld by the Group		Investment
		2012	2011	2012	2011
		%	%	$	$
Tantalum International Pty Ltd	Australia	100	100	100	100
Here2win.com Pty Ltd	Australia	100	100	100	100
Adobha Resources (Eritrea) Pty Ltd	Australia	100	100	100	100
Oryx Resources Pty Ltd	Australia	100	100	100	100
Gippsland (Jordan) Pty Ltd	Australia	100	100	100	100
Nubian Resources PLC	United Kingdom	100	100	27,388	27,388
Tantalum Egypt JSC	Egypt	50	50	‐	‐
Nubian Resources JSC	Egypt	100	100	‐	‐
				27,888	27,888

Gippsland Limited is the ultimate Australian parent entity and ultimate parent of the Group.

FOR THE YEAR ENDED 30 JUNE 2012

20 INTERESTS IN JOINT VENTURE OPERATIONS AND BUSINESS UNDERTAKINGS

At 30 June 2012, the Group was a participant in the following joint ventures:

Name of joint venture

	2012	2011
	% Interest	% Interest
Heemskirk Tin Deposit – Tasmania, Australia*	‐	40
Seiga – Wadi Allaqi, Egypt	50	50
Um Shashoba – Wadi Allaqi, Egypt	50	50
Haimur – Wadi Allaqi, Egypt	50	50
Nile Valley Block E – Wadi Allaqi, Egypt	50	50
Nile Valley Block A – Wadi Allaqi, Egypt	50	50
Um Garayat – Wadi Allaqi, Egypt	50	50
Koleit – Wadi Allaqi, Egypt	50	50
Um Tiur – Wadi Allaqi, Egypt	50	50
Abu Swayel – Wadi Allaqi, Egypt	50	50

* During the year, Gippsland Ltd sold its interest in the Heemskirk Tin Joint Venture for 43,528,743 shares in Stellar Resources Ltd valued at $4,635,811. The value of the shares in Stellar Resources Ltd has been determined by multiplying the number of shares received by $0.1065, being the 5 day volume weighted average price for Stellar Resources Ltd shares for the 5 business days between 19 January and 25 January 2012.

The joint ventures are not separate legal entities. They are contractual arrangements between the participants and are of the type where initially one party contributes tenements with the other party earning a specified percentage by funding exploration activities. The Joint Ventures do not hold any assets and accordingly the Company's share of exploration expenditure is accounted for in accordance with the policy set out in Note 2.

21 EXPENDITURE COMMITMENTS

(a) Lease expenditure commitments

The Group has entered into commercial leases for office accommodation in Perth, Australia; Asmara, Eritrea; and Cairo, Egypt.

Perth Office Lease

The property lease is a non‐cancellable lease with a two and a half year term, with rent payable monthly in advance. Contingent rental provisions within the lease agreement require the minimum lease payments shall be increased by the lower of CPI or 5% per annum. An option exists to renew the lease at the end of the 2.5 year term for an additional 2.5 years.

Cairo Office Lease

The property lease is a non‐cancellable lease with a five year term, with rent payable monthly in advance.

Asmara Office Lease

The property lease is a non‐cancellable lease with a twelve month term, with rent payable monthly in advance.

Future minimum rentals payable as at 30 June are as follows:

	2012	2011
	$	$
Within one year	159,500	160,000
After one year but not more than five years	149,900	285,000
	309,400	445,000

FOR THE YEAR ENDED 30 JUNE 2012

(b) Exploration expenditure commitments

Under Eritrean mining law, expenditure commitments entered into by a tenement holder with respect to a tenement are mandatory. Failure to expend funds in accordance with a commitment may result in a liability to the Eritrean government to the extent of the unexpended portion of the expenditure commitment, or forfeiture of the tenement/s. As at 30 June 2012, the Group was required to expend a further $367,000 on the Adobha Exploration Licence in Eritrea by no later than 23 July 2012, being the second anniversary of the grant of the tenement, and a further $64,300 on the Gerasi South Exploration Licence in Eritrea by no later than 25 August 2012, being the first anniversary of the grant of the tenement. The Company did not meet these expenditure commitments for the Exploration Licences due to a delay in the drilling programme resulting from the Eritrean authorities changing the visa requirements for foreign drillers and technical workers entering the country and a further delay when a drilling rig mobilsing to site was washed off a causeway by a flash flood. Although the Company had not expended these funds by the due dates, it had entered into a drilling contract which committed sufficient funds to satisfy the minimum expenditure requirements. The Company has received verbal advice from the Eritrean Ministry of Energy and Mines that there will be no liability to the Eritrean government for not expending the funds by the due dates due to these delays. The minimum expenditure commitments for year 3 of the Adobha Exploration Licence is US$3,440,000 and the minimum expenditure commitments for year 2 of the Gerasi South Exploration Licence is US$200,000. The Group has pending applications regarding other exploration licence areas. The granting of the new exploration licences is not guaranteed, however, if granted, there will be additional minimum expenditure commitments. The Company does not currently have the funds to meet these requirements and will need to raise additional capital to do so.

During 2011, the Group committed to spend US$300,000 on exploration at its Nuweibi Tantalum‐Tin Project by 31 December 2011. Drilling at Nuweibi planned for the December 2011 quarter was deferred due to the lack of a suitable drilling rig. Approximately US$294,400 as at 30 June 2012 is required to be spent in relation to exploration once a suitable drilling rig becomes available in order to meet this expenditure commitment.

The Group has no other minimum exploration expenditure commitments in respect to any mining tenements or projects.

(c) Joint venture expenditure commitments

The Group has no minimum expenditure commitments in respect to any of its mining joint ventures.

(d) Bank guarantee

A subsidiary of the Group has been required to provide a bank guarantee of US$30,000 to the General Authority for Investment and Free Zone in Egypt. The letter of guarantee is valid until 10 August 2013.

(e) Capital Commitments

Gippsland's subsidiary, Tantalum Egypt JSC, entered into a contract during 2011 with a mining contractor in relation to its Alluvial Tin Project. The total contract value is estimated at US$1,740,000 over the life of the project. As at 30 June 2012, under this contract, Tantalum Egypt JSC had paid approximately US$392,000.

Gippsland's subsidiary, Adobha Resources (Eritrea) Pty Ltd, entered into a drilling contract during the year in relation to its exploration in Eritrea. The total contract value is estimated at US$480,000. Drilling commenced during July 2012.

22 SHARE BASED PAYMENT PLANS

(a) Recognised share‐based payment expenses

The expense recognised for share based payments during the year is shown in the table below:

	2012	2011
	$	$
Expense arising from equity‐settled share‐based payment
transactions	4,260	22,500
	4,260	22,500

FOR THE YEAR ENDED 30 JUNE 2012

(b) Types of share‐based payment plans

On 30 November 2010, 500,000 fully paid ordinary shares were issued to Mr Ayman Ayyash for nil consideration in accordance with his employment contract. The shares had a deemed value of 4.5 cents per share being a total deemed value of $22,500.

On 25 November 2011, 1,200,000 options were issued to employees of the Company for nil consideration. The expiry date, exercise price and fair value of the options are shown in the table below.

The following share‐based payment arrangements were in existence during the current and prior reporting periods:

Options series	Number	Grant date	Expiry date	Exercise price	Fair value atgrant date
				$	$
(1) Issued 25 November 2012 (*)	600,000	25/11/11	31/12/12	0.04	0.0032
(2) Issued 25 November 2012 (*)	600,000	25/11/11	31/12/13	0.06	0.0039
(3) Issued 16 May 2006	25,000,000	16/5/06	26/5/12	0.135	Nil
(4) Issued 5 February 2008	4,000,000	5/2/08	15/12/11	UK£0.0665	0.0484
(5) Issued 28 November 2008	17,000,000	28/11/08	31/5/12	0.150	0.0010
(6) Issued 17 August 2009	10,000,000	17/8/09	14/12/11	0.080	0.0181
Shares	Number	Issue date	Fair value at
			issue date
			$
Ordinary fully paid	500,000	30/11/10	0.045

(*) In accordance with the terms of the share‐based arrangement, options issued during the financial year ended 30 June 2012, vest at the date of their issue.

(c) Summary of options granted

The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options issued during the year.

	2012	2012	2011	2011
	No	WAEP	No	WAEP
Outstanding at the beginning of the year	56,000,000	0.13	56,000,000	0.13
Granted during the year	1,200,000	0.05	‐	‐
Exercised during the year	‐	‐	‐	‐
Expired during the year	(56,000,000)	0.13	‐	‐
Outstanding at the end of the year	1,200,000	0.05	56,000,000	0.13
Exercisable at the end of the year	1,200,000	0.05	56,000,000	0.13

(d) Weighted average of remaining contractual life

The weighted average remaining contractual life for the share options outstanding as at 30 June 2012 is 1.00 year (2011: 0.80 years).

(e) Range of exercise price

The range of exercise prices for options outstanding at the end of the year was $0.04 ‐ $0.06. (2011: $0.08 ‐ $0.15).

(f) Weighted average fair value

The weighted average fair value of options granted during the year was $0.05 (2011: nil).

FOR THE YEAR ENDED 30 JUNE 2012

(g) Option pricing model

Equity‐settled transactions

The fair value of the equity‐settled share options granted is estimated as at the date of grant using a binomial model taking into account the terms and conditions upon which the options were granted.

Using the Binomial Tree option valuation, the fair value of the options issued during the year was calculated. The model takes into account share price volatilities. The following inputs were used:

	2012	2012
Strike price	$0.04	$0.06
Stock price	$0.022	$0.022
Valuation date	25/11/11	25/11/11
Expiry date	31/12/12	31/12/13
Volatility	76.03%	76.03%
Risk free rate	3.77%	3.77%
Value per option	$0.0032	$0.0039
Number of options	600,000	600,000
Value of options	$1,920	$2,340

23 CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(a) Contingent Liabilities

During the reporting period, the Company received an invoice for $108,000 plus GST from John S Dunlop and Associates Pty Ltd, a company controlled by Mr JSF Dunlop, for consulting work done prior to his resignation as an Executive Director of the Company. Gippsland disputes this amount is payable and is in discussions with Mr Dunlop.

The Group did not have any other contingent liabilities as at Balance Date.

(b) Contingent Assets

During the year, the Company executed a sale and purchase agreement with Stellar Resources Ltd whereby Stellar Resources Ltd acquired the Company's 40% interest in the Heemskirk Tin Project for 43,528,743 shares in Stellar Resources Ltd and a royalty. Under the Minerals Royalty Deed dated 30 January 2012, the royalty receivable by the Company will be calculated as follows:

Net Realised Price (Tin Price) per tonne Royalty Percentage

Less than $25,000	Nil
$25,000 ‐ $30,000	1% plus 0.0002% for every $1 the Net Realised Price is over $25,000
$30,000 or more	2%

The Group did not have any other contingent assets as at Balance Date.

24 SUBSEQUENT EVENTS

On 12 July 2012, Mr John Dunlop resigned as a Director of the Company.

During July to September 2012, the Company commenced and completed a non‐renounceable rights issue to raise $1,384,105 before costs.

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

FOR THE YEAR ENDED 30 JUNE 2012

25 REMUNERATION OF AUDITORS

The auditor of Gippsland Limited is Deloitte Touche Tomatsu ("Deloitte").

	2012	2011
	$	$
Amounts received or due and receivable by Deloitte for:
•an audit or review of the financial report of the entity and any
other entity in the Group	40,138	37,827
Amounts received by auditors other than Deloitte for:
•an audit or review of the financial report of the entity and any
entity in the Group	34,537	34,696
	74,675	72,523

26 RELATED PARTY DISCLOSURE

The following table provides the total amount of transactions which have been entered into with related parties for the relevant financial year:

	2012$	2011$
Gandel Metals Pty Ltd – a company controlled by Mr IJ Gandelreceived director's fees.	80,000*	88,188*
Gandel Metals Pty Limited ‐ a company associated with Mr IJGandel rented a Niton Analyser to Tantalum Egypt JSC for use inrelation to the Abu Dabbab Project. The rental charged by GandelMetals Pty Ltd was less than the rental that would have beencharged by an arms‐length party.	17,357	5,000
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandelprovided loan funds to Gippsland.	400,000	‐
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandelwas repaid loan funds by Gippsland.	400,000	‐
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandelreceived interest on its loan funds to Gippsland up to the date ofrepayment of the loan by Gippsland Ltd.	592	‐
Gandel Metals Pty Limited ‐ a company associated with Mr IJGandel received a fee of 4% for sub‐underwriting the rights issueby Gippsland during August 2011. The fee was paid by PatersonsSecurities Ltd as underwriter of the rights issue.	202,544	‐
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandelparticipated in the rights issue by Gippsland Ltd during August2011 and purchased the shortfall of the rights issue in accordancewith the sub‐underwriting agreement between Gandel Metals PtyLtd and Patersons Securities Ltd.	2,989,659	‐
Gandel Metals Pty Limited ‐ a company associated with Mr IJGandel received a fee of 4% for sub‐underwriting the rights issueby Gippsland during March 2012. The fee was paid by PatersonsSecurities Ltd as underwriter of the rights issue.	68,175	‐
Abbotsleigh Pty Limited – a company associated with Mr IJ Gandelparticipated in the rights issue by Gippsland Ltd during March2012 and purchased the shortfall of the rights issue in accordancewith the sub‐underwriting agreement between Gandel Metals Pty
Ltd and Patersons Securities Ltd.	1,260,738	‐

FOR THE YEAR ENDED 30 JUNE 2012

	2012	2011
	$	$
Mandu Pty Ltd – a company controlled by Dr JM Chisholm
received geological consulting fees.	244,693*	94,238*
Mandu Pty Ltd ‐ a company controlled by Dr JM Chisholm received$37,500 for consulting fees during the year ended 30 June 2011from Adobha Resources Ltd, which was intended to be the listingvehicle for the Eritrean exploration assets through a proposedInitial Public Offering. The proposed Initial Public Offering was
cancelled and during the year ended 30 June 2012, these fees of$37,500 were brought to account in Gippsland's subsidiary,Adobha Resources (Eritrea) Pty Ltd, in order for the fees tocontribute towards the Company's exploration expenditurecommitments in Eritrea.	37,500	‐
Ventureworks JDK Pty Ltd – a company controlled by Mr JD Kennyreceived director's fees.	40,000*	36,808*
Mr J Starink – received directors fees and consulting fees.	200,000*	135,000*
John S Dunlop and Associates Pty Ltd – a company controlled byMr JSF Dunlop received directors and mining consulting fees.	95,833*	74,800*
Mr JSF Dunlop – received directors fees and superannuation.	19,167*	‐
John S Dunlop and Associates Pty Ltd – a company controlled byMr JSF Dunlop issued an invoice to Gippsland for consulting workdone prior to his resignation. Gippsland disputes this amount ispayable and is in discussions with Mr Dunlop.	Refer Note23(a)	‐
Gippsland loaned funds to Adobha Resources Ltd in relation to theproposed Initial Public Offering ("IPO") of Adobha Resources Ltd.Adobha Resources Ltd was established as a wholly ownedsubsidiary of Gippsland, however, the ownership of AdobhaResources Ltd was transferred to Mr GA Hawkins based onprofessional advice regarding the structuring of the proposed IPO.The loan funds were used by Adobha Resources Ltd forestablishment costs, IPO costs, working capital and on‐loaningfunds to Adobha Resources (Eritrea) Pty Ltd for exploration costs.The proposed IPO was terminated in June 2011.	66,747	239,596
Adobha Resources Ltd loaned funds to Gippsland's 100% ownedsubsidiary, Adobha Resources (Eritrea) Pty Ltd, in relation tofunding exploration activities in Eritrea. The loans were acomponent of a transaction regarding the proposed IPO ofAdobha Resources Ltd. Adobha Resources Ltd was established asa wholly owned subsidiary of Gippsland, however, the ownershipof Adobha Resources Ltd was transferred to Mr GA Hawkins basedon professional advice regarding the structuring of the proposedIPO. The proposed IPO was terminated in June 2011.	37,500	188,957
Adobha Resources (Eritrea) Pty Ltd repaid loan funds to Adobha
Resources Ltd.	160,000	‐
Loan funds owed by Adobha Resources (Eritrea) Pty Ltd to AdobhaResources Ltd were offset against loans owed by AdobhaResources Ltd to Gippsland Ltd.	66,457	‐

* Note: These amounts are included within the Remuneration Report in the Directors' Report.

FOR THE YEAR ENDED 30 JUNE 2012

27 KEY MANAGEMENT PERSONNEL

(a) Details of key management personnel

IJ Gandel	‐ Chairman (Non‐Executive)
J Starink	‐ Executive Director
J Kenny	‐ Non‐Executive Director
JM Chisholm	‐ Chief Geologist
A Ayyash	‐ Regional Manager ‐ Middle East and North Africa
RS Caren	‐ Company Secretary
GA Hawkins	‐ Chief Financial Officer
JSF Dunlop	‐ Executive Director (resigned 12 July 2012)

(b) Compensation of key management personnel

The aggregate compensation made to key management personnel of the Group is set out below:

	2012	2011
	$	$
Short‐term employee benefits	1,106,795	989,670
Post‐employment benefits	15,413	11,009
Share‐based payment	3,550	22,500
	1,125,758	1,023,179

Key management personnel remuneration has been included in the Remuneration Report section of the Directors' Report.

The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.

(c) Option holdings of key management personnel (consolidated)

Options held in Gippsland Limited (number) by Key Management personnel are:

30 June 2012	Balance at1.7.2011	Granted asremune‐ration	Optionsexerci‐sed	Optionsexpired	Balance at30.6.2012	Vested at30.6.2012	Vestedbut notexerci‐sable	Vested andexerci‐sable	Vestedduring theyear
Directors
Mr IJ Gandel	‐	‐	‐	‐	‐	‐	‐	‐	‐
Mr JSF Dunlop	2,000,000	‐	‐	2,000,000	‐	‐	‐	‐	‐
Mr JD Kenny	1,000,000	‐	‐	1,000,000	‐	‐	‐	‐	‐
Mr J Starink	2,000,000	‐	‐	2,000,000	‐	‐	‐	‐	‐
Executives					‐	‐		‐	‐
Mr A Ayyash	1,000,000	‐	‐	1,000,000	‐	‐	‐	‐	‐
Mr RS Caren	1,000,000	‐	‐	1,000,000	‐	‐	‐	‐	‐
Dr JM Chisholm	3,000,000	‐	‐	3,000,000	‐	‐	‐	‐	‐
Mr GA Hawkins	‐	1,000,000	‐	‐	1,000,000	1,000,000	‐	1,000,000	1,000,000
	10,000,000	1,000,000	‐	10,000,000	1,000,000	1,000,000	‐	1,000,000	1,000,000

FOR THE YEAR ENDED 30 JUNE 2012

30 June 2011	Balance at1.7.2010	Granted asremune‐ration	Optionsexerci‐sed	Optionsexpired	Balance at30.6.2011	Vested at30.6.2011	Vestedbut notexerci‐sable	Vested andexerci‐sable	Vestedduring theyear
Directors
Mr IJ Gandel	‐	‐	‐	‐	‐	‐	‐	‐	‐
Mr JSF Dunlop	2,000,000	‐	‐	‐	2,000,000	2,000,000	‐	2,000,000	‐
Mr JD Kenny	1,000,000	‐	‐	‐	1,000,000	1,000,000	‐	1,000,000	‐
Mr J Starink	2,000,000	‐	‐	‐	2,000,000	2,000,000	‐	2,000,000	‐
Executives
Mr A Ayyash	1,000,000	‐	‐	‐	1,000,000	1,000,000	‐	1,000,000	‐
Mr RS Caren	1,000,000	‐	‐	‐	1,000,000	1,000,000	‐	1,000,000	‐
Dr JM Chisholm	3,000,000	‐	‐	‐	3,000,000	3,000,000	‐	3,000,000	‐
Mr GA Hawkins	‐	‐	‐	‐	‐	‐	‐	‐	‐
	10,000,000	‐	‐	‐	10,000,000	10,000,000	‐	10,000,000	‐

(d) Shareholdings of key management personnel (consolidated)

Shares held in Gippsland Limited (number) by key management personnel are:

Balance 1.7.2011	Granted asremuneration	On exercise ofOptions	Net ChangeOther*	Balance30.6.2012
Ord	Ord	Ord	Ord	Ord
133,824,073	‐	‐	194,777,319	328,601,392
2,892,858	‐	‐	‐	2,892,858
300,000	‐	‐	1,860,000	2,160,000
‐	‐	‐	1,200,000	1,200,000
974,784	‐	‐	‐	974,784
‐	‐	‐	‐	‐
2,420,000	‐	‐	370,370	2,790,370
‐	‐	‐	‐	‐
140,411,715	‐	‐	198,207,689	338,619,404

30 June 2011	Balance 1.7.2010	Granted asremuneration	On exercise ofOptions	Net ChangeOther*	Balance30.6.2011
	Ord	Ord	Ord	Ord	Ord
Directors
Mr IJ Gandel	133,824,073	‐	‐	‐	133,824,073
Mr JSF Dunlop	‐	‐	‐	‐	‐
Mr JD Kenny	2,892,858	‐	‐	‐	2,892,858
Mr J Starink	300,000	‐	‐	‐	300,000
Executives
Mr A Ayyash	974,784	500,000	‐	(500,000)	974,784
Mr RS Caren	‐	‐	‐	‐	‐
Dr JM Chisholm	2,420,000	‐	‐	‐	2,420,000
Mr GA Hawkins	‐	‐	‐	‐	‐
	140,411,715	500,000	‐	(500,000)	140,411,715

* Net change refers to shares purchased or sold during the financial year.

FOR THE YEAR ENDED 30 JUNE 2012

(e) Other transactions with key management personnel

Please refer to note 26 regarding loans from key management personnel to the Company.

28 SEGMENT INFORMATION

(a) Reportable segments

The Group operates predominantly in the mining and exploration industry.

Information reported to the Group's chief operating decision maker for the purpose of resource allocation and assessment of segment performance is focussed on the type of resources being explored for and evaluated or developed. The Group's reportable segments under AASB 8 are therefore as follows:

• Tantalum
• Gold
• Copper
• Corporate

The tantalum segment relates to the development of the Group's Abu Dabbab tantalum‐tin project in Egypt. The gold segment relates to the exploration activities at Wadi Allaqi in Egypt.

The copper segment relates to the exploration activities at the Adobha project in Eritrea.

The corporate segment relates to operations of the corporate head office in Perth, Western Australia.

The following tables present revenue and profit information and certain asset and liability information regarding reportable segments for the years ended 30 June 2012 and 2011.

					Total
		Continuing Operations			Operations
	Tin/Tantalum	Gold	Copper	Corporate
	$	$	$	$	$
Year ended 30 June 2012
Revenue
Other revenues from external customers	‐	‐	2,222	4,724,409	4,726,631
Inter‐segment transactions	‐	2,593	‐	‐	2,593
Total segment revenue	‐	2,593	2,222	4,724,409	4,729,224
Inter‐segment elimination					(2,593)
Total consolidated revenue					4,726,631
Result
Segment result	(652,014)	(41,596)	(175,074)	1,668,043	799,359
Profit/(loss) before income tax and minorityinterest					799,359
Income tax expense					‐
Net profit for the year					799,359
Assets and liabilities
Segment assets	6,143,999	44,322	2,851,032	4,238,591	13,277,944
Total assets					13,277,944
Segment liabilities	(556,932)	(168,740)	(85,683)	(255,646)	(1,067,001)
Total liabilities					(1,067,001)
Other segment information
Capital expenditure	(776,150)	‐	(173,808)	(3,745)	(953,703)
Depreciation	(14,245)	(13,686)	(21,647)	(15,927)	(65,505)
Impairment losses	‐	(2,289)	(41,808)	‐	(44,097)

FOR THE YEAR ENDED 30 JUNE 2012

					Total
		Continuing Operations			Operations
	Tin/Tantalum	Gold	Copper	Corporate
	$	$	$	$	$
Year ended 30 June 2011
Revenue
Other revenues from external customers	‐	‐	‐	82,938	82,938
Inter‐segment transactions	‐	16,776	‐	‐	16,776
Total segment revenue	‐	16,776	‐	82,938	99,714
Inter‐segment elimination					(16,776)
Total consolidated revenue					82,938
Result
Segment result	(600,027)	(57,715)	(48,502)	(1,924,401)	(2,630,645)
Loss before income tax and minorityinterest					(2,630,645)
Income tax expense					‐
Net loss for the year					(2,630,645)
Assets and liabilities
Segment assets	3,980,413	58,270	590,512	957,259	5,586,454
Total assets					5,586,454
Segment liabilities	(691,095)	(164,196)	(224,553)	(129,617)	(1,209,461)
Total liabilities					(1,209,461)
Other segment information
Capital expenditure	(104,596)	‐	(87,223)	(14,629)	(206,448)
Depreciation	(5,042)	(15,396)	(3,109)	(15,675)	(39,222)
Impairment losses	‐	(5,793)	‐	‐	(5,793)

(b) Geographical information

The Group's geographical areas are determined based on the location of the Group's assets and operations.

The following tables present revenue, expenditure and certain asset information regarding geographical locations for the years ended 30 June 2012 and 2011:

	Australia$	Egypt$	Eritrea$	Total$
Year ended 30 June 2012
Revenue
Other revenues from external customers	4,724,409	‐	2,222	4,726,631
Inter‐segment sales	‐	2,593	‐	2,593
Segment revenue	4,724,409	2,593	2,222	4,729,224
Other segment information
Segment assets	4,238,591	6,188,321	2,851,032	13,277,944
Total assets				13,277,944
Capital expenditure	(3,745)	(776,150)	(173,808)	(953,703)

FOR THE YEAR ENDED 30 JUNE 2012

	Australia$	Egypt$	Eritrea$	Total$
Year ended 30 June 2011
Revenue
Other revenues from external customers	82,938	‐	‐	82,938
Inter‐segment sales	‐	16,776	‐	16,776
Segment revenue	82,938	16,776	‐	99,714
Other segment information
Segment assets	957,259	4,038,683	590,512	5,586,454
Total assets				5,586,454
Capital expenditure	(14,629)	(104,596)	(87,223)	(206,448)

29 FINANCIAL INSTRUMENTS

(a) Financial risk management policy

The Group's management of financial risk is aimed at ensuring net cash flows are sufficient to:

• meet all financial commitments as and when they fall due, and
• maintain the capacity to fund its forecast project development and exploration strategies.

The Group continually monitors and tests its forecast financial position against these criteria.

The Group's principal financial instruments comprise cash, short‐term deposits and an investment in an ASX listed company. The main purpose of these financial instruments is to raise finance for the Group operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. It is, and has been throughout the period under review, the Group's policy that no trading in financial instruments shall be undertaken.

The Group currently has minimal exposure to commodity price risk but it is expected that as the Group's Alluvial Tin Project has commenced production, and as its other projects move into the production phase, the exposure to these risks is expected to increase significantly. The main risks arising from the Group's financial instruments are interest rate risk, foreign currency risk, credit risk, security risk and liquidity risk.

The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rate, foreign exchange and commodity prices. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future rolling cash flow forecasts.

FOR THE YEAR ENDED 30 JUNE 2012

(b) Interest rate risk

The following table sets out the carrying amount of the financial instruments exposed to interest rate risk:

	2012	2011
	$	$
FINANCIAL ASSETS
Interest Bearing
Cash at bank	882,031	626,756
Weighted average interest rate	2.54%	3.47%
Non‐Interest Bearing
Cash at bank	287,551	179,641
Trade receivables	25,902	98,480
	313,453	904,877
FINANCIAL LIABILITIES
Non‐Interest Bearing
Trade and other payables	993,262	1,010,327
Other loans	‐	188,957
	993,262	1,199,284

The following table summarises the sensitivity of financial assets held at balance date to interest rate risk, following a movement of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below.

	Post‐tax gain/(loss)/equityincrease/(decrease)
	2012	2011
	$	$
+1% (100 basis points)	8,820	6,263
‐1% (100 basis points)	(8,820)	(6,263)

FOR THE YEAR ENDED 30 JUNE 2012

(c) Fair values

Set out below is a comparison by category of carrying amounts and fair values of all of the Group's financial instruments recognised in the financial statements

	Carrying Amount		Fair Value
	2012	2011	2012	2011
	$	$	$	$
Financial Assets
Cash	1,169,582	806,397	1,169,582	806,397
Trade and other receivables ‐ current	25,902	98,480	25,902	98,480
Available for sale financial asset	3,264,656	‐	3,264,656	‐
Financial Liabilities
Trade and other payables	993,262	1,010,327	993,262	1,010,327
Unsecured loans	‐	188,957	‐	188,957
Convertible loan	‐	‐	‐	‐

Cash, cash equivalents and security deposits: The carrying amount approximates fair value because of their short term to maturity

Trade receivables and trade creditors: The carrying amount approximates fair value.

Shares in controlled entities are excluded from the above as these are accounted for at cost in accordance with AASB 127.

Financial asset designated as available for sale: The carrying amount of this asset, which consists of shares in an ASX listed company, approximates fair value as the asset is valued at market value based on the closing price of the ASX listed shares on the last business day of the reporting period.

Fair value measurements recognised in the consolidated statement of financial position

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

30 June 2012	Level 1	Level 2	Level 3	Total
	$	$	$	$
Available for sale
Quoted equities	3,264,656	‐	‐	3,264,656
Total	3,264,656	‐	‐	3,264,656

FOR THE YEAR ENDED 30 JUNE 2012

(d) Credit Risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, and trade and other receivables. The Group's exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments.

The Group does not hold any credit derivatives to offset its credit exposure.

In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not significant.

There are no significant concentrations of credit risk within the Group.

(e) Liquidity Risk

The Group's liquidity position is managed to ensure sufficient funds are available to meet our financial commitments in a timely and cost‐effective manner.

The Company continually reviews its liquidity position including cash flow forecast to determine the forecast liquidity position and maintain appropriate liquidity levels.

The table below reflects the contractual maturity of financial instruments as at 30 June. Cash flows for financial instruments are presented on an undiscounted basis.

		Aging analysis between		Currency
2012	Total	<30 days	30‐60 days	>60 days	AUD	Other
Cash and Cash
Equivalents	(1,169,582)	(1,169,582)	‐	‐	(888,868)	(280,714)
Trade Receivables	(25,903)	(25,903)	‐	‐	(21,486)	(4,417)
Available for Sale
Financial Asset	(3,264,656)	(3,264,656)	‐	‐	(3,264,656)	‐
Trade Payables	500,391	422,849	13,622	63,920	228,267	272,124
Other Payables	492,872	‐	‐	492,872	‐	492,872
Other Loans	‐	‐	‐	‐	‐	‐
Convertible Loan	‐	‐	‐	‐	‐	‐
Total	(3,466,878)	(4,037,292)	13,622	556,792	(3,946,743)	479,865

2011		Aging analysis between			Currency
	Total	<30 days	30‐60 days	>60 days	AUD	Other
Cash and Cash
Equivalents	(806,397)	(806,397)	‐	‐	(639,944)	(166,453)
Trade Receivables	(98,480)	(98,480)	‐	‐	(85,038)	(13,442)
Trade Payables	531,010	392,594	32,787	105,629	181,925	349,085
Other Payables	479,317	‐	‐	479,317	‐	479,317
Other Loans	188,957	‐	188,957	‐	188,957	‐
Convertible Loan	‐	‐	‐	‐	‐	‐
Total	294,407	(512,283)	221,744	584,946	(354,100)	648,507

FOR THE YEAR ENDED 30 JUNE 2012

(f) Foreign Exchange Risk

As a result of operations in Egypt, the Group's statement of financial position can be affected significantly by movements in the EGP/AUD exchange rates. The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating entity in currencies other than the functional currency.

At 30 June 2012, the Group had the following exposure to foreign currency:

	2012	2011
Financial Assets
US$
Cash and cash equivalentsEGP	186,453	123,458
Cash and cash equivalents	31,690	30,326
Trade ReceivablesGBP	4,416	13,442
Cash and cash equivalents	62,571	12,669
	285,130	179,895
Financial Liabilities
US$
Trade and other payablesEGP	128,309	23,446
Trade and other payablesEuro	553,787	769,360
Trade and other payablesNakfa	‐	‐
Trade and other payablesGBP	73,677	25,016
Trade and other payables	9,222	10,580
	764,995	828,402
Net exposure	(479,865)	(648,507)

The following sensitivity is based on the most significant foreign currency risk exposures in existence at the statement of financial position date, which is the Australian Dollar moving against the Egyptian Pound (EGP).

At 30 June 2012, had the Australian Dollar moved, as illustrated in the table below, with all other variables held constant, post tax profit and equity would have been affected as follows:

Judgements of reasonably possible movements:

		Post Tax Loss (Higher)/Lower		Equity Higher/(Lower)
	2012	2011	2012	2011
	$	$	$	$
AUD/EGP +10%	(5,821)	(316,070)	(1,166,163)	(1,126,003)
AUD/EGP ‐10%	7,114	386,308	1,425,310	1,376,226

FOR THE YEAR ENDED 30 JUNE 2012

Foreign exchange rates used during the period were as follows:

	2012	2011
	AUD:EGP	AUD:EGP
Rate as at 30 June	6.13180	6.30520
Average Rate for year ended 30 June	6.17090	5.72250

(g) Capital management policy

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

There were no changes in the Group's approach to capital management during the year.

Neither the Company nor any of its controlled entities are subject to externally imposed capital requirements.

Management monitors capital through the gearing ratio (net debt/total capital). The gearing ratios based on continuing operations at 30 June 2012 and 2011 were as follows:

	2012	2011
	$	$
Total trade and other payables	993,262	1,010,327
Loans & borrowings	‐	188,957
Less cash and cash equivalents	(1,169,582)	(806,397)
Net debt position	(176,320)	392,887
Total equity	12,252,752	4,376,993
Total capital	12,076,432	4,769,880
Gearing ratio	‐1.5%	8.2%

(h) Equity price risk

The Group is exposed to equity price risks arising from equity investments. The equity investments were acquired from the sale of the Heemskirk Joint Venture interest.

The sensitivity analysis below has been determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 10% higher/lower:

• profit for the year ended 30 June 2012 would increase/decrease by $326,465 (2011: nil) as a result of the changes in fair value in the equity investments; and
• other comprehensive income for the year ended 30 June 2012 would have been unaffected as a result of the changes in fair value of the equity investments.

The Group's sensitivity to equity prices has changed significantly from the prior year due to the sale of the Heemskirk Joint Venture interest for shares in Stellar Resources Ltd during the reporting period.

FOR THE YEAR ENDED 30 JUNE 2012

30 PARENT ENTITY INFORMATION

The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the same as those applied in the consolidated financial statements. Refer to note 2 for a summary of the significant accounting policies relating to the Group.

	2012	2011
	$	$
(a) Financial Position
Assets
Current assets	939,242	795,010
Non‐current assets	3,327,238	74,764
Total assets	4,266,480	869,774
Liabilities
Current liabilities	255,647	129,617
Non‐current liabilities	‐	‐
Total liabilities	255,647	129,617
Equity
Contributed equity	45,530,847	38,588,181
Accumulated losses	(42,054,676)	(38,378,426)
Option issue reserve	534,662	530,402
Total equity	4,010,833	740,157
	2012	2011
	$	$
(b) Financial Performance
Profit/(loss) for the year	(3,791,623)	(3,508,750)
Other comprehensive income	‐	‐
Total comprehensive income	(3,791,623)	(3,508,750)

(c) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

At the Balance Date there are no guarantees entered into by the Parent Entity in relation to the debts of its subsidiaries (2011: nil).

(d) Contingent liabilities of the parent entity

The Parent Entity did not have any contingent liabilities as at Balance Date.

(e) Commitments for capital expenditure entered into by the parent entity

The Parent Entity did not have any commitments for capital expenditure as at Balance Date.

DIRECTORS' DECLARATION

The directors of Gippsland Limited declare that:

• (a) in the directors' opinion, the financial statements and notes on pages 12 to 54, and the remuneration disclosures that are contained in the Directors' report, set out on pages 6 to 10, are in accordance with the Corporations Act 2001, including:
  • (i) giving a true and fair view of the Company's and the Consolidated Entity's financial position as at 30 June 2012 and of their performance, for the year ended on that date; and
  • (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations Regulations 2001.
• (b) in the directors' opinion, the financial report also complies with International Financial Reporting Standards issued by the International Accounting Standards Board as disclosed in note 2 to the financial statements; and
• (c) in the directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations required by Section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of the directors pursuant to Section 295(5) of the Corporations Act 2001.

Dated 28th day of September 2012.

J Starink Director

Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 8 9365 7000 Fax: +61 8 9365 7001

www.deloitte.com.au Independent Auditor's Report to the members of Gippsland Limited

Report on the Financial Report

We have audited the accompanying financial report of Gippsland Limited, which comprises the statement of financial position as at 30 June 2012, the statement of comprehensive income, the statement of cash flows and the statement of changes in equity for the year ended on that date, 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 as set out on pages 12 to 55.

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, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the consolidated 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 entity's preparation of the financial report that gives a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Auditor's Independence Declaration

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Gippsland Limited, would be in the same terms if given to the directors as at the time of this auditor's report.

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

Opinion

In our opinion:

• (a) the financial report of Gippsland 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 2012 and of its performance for the year ended on that date; and
  • (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
• (b) the consolidated financial statements also comply with International Financial Reporting Standards as disclosed in Note 2.

Material Uncertainty Regarding Continuation as a Going Concern

Without modifying our opinion, we draw attention to Note 2(b) in the financial report which indicates that the consolidated entity has experienced net cash outflows from operations of $2,820,646 (2011: $2,292,832) and net cash outflows from investing activities of $3,499,644 (2011: $1,031,122) for the year ended 30 June 2012. These conditions, along with other matters set out in Note 2(b), indicate the existence of a material uncertainty which may cast significant doubt about the consolidated entity's and the company's ability to continue as going concerns and therefore, whether they will realise their assets and extinguish their liabilities in the ordinary course of business, and at amounts stated in the financial report.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 6 to 10 of the directors' report for the year ended 30 June 2012. 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 Gippsland Limited for the year ended 30 June 2012, complies with section 300A of the Corporations Act 2001.

DELOITTE TOUCHE TOHMATSU

Neil Smith Partner Chartered Accountants Perth, 28 September 2012

ASX ADDITIONAL INFORMATION

AS AT 25 SEPTEMBER 2012

A	TOTALEQUITYSECURITIES	Shares	Options ex31/12/2012at 4 cents		Options ex31/12/2013at 6 cents
	Totals on Issue	1,205,894,315	600,000		600,000
B	DISTRIBUTIONOFEQUITYSECURITIES1‐1,000	37
	1,001‐5,0005,001‐10,000	3732
	10,001 ‐100,000	518
	100,001and over	421		2	2
		1,045		2	2
	No of shareholders holdingan unmarketable parcel	526
C	TOP20SHAREHOLDERS	Number			%
1	Abbotsleigh Pty Ltd		469,430,560		38.93
2	JP Morgan Nominees Aust Limited		178,473,888		14.80
3	National Nominees Limited		89,059,028		7.39
4	HSBC Custody Nominees Aust Limited		52,499,177		4.35
5	Situate Pty Ltd		17,777,517		1.47
6	Taveroam Pty Limited		17,640,345		1.46
7	Situate Pty Limited		14,991,280		1.24
8	Nessim Emile Alfred		12,500,001		1.04
9	Taveroam Pty Ltd		10,260,243		0.85
10	Sunland Systems Pty Ltd		10,100,000		0.84
11	EJ & LY Congdon		9,875,912		0.82
12	Eco International Pty Ltd		8,391,231		0.70
13	King Town Holdings Pty Ltd		8,239,000		0.68
14	David Same		6,648,006		0.55
15	Alsanto Nominees Pty Ltd		6,390,000		0.53
16	Citicorp Nominees Pty Limited		6,013,105		0.50
17	Starlight Holdings Ltd		6,000,000		0.50
18	Figjar Holdings Pty Ltd		5,965,000		0.49
19	Fitel Nominees Ltd		5,947,284		0.49
20	Broko Investments Pty Ltd		4,500,000		0.37
			940,701,577		78.00

ASX ADDITIONAL INFORMATION

AS AT 25 SEPTEMBER 2012

D	UNLISTEDOPTIONHOLDERS	Number	Exercise Price	Expiry
	Geoffrey Alexander Hawkins	500,000	4 cents	31/12/12
	Geoffrey Alexander Hawkins	500,000	6 cents	31/12/13
	Rhonda Jean Light	100,000	4 cents	31/12/12
	Rhonda Jean Light	100,000	6 cents	31/12/13
E	SUBSTANTIALSHAREHOLDERS	Number	%
	Abbotsleigh Pty Ltd	469,430,560	38.93
	Acorn Capital Limited	70,285,714	5.83
	Situate Pty Ltd, Taveroam Pty Ltd and RW Beale	61,000,000	5.06

F VOTING RIGHTS

Under the Company's constitution, all ordinary shares carry one vote per share without restriction. Options over ordinary shares do not carry any voting rights.

F EXPLORATION INTERESTS

As at 24 September 2012, the Company has an interest in the following tenements:

Country	Project	Tenement	Status	Interest
Egypt	Abu Dabbab	Exploitation Licence 1658	Granted	50%
Egypt	Abu Dabbab	Exploitation Licence 1659	Granted	50%
Egypt	Nuweibi	Exploitation Licence 1785	Granted	50%
Egypt	Wadi Allaqi ‐ Seiga	Exploration Licence 1	Granted	50%
Egypt	Wadi Allaqi ‐ Shashoba	Exploration Licence 1	Granted	50%
Egypt	Wadi Allaqi – Haimur	Exploration Licence 1	Granted	50%
Egypt	Wadi Allaqi – Garayat	Exploration Licence 1	Granted	50%
Egypt	Wadi Allaqi – Koleit	Exploration Licence 1	Granted	50%
Egypt	Wadi Allaqi – Nile Valley A	Exploration Licence 1	Granted	50%
Egypt	Wadi Allaqi – Nile Valley E	Exploration Licence 1	Granted	50%
Egypt	Wadi Allaqi – Abu Swayel	Exploration Licence 1	Granted	50%
Egypt	Wadi Allaqi – Um Tiur	Exploration Licence 1	Granted	50%
Eritrea	Adobha	Exploration Licence	Granted	100%
Eritrea	Adobha (Gerasi South)	Exploration Licence	Granted	100%
Eritrea	Adobha (Gerasi)	Exploration Licence	Pending	‐

Notes: 1. Tenements granted subject to an agreement with the Egyptian Government (EMRA) dated 21 June 2004. Applications to renew tenements have been lodged.